UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Soliciting Material Pursuant to §240.14a-12 |
Sohu.com Inc.
(Name of Registrant as Specified In Its Charter)
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Sincerely, | ||||||
Charles Zhang | ||||||
Chief Executive Officer |
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS |
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TO BE HELD ON JUNE 19, 2015 |
April 29, 2015
1) | To elect |
2) | To vote on an advisory resolution approving our executive compensation; |
3) | To ratify the appointment of PricewaterhouseCoopers Zhong Tian LLP as our independent auditors for the fiscal year ending December 31, |
4) | To vote upon a stockholder proposal regarding the |
5) | To consider and act upon all other matters which may properly come before the Annual Meeting or any adjournment or postponement thereof. |
By order of the Board of Directors, | ||||||
/s/ Timothy B. Bancroft |
Timothy B. Bancroft | ||||||
Secretary |
ANNUAL MEETING OF STOCKHOLDERS |
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Meeting. Under our Second Amended and Restated By-laws, the presence in person or by proxy of a majority of the shares of our common stock outstanding on the record date is required for a quorum. Abstentions and broker non-votes are each included for purposes of determining the presence or absence of a sufficient number of shares to constitute a quorum for the transaction of business. With respect to the approval of any particular proposal, abstentions and broker non-votes are not counted in determining the number of votes cast. The election of directors requires a plurality of the votes cast in person or by proxy. The nominees receiving the highest number of affirmative votes of the shares present or represented and voting on the election of the directors at the Annual Meeting will be elected as directors. In voting on the advisory resolution approving our executive compensation, stockholders may vote in favor of the proposal or against the proposal, or abstain from voting. This matter will be decided by the affirmative vote of the holders of a majority of the shares of our common stock that are present in person or by proxy at the Annual Meeting.Meeting and entitled to vote thereon. The result of the advisory vote approving our executive compensation will not be binding on us or our Board. Our Board and Compensation Committee will review the voting result and take it into consideration when making future decisions regarding executive compensation. The ratification of the appointment of PricewaterhouseCoopers as our independent auditors requires the affirmative vote of the holders of a majority of the shares of our common stock that are present in person or by proxy at the Annual Meeting.Meeting and entitled to vote thereon. In voting on the stockholder proposal regarding the positionclassification of Chairman of theour Board, if the proposal is properly presented at the Annual Meeting, stockholders may vote in favor of the proposal or against the proposal, or abstain from voting. This matter will be decided by the affirmative vote of the holders of a majority of the shares of our common stock that are present in person or by proxy at the Annual Meeting.Meeting and entitled to vote thereon. The result of a vote on the stockholder proposal regarding the positionclassification of Chairman of theour Board will not be binding on us or our Board. Our Board will review the voting result and may take it into consideration when making any recommendations to our stockholders in the future decisions regarding the positionclassification of Chairman of theour Board.
Name, Age, Positions and Offices with Sohu.com Inc. | Principal Occupation, Business Experience and Directorships held with Other Public Corporations during the past Five Years | Term of Office as Director | |||||||||||||
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Education Holdings Ltd. 45 years old. | Mr. Charles Huang is the Founder, Chief Executive Officer and Chairman of Netbig Education Holdings Ltd. (“Netbig”), a leading education enterprise in China. Prior to founding Netbig in 1999, Mr. Charles Huang served as Executive Director and Head of Asia Securitization Group of Deutsche Bank, New York and Hong Kong, as well as Senior Vice President of Prudential Securities Inc., New York. He holds a Master of Science degree in Computer Science from We believe Mr. Charles Huang’s qualifications to serve on our Board include his (i) qualification as a Chartered Financial Analyst and related experience in senior positions in the corporate finance industry in the U.S. and Asia, (ii) academic credentials and experience in the computer industry, (iii) status and track record as a successful entrepreneur and (iv) extensive experience managing an Internet company. | Mr. Charles Huang’s term expires at the 2015 Annual Meeting. |
Dr. Dave Qi 51 years old. | Dr. Dave Qi is a Professor of Accounting and the former Associate Dean of the Cheung Kong Graduate School of Business. He began teaching at the Cheung Kong Graduate School of Business in 2002 and was the founding Director of the Executive MBA program. Before joining the Cheung Kong Graduate School of Business, Dr. Dave Qi was an Associate Professor at the School of Accounting of the Chinese University of Hong Kong. Dr. Dave Qi has published many articles and research essays on accounting, financial reporting, capital market and other related topics. He has a Ph.D. in accounting from the Eli Broad Graduate School of management of Michigan State University, a Master of Business Administration from the University of Hawaii at Manoa and a Bachelor of Science and a Bachelor of Arts degree from Fudan University. Dr. Dave Qi is currently a member of the American Accounting Association. Dr. Dave Qi also serves as director of the following public companies: We believe Dr. Dave Qi’s qualifications to serve on our Board include his (i) strong academic credentials and working experience with accounting and finance in general, and with accounting and finance in China in particular, (ii) status as associate Dean of one of the best business schools in China, and (iii) extensive connections in the telecom and tech industries in China | Dr. Dave Qi’s term expires at the 2015 Annual Meeting. |
Name, Age, Positions and Offices with Sohu.com Inc. | Principal Occupation, Business Experience and Directorships held with Other Public Corporations during the past Five Years | Term of Office as Director | ||||||
Mr. Shi Wang 64 years old. | Mr. Shi Wang is the Chairman of the Board of Directors of Vanke, of which he also served as General Manager from 1991 to 1999. In 1984 Mr. Shi Wang founded the Shenzhen Exhibition Center of Modern Science and Education Equipment, We believe Mr. Shi Wang’s qualifications to serve on our Board include (i) history as the founder of Vanke, a | Mr. Shi Wang’s term | ||||||
Dr. Charles Zhang 50 years old. | Dr. Charles Zhang is our founder and has been Chairman of our Board and Chief Executive Officer since August 1996. Dr. Charles Zhang also served as our President from August 1996 to July 2004. Prior to founding Sohu.com Inc., Dr. Charles Zhang worked for Internet Securities Inc. and helped to establish its China operations. Prior to that, Dr. Charles Zhang worked as MIT’s liaison officer with China. Dr. Charles Zhang has a Ph.D. in experimental physics from MIT and a Bachelor of Science degree from Tsinghua University in Beijing. Dr. Charles Zhang is a native of the People’s Republic of China. Dr. Charles Zhang is also the Chairman of the Board of Changyou.com Limited, our independently-listed majority-owned subsidiary. We believe Dr. Charles Zhang’s qualifications to serve on our Board include his (i) position as our Chief Executive Officer, (ii) history as the founder of our company and status as one of the best-known and most successful entrepreneurs in China, (iii) general reputation and track record as an innovator, visionary and early mover in the Internet industry in China and (iv) deep understanding of the Chinese Internet industry. | Dr. Charles Zhang’s term expires at the 2016 Annual Meeting. |
Positions and Offices with Sohu.com Inc. | Principal Occupation, Business Experience and Directorships held with Other Public Corporations during the past Five Years | Term of Office as Director | ||
Dr. Edward B. Roberts 79 years old. | Dr. Edward B. Roberts is the David Sarnoff Professor of Management of Technology at MIT’s Alfred P. Sloan School of Management. Dr. Edward B. Roberts chaired MIT’s research and educational programs in the management of technological innovation from 1967 to 1993 and also founded and chairs the MIT Entrepreneurship Center. Dr. Edward B. Roberts is currently a director of Medical Information Technology, Inc. Dr. Edward B. Roberts has authored over 160 articles and eleven books, one of which is Entrepreneurs in High Technology (Oxford University Press, 1991). Dr. Edward B. Roberts received four degrees from MIT, including a Ph.D. in 1962. We believe Dr. Edward B. Roberts’ qualifications to serve on our Board include his (i) decades of experience teaching at the Alfred P. Sloan School of Management, (ii) related supervisory, board and committee positions, many of which have had a particular emphasis on technological innovation and entrepreneurship, and (iii) extensive experience investing in and serving on the boards of directors of, growing companies. | Dr. Edward B. Roberts’ term expires at the 2016 Annual Meeting. | ||
Dr. Zhonghan Deng 47 years old. | Dr. Zhonghan Deng is the Chief Executive Officer and Chairman of the Board of Directors of Vimicro International Corporation (“Vimicro”), which he co-founded in 1999. Dr. Zhonghan Deng received a Ph.D. in electrical engineering and computer sciences, a Master of Science degree in economics and a Master of Science degree in physics from the University of California, Berkeley. After graduating from Berkeley, Dr. Zhonghan Deng worked as a research scientist for International Business Machines Corporation at the T.J. Watson Research Center in Yorktown Heights, New York. We believe Dr. Zhonghan Deng’s qualifications to serve on our Board include (i) academic credentials and experience in the computer industry, (ii) history as the founder of Vimicro, a NASDAQ listed company (iii) status and track record as a successful entrepreneur in China, and (iv) extensive experience managing a NASDAQ listed company. | Dr. Zhonghan Deng’s term expires at the 2016 Annual Meeting. |
(1) | member of our Audit Committee |
(2) | member of our Compensation Committee |
(3) | member of our Nominating Committee |
awards under our equity incentive plans, and otherwise determines compensation levels and performs such other functions regarding compensation as our Board may delegate to our Compensation Committee. Our Board adopted a
There werehave been no material changes to suchin our Nominating Committee’s procedures after wefor selecting director candidates since our last provided this disclosure.annual meeting of stockholders. The committeeNominating Committee does not intend to alter the manner in which it evaluates candidates, including the criteria set forth above, based on whether the candidate was recommended by a stockholder or otherwise.
