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

Filed by the Registrant ☒

x

Filed by a party other than the Registranto

Check the appropriate box:

oPreliminary Proxy Statement
oConfidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
xDefinitive Proxy Statement
oDefinitive Additional Materials
oSoliciting Material pursuant to §240.14a-12

STAMPS.COM 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):
x    No fee required.
o    Preliminary Proxy Statement

oFee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒   Definitive Proxy Statement

o   Definitive Additional Materials

o   Soliciting Material pursuant to §240.14a-12

STAMPS.COM 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):
☒
(1)
No fee required.
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction applies:

(2)
(2)
Aggregate number of securities to which transaction applies:

(3)
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-110‑11 (set forth the amount on which the filing fee is calculated and state how it was determined):

(4)
(4)
Proposed maximum aggregate value of transaction:

(5)
(5)
Total fee paid:

o
o
Fee paid previously with preliminary materials.
o
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)
(1)
Amount previously paid:

(2)
(2)
Form, Schedule or Registration Statement No.:

(3)
Filing party:

(4)
(3)
Filing party:
(4)
Date filed:



image0.jpg

 

1990 E. Grand Avenue

El Segundo, CA 90245
(310) 482-5800

Dear Stockholder:

You are cordially invited to electronically attend the 20172020 Annual Meeting of Stockholders of Stamps.com Inc. (the “Annual Meeting”) to be held at 10:00 a.m. Pacific Daylight Savings Time on Wednesday, June 14, 2017,10, 2020. This year's Annual Meeting will be a "virtual meeting" conducted solely online. You will be able to attend the Annual Meeting online by logging in at Stamps.com Inc., 1990 E. Grand Avenue, El Segundo, CA 90245.

www.virtualshareholdermeeting.com/STMP2020.

Your vote at the Annual Meeting is important to us. At the Annual Meeting, you will be asked (i) to elect two Class III directors, (ii) to approve, on a non-binding advisory basis, the compensation of our named executive compensation,officers, and (iii) to vote, on a non-binding advisory basis, on the frequency of future advisory votes on our executive compensation, and (iv) to ratify the selection of our independent auditors for 2017.2020. The accompanying Notice of 20172020 Annual Meeting of Stockholders and proxy statement provides information on how to participate in the Annual Meeting, how to vote your shares, and describes the matters to be presented at the Annual Meeting.

Our board of directors unanimously recommends that stockholders vote in favor of (i) the election of the nominated directors, (ii) the resolution approving, on a non-binding advisory basis, the compensation of our named executive compensation,officers, and (iii) holding future advisory votes on executive compensation every year, and (iv) the ratification of our independent auditors for 2017.

2020.

Whether or not you plan to virtually attend the Annual Meeting, please mark, sign, date and return your proxy card in the enclosed envelope as soon as possible. Your stock will be voted in accordance with the instructions you have given in your proxy card. Please note that if your stock is held by a bank, broker or other nominee, you must follow the instructions you receive from your bank, broker or other nominee, to have your stock voted. You may virtually attend the Annual Meeting and vote in personat such meeting even if you have previously returned your proxy card.

Sincerely,



/s/ Ken McBride



Ken McBride

Chief Executive Officer

Los Angeles, California
May 8, 2017

4, 2020




image1.jpg

 


1990 E. Grand Avenue
El Segundo, CA 90245
(310) 482-5800

NOTICE OF 20172020 ANNUAL MEETING OF STOCKHOLDERS
   
TO BE HELD JUNE 14, 2017

10, 2020

TO THE STOCKHOLDERS OF STAMPS.COM INC.:

NOTICE IS HEREBY GIVEN that the 20172020 Annual Meeting of Stockholders (the “Annual Meeting”) of Stamps.com Inc., a Delaware corporation, will be held on June 14, 2017,10, 2020, beginning at 10:00 a.m. Pacific Daylight Savings TimeTime. This year's Annual Meeting will be a "virtual meeting" conducted solely online. You will be able to attend the Annual Meeting online by logging in at Stamps.com Inc., 1990 E. Grand Avenue, El Segundo, CA 90245,www.virtualshareholdermeeting.com/STMP2020. The Annual Meeting is being called for the following purposes:

1.To elect two Class III directors to serve for a three-year term ending at the 20202023 annual meeting of stockholders or until their successors are duly elected and qualified;
2.To approve, on a non-binding advisory basis, the compensation of our named executive compensation;officers; and
3.To vote, on a non-binding advisory basis, on the frequency of future advisory votes on our executive compensation; and
4.3.To ratify the appointment of Ernst & Young LLP as our independent auditors for 2017.2020.

The foregoing matters are described in more detail in the enclosed proxy statement. Our board of directors has fixed the close of business on April 17, 201713, 2020 as the record date for the determination of our stockholders entitled to notice of, and to vote at, the Annual Meeting and any and all postponements or adjournments thereof. Only those stockholders of record as of the close of business on that date are entitled to notice of and to vote at the Annual Meeting. Our stock transfer books will remain open between the record date and the date of the meeting.Annual Meeting. A complete list of stockholders entitledshareholders will be available for examination by any shareholder commencing no later than May 30, 2020 at our headquarters at 1990 E. Grand Ave., El Segundo, California 90245. If you would like to vote atview the Annual Meetinglist, please contact our Investor Relations Department to schedule an appointment by calling (310) 482-5830. In addition, the list will be available for inspection by any of our stockholders, for any purpose germane toshareholders on the virtual meeting atwebsite during the Annual Meeting and during ordinary business hours at our executive offices for a period of ten days prior to the Annual Meeting.

meeting.

All stockholders are cordially invited to electronically attend the Annual Meeting in person.Meeting. Whether or not you plan to attend, please sign and return the enclosed proxy card as promptly as possible in the envelope enclosed for your convenience. Please note that if your stock is held by a bank, broker or other nominee, you must follow the instructions you receive from your bank, broker or other nominee, to have your stock voted. Should you receive more than one proxy card because your shares are registered in different names and addresses, each proxy should be signed and returned to assureensure that all your shares will be voted. You may revoke your proxy at any time before the Annual Meeting. If you attend and vote at the Annual Meeting, and vote by ballot, your proxy will be revoked automatically and only your vote at the Annual Meeting will be counted.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE READ THE ATTACHED PROXY STATEMENT CAREFULLY, COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE.