well-known, respected and influential leader of the Internet industry in China. Independent directors and management have different perspectives and roles in strategy development. Our independent directors bring experience, oversight and expertise from outside our company and industry, while our Chief Executive Officer brings company-specific experience and expertise. Our Board believes that the combined role of Chairman and Chief Executive Officer promotes strategy development and execution, and facilitates information flow between management and our Board, which are essential to effective governance.
● | Appropriate weighting of long-term incentive compensation; |
● | goals are appropriately set to avoid targets that, if not achieved, result in a large percentage loss of compensation; |
● | we do not rely on hard targets that can only be evaluated with reference to numerical results, so as to minimize the risk of our executives’ focusing excessively on short-term results; and |
● | we have a limit on the total amount of compensation that can be paid to each executive, which helps reduce the risk of our executives’ pursuing achievement of short term goals in order to increase compensation. |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percent of Class(1) | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Charles Zhang | 7,745,479 | (2) | 20.12 | % | ||||||
Edward Roberts | 300,920 | (3) | * | |||||||
Charles Huang | 70,387 | (4) | * | |||||||
Xiaochuan Wang | 38,858 | (5) | * | |||||||
Carol Yu | 35,000 | (6) | * | |||||||
Dave Qi | 22,261 | (7) | * | |||||||
Shi Wang | 31,387 | (8) | * | |||||||
Zhonghan Deng | 9,671 | (9) | * | |||||||
All directors, nominees and executive officers as a group (8 persons) | 8,248,963 | (10) | 21.40 | % | ||||||
Photon Group Limited | 7,028,254 | (11) | 18.27 | % | ||||||
Orbis Investment Management Ltd. | 6,245,827 | (12) | 16.24 | % | ||||||
Delaware Management Business Trust | 2,776,876 | (13) | 7.22 | % | ||||||
Platinum Asset Management Ltd. | 2,752,963 | (14) | 7.16 | % |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percent of Class(1) | |||||||||
Charles Zhang | 7,745,479 | (2) | 20.07 | % | |||||||
Edward Roberts | 287,732 | (3) | * | ||||||||
Charles Huang | 71,982 | (4) | * | ||||||||
Carol Yu | 35,000 | (5) | * | ||||||||
Dave Qi | 24,073 | (6) | * | ||||||||
Shi Wang | 32,982 | (7) | * | ||||||||
Zhonghan Deng | 11,266 | (8) | * | ||||||||
Belinda Wang | 0 | (9) | — | ||||||||
All directors, nominees and executive officers as a group (8 persons) | 8,208,514 | (10) | 21.26 | % | |||||||
Orbis Investment Management Ltd. | 7,365,247 | (11) | 19.10 | % | |||||||
Photon Group Limited | 7,028,254 | (12) | 18.23 | % | |||||||
Delaware Management Business Trust | 3,069,878 | (13) | 7.96 | % | |||||||
Coronation Asset Management (Pty) Ltd. | 2,943,886 | (14) | 7.63 | % |
* | Less than 1%. |
(1) | Includes the number of shares and percentage ownership represented by such shares determined to be beneficially owned by a person in accordance with the rules of the SEC. The number of shares beneficially owned by a person includes shares of common stock subject to options or restricted stock units held by that person that are currently exercisable or |
(2) | Includes (i) 30,000 shares of our common stock subject to options exercisable within 60 days of April |
(3) | Includes (i) |
(4) |
(5) |
Ms. Carol Yu’s address is c/o Sohu.com Inc., Level 18, Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. |
(6) | Dr. Dave Qi’s address is c/o Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. |
(7) | Includes 10,000 shares of our common stock subject to options exercisable within 60 days of April |
(8) | Dr. Zhonghan Deng’s address is c/o Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. |
(9) | Ms. Belinda Wang resigned as our Co-President and Chief Operating Officer effective March 31, 2014. | |
(10) | Includes |
(11) | Orbis Investment Management Ltd’s address is Orbis House, 25 Front Street, Hamilton HM 11, Bermuda. |
(12) | Photon Group Limited’s address is c/o Sohu.com Inc., Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. |
(13) | Delaware Management Business Trust’s address is 2005 Market Street, Philadelphia, PA 19103. |
(14) |
● | the nature of the related person’s interest in the transaction; |
● | the material terms of the transaction, including, without limitation, the amount and type of transaction; |
● | the importance of the transaction to the related person and to us; |
● | whether the transaction would impair the judgment of any of our directors or executive officers to act in our best interest; |
● | whether the terms of the transaction are substantially equal to or more favorable to us and no more favorable to the related person than if we had negotiated similar arrangements with non-affiliated third parties; and |
● | any other matters our Audit Committee deems appropriate. |
● | received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee concerning independence; |
● | discussed with the independent auditors the independent auditors’ independence; and |
● | discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 16 as adopted by the Public Company Accounting Oversight Board, pursuant to SEC Release No. 34-68453, File No. PCAOB 2012-01. |
Respectfully submitted, | ||||||
AUDIT COMMITTEE | ||||||
Dr. Dave Qi | ||||||
Mr. Charles Huang | ||||||
Dr. Zhonghan Deng |
● | Attract and retain executives who will significantly contribute to the creation of value for our stockholders; |
● | Pay compensation that is competitive in comparison to that paid by others in our industry; |
● | Effectively make use of our cash and available equity incentives by determining appropriate cash salary and bonus and equity award components in view of each executive’s position and responsibility level in our company, individual performance, skills, competency, experience, and contribution to our realization of our performance goals as a company; and |
● | Rationally and fairly pay performance-based compensation through a combination of financial performance reviews and non-quantitative evaluations, in order to help ensure transparency in our executive compensation decisions. |
● | Cash compensation, which includes an annual salary and the opportunity to earn an annual performance-based cash bonus; |
● | Equity incentive compensation, in the form of stock options and restricted stock units; |
● | Other benefits, in the form of housing allowances, tax equalization, tuition/training reimbursement and premiums paid for health, life, travel and disability insurance; and |
● | Severance benefits. |
● | the competitiveness of the total compensation packages for our named executive officers as compared to the total compensation packages for similarly situated named executive officers at peer companies in different markets, including the Chinese market and the U.S. market; |
● | the level of responsibility of our named executive officers; and |
● | the skills, competency, and past work experience of our named executive officers. |
Base salary. We aim to offer pay at a level that is sufficiently competitive to attract and retain experienced and successful executives. We make adjustments to base salaries with reference to individual performance, contributions to our business, competitive pay levels and comparisons to pay levels to our other executives. The base salary is set to reflect the named executive officer’s level of responsibility, expertise, skills, knowledge and experience. |
Annual cash incentive. We offer an annual cash bonus incentive to encourage and reward contributions to our annual financial performance objectives, strategic objectives and an executive’s leadership. The potential award amount varies with the degree to which we achieve our annual financial objectives, the extent to which the executive officer contributes to strategic and operational objectives and his or her individual leadership. The incentive payouts are linked to Sohu’s performance, with individual compensation differentiated based on individual performance. The actual total cash compensation (base salary and annual cash incentive) of one of our named executive officers may reach the market 75th percentile under circumstances where Sohu’s performance and the named executive officer’s performance are both determined to be excellent. For |
of 200% (i.e., a maximum annual cash bonus amount equal to 200% of the executive officer’s annual base salary for 2014), to encourage our executives to achieve outstanding performance, and to allow their actual total cash compensation to be increasingly attractive in comparison to the market as performance levels increase. |
Long-term incentives. Long-term incentives are designed to encourage and reward building long-term stockholder value and to retain our executive officers. We provide a mix of stock options and |
Selection of and Analysis of Peer Groups for Competitive Compensation Packages
● | consideration of pay-for-performance, in order to align compensation with our business objectives and performance; |
● | consideration of the state of the market for executive talent, in order to position Sohu competitively among the companies against which we recruit and compete for talent, in order to enable us to attract, retain, and reward executive officers; and |
● | the availability of relevant data from the companies selected. |
Activision Blizzard, Inc. | Juniper Networks, Inc. | |||||
Adobe Systems Inc. | ||||||
Amazon.com, Inc. | Microsoft Corp. | |||||
AOL, Inc. | NetApp, Inc. | |||||
Apple Inc. | Netflix, Inc. | |||||
Blucora Inc. | News Corp. | |||||
Comcast Corp. | Oracle Corp. | |||||
Demand Media Inc. | Qualcomm, Inc. | |||||
eBay Inc. | Symantec Corp. | |||||
Electronic Arts Inc. | The Walt Disney Co. | |||||
EMC Corp. | TheStreet.com, Inc. | |||||
Expedia, Inc. | Time Warner Inc. | |||||
Facebook Inc. | ||||||
Google Inc. | Viacom, Inc. | |||||
IAC/InterActive Corp. | Xo Group Inc. | |||||
Intuit Inc. | Yahoo! Inc |
● | Coca Cola China Industries Limited |
● | Compass Group |
● | ABB (China) Ltd. |
● | Siemens Limited China |
Minnesota Mining and Manufacturing Limited China |
● | Saint-Gobain Abrasives (Shanghai) Co., Ltd. |
● | Dell (China) Co., Ltd. |
● | Shell China Ltd. |
Volvo Group China | |
Caterpillar (China) Investment Co., Ltd. |
21Vianet Group Inc. | NetQin Mobile Inc. | |||||
Ninetowns Internet Technology Group Co., Ltd. | ||||||
Noah Education Holdings Ltd. | ||||||
Pacific Online Ltd. | ||||||
Perfect World Co., Ltd. | ||||||
Phoenix New Media Ltd | ||||||
Qihoo 360 Technology Co Ltd | ||||||
Charm Communications Inc. | Qunar Cayman Islands Ltd. | |||||
China Finance Online Co. | Renren Inc | |||||
Chinanet Online Holdings Inc. | ||||||
Ctrip.com International, Ltd. |
E Commerce China Dangdang Inc. | ||||||
Sky mobi Ltd. | ||||||
Taomee Holdings Ltd. |
Giant Interactive Group Inc. | Tencent Holdings Ltd. | |||||
Jiayuan.com International Ltd. | The9 Ltd. | |||||
Kingsoft Corp. Ltd. | V Media Corp. | |||||
KongZhong Corp. | Vipshop Holdings Ltd. | |||||
Ku6 Media Co., Ltd. | VisionChina Media Inc. | |||||
Youku Tudou Inc | ||||||
Net Dragon Websoft Inc. | YY Inc | |||||
NetEase.com, Inc. | SouFun Holdings Ltd. |
● | Key financial measurements such as revenue, operating profit, earnings per share and operating margins; |
Key performance indicator measurements intended to challenge executive officers to drive high financial and operating results; |
● | Promoting commercial excellence by launching new or continuously improving products or services; |
● | Becoming or remaining as a leading market player and attracting and retaining customers and users; |
● | Achieving excellence in the named executive officer’s business area of responsibility; and |
● | Supporting our values by promoting a culture of integrity and adherence to our code of conduct. |
salaries, (ii) targeted annual performance bonuses, which generally are approximately 60%would be calculated by multiplying a base amount that is equal to 80%100% of annual base salary for 2014 by a bonus ratio determined based on the criteria described under the heading “2014 Executive Bonus Plan” of this proxy statement, (iii) equity awards, and (iv) allowances frequently provided to executives, such as housing allowances, ranging from $80,000 to $150,000.
2013 Increase | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | 2012 Base Salary | Increase Amount | Increase Percentage | 2013 Base Salary Effective 1-Jan-13 | ||||||||||||||
Charles Zhang | $ | 520,000 | $ | 50,000 | 9.6 | % | $ | 570,000 | ||||||||||
Carol Yu | $ | 420,000 | $ | 40,000 | 9.5 | % | $ | 460,000 | ||||||||||
Belinda Wang | $ | 400,000 | $ | 37,000 | 9.3 | % | $ | 437,000 | ||||||||||
Xiaochuan Wang | $ | 320,000 | $ | 10,000 | 3.1 | % | $ | 330,000 |
2014 Increase | 2014 Base Salary | ||||||||||||||||||||||
2013 Base | Increase | Increase | Effective | ||||||||||||||||||||
Name | Salary | Amount | Percentage | 1-Jan-14 | |||||||||||||||||||
Charles Zhang | $ | 570,000 | $ | 83,595 | 14.7 | % | $ | 653,595 | |||||||||||||||
Carol Yu | $ | 460,000 | $ | 30,196 | 6.6 | % | $ | 490,196 | |||||||||||||||
Belinda Wang | $ | 437,000 | $ | 0.00 | 0.0 | % | $ | 437,000 |
correlation between annual cash bonus payoutpayouts and our overall corporate performance and to specify the range of our Compensation Committee’s or our Chief Executive Officer’s discretion as to bonuses.
In determining the annual bonus rewards the high-performing officers who drive results in these areas and provides them with an incentive to sustain this performance over a long career with us. Under the plan, the named executive officers were eligible to receive a cash bonus equal to a percentage of their base salaries based on the attainment of certain corporate performance goals which were established at the beginning of the year. Once the overall bonus opportunity is calculated, our Chief Executive Officer, with respect to his direct reports (which included Ms. Carol Yu and Ms. Belinda Wang for 2013), or the Compensation Committee, with respect to our Chief Executive Officer, has the discretion to adjust the top bonus opportunity from 150% up to 200% based upon such named executive officer’s individual performance during the year. As Mr. Xiaochuan Wang resigned his position as our Chief Technology Officer on February 3, 2013, he did not participate in our 2013 Executive Bonus Plan, but instead was given a bonus opportunity based on corporate performance goals for Sogou.
Name | 2013 Threshold Bonus Opportunity (as a % of base salary) | 2013 Targeted Bonus Opportunity (as a % of base salary) | 2013 Maximum Bonus Opportunity (as a % of base salary) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Charles Zhang | 0 | % | 60 | % | 120 | % | ||||||||
Carol Yu | 0 | % | 80 | % | 160 | % | ||||||||
Belinda Wang | 0 | % | 80 | % | 160 | % |
The Compensation Committee believes that these criteria are consistent with the overall goals and long-term strategic direction that our Board has set for our company and are closely related to or reflective of financial performance, operational improvements, growth and return to stockholders.