BY ORDER OF THE BOARD OF DIRECTORS,



/s/ SETH WEISBERG

Seth Weisberg
MATTHEW A. LIPSON

Matthew A. Lipson
Chief Legal Officer
and Secretary

Los Angeles, California
May 8, 2017

4, 2020



Important Notice Regarding Availability of Proxy Materials

for the 20172020 Annual Meeting of Stockholders to be Held on June 14, 2017

10, 2020

Our notice of annual meeting, proxy statement and annual report on Form 10-K are available on the Internet athttp://investor.stamps.com/sec.cfm.

sec.cfm.







image2.jpg 


1990 E. Grand Avenue
El Segundo, CA 90245

PROXY STATEMENT

FOR THE ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 14, 2017
   
10, 2020
GENERAL INFORMATION

General

The enclosed proxy is solicited on behalf of the board of directors (our “Board”"Board") of Stamps.com Inc., for use at our Annual Meeting of Stockholders to be held on June 14, 201710, 2020 and at any and all adjournments or postponements thereof (the “Annual Meeting”"Annual Meeting"). The Annual Meeting will begin at 10:00 a.m. Pacific Daylight Savings Time and will be conducted as a "virtual meeting" via live webcast on the Internet. There will be no physical location for stockholders to attend. Stockholders may only participate by logging in at Stamps.com Inc., 1990 E. Grand Avenue, El Segundo, CA 90245.www.virtualshareholdermeeting.com/STMP2020. To participate in the 2020 Annual Meeting, you will need your unique control number included on your proxy card or on the instructions that accompanied your proxy materials. This proxy statement and the accompanying proxy card are first being mailed to stockholders on or about May 8, 2017.

4, 2020.

Voting and Proxies

Only holders of record of our common stock at the close of business on April 17, 201713, 2020 (the “Record Date”"Record Date") are entitled to notice of and to vote at the Annual Meeting. As of the Record Date, 17,012,38517,093,178 shares of our common stock were issued and outstanding. Holders are entitled to one vote at the Annual Meeting for each share of common stock held that was issued and outstanding as of the Record Date. A majority of the outstanding shares of our common stock, virtually present in personat the meeting or represented by proxy, constitutes a quorum for the transaction of business at the Annual Meeting.

All votes will be tabulated by the inspector of election appointed for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. Abstentions and broker non-votes are counted as present for purposes of determining the presence or absence of a quorum for the transaction of business.

If you properly sign and return the enclosed form of proxy or transmit your voting instructions via telephone or Internet, then your shares represented will be voted at the Annual Meeting in accordance with your specified instructions. If you do not specify how your shares are to be voted, your shares will be voted (i) FOR the election of the directors proposed by our Board, (ii) FOR the resolution approving, on a non-binding advisory basis, the compensation of our named executive compensation,officers, and (iii) FOR holding future advisory votes on executive compensation every ONE YEAR, and (iv) FOR the ratification of our independent auditors for 2017.

2020.

If your shares of common stock are held by a bank, broker or other nominee, please follow the instructions you receive from your bank, broker or other nominee to have your shares of common stock voted. If your shares are held by a broker, then the broker will ask you how you want your shares to be voted. If you give the broker instructions, then your shares will be voted as you direct. If you do
A broker non-vote occurs when a bank, broker, or other nominee submits a proxy card with respect to shares it holds in a fiduciary capacity (typically referred to as being held in “street name”) but declines to vote on a particular matter because the bank, broker, or other nominee has not givereceived voting instructions then forfrom the beneficial owner. Under the rules that govern banks, brokers, or nominees who are voting with respect to shares held in street name, banks, brokers, or nominees have the discretion to vote such shares on routine matters, but not on non-routine

matters. The ratification of the independent auditors the broker may vote your shares in its discretion, but for theis a routine matter. The election of directors the approval of our executive compensation, and the vote on the frequency of future advisory votesvote on executive compensation the broker may not be entitled to vote your shares at all.

Youare non-routine matters.

Revocation of Proxies
If you are a beneficial stockholder, you may revoke your proxy or change your vote only by following the separate instructions provided by your broker, trust, bank or other nominee.
If you are a registered stockholder, you may revoke your proxy at any time before it is exercised at the Annual Meeting by: (i) delivering written notice, bearing a date later than the proxy, stating that the proxy is revoked; (ii) submitting a later-dated proxy relating to the same stock by filing with our secretarymail, telephone or the internet prior to the vote at 1990 E. Grand Avenue, El Segundo, CA 90245, a notice of revocationthe Annual Meeting; or another signed proxy with a later date. You may also revoke your proxy by(iii) virtually attending and voting at the Annual Meeting and voting in person.

itself. Registered stockholders may also follow the instructions provided on the proxy card to submit a new proxy by telephone or via the internet.

Solicitation

We will bear the entire cost of solicitation, including the preparation, assembly, printing and mailing of this notice of annual meeting, proxy statement, the proxy card and any additional solicitation materials furnished to our stockholders. Copies of solicitation materials will be furnished to brokerage houses, fiduciaries and custodians holding shares in their

1

names that are beneficially owned by others so that they may forward this solicitation material to such beneficial owners. In addition, we may reimburse such persons for costs incurred in forwarding the solicitation materials to such beneficial owners. The original solicitation ofWe intend to solicit proxies by mail, may be supplemented by a solicitation by telephone e-mail or other means by our directors, officers or employees.and internet. No additional compensation will be paid to these individuals for soliciting. We intend to post this proxy statement and our 20162019 Annual Report on Form 10-K on our website (http://investor.stamps.com/sec.cfm) for public review. Except as described above, we do not presently intend to solicit proxies other than by mail. We have no present plans to hire special employees or paid solicitors to assist in obtaining proxies, but reserve the option to do so.

Annual Meeting Attendance

Attendance

The audio webcast of the Annual Meeting will begin promptly at 10:00 a.m., Pacific Daylight Savings Time. Online access to the audio webcast will open approximately thirty minutes prior to the start of the Annual Meeting to allow time for you to log in and voting attest your computer audio system. We encourage you to access the meeting prior to the start time.
As the Annual Meeting is limited to stockholders at the close of business on the Record Date and our invitees. No cameras, recording equipment or other electronic devices will be permitted in the Annual Meeting. In order to be admitted tobeing conducted via an audio webcast, there is no physical meeting location. To attend the Annual Meeting, iflog in at www.virtualshareholdermeeting.com/STMP2020. You will need your unique control number included on your proxy card or on the instructions that accompanied your proxy materials. We recommend that you log in a few minutes before the meeting to ensure you are (i)logged in when the meeting starts.
If your shares are held through a stockholderbroker, trustee or other nominee, it is likely that they are registered in the name of record, you must bring a valid, government issued photo identificationthe nominee and (ii) if you are the beneficial owner of shares held in street name. As the beneficial owner of shares held for your account, you have the right to direct the registered holder to vote your shares as you instruct. Your broker, trustee or other nominee has provided a voting instruction card for you to use in directing how your shares are to be voted. As a beneficial stockholderowner, you must bring an account statement or letter fromalso have the right to vote your broker or bank showing that you owned stock as ofshares online during the Record Date and a valid, government issued photo identification.virtual Annual Meeting. We will not be required to admitallow access to the Annual Meeting to anyone that does not log in at www.virtualshareholdermeeting.com/STMP2020with valid credentials.