Under our 2014 Executive Bonus Plan:
● | The initial annual bonus ratio for a named executive officer was determined based on a performance review and was initially equal to the percentage level of attainment of specified corporate performance goals (including specified performance goals for our subsidiaries), except that no annual bonus would be paid unless a minimum percentage level of performance, which was 70% for 2014, was achieved; and |
● | After the initial annual bonus ratio was determined, our Compensation Committee, in the case of our Chief Executive Officer, and our Chief Executive Officer Dr. Charles Zhang, in the case of our named executive officers other than our Chief Executive Officer (which included only Ms. Carol Yu, our President and Chief Financial Officer, for 2014), had the discretion to adjust the applicable executive officer’s initial bonus ratio within a pre-determined, specified range based on our Compensation Committee’s or our Chief Executive Officer’s non-quantitative evaluation based on strategic indicators and competency indicators. Our Compensation Committee and our Chief Executive Officer generally did not expect to adjust the initial bonus ratio downward unless the applicable executive officer’s performance was deemed to have fallen below expectations. Neither our Compensation Committee nor our Chief Executive Officer established in advance specific criteria for adjusting the bonus upward (or downward), but made an assessment retroactively based on its or his judgment, as the case may be, of the applicable executive officer’s having exceeded expectations in his or her area of responsibility. |
The levels of performance attainment on a sliding scale and the corresponding discretion ranges for our Compensation Committee and our Chief Executive Officer for 2014 were as follows:
% attainment | Compensation Committee’s and CEO’s Discretion range | ||||
< 70% | 0 bonus | ||||
70 to 99% | 50%–110% | ||||
100 to 105% | 70–130% | ||||
106 to 120% | 80–150% | ||||
121% to 140% | 100–180% | ||||
Over 140 % | 120–200% |
The Compensation Committee established an annual bonus ratio for 2014 for Dr. Charles Zhang, our Chief Executive Officer, equal to attainment of a performance percentage of 89%. In deciding on Dr. Charles Zhang’s bonus ratio, our Compensation Committee considered (i) Dr. Charles Zhang’s increased responsibilities in connection with his responsibility for managing our subsidiary Sohu Video Limited (“Sohu Video”); (ii) progress we made under his leadership towards achieving specified performance goals; and (iii) the effectiveness of his leadership.
Based on the recommendation of our Chief Executive Officer, our Compensation Committee approved an annual bonus ratio for Ms. Carol Yu, our President and Chief Financial Officer, equal to attainment of a performance percentage of 76%. In deciding on Ms. Carol Yu’s bonus ratio, our Chief Executive Officer considered the following factors: (i) progress we made under her leadership towards achieving specified performance goals; (ii) her contribution to balancing our achievement of short-term and long-term business objectives; (iii) a comparison of our products and services with similar products and services of our competitors; (iv) the effectiveness of her leadership; (v) her exemplary efforts and contributions; and (vi) her additional responsibilities for our subsidiary Changyou.com Limited (“Changyou”). In addition to her role beginning in November 2014 as Changyou’s Co-Chief Executive Officer, as a result of a series of changes in Changyou’s senior management earlier in 2014, including the resignation of Alex Ho as Changyou’s Chief Financial Officer, it became necessary for Ms. Yu to assume increased responsibility for Changyou operational matters beginning in March 2014, and she provided a leading role in Changyou’s financial reporting, investment activities and other business operations. In view of Ms. Yu’s role as Changyou’s Co-Chief Executive Officer and these other increased operational responsibilities, Changyou’s board of directors approved a special bonus of $620,915 to be paid by Changyou to Ms. Yu for her services to Changyou during 2014.
Annual Equity Compensation
Ms. Belinda Wang resigned as our Co-President and Chief Operating Officer effective March 31, 2014. To assist us with the transition of Ms. Wang’s former duties, Ms. Wang served as a consultant to us from April 1, 2014 through December 31, 2014, providing advisory services regarding management of our operations in our portal, marketing, public relations, mobile and auto businesses, and received a consulting fee from us in an aggregate amount of $146,316. Ms. Wang also received a bonus for the 2013 fiscal year in the amount of $349,600. In addition, Ms. Wang agreed that, until she receives written notice from us that she may do so, she will not exercise options she holds for the purchase of 312,500 ordinary shares of Sohu Video, representing approximately 0.125%
of the equity capital of Sohu Video on a fully-diluted basis at the time of her resignation, and we agreed that such options, which otherwise would have been exercisable only for 90 days after the effective date of her resignation, will be exercisable by Ms. Wang at any time within 90 days after we first give such notice to Ms. Wang. Ms. Wang agreed that the non-competition and employee non-solicitation provisions of her employee non-competition, non-solicitation, confidential information and work product agreement with us would remain in effect until March 2015.
Compensation for Independent Directors in 20132014
Respectfully submitted, | ||||||
COMPENSATION COMMITTEE | ||||||
Dr. Edward B. Roberts | ||||||
Dr. Dave Qi |
Name and Principal Position | Year | Salary ($) | Sohu Option Awards ($)(1) | Sohu Stock Awards ($)(1) | Sogou Share Option Awards ($)(2) | Sohu Video Share Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | ||||||||||||||||||||||||||||
Charles Zhang | 2014 | $ | 653,595 | $ | 0 | $ | 6,294 | $ | 0 | $ | 0 | $ | 584,175 | $ | 725,977 | $ | 1,970,041 | ||||||||||||||||||||
Chairman of the Board and | 2013 | $ | 570,000 | $ | 0 | $ | 123,264 | $ | 0 | $ | 0 | $ | 376,200 | $ | 620,453 | $ | 1,689,917 | ||||||||||||||||||||
Chief Executive Officer | 2012 | $ | 520,000 | $ | 0 | $ | 281,987 | $ | 0 | $ | 0 | $ | 343,200 | $ | 584,442 | $ | 1,729,629 | ||||||||||||||||||||
Carol Yu | 2014 | $ | 490,196 | $ | 0 | $ | 6,294 | $ | 3,235,551 | $ | 253,125 | $ | 919,111 | (7) | $ | 360,620 | $ | 5,264,897 | |||||||||||||||||||
President and | 2013 | $ | 460,000 | $ | 0 | $ | 123,264 | $ | 249,912 | $ | 0 | $ | 441,600 | $ | 413,375 | $ | 1,688,151 | ||||||||||||||||||||
Chief Financial Officer | 2012 | $ | 420,000 | $ | 0 | $ | 281,987 | $ | 228,888 | $ | 0 | $ | 302,400 | $ | 379,862 | $ | 1,613,137 | ||||||||||||||||||||
Belinda Wang | 2014 | $ | 255,566 | (6) | $ | 0 | $ | 8,392 | $ | 1,262,531 | $ | 253,125 | — | $ | 26,372 | $ | 1,805,986 | ||||||||||||||||||||
Former Co-President and | 2013 | $ | 437,000 | $ | 0 | $ | 164,352 | $ | 167,569 | $ | 0 | $ | 349,600 | $ | 104,683 | $ | 1,223,204 | ||||||||||||||||||||
Chief Operating Officer | 2012 | $ | 400,000 | $ | 0 | $ | 375,982 | $ | 190,740 | $ | 0 | $ | 352,000 | $ | 120,007 | $ | 1,438,729 |