Once online access to the Annual Meeting is open, shareholders may submit questions, if any, attendeeson www.virtualshareholdermeeting.com/STMP2020. You will need your unique control number included on your proxy card or on the instructions that do not showaccompanied your proxy materials. Questions pertinent to meeting matters will be answered during the documentation specifiedmeeting, subject to time constraints. You may vote your shares at the Annual Meeting even if you have previously submitted your vote.

Our Choice to Hold a Virtual Meeting this Year
Our board of directors has decided to hold the Annual Meeting virtually this year in response to public health concerns over, and state and local prohibitions on, large gatherings of people in order to help limit potential transmission of COVID-19. While we currently intend to conduct in-person annual meetings in future years, we cannot predict whether circumstances may again militate in favor of a virtual environment. Furthermore, in the preceding sentence.

event our experience with holding the Annual Meeting virtually this year is positive, our board may choose to hold future annual meetings via either a virtual or a hybrid method for reasons unrelated to social distancing.

Deadline for Receipt of Stockholder Proposals

/ Nominations

Under Securities and Exchange Commission (“SEC”("SEC") Rule 14a-8, proposals of stockholders that are intended to be presented by such stockholders at our 20182021 annual meeting of stockholders and included in the proxy statement and form of proxy relating to that meeting must be received no later than January 8, 2018.4, 2021. Stockholders wishing to submit proposals for the 20182021 annual meeting of stockholders outside of Rule 14a-8 may do so if the proposal was timely received by us under our bylaws, as calculated below. In addition, subject to SEC Rule 14a-4(c), the proxy solicited by our Board for the 20182021 annual meeting of stockholders will confer discretionary authority to vote on any stockholder proposal presented at that meeting if notice of the proposal was not timely received by us under our bylaws, as calculated below. Our bylaws provide that to be timely, notice of a nomination for director or other proposal must be delivered to or mailed and received at our principal executive offices not less than 120 days nor more than 150 days before the one year anniversary of the date of the preceding year's annual meeting.


2

PROPOSAL ONE: ELECTION OF DIRECTORS


General

Our certificate of incorporation provides for a classified board of directors consisting of three classes of directors with staggered three-year terms, with each class consisting, as nearly as possible, of one-third of the total number of directors. Our Board currently consists of six members.

Our six member Board is currently divided into three classes comprised of two Class I directors, two Class II directors and two Class III directors.

Class III, the class whose term of office expires at the Annual Meeting, currently consists of two directors. Each directorThe directors elected to this class will serve for a term of three years, beginning on the date of the Annual Meeting and expiring at the 20202023 annual meeting of stockholders, or until his successor hastheir successors have been duly elected and qualified. Each of the nominees listed below is currently a director.

Each nominee for election has agreed to serve if elected, and management has no reason to believe that anyeither nominee will be unavailable to serve. If a nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any substitute nominee who may be designated by our Board to fill the vacancy.

Directors are elected by a plurality of the votes cast on the election of directors, which means that the nominees with the highest number of votes cast in their favor are elected as directors up to the maximum number of directors to be elected. Accordingly, an abstentiona withhold vote or broker non-vote will have no effect on the outcome of this election. You may not cumulate votes in the election of directors.

Unless otherwise instructed, the proxy holders will vote the proxies received by them FOR the nominees named below.

Directors

The following table sets forth certain information regarding our current directors as of April 17, 2017:

13, 2020:
Name
Age
Position
NameAgePosition
Mohan P. Ananda (1)(2)(3)
70
73
Director
David C. Habiger (3)
48
51
Director
G. Bradford Jones (1)(2)
62
65
Director
Kate Ann May
53Director
Kenneth T. McBride
49
52
Chairman of the Board, and Chief Executive Officer
and Director Nominee
Lloyd I. Miller (2)(3)
62
Director
Theodore R. Samuels, II (1)
62
65
Director
and Director Nominee


(1)Member of the Audit Committee
(1) Member of the Audit Committee
(2) Member of the Nominating Committee
(3) Member of the Compensation Committee
(2)Member of the Nominating Committee
(3)Member of the Compensation Committee

Each of our directors, including our current nominees, was nominated based on the assessment of our Nominating Committee and our Board that he or she has demonstrated: relevant business experience, excellent decision-making ability, good judgment, and personal integrity and reputation. Our Board consists of, and seeks to continue to include, persons whose diversity of skills, experience and background are complementary to those of our other directors.


Nominees For Term Ending at the 20202023 Annual Meeting of Stockholders

Kenneth T. McBridehas served as our chief executive officer and a Board member since August 2001. Beginning in 1999, Mr. McBride has held various positions at our company: as President from 2001 until January 2012; as chief financial officer from August 2000 to January 2004; and as senior director and vice president of finance from 1999 to 2000. Mr. McBride has also been chairman of our Board since January 2012. From May 2015 through November 2018, Mr. McBride served on the board of directors of CafePress Inc., a recognized pioneer in the customized retail products industry. From August 2012 through January 2014, Mr. McBride served on the board of directors of LegalZoom.com, Inc.,

3

the leading provider of Internet-based legal services for small businesses and consumers, where he also served as the chairman of the audit committee, and as a member of the compensation committee. Mr. McBride currently serves on the board of directors of CafePress Inc., a recognized pioneer in the customized retail products industry. Mr. McBride holds a bachelor’s degree, with honors, and a master’s degree, in Electrical Engineering from Stanford University. Mr. McBride also holds an MBA from the Graduate School of Business at Stanford University.

Theodore R. Samuels, IIjoined our board of directors in 2017. From 1981 to his retirement in 2017, Mr. Samuels served the Capital Group Companies, aan investment management company that grew to $1.4 trillion investment management company,during Mr. Samuels's tenure, in a variety of capacities, including as the President of Capital Guardian Trust Company from 2010 to 2017. Mr. Samuels has also been a member of the boards of directors, audit, proxy and finance committees of Capital Group and certain of its affiliates from time to time. Mr. Samuels also serves on the boards of directors of the Perrigo Company plc, a healthcare company based in Ireland (NYSE: PRGO), and Bristol Myers Squibb Company, a leading global biopharmaceutical company (NYSE: BMY). Mr. Samuels is also on the board of Research Corporation Technologies, a private technology investment and management company. Mr. Samuels received an MBA from Harvard Business School. Mr. Samuels’ extensive experience with and knowledge of investment management, finance, accounting, and business strategy are invaluable to our Board’s discussions on accounting, technology, finance, business strategy, and cash management.