Name and Principal Position | Year | Salary ($) | Sohu Option Awards ($)(1) | Sohu Stock Awards ($)(1) | Sogou Share Option Awards ($)(2) | Sohu Video Share Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | |||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Charles Zhang | 2013 | $ | 570,000 | $ | 0 | $ | 123,264 | $ | 0 | $ | 0 | $ | 376,200 | $ | 620,453 | $ | 1,689,917 | |||||||||||||||||||||
Chairman of the Board and | 2012 | $ | 520,000 | $ | 0 | $ | 281,987 | $ | 0 | $ | 0 | $ | 343,200 | $ | 584,442 | $ | 1,729,629 | |||||||||||||||||||||
Chief Executive Officer | 2011 | $ | 460,000 | $ | 0 | $ | 531,051 | $ | 0 | $ | 0 | $ | 276,000 | $ | 504,624 | $ | 1,771,675 | |||||||||||||||||||||
Carol Yu | 2013 | $ | 460,000 | $ | 0 | $ | 123,264 | $ | 249,912 | $ | 0 | $ | 441,600 | $ | 413,375 | $ | 1,688,151 | |||||||||||||||||||||
Co-President and | 2012 | $ | 420,000 | $ | 0 | $ | 281,987 | $ | 228,888 | $ | 0 | $ | 302,400 | $ | 379,862 | $ | 1,613,137 | |||||||||||||||||||||
Chief Financial Officer | 2011 | $ | 350,000 | $ | 0 | $ | 529,000 | $ | 109,678 | $ | 0 | $ | 273,000 | $ | 320,908 | $ | 1,582,586 | |||||||||||||||||||||
Belinda Wang | 2013 | $ | 437,000 | $ | 0 | $ | 164,352 | $ | 167,569 | $ | 0 | $ | 349,600 | $ | 104,683 | $ | 1,223,204 | |||||||||||||||||||||
Co-President and | 2012 | $ | 400,000 | $ | 0 | $ | 375,982 | $ | 190,740 | $ | 0 | $ | 352,000 | $ | 120,007 | $ | 1,438,729 | |||||||||||||||||||||
Chief Operating Officer | 2011 | $ | 340,000 | $ | 0 | $ | 704,649 | $ | 91,399 | $ | 0 | $ | 326,400 | $ | 78,819 | $ | 1,541,267 | |||||||||||||||||||||
Xiaochuan Wang | 2013 | $ | 330,000 | $ | 0 | $ | 123,264 | $ | 1,786,728 | $ | 0 | $ | 287,760 | $ | 59,390 | $ | 2,587,142 | |||||||||||||||||||||
Chief Technology Officer | 2012 | $ | 320,000 | $ | 0 | $ | 281,987 | $ | 2,359,260 | $ | 0 | $ | 211,200 | $ | 54,790 | $ | 3,227,237 | |||||||||||||||||||||
2011 | $ | 230,000 | $ | 0 | $ | 528,132 | $ | 1,011,614 | $ | 0 | $ | 207,000 | $ | 45,765 | $ | 2,022,511 |
(1) | Amount represents only expense recognized with respect to stock awards granted from January 1, 2006 through December 31, | |
See Note 16 “Sohu.com Inc. Shareholders’ Equity” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, |
(2) | Amount represents expense recognized with respect to Sogou share option awards. |
(3) | Sohu Video share options, which are exercisable for the purchase of Sohu Video ordinary shares, were granted in 2012 under Sohu Video’s 2011 Share Incentive Plan. |
(4) | Consists of annual cash bonuses earned for |
(5) | The table below shows the components of this column for | |
(6) | Consists of Ms. Wang’s base salary for the period from January 1, 2014 through March 31, 2014 in the amount of $109,250 and her consulting fee for the period from April 1, 2014 through December 31, 2014 in the amount of $146,316. | |
(7) | Consists of Ms. Carol Yu’s bonus of $298,196 under the 2014 Executive Bonus Plan and a special bonus of $620,915 paid by Changyou to Ms. Yu. See the description under the heading “2014 Executive Bonus Plan” above. |
Name Housing
Allowance Tax
Equalization Health,
Life, Travel
and Disability
Insurance Total Charles Zhang $ 196,078 $ 502,836 $ 27,063 $ 725,977 Carol Yu $ 196,078 $ 130,597 $ 33,945 $ 360,320 Belinda Wang $ 20,000 $ 0 $ 6,372 $ 26,372
Name | Housing Allowance | Tax Equalization | Health, Life, Travel and Disability Insurance | Training fees | Total | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Charles Zhang | $ | 150,000 | $ | 446,470 | $ | 23,983 | $ | 0 | $ | 620,453 | ||||||||||||
Carol Yu | $ | 150,000 | $ | 232,365 | $ | 31,010 | $ | 0 | $ | 413,375 | ||||||||||||
Belinda Wang | $ | 80,000 | $ | 0 | $ | 24,683 | $ | 0 | $ | 104,683 | ||||||||||||
Xiaochuan Wang | $ | 40,000 | $ | 0 | $ | 19,390 | $ | 0 | $ | 59,390 |
Estimated Payouts Under Non-Equity Incentive Plan Awards(1) | |||||||||
Name | Threshold ($) | Target ($) | Maximum ($) | ||||||
Charles Zhang | $0 | $ | 653,595 | $ | 1,307,190 | ||||
Carol Yu | $0 | $ | 490,196 | $ | 980,392 | ||||
Belinda Wang | N/A | N/A | N/A |
Estimated Payouts Under Non-Equity Incentive Plan Awards(1) | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Stock Award Grant Date | Threshold ($) | Target ($) | Maximum ($) | All Other Stock Awards: Number of Shares of Stock or Units Sogou | Grant Date Fair Value of Stock and Option Awards Sogou | ||||||||||||||||||||
Charles Zhang | N/A | $ | 0 | $ | 342,000 | $ | 684,000 | 0 | N/A | |||||||||||||||||
Carol Yu | 3/1/2013 | $ | 0 | $ | 368,000 | $ | 736,000 | 2,400,000 | (2) | 0.38 | ||||||||||||||||
Belinda Wang | N/A | $ | 0 | $ | 349,600 | $ | 699,200 | N/A | N/A | |||||||||||||||||
Xiaochuan Wang | 1/31/2013 | $ | 0 | $ | 264,000 | $ | 528,000 | 7,200,000 | (3) | 0.38 |
(1) | The amounts shown represent the range of non-equity incentive bonus opportunities for each named executive officer under our |
● | payments equal to the named executive officer’s monthly base salary (which includes his or her housing allowance) in effect on the date of termination for the shorter of (i) six months and (ii) the remainder of the term of the named executive officer’s employment agreement; and |
● | insurance benefits for so long as we are obligated to pay severance. |
● | the named executive officer will not be entitled to any further payments from us; |
● | any insurance or other benefits that have continued will terminate immediately; and |
● | the named executive officer must reimburse us for any severance payments previously made by us to the named executive officer. |
subject to the achievement of annual performance milestones related to Sogou that our Board establishes in its discretion. Vesting of share options exercisable for the purchase of Sogou ordinary shares and vesting of Sogou restricted ordinary shares that we granted to Ms. Carol Yu and Mr. Xiaochuan Wang in 2013 will occur in five equal installments over a four-year period, with the first installment vesting upon an initial public offering by Sogou and the remaining four installments vesting upon the first four anniversaries of Sogou’s initial public offering. The annual performance milestones set by our Board for periods through the end of 20132014 are based in part on financial targets, consisting of target revenue levels and target operating profit levels, and in part on operating metric targets, consisting of target levels of search traffic. We do not disclose the actual amounts of these milestones, as they constitute confidential business and financial information related to Sogou’s internal budgeting and planning that could be unfairly used by Sogou’s competitors if revealed publicly, and we do not believe that the amounts of these milestones is material information to our investors. Until Sogou’s completion of an underwritten public offering on NASDAQ, the New York Stock Exchange or another internationally recognized stock exchange of similar prestige and liquidity, upon the termination of employment with us of any of our named executive officers who has received Sogou share option awards, we have the right at our discretion to repurchase up to 50% of Sogou ordinary shares, at the then fair market value of such ordinary shares, acquired by any such named executive officer upon exercise of vested Sogou share options.