Continuing Directors Whose Term Expires at the 20182021 Annual Meeting of Stockholders

G. Bradford Joneshas been one of our directors since 1998. Mr. Jones is currently a general partner at Brentwood Venture Capital, which he joined in 1981,venture capital and real estate investor, and an advisory partner of Redpoint Ventures, a firm he co-founded in 1999. Mr. Jones currently serves on the boardsboard of directors of severalone privately held company. In the past, he has served on the board of more than ten public companies and many private companies. Mr. Jones received his B.A. in Chemistry from Harvard University, his M.A. in Physics from Harvard University and his J.D./M.B.A. from Stanford University. Mr. Jones' extensive experience with and knowledge of the technology industry, business management, investment management, finance and accounting, and his experience serving on the boards of directors of other companies are invaluable to our Board’s discussions regarding business strategy, accounting, technology, finance, cash management, capital allocation, and share repurchase strategies.

Lloyd I. Miller has been one

Kate Ann May joined our board of our directors since 2002. Mr. Miller is an independent investor and has served on numerous corporate boards of publicly traded companies. Mr. Millerin March 2019. Ms. May currently serves as a director of American Banknote Corporation, a global supplier of secure documents, services and systems. Mr. Miller was also an observerconsultant to the board of directors of Crossroads Inc.Company and had served as the chief executive officer of our ShippingEasy subsidiary from the time we acquired it on July 1, 2016 until her resignation effective December 31, 2019. Ms. May became the chief executive officer of ShippingEasy, Inc., then a non-board nominating committee chairmanfledgling Sydney-based start-up, in 2012. Prior to that, she was the founder and chief executive officer of Lexington Coal Company. Mr. Miller also servedKidspot.com from 2005 to 2012. Ms. May earned her MBA with honors from the University of Texas. Ms. May brings to our Board her extensive experience in the technology industry in general and shipping and mailing technology in particular, as well as her experience as a director of DDI Corp. from March 2011 until the closing of a merger transaction on May 31, 2012. He was a member of the Chicago Stock Exchange, Chicago Board of Trade,business leader constructing successful business models around disruptive technologies and traded actively on the floor of the Chicago Board of Trade from 1978executing to 1992. Mr. Miller received his B.A. from Brown University. Mr. Miller's extensive experience with and knowledge of business management, investment management, accounting, finance, and capital markets, and his experience serving on the boards of directors of other companies are invaluablebring exceptional returns to our Board’s discussions regarding business strategy, accounting, finance, cash management, and share repurchase strategies.

shareholders.

Continuing Directors Whose Term Expires at the 20192022 Annual Meeting of Stockholders

Mohan P. Anandahas been one of our directors since 1998. Mr. Ananda is a founder, and currently serves as the chief executive officer and chairman of the board, of Ananda Enterprises, Inc., an investment and management consulting company, and has served there for more than five years. He is also currently serving as the chief executive officer and chairman of the board of Second OpinionExpert, Inc., a healthcare technology company. From 1997 to 1998, Mr. Ananda served as our chief executive officer. From 1986 to 1996, Mr. Ananda was a partner of Ananda & Krause, a law firm. Mr. Ananda also serves on the boards of directors of several privately held companies and previously served on the boards of directors of JAB Holdings Ltd and Envestnet. Mr. Ananda received his B.S. in Mechanical Engineering from Coimbature Institute of Technology in India, his M.S. in Aeronautics from the California Institute of Technology, his Ph.D. in Astrodynamics and Control from University of California, Los

Angeles, and his J.D. from the University of West Los Angeles. Mr. Ananda was instrumental in the founding of our company and has extensive experience with the technology and industry of our PC Postage business, and that experience has proven invaluable for our Board.

David C. Habiger joined our board of directors in 2016. Beginning in March 2018, Mr. Habiger has served as Chief Executive Officer of JD Power, a data analytics company. From 2012 to 2016, Mr. Habiger was the Chief Executive Officer and a director of Textura, a cloud based provider of collaboration productivity and payment

4

solutions, leading them through their IPO and ultimate solutions. From July 2011 until its sale to Oracle for approximately $700 millionCisco Systems in cash.August 2012, Mr. Habiger served as the Chief Executive Officer of NDS Group Ltd., a provider of video software and content security solutions. Previously, Mr. Habiger served as President and Chief Executive Officer of Sonic Solutions, a world leader in digital media tools and software. Mr. Habiger also serves on the boards of directors of the following public companies: Control4 Corp. (Nasdaq: CTRL); Echo Global Logistics, Inc. (Nasdaq: ECHO); Enova International, Inc. (Nasdaq: ENVA); GrubHub Inc. (NYSE: GRUB); and Xperi (Nasdaq: XPER). Mr. Habiger is also a director on the Chicago Federal Reserve Board where he serves on the SABOR (Systems Activities, Bank Operations, and Risk) and the Governance & HR Committees for the Federal Reserve. Mr. Habiger had previously served on the boards of directors of the following public companies: Control4 Corp (Nasdaq: CNTRL) from September 2012 until August 2019; Enova International, Inc. (NYSE: ENVA) from October 2014 until December 2017; Immersion Corp. (Nasdaq: IMMR); from September 2014 until June 2017; RealD Inc. (NYSE: RLD) from July 2011 until March 2016; Textura Corp. (NYSE: TXTR) from December 2012 until August 2016; and Tessera Holding Corp.DTS, Inc. (Nasdaq: TSRA). He is a venture partner at the Pritzker Group and a Senior Advisor to Silver Lake. Mr. Habiger received an MBADTSI) from the University of Chicago. March 2014 until December 2016. Mr. Habiger’s extensive experience operating large organizations, including those that are publicly traded, and his knowledge of technology, business, accounting, and finance, as well as his experience serving on the boards of directors of other companies are invaluable to our Board’s discussions regarding business operations, executive compensation, business strategy, and finance.

Unless otherwise instructed, the proxies will vote “for” the election of the nominees listed above.

Recommendation of our Board

Our Board unanimously recommends that the stockholdersyou vote “FOR” the election of the nominees listed above.


5

BOARD COMMITTEES AND MEETINGS AND CORPORATE GOVERNANCE

Board Committees and Meetings

Our Board held seveneight meetings during 2016 and acted by unanimous written consent on three occasions.2019. Each director attended 75% or more of the aggregate of (i) the total number of meetings of our Board and (ii) the total number of meetings held by all committees of our Board on which such director served during 2016.2019. Our Board members are not required to attend our annual meetings of stockholders, and no director other than our chief executive officer, attended our annual meeting of stockholders in 2016.2019. Our Board has a standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, a Compensation Committee and a Nominating Committee.

Audit Committee. The Audit Committee consistedconsists of three directors, Messrs. Ananda, Jones and Miller, throughout 2016,Samuels, and is primarily responsible for hiring our independent auditors, approving the services performed by our independent auditors and reviewing their reports regarding our accounting practices and systems of internal accounting controls. In January 2017, Mr. Samuels replaced Mr. Miller on the Audit Committee. Mr. Jones serves as the chairman of our Audit Committee. The Audit Committee acts pursuant to a written charter adopted by our Board, which is available on our website at http://investor.stamps.com/documentdisplay.cfm?DocumentID=1898. All members of the Audit Committee are, and during 20162019 were, non-employee directors and “independent” pursuant to the rules of The NASDAQ Stock Market and SEC rules. In addition, our Board has determined that each of Messrs. Jones Miller and Samuels is an “audit"audit committee financial expert”expert" as defined by applicable SEC rules. Our Audit Committee held fivefour meetings and acted by unanimous written consent on one occasion during 2016.

2019.

Compensation Committee. The Compensation Committee consisted of two directors, Messrs. Ananda and Miller,Habiger, throughout 2016.2019. The Compensation Committee is primarily responsible for reviewing and approving our general compensation policies and setting compensation levels for our executive officers. Our Compensation Committee also has the authority to administer our employee stock purchase plan and our stock incentive plan and to grant awards under our stock incentive plan. On October 25, 2016, Mr. Habiger was appointed toserves as the chairman of our Compensation Committee. All members of the Compensation Committee are non-employee directors and are “independent” pursuant to the rules of The NASDAQ Stock Market. The Compensation Committee acts pursuant to a written charter adopted by our Board, which is available on our website at http://investor.stamps.com/documentdisplay.cfm?DocumentID=1896. The Compensation Committee will only delegate its authority to the extent consistent with our certificate of incorporation and bylaws and applicable laws, regulations and listing standards. No compensation consultant was engaged to provide advice or recommendations on our executive or director compensation for 2016.2019. The Compensation Committee held one meeting and acted by unanimous written consent on sixteen occasions during 2016.

2019.

Nominating Committee. The current members of our Nominating Committee arethroughout 2019 were Messrs. Ananda Jones and Miller.Jones. All members of the Nominating Committee are non-employee directors and are “independent” directors under the rules of The NASDAQ Stock Market. The Nominating Committee acts pursuant to a written charter adopted by our Board, which is available on our website at http://investor.stamps.com/documentdisplay.cfm?DocumentID=1894. The Nominating Committee held three meetingsone meeting during 2016.

2019.

The responsibilities of the Nominating Committee include (i) screening and recommending to our Board qualified candidates for election or appointment to our Board; (ii) recommending the number of members that shall serve on our Board; (iii) evaluating and reviewing the independence of existing and prospective directors; and (iv) reviewing and reporting on additional corporate governance matters as directed by our Board.

Our Nominating Committee manages the process for evaluating current Board members at the time they are considered for re-nomination. After considering the appropriate skills and characteristics required on our Board, the current makeup of our Board, the results of the evaluations, and the wishes of our Board members to be re-nominated, our Nominating Committee recommends to our Board whether those individuals should be re-nominated. Our Nominating Committee also periodically reviews with our Board whether it believes our Board would benefit from adding one or more new members, and if so, the appropriate skills and characteristics desired in such new member(s). If our Board determines that a new member would be beneficial, our Nominating Committee solicits and receives recommendations for candidates and manages the process for evaluating candidates. All potential candidates, regardless of their source (including candidates recommended by

6

stockholders), are reviewed under the same process. Our Nominating Committee screens the available information about the potential candidates. Based on the results of the initial screening, interviews with viable candidates are scheduled with Nominating Committee members, other members of our Board and senior members of management. Upon


completion of these interviews and other due diligence, our Nominating Committee may recommend to our Board the election or nomination of a candidate.

We expect that candidates for independent director will typically be found through recommendations from current directors, although recommendations may come from other sources as well. For example, in 2016, we hired an executive search firm that assisted us in searching for new director candidates. Our stockholders may also recommend director candidates by sending the candidate’s name, age, resume, amount of our stock beneficially owned and other information required in solicitations of proxies for the election of directors, to the Nominating Committee under the provisions set forth below for communication with our Board. To be timely, a recommendation must be delivered to or mailed and received not less than one-hundred twenty (120) days prior to our annual meeting at which directors are to be elected. No such suggestions from our stockholders were received in time for the Annual Meeting.

The Nominating Committee has no predefined minimum criteria for selecting director nominees, although it believes that all directors should share qualities such as business experience, excellent decision-making ability, good judgment, personal integrity and excellent reputation. In any given search, the Nominating Committee may also define particular characteristics for candidates to balance the overall skills and characteristics of our Board and our perceived needs. However, during any search, the Nominating Committee reserves the right to modify its stated search criteria for exceptional candidates. Although the Nominating Committee does not have a formal policy with respect to diversity, the Nominating Committee endeavors to seek nominees representing diverse experience in policy-making positions in business and technology, and in areas that are relevant to our activities.

Furthermore, the Nominating Committee Charter provides that it is committed to actively seeking out highly qualified women and individuals from minority groups to include in the pool from which Board nominees are chosen.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee currently consists of threetwo directors, Messrs. Ananda Habiger and Miller.Habiger. None of these individuals was one of our officers or employees during 20162019 or had any relationship with us requiring disclosure under Item 404 of Regulation S-K. None of our current executive officers has ever served as a member of the board of directors or the compensation committee of any other entity that has or has had one or more executive officers serving as a member of our Board or Compensation Committee.

Contacting the Board

Any stockholder who desires to contact our Board may do so by writing to the following address: Board of Directors, c/o Legal Department, Stamps.com Inc., 1990 E. Grand Avenue, El Segundo, CA 90245. Communications received are distributed to an independent Board member, as well as other members of our Board, as appropriate, depending on the facts and circumstances outlined in the communication received, within the discretion of the Legal Department.

Director Independence

We are required to identify directors who are independent under standards defined by SEC rules governing proxy statement disclosures. Our Board has determined that, except for Mr. McBride and Ms. May, each of our directors qualifies as an independent director under the rules of The NASDAQ Stock Market, the standard applied to us by such SEC rules. Mr. McBride is not independent because he serves as our chief executive officer.

officer, and Ms. May is not independent because she served as the chief executive officer of our ShippingEasy subsidiary until December 31, 2019.