Option Awards(1) | Stock Awards(1) | ||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | |||||||||||||
Charles Zhang | 30,000 | (2) | 0 | $22.86 | 7/25/2015 | (3) | 0 | $0 | |||||||||||
Carol Yu | — | — | — | — | 0 | $0 | |||||||||||||
Belinda Wang | — | — | — | — | 0 | $0 |
Option Awards(1) | Stock Awards(1) | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | |||||||||||||||||||||
Charles Zhang | 30,000 | (2) | 0 | $ | 22.86 | 7/25/2015 | (3) | 7,500 | (4) | $ | 546,975 | ||||||||||||||||
Carol Yu | — | — | — | — | 7,500 | (4) | $ | 546,975 | |||||||||||||||||||
Belinda Wang | — | — | — | — | 10,000 | (4) | $ | 729,300 | |||||||||||||||||||
Xiaochuan Wang | — | — | — | — | 7,500 | (4) | $ | 546,975 |
(1) | Sohu options and restricted stock unit awards were granted under our 2000 Stock Incentive Plan and 2010 Stock Incentive Plan, and relate to our common stock. |
(2) | These options became fully vested on July 26, 2009. |
(3) | The grant date of each option is listed on the table below by reference to the expiration date set forth in the table below. |
Grant Date | Expiration Date | |||||||||
7/26/2005 | 7/25/2015 |
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares That Have Not Vested (#) | Market Value of Shares That Have Not Vested ($) | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Carol Yu | — | 720,000 | (5) | $ | 0.625 | 6/3/2021 | (7) | — | — | |||||||||||||||||
— | 2,400,000 | (6) | $ | 0.625 | 2/28/2023 | (7) | — | — | ||||||||||||||||||
Belinda Wang | — | 1,200,000 | (5) | $ | 0.625 | 6/3/2021 | (7) | — | — | |||||||||||||||||
Xiaochuan Wang | — | — | — | — | 14,400,000 | (8) | N/A | (9) |
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Carol Yu | — | 720,000 | (4) | $ | 0.625 | 6/3/2021 | (5) | ||||||
— | 2,400,000 | (4) | $ | 0.625 | 2/28/2023 | (5) | |||||||
Belinda Wang | — | — | (4) | N/A | N/A |
(4) | Consists of options granted to Ms. Carol Yu and Ms. Belinda Wang by Sohu prior to |
(5) | The grant date of each option |
Grant Date | ||||
6/4/2011 | 6/3/2021 | |||
3/1/2013 | 2/28/2023 |
Sohu Video Share Option Awards
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Carol Yu | 0 | (10) | 1,250,000 | $ | 0.01 | 1/3/2022 | (11) | |||||||||||
Belinda Wang | 0 | (10) | 1,250,000 | $ | 0.01 | 1/3/2022 | (11) | |||||||||||
Xiaochuan Wang | 0 | (10) | 50,000 | $ | 0.01 | 1/3/2022 | (11) |
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||||||||
Carol Yu | 312,500 | (6) | 937,500 | $ | 0.01 | 1/3/2022 | (7) | ||||||||||||
Belinda Wang | 312,500 | (6) | 0 | $ | 0.01 | 1/3/2022 | (7) |
(6) | Options granted to Ms. Carol Yu and Ms. Belinda Wang by Sohu Video under |
(7) | The grant date of each option |
Grant Date | Expiration Date | |||||||||
1/4/2012 | 1/3/2022 |
Option Awards(1) | Stock Awards(2) | |||||||||||||||||||||||||
Sohu | Sogou | Sohu | ||||||||||||||||||||||||
Name | Number of Shares | Value Realized on Exercise ($) | Number of Shares | Value Realized on Exercise ($) | Number of Shares | Value Realized on Vesting ($) | ||||||||||||||||||||
Charles Zhang | 0 | $ | 0 | 0 | $ | 0 | 7,500 | $ | 574,425 | |||||||||||||||||
Carol Yu | 0 | $ | 0 | 0 | $ | 0 | 7,500 | $ | 527,175 | |||||||||||||||||
Belinda Wang | 0 | $ | 0 | 600,000 | $ | 5,625,000 | 10,000 | $ | 718,600 |
Option Awards(1) | Stock Awards(2) | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sohu | Sogou | Sohu | |||||||||||||||||||||||||
Name | Number of Shares Acquired On Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired On Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||||||||||||||||
Charles Zhang | 9,000 | $ | 296,640 | 0 | $ | 0 | 0 | (3) | $ | 0 | |||||||||||||||||
Carol Yu | 0 | $ | 0 | 1,440,000 | $ | 1,915,200 | 7,500 | $ | 360,150 | ||||||||||||||||||
Belinda Wang | 0 | $ | 0 | 600,000 | $ | 9,000 | 10,000 | $ | 480,200 | ||||||||||||||||||
Xiaochuan Wang | 5,000 | $ | 178,300 | 10,800,000 | (4) | $ | 5,778,000 | 7,500 | $ | 364,950 |
(1) | Reflects shares received upon the exercise of stock options granted under the Sohu 2000 Stock Incentive Plan and the |
(2) | Reflects shares received upon the vesting and settlement of restricted stock units granted under the Sohu 2000 Stock Incentive Plan and the Sohu 2010 Stock Incentive Plan. |
“cause” means: | |
● | willful misconduct or gross negligence by the named executive officer, or any willful or grossly negligent omission to perform any act, resulting in injury to us; |
● | misconduct or negligence of the named executive officer that results in gain or personal enrichment of the named executive officer to our detriment; |
● | breach of any of the named executive officer’s agreements with us, including, but not limited to, the repeated failure to perform substantially the named executive officer’s duties to us, excessive absenteeism or dishonesty; |
● | any attempt by the named executive officer to assign or delegate his or her employment agreement or any of the rights, duties, responsibilities, privileges or obligations thereunder without our prior consent (except in respect of any delegation by the named executive officer of his employment duties thereunder to our other employees in accordance with our usual business practice); |
the named executive officer’s indictment or conviction for, or confession of, a felony or any crime involving moral turpitude under the laws of the U.S. or any State thereof, or under the laws of China or Hong Kong; |
● | declaration by a court that the named executive officer is insane or incompetent to manage his or her business affairs; |
● | habitual drug or alcohol abuse which materially impairs the named executive officer’s ability to perform his or her duties; or |
● | filing of any petition or other proceeding seeking to find the named executive officer bankrupt or insolvent. |
“change-in-control” means the occurrence of any of the following events: | |
● | any person (within the meaning of Section 13(d) or Section 14(d)(2) of the Securities Exchange Act of 1934) other than us, any trustee or other fiduciary holding securities under an employee benefit plan of Sohu or any corporation owned, directly or indirectly, by our stockholders in substantially the same proportion as their ownership of our common stock, becomes the direct or beneficial owner of securities representing 50% or more of the combined voting power of our then-outstanding securities; |
● | during any period of two consecutive years after the date of the named executive officer’s employment agreement, individuals who at the beginning of such period constitute our Board, and all new directors (other than directors designated by a person who has entered into an agreement with us to effect a transaction described in the first, third and fourth bullet point of this definition) whose election or nomination to our Board was approved by a vote of at least two-thirds of the directors then in office, cease for any reason to constitute at least a majority of the members of our Board; |
● | the effective date of a merger or consolidation of us with any other entity, other than a merger or consolidation which would result in our voting securities outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; |
● | our complete liquidation or the sale or disposition by us of all or substantially all of our assets; or |
● | there occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Securities and Exchange Act of 1934, whether or not we are then subject to such reporting requirements. |
any significant change in the duties and responsibilities of the named executive officer inconsistent in any material and adverse respect with the named executive officer’s title and position (including status, officer positions and reporting requirements), authority, duties or responsibilities as contemplated by the named executive officer’s employment agreement. |
● | any material breach by us of the employment agreement with the named executive officer, including without limitation any reduction of the named executive officer’s base salary or our failure to pay to the named executive officer any portion of his or her compensation; or |
the failure, in the event of a change-in-control in which we are not the surviving entity, of the surviving entity or the successor to our business to assume the named executive officer’s employment agreement pursuant to its terms or to offer the named executive officer employment on substantially equivalent terms to those set forth in such employment agreement. |
Involuntary Termination | Change in Control | ||||||||||||||||||||||||||||||||
Voluntary | Voluntary | Involuntary Termination within 12 months | |||||||||||||||||||||||||||||||
Name | Compensation Element | for Good | Death or Disability | Without Cause | For Cause | for Good | Without Cause | For Cause | |||||||||||||||||||||||||
Charles Zhang | Severance Pay(1) | $ | 292,209 | (2) | $ | 0 | $ | 292,209 | (2) | $ | 0 | $ | 292,209 | (2) | $ | 292,209 | (2) | $0 | |||||||||||||||
Housing Allowance(1) | $ | 196,078 | $ | 0 | $ | 196,078 | $ | 0 | $ | 196,078 | $ | 196,078 | $0 | ||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $ | 0 | $ | 0 | (3) | $ | 0 | (3) | $0 | |||||||||||||||