Board Leadership Structure and Role in Risk Oversight

Our Board combined the role of chairman and chief executive officer effective January 13, 2012. Our Board believes that the chief executive officer is best situated to serve as chairman because he is the director most familiar with our business and industry and is therefore best able to identify the strategic priorities to be discussed by the Board. Our Board believes that combining the role of chairman and chief executive officer facilitates information flow between management and the Board and fosters strategic development and execution. Our Board has not appointed a lead independent director as all members of our Board take an active role in evaluating our risks and strategic direction. Each committee of our Board is responsible for evaluating certain risks and overseeing the

management of such risks. The Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The Audit Committee

7

oversees the process by which our senior management and the relevant departments assess and manage our exposure to, and management of, financial risks as well as potential conflicts of interest. The Nominating Committee manages risks associated with the independence of our Board. Our entire Board is regularly informed about these risks and oversees the management of these risks and regularly reviews information regarding our operations and finances as well as our strategic direction. Our Board’s role in risk oversight (including cyber risk) has confirmed our Board’s determination that its leadership structure is most appropriate for our company, as the Board is fully integrated into the risk oversight function.

Compensation-Related Risk
As part of its risk oversight role, our Compensation Committee considers whether our compensation policies and practices for all employees, including our executive officers, creates risks that are reasonably likely to have a material adverse effect on us. We do not believe our compensation structure and policies are reasonably likely to have a material adverse effect on us, and we seek to maintain a compensation structure that discourages excessive risk taking by our executives.
Code of Ethics

We have adopted a written code of business and ethical conduct (our “Code of Ethics”) that applies to our principal executive officer, principal financial officer and principal accounting officer. Our Code of Ethics, which also applies to our directors and all of our officers and employees, can be found on our web site, at http://investor.stamps.com/documentdisplay.cfm?DocumentID=1897. We intend to make all required disclosures concerning any amendments to, or waivers from, our Code of Ethics on our web site at http://investor.stamps.com. Upon request to our secretary, we will provide a copy of our Code of Ethics to any person without charge.

Hedging and Speculative Trading
Our Securities and Insider Trading Policy (the "Securities Policy"), which is applicable to all of our directors, officers and employees, prohibits such persons from engaging in certain hedging and speculative trading with respect to our securities. Among other things, our Securities Policy prohibits such persons from: (i) engaging in any transaction in which they may benefit from a decline in our stock price, such as a short sale, writing a call option, purchasing a put option or any economically equivalent transaction; (ii) purchasing or selling Stamps.com options on an exchange (whether "covered" or not); (iii) purchasing shares of our stock on margin without first obtaining the approval of our chief executive officer or chief financial officer; or (iv) directly or indirectly participating in any transactions involving trading activities that, by their nature, are aggressive or speculative or may give rise to an appearance of impropriety (including, without limitation, forward contracts, put and call "collars," "equity" or "performance" swap or exchange agreements or any similar agreements or arrangements however denominated in Stamps.com securities).

DIRECTOR COMPENSATION

Summary of Compensation

Our Board has periodically independently reviewed compensation levels of other company boards, most recently in April 2014 and established2017, at which time it set our Board service compensation level at approximately the average level of 38 comparable publicly traded technology companies with revenue between $100 and $300 million and market cap over $400 million (as set forth on Annex A). Our Board again reviewed its compensation as compared to other company boards in April 2017 and increased each component of our Board service cash compensation, effective May 1, 2017, to a level somewhat below the average level of 91 comparable publicly traded technology companies with market capcapitalization between $1 billion and $3 billion. Such comparable companies, which are also identified on Annex A, havehad average revenue of approximately $560 million, average market capcapitalization of approximately $1.8 billion and average net income of approximately $20 million. Our Board expects to review its compensation as needed or as proposed by any director, but in any event at least every four years. Although our executive officers may provide background data in connection with this process, they are generally not involved in the decision on Board compensation except to the extent that Mr. McBride, our chief executive officer, isand Ms. May, the former chief executive officer of our ShippingEasy subsidiary, are involved as a membermembers of our Board.


The following summarizes our non-employee director compensation. Directors who are also our employees do not receive any additional compensation for Board service.

Accordingly, until Ms. May's employment was terminated in January 2020, she received no compensation in her capacity as a director. Ms. May was, however, compensated in her capacity as an employee throughout 2019. As the chief executive officer of our ShippingEasy subsidiary, Ms. May received an aggregate of $1,865,099 of compensation for 2019, comprised of: $381,154 salary; a $475,000 discretionary bonus to be paid in 2020 for services performed in 2019; an award of options valued at $1,008,843; and $100 holiday gift card (plus a $2 tax gross-up related to the gift card). Ms May's 2019 compensation does not include amounts paid in 2019 but earned in prior years, including a $450,000 discretionary bonus earned in 2018, and both a $202,600 cash bonus and the $380,042 value of shares earned as a result of performance in 2018 pursuant to the Management Incentive Plan we entered into in 2016 in connection with our acquisition of ShippingEasy. Starting in 2020, Ms. May will be eligible to receive cash compensation and annual director option grants as described below. Further, on January 17, 2020, the Company and Ms. May entered into a consulting agreement in connection with certain post-employment transition services that Ms. May will provide to the Company for an initial period of 12 months commencing January 21, 2020. Ms. May will be compensated for her services at an hourly rate for actual hours worked, and the total fees for the 12 month term will not exceed $360,000. In connection with entering into the consulting agreement, Ms. May agreed to forfeit the unvested portion of each stock option award she had previously received from the Company, other than the portion of the stock options granted on June 3, 2019 which are scheduled to vest on June 3, 2020, subject to Ms. May’s continued service.
Cash Compensation. Each of our non-employee directors receivedreceives an annual retainer of $30,000, $1,400 for each Board meeting attended and $700 for each Board committee meeting attended during 2016. Beginning May 1, 2017, each of our non-employee directors will receive an annual retainer of $45,000, together with $1,500 for each Board meeting attended and $800 for each Board committee meeting attended. Additional annual retainers were paid for service on our Audit Committee or Compensation Committee in 2016 as follows: the chairman of the Audit Committee received an additional $15,000; other members of the Audit Committee received an additional $5,000; the chairman of the Compensation Committee received an additional $10,000; and other members of the Compensation Committee receive an additional $4,000. Beginning May 1, 2017, additional annual retainers will beare paid for service on our Audit Committee or Compensation Committee as follows: the chairman of the Audit Committee will receivereceives an additional $18,000; other members of the Audit Committee will receive an additional $6,000; the chairman of the Compensation Committee will receivereceives an additional $13,000; and other members of the Compensation Committee will receive an additional $5,000. Directors are reimbursed for all reasonable expenses incurred by them in attending Board and committee meetings.

Option Grants. Each individual who joins our Board as a non-employee director and has not previously been one of our employees automatically receives, at the time of his or her initial election or appointment, an option to purchase 5,000 shares of our common stock. In addition, on the date of each annual meeting of stockholders, each individual who is to continue to serve as a non-employee Board member, whether or not that individual is standing for re-election at that particular annual meeting, automatically receives an option to

8

purchase 5,000 shares of our common stock. Each option granted to our non-employee directors vests immediately, and has an exercise price per share equal to the fair market value per share of our common stock on the grant date and will havehas a maximum term of ten years. All non-employee directors who were serving at such time received automatic option grants on June 13, 201612, 2019 for 5,000 shares each of our common stock at an exercise price per share of $90.68,$38.70, the fair market value per share of our common stock on the grant date. Mr. Habiger received an automatic option grant on October 25, 2017, the date he joined our Board, for 5,000 shares of our common stock at an exercise price per share of $93.28, the fair market value per share of our common stock on the grant date.

Director Compensation Table


The following table contains information with respect to the compensation of our non-employee directors for 2016:

Name
Fees Earned or
Paid in Cash
($)
Option
Awards
($)(1)(2)
Total
($)
Mohan Ananda
 
53,700
 
 
161,200
 
 
214,900
 
David C. Habiger
 
1,400
 
 
167,200
 
 
168,600
 
G. Bradford Jones
 
59,000
 
 
161,200
 
 
220,200
 
Lloyd I. Miller
 
59,700
 
 
161,200
 
 
220,900
 
the fiscal year ended December 31, 2019:
Name Fees Earned or Option  
 Paid in Cash Awards  Total
 ($) ($)(1)(2) ($)
Mohan Ananda $72,800 $106,113 $178,913
David C. Habiger $70,800 $106,113 $176,913
G. Bradford Jones $79,000 $106,113 $185,113
Theodore R. Samuels, II $66,200 $106,113 $172,313

(1)The amounts in this column represent the aggregate grant date fair value of option awards granted in 2016,2019, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“("ASC 718”718"). See Note 2 of our “Notes to Consolidated Financial Statements” in our annual report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2017 for a discussion of assumptions we made in determining the amounts included in this column. For each director who served in such capacity for the full 2016 year, the aggregate grant date fair value in this column is equal to the individual grant date fair value of the options to purchase 5,000 shares of common stock granted on June 13, 2016, as such directors received only one grant of options during 2016. For Mr. Habiger, the aggregate grant date fair value in this column is equal to the individual grant date fair value of the options to purchase 5,000 shares of common stock granted on October 25, 2016, as such director received only one grant of options during 2016. Mr. Samuels did not join our board until January 2017 and received no grant of options during 2016.

Financial Statements” in our annual report on Form 10-K filed with the Securities and Exchange Commission on March 2, 2020 for a discussion of assumptions we made in determining the amounts included in this column. For each non-employee director, the aggregate grant date fair value in this column is equal to the individual grant date fair value of the options to purchase 5,000 shares of common stock granted on June 12, 2019, as such directors received only one grant of options during 2019.
(2)As of December 31, 2016,2019, Mohan Ananda held options to purchase 25,00020,000 shares of our common stock, David C. Habiger held options to purchase 5,00020,000 shares of our common stock, G. Bradford Jones held options to purchase 50,00035,000 shares of our common stock and Lloyd I. MillerTheodore R. Samuels, II held options to purchase 25,00020,000 shares of our common stock.


9

PROPOSAL TWO: ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION


As required pursuant to Section 14A of the Securities Exchange Act of 1934, we are giving our stockholders the opportunity to vote, on a non-binding advisory basis, to approve our named executive officer compensation. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. In 2016, our2019, the advisory vote on our named executive officer compensation was approved by approximately 95%eighty-nine and two-tenths percent (89.2%) of the votes cast. Theseshares present and entitled to vote. The Compensation Committee has reviewed these results represented an overwhelming majority support forand considers these results supportive of our named executive officer compensation.

compensation policies and decisions.

As described in detail under the heading “Executive Compensation—Compensation Discussion and Analysis,” our executive compensation structure is designed to attract and retain executives who have the skills and experience necessary to achieve our corporate goals, to align management’s interests with those of long-term stockholders, and to attract and retain executive management talent by providing overall compensation that is comparable to what is available through other employment opportunities for those individuals. We believe our total compensation is designed to reflect the value created for stockholders while supporting our strategic goals. Please read the “Executive Compensation”"Executive Compensation" section, including “Compensation Discussion and Analysis,” for additional details about our executive compensation programs, including information about the fiscal 20162019 compensation of our named executive officers.

We will ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:

RESOLVED, that the stockholders of Stamps.com Inc. hereby approve, on a non-binding advisory basis, the compensation of the named executive officers, as disclosed in Stamps.com Inc.’s Proxy Statement for the 20172020 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosures.

This vote is advisory, and therefore not binding on us, our Board or our Compensation Committee. However, our Board and Compensation Committee value the opinions that our stockholders express in their votes and will consider the outcome of this vote when considering future executive compensation arrangements as they deem appropriate. At our 2017 annual meeting of stockholders, a majority of our stockholders recommended that we hold a “say on pay” advisory vote every one year. In light of this recommendation, the next “say-on-pay” advisory vote will occur at our 2021 annual meeting of stockholders. Abstentions will be counted towards the tabulations of votes cast and will have the same effect as negative votes, whereas broker non-votes, if any, will not constitute votes cast and therefore will have no effect on the outcome of this advisory vote.

Unless otherwise instructed, the proxies will vote “for” the above resolution.

Recommendation of our Board

Our Board unanimously recommends that the stockholdersyou vote “FOR” approval of the Non-Binding Advisory Vote on Named Executive Officer Compensation.


10

PROPOSAL THREE: ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON EXECUTIVE COMPENSATION

In addition to providing stockholders with the opportunity to cast a non-binding advisory vote on the compensation of our named executive officers, in accordance with Section 14A of the Exchange Act and related SEC rules, we are also providing our stockholders with the opportunity to indicate how frequently they would like us to hold an advisory vote on the compensation of our named executive officers in the future. This non-binding advisory vote is commonly referred to as a “say-on-frequency” vote. Under this proposal, our stockholders may vote to recommend that we hold an advisory vote on executive compensation every one year, every two years or every three years.