Benefits | $ | 13,532 | $ | 0 | $ | 13,532 | $ | 0 | $ | 13,532 | $ | 13,532 | $0 | ||||||||||||||||||||
Accelerated Vesting of | |||||||||||||||||||||||||||||||||
Sohu Stock Options and | |||||||||||||||||||||||||||||||||
Restricted Stock Unit | |||||||||||||||||||||||||||||||||
Awards | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $0 | ||||||||||||||||||||
Total | $ | 501,819 | $ | 0 | $ | 501,819 | $ | 0 | $ | 501,819 | $ | 501,819 | $0 | ||||||||||||||||||||
Carol Yu | Severance Pay(1) | $ | 245,098 | $ | 0 | $ | 245,098 | $ | 0 | $ | 245,098 | $ | 245,098 | $0 | |||||||||||||||||||
Housing Allowance(1) | $ | 98,039 | $ | 0 | $ | 98,039 | $ | 0 | $ | 98,039 | $ | 98,039 | $0 | ||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $ | 0 | $ | 0 | (3) | $ | 0 | (3) | $0 | |||||||||||||||
Benefits | $ | 16,972 | $ | 0 | $ | 16,972 | $ | 0 | $ | 16,972 | $ | 16,972 | $0 | ||||||||||||||||||||
Accelerated Vesting of | |||||||||||||||||||||||||||||||||
Sohu Stock Options and | |||||||||||||||||||||||||||||||||
Restricted Stock Unit | |||||||||||||||||||||||||||||||||
Awards | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $0 | ||||||||||||||||||||
Accelerated Vesting of | |||||||||||||||||||||||||||||||||
Sogou Share Options | |||||||||||||||||||||||||||||||||
Awards | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 530,049 | $0 | ||||||||||||||||||||
Total | $ | 360,109 | $ | 0 | $ | 360,109 | $ | 0 | $ | 360,109 | $ | 890,158 | $0 |
Involuntary Termination | Change in Control | ||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Involuntary Termination within 12 months | |||||||||||||||||||||||||||||||||||
Name | | Compensation Element | | Voluntary Resignation for Good Reason | | Death or Disability | | Without Cause | | For Cause | | Voluntary Resignation for Good Reason | | Without Cause | | For Cause | |||||||||||||||||||
Charles Zhang | Severance Pay(1) | $ | 299,947 | (2) | $ | 0 | $ | 299,947 | (2) | $0 | $ | 299,947 | (2) | $ | 299,947 | (2) | $0 | ||||||||||||||||||
Housing Allowance(1) | $ | 150,000 | $ | 0 | $ | 150,000 | $0 | $ | 150,000 | $ | 150,000 | $0 | |||||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $0 | $ | 0 | (3) | $ | 0 | (3) | $0 | ||||||||||||||||||
Benefits | $ | 11,991 | $ | 0 | $ | 11,991 | $0 | $ | 11,991 | $ | 11,991 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Sohu Stock Options and Restricted Stock Unit Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 6,294 | $0 | |||||||||||||||||||||||
Total | $ | 461,938 | $ | 0 | $ | 461,938 | $0 | $ | 461,938 | $ | 468,232 | $0 | |||||||||||||||||||||||
Carol Yu | Severance Pay(1) | $ | 230,000 | $ | 0 | $ | 230,000 | $0 | $ | 230,000 | $ | 230,000 | $0 | ||||||||||||||||||||||
Housing Allowance(1) | $ | 75,000 | $ | 0 | $ | 75,000 | $0 | $ | 75,000 | $ | 75,000 | $0 | |||||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $0 | $ | 0 | (3) | $ | 0 | (3) | $0 | ||||||||||||||||||
Benefits | $ | 15,505 | $ | 0 | $ | 15,505 | $0 | $ | 15,505 | $ | 15,505 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Sohu Stock Options and Restricted Stock Unit Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 6,294 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Sogou Share Options Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 0 | $0 | |||||||||||||||||||||||
Total | $ | 320,505 | $ | 0 | $ | 320,505 | $0 | $ | 320,505 | $ | 326,799 | $0 |
Involuntary Termination | Change in Control | ||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Involuntary Termination within 12 months | |||||||||||||||||||||||||||||||||||
Name | | Compensation Element | | Voluntary Resignation for Good Reason | | Death or Disability | | Without Cause | | For Cause | | Voluntary Resignation for Good Reason | | Without Cause | | For Cause | |||||||||||||||||||
Belinda Wang | Severance Pay(1) | $ | 233,447 | (2) | $ | 0 | $ | 233,447 | (2) | $0 | $ | 233,447 | (2) | $ | 233,447 | (2) | $0 | ||||||||||||||||||
Housing Allowance(1) | $ | 80,000 | $ | 0 | $ | 80,000 | $0 | $ | 80,000 | $ | 80,000 | $0 | |||||||||||||||||||||||
Bonus | $ | 0 (3 | ) | $ | 0 (4 | ) | $ | 0 (3 | ) | $0 | $ | 0 (3 | ) | $ | 0 (3 | ) | $0 | ||||||||||||||||||
Benefits | $ | 12,341 | $ | 0 | $ | 12,341 | $0 | $ | 12,341 | $ | 12,341 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Sohu Stock Options and Restricted Stock Unit Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 8,392 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Sogou Share Options Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 40,691 | $0 | |||||||||||||||||||||||
Total | $ | 325,788 | $ | 0 | $ | 325,788 | $0 | $ | 325,788 | $ | 374,871 | $0 | |||||||||||||||||||||||
Xiaochuan Wang | Severance Pay(1) | $ | 179,852 | (2) | $ | 0 | $ | 179,852 | (2) | $0 | $ | 179,852 | (2) | $ | 179,852 | (2) | $0 | ||||||||||||||||||
Housing Allowance(1) | $ | 40,000 | $ | 0 | $ | 40,000 | $0 | $ | 40,000 | $ | 40,000 | $0 | |||||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $0 | $ | 0 | (3) | $ | 0 | (3) | $0 | ||||||||||||||||||
Benefits | $ | 9,695 | $ | 0 | $ | 9,695 | $0 | $ | 9,695 | $ | 9,695 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Sohu Stock Options and Restricted Stock Unit Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 6,294 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Sogou Share Options Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 434,052 | N/A | |||||||||||||||||||||||
Total | $ | 229,547 | $ | 0 | $ | 229,547 | $0 | $ | 229,547 | $ | 669,893 | $0 |
(1) | Severance payments are made ratably over the severance period according our standard payroll practices. |
(2) | Dr. Charles Zhang |
(3) | In the event of a voluntary resignation for good reason or an involuntary termination without cause, our named executive officers are each entitled to receive payments of the bonus for the remainder of the year of the termination, but only to the extent that the bonus would have been earned had the named executive officers continued in employment through the end of such year, as determined in good faith by our Chief Executive Officer, Board or our Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses were paid for such fiscal year to other similarly situated employees. The payment of the entire |
(4) | In the event of a termination of named executive officer’s employment by reason of death or disability, they or their estates or representatives, as applicable, are entitled to receive the bonus for the year in which the death or disability occurs to the extent that a bonus would have been earned had named executive officers continued in employment through the end of such year, as determined in good faith by our Chief Executive Officer, Board or our Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees. The payment of the entire |
Name | Sohu Option Awards ($)(2)(3) | Sohu Stock Awards ($)(2)(4) | Total ($) | ||||||||||
Dave Qi | — | $ | 132,131 | $ | 132,131 | ||||||||
Shi Wang | — | $ | 116,307 | $ | 116,307 | ||||||||
Edward B. Roberts | — | $ | 132,131 | $ | 132,131 | ||||||||
Charles Huang | — | $ | 116,307 | $ | 116,307 | ||||||||
Zhonghan Deng | — | $ | 116,307 | $ | 116,307 |
Name | Sohu Option Awards ($)(2)(3) | Sohu Stock Awards ($)(2)(4) | Total ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dave Qi | — | $ | 144,870 | $ | 144,870 | |||||||||
Shi Wang | — | $ | 127,468 | $ | 127,468 | |||||||||
Edward B. Roberts | — | $ | 144,870 | $ | 144,870 | |||||||||
Charles Huang | — | $ | 127,468 | $ | 127,468 | |||||||||
Zhonghan Deng | — | $ | 127,468 | $ | 127,468 |
(1) | Dr. Charles Zhang has been omitted from this table because he receives no compensation for serving on our Board. All compensation paid to Dr. Charles Zhang in fiscal year |
(2) | Amounts shown |
(3) | As of December 31, |
(4) | The grant date fair value of the |
As provided in the Dodd-Frank Act, this vote will not be binding on our Board and may not be construed as overruling a decision by our Board, creating or implying any change to the fiduciary duties of our Board or any additional fiduciary duty by our Board or restricting or limiting the ability of stockholders to make proposals for inclusion in proxy materials related to executive compensation. Our Board and our Compensation Committee, however, may take into account the outcome of the vote when considering future executive compensation arrangements.
the opportunity to make a statement if they so desire and will be available to respond to appropriate questions. Stockholder ratification of our independent auditors is not required under Delaware law or under our Sixth Restated Certificate of Incorporation or our Second Amended and Restated By-Laws. If our stockholders do not ratify the selection of PricewaterhouseCoopers as our independent auditors for the current fiscal year ending December 31, 2014,2015, our Audit Committee will evaluate what would be in our best interests and our stockholders and consider whether to select new independent auditors for the current fiscal year or for future fiscal years. Unless otherwise instructed on the proxy, properly executed proxies will be voted in favor of ratifying the appointment of PricewaterhouseCoopers to audit our books and accounts for the fiscal year ending December 31, 2014.
Resolved:shareholders of Sohu.com Inc. recommend the Board of Directors take all necessary steps (other than any steps that must be taken by shareholders) to eliminate the classification of the Board of Directors and to elect all directors on an annual basis after the annual meeting in 2015. Implementation of this proposal should not prevent any director elected prior to and at the annual meeting held in 2015 from completing the term for which such director was elected.
Supporting Statement of Proponent of Proposal IV:
Our Board is divided into two classes. This caused many corporate governance problems. For example, only one (out of six) directors attended our last annual meeting of shareholders, mainly because four directors’ term expires at the 2015 annual meeting. Since 83.3%[sic] directors did not attend annul[sic] meeting of shareholders, shareholders wonder how many meetings the Board ever held annually?[sic] The Board has continuously refused or is unable to communicate with shareholders on any issue to improve corporate governance.
According to the Harvard Law School Shareholder Rights Project (http://srp.law.harvard.edu/Template-Proposal.pdf), declassification of the board would enable shareholders to register their views on the performance of all directors at each annual meeting. Having directors stand for elections annually makes directors accountable to shareholders, and could thereby contribute to improving performance and increasing company’s value. Over the past decade many S&P 500 companies have declassified their board of directors; the number of S&P 500 companies with classified boards declined by more than 50%; and the average percentage of votes cast in favor of shareholder proposals to declassify the boards of S&P 500 companies during the period January 2010 - June 2011 exceeded 75%. The significant shareholder support for proposals to declassify boards is consistent with empirical studies reporting that classified boards could be associated with lower company valuation and worse corporate decision making.
This proposal is the same as the shareholder proposal advised by the above Harvard Project to Best Buy Co., Inc. in 2012. Best Buy’s Board moved from a neutral position to a recommendation that the shareholders approve the proposal recommending declassification of the Board and reissued their statement: “The Board supports the Proposal as an additional demonstration of its commitment to strong corporate governance practices. It believes that all directors - with no exceptions - should be subject to approval by the shareholders on an annual basis.” More than 98% voted for the proposal.
Especially concerning that our company operates out of the United States, please vote for this proposal to make our directors accountable to shareholders.”
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We believe that since our IPO in the year 2000, our Board has functioned well with its existing classified Board, which, as noted above, unlike more typical classified boards, consists of only two classes. After careful consideration, we see no reason to recommend a change at this point in our company’s corporate governance ondevelopment. We believe that this arrangement has afforded our stockholders the Proponent’s part. Apart from perplexing referencesdesirable goal of providing some continuity to the government ofBoard’s membership, while retaining for our stockholders the People’s Republic of China andopportunity to Dr. Zhang’s beingreplace the founder of our company, much of the Proponent’s supporting statement seemsBoard in an orderly manner should they wish to have been lifted, almost verbatim, from one or more stockholder proposals previously includeddo so in the proxy statements of other companies. For example, a supporting statement for a similar proposal in the proxy statement of American Express Company filed with the SEC on March 8, 2013 (the “2013 American Express Stockholder Proposal”) states, “When our CEO is our board chairman, this arrangement can hinder our board’s ability to monitor our CEO’s performance,” and the Proponent’s supporting statement states, “When our CEO is our board chairman, our board cannot monitor our CEO’s performance.” The 2013 American Express Stockholder Proposal includes the statement, “An independent Chairman is the prevailing practice in the United Kingdom and many international markets,” and the Proponent’s supporting statement includes the statement, “An independent chairman is the prevailing practice in the international market, such as the United Kingdom.” The 2013 American Express Stockholder Proposal includes the clause, “This proposal should also be evaluated in the context of our Company’s overall corporate governance . . .” and the Proponent’ supporting statement includes exactly the same clause. The 2013 American Express Stockholder Proposal includes the clause, “GMI/The Corporate Library, an independent investment research firm, had rated our company a ‘D’,” and the Proponent’s supporting statement states, “[T]he independent think tank US-Japan-China Comparative Policy Research Institute rated our company a ‘D’.” To make matters worse, this apparently cribbed clause in the Proponent’s supporting statement is highly misleading. A review of the material to be found using the Web address provided by the Proponent in his supporting statement (or alternatively the Web address that he may have replaced or updated it with at http://cpri.tripod.com/cpr2014/csri.pdf) will make it clear that the author of the report of the “independent think tank” is none other than the Proponent himself, and that the “D” rating purportedly given to us by a “think tank” appears to have nothing whatsoever to do with our corporate governance, but rather was given by the Proponent because he was disappointed that an acquaintance of his was unable to speak with Dr. Zhang at a private function unrelated to Sohu business. In sum, our Board believes that the Proponent’s proposal is frivolous.
By order of our Board of Directors |
IMPORTANT ANNUAL MEETING INFORMATION |
Electronic Voting Instructions | |
Available 24 hours a day, 7 days a week! | |
Instead of mailing your proxy, you may choose one of the 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 10:00 p.m., Eastern Time, on June 17, 2015. | |
Vote by Internet | |
● | Go towww.envisionreports.com/SOHU |
● | Or scan the QR code with your smartphone |
● | Follow the steps outlined on the secure website |
Vote by telephone | |
● | Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone |
● | Follow the instructions provided by the recorded message |
Using ablack inkpen, mark your votes with anXas shown in |
Annual Meeting Proxy Card |
▼IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.▼ |
A | Proposals — | The Board of Directors recommends a voteFOR all the nominees listed,FOR Proposals 2 and 3, | |
andAGAINST Proposal 4. |
1. | To elect three directors, who shall serve for a two-year term or until their earlier death, resignation or removal. Nominees: |
01 - Mr. Charles Huang | 02 - Dr. Dave Qi | 03 - Mr. Shi Wang |
☐ | Mark here to vote FOR all nominees | ☐ | Mark here toWITHHOLD vote from all nominees | ☐ | For AllEXCEPT- To withhold authority to vote for any nominee(s), write the name(s) of such nominee(s) below. | |||||
For | Against | Abstain | For | Against | Abstain | |||||||
2. | Advisory resolution approving our executive compensation | ☐ | ☐ | ☐ | 3. | Ratification of the appointment of PricewaterhouseCoopers Zhong Tian LLP as our independent auditors for the fiscal year ending December 31, 2015 | ☐ | ☐ | ☐ | |||
4. | Stockholder proposal regarding the classification of our Board of Directors, if the stockholder proposal is properly presented at the Annual Meeting | ☐ | ☐ | ☐ | 5. | All other matters which may properly come before the Annual Meeting or any adjournment or postponement thereof |
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: Please sign as your name(s) is (are) shown on the certificates to which the Proxy applies. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership or limited liability company, please sign in partnership or limited liability company name by authorized person. |
Date (mm/dd/yyyy) — Please print date below. | Signature 1 — Please keep signature within the box. | Signature 2 — Please keep signature within the box. | ||
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Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders.
The Proxy Statement and the 2014
▼IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.▼ |
Proxy — SOHU.COM INC. |
LEVEL 18, SOHU.COM MEDIA PLAZA
BLOCK 3, NO. 2 KEXUEYUAN SOUTH ROAD, HAIDIAN DISTRICT
BEIJING 100190, PEOPLE’S REPUBLIC OF CHINA
Proxy for the Annual Meeting of Stockholders – June 19, 2015 Beijing Time
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The person or entity signed on the reverse side of this proxy card hereby appoints Dr. Charles Zhang and Ms. Carol Yu and each of them, as proxy or proxies for such person or entity, with full power of substitution, who may act by unanimous vote of said proxies or their substitutes as shall be present at the meeting, or, if only one be present, then the one shall have all the powers hereunder, to represent and to vote, as designated on the other side(if no direction is made, this Proxy will be voted FOR Proposals 1, 2, and 3, and AGAINST Proposal 4),all of the shares of common stock, par value $0.001 per share, of Sohu.com Inc. standing in the name of such person or entity on April 20, 2015 at the Annual Meeting of Stockholders of Sohu.com Inc. to be held on Friday, June 19, 2015 at 10:00 a.m., Beijing time, and any adjournment thereof. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting.
(Please sign, date and return this proxy in the enclosed postage prepaid envelope).
(Continued and to be marked, dated and signed, on the other side)