After careful consideration, our board has determined that the advisory vote on executive compensation should be conducted every one year so that our stockholders may annually provide us with direct input on the most recent executive compensation information, as disclosed in our proxy statement. Setting a one year period for conducting this advisory stockholder vote will enhance stockholder communication by providing a simple means for us to obtain information on investor sentiment about our executive compensation program design, structure and policies.

You may cast your vote on your preferred voting frequency by choosing the option of “one year,” “two years,” or “three years,” or by abstaining from a vote, when you vote in response to the resolution set forth below. You are not voting to approve or disapprove the board’s recommendation on this item.

RESOLVED, that a non-binding advisory vote of the stockholders of Stamps.com Inc. to approve the company’s executive compensation, as disclosed pursuant to Item 402 of Regulation S-K (which disclosure includes the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure) shall be held at an annual meeting of stockholders, beginning with the 2018 Annual Meeting of Stockholders, (i) every one year, (ii) every two years, or (iii) every three years.

This vote is advisory, and therefore not binding on us or our board. Our board values the opinions that our stockholders express in their votes and will consider the outcome of this vote when considering how frequently we should conduct an advisory vote on our executive compensation as it deems appropriate. Abstentions and broker non-votes will result in the alternatives receiving fewer votes.

Unless otherwise instructed, the proxies will vote for the “one year” frequency alternative.

Recommendation of our Board

Our board of directors recommends that the stockholders vote for the option of every “ONE YEAR” as the frequency with which they are provided an advisory vote on executive compensation.

11

PROPOSAL FOUR: RATIFICATION OF INDEPENDENT AUDITORS


General

Our Audit Committee has appointed the firm of Ernst & Young LLP, our independent auditors during 2016,2019, to serve in the same capacity for 2017,2020, and is asking our stockholders to ratify this appointment. Stockholder ratification of the appointment is not required by our bylaws or by any other applicable legal requirement. However, our Board is submitting the appointment of Ernst & Young LLP to our stockholders for ratification as a matter of good corporate practice.

If stockholders fail to ratify the appointment, the Audit Committee and our Board will reconsider whether or not to retain Ernst & Young LLP. Even if the appointment is ratified, our Audit Committee in its discretion may direct the appointment of a different independent auditing firm at any time during the year if our Audit Committee believes that such a change would be in our best interests.

A representative of Ernst & Young LLP is expected to be virtually present at the Annual Meeting, will have the opportunity to make a statement if he or she desires to do so, and will be available to respond to appropriate questions.

The ratification of the appointment of Ernst & Young LLP as our independent auditors for 20172020 requires the affirmative vote of the holders of a majority of the shares of our common stock present at the Annual Meeting in personvirtually or represented by proxy and entitled to vote. Abstentions will be counted towards the tabulation of votes cast and will have the same effect as negative votes, whereasvotes. Brokers may vote on this proposal, and any broker non-votes if any, will not be counted for purposeswould have no effect on the outcome of determining whether the proposal has been approved.

this vote.

Unless marked to the contrary, proxies received will be voted “for” ratification of the appointment of Ernst & Young LLP as our independent auditors for 2017.

2020.

Recommendation of our Board

Our Board unanimously recommends that the stockholdersyou vote “FOR” the ratification of the appointment of Ernst & Young LLP to serve as our independent auditors for 2017.

2020.

12

INDEPENDENT AUDITORS’ FEES AND SERVICES

Fees Billed by Ernst & Young LLP during 20162019 and 2015

2018

During 20162019 and 2015,2018, Ernst & Young LLP provided various audit, audit related and non-audit services to us as follows:

Audit Fees

Aggregate fees billed to us by Ernst & Young LLP for professional services rendered for the audit of our annual financial statements, including professional services related to the audits of the effectiveness of internal control over financial reporting, and review of financial statements included in our quarterly reports on Form 10-Q, totaled approximately $762,200$820,561 and $689,552$820,834 during 20162019 and 2015, respectively.

2018, respectively, and included, for 2019, the services of Ernst & Young LLP in connection with the filing of a Form S-8 Registration Statement.

Audit-Related Fees

There were no audit-related fees billed to us during 2016. Audit-related fees related to accounting consultations in connection with acquisitions totaled approximately $11,880 in 2015.

2019 or 2018.

Tax Fees

Fees billed to us by Ernst & Young LLP for tax services rendered to us during 20162019 and 20152018 totaled approximately $26,314$8,904 and $25,157,$74,482, respectively. Tax services for which we were billed in 2015 comprised a review of2019 involved certain federal tax matters. Tax services for which we were billedmatters, and in 20152018 comprised a review of certain federal tax matters undertaken partly in 2014 and partly in 2015.

tax advice related to the acquisition of MetaPack.

All Other Fees

We had no fees billed to us by Ernst & Young LLP for professional services during 20162019 or 20152018 other than the audit fees, audit-related fees and tax fees described above.

Pre-Approval Policy

Our Audit Committee’s charter provides that the Audit Committee pre-approve all audit and permitted non-audit services to be performed by our independent auditors. Pre-approval is generally provided at a meeting of the Audit Committee and covers a specified period of time. Any pre-approval is detailed as to the particular service or category of services covered and is generally subject to a specific budget. The independent auditors and management periodically report to the Audit Committee regarding the extent of services provided by our independent auditors in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve other particular services on a case-by-case basis. All services provided to us by Ernst & Young LLP during 20162019 and 20152018 were pre-approved by the Audit Committee in accordance with this policy.

Determination of Independence

Our Audit Committee and our Board have determined that the fees received by Ernst & Young LLP for the non-audit related professional services listed above are compatible with maintaining Ernst & Young LLP’s independence, and such fees were approved by the Audit Committee.


MANAGEMENT

13

MANAGEMENT

The following table sets forth certain information regarding our executive officers as of April 17, 2017:

13, 2020:
Name
Age
Position
NameAgePosition
Ken McBride
49
52
Chief Executive Officer, President and Chairman of the Board of Directors
Kyle Huebner
Jeff Carberry
46
46
Chief Financial Officer and Co-President
Michael Biswas
Jonathan Bourgoine
40
49
Chief Technology Officer
James Bortnak
Sebastian Buerba
48
Co-President and Corporate & Business Development45
Chief Marketing Officer
John Clem
45
48
Chief Product & Strategy Officer
J. Nathan Jones
50Chief Executive Officer of ShipStation
Amine Khechfe
52
55
Chief Strategy Officer
Steve Rifai
Matt Lipson
49
Senior VP of Sales and Customer Development
Seth Weisberg
47
48
Chief Legal Officer and Secretary
Steve Rifai52Chief Sales Officer


Mr.


Ken McBride’s biography is set forth above under the heading “Proposal"Proposal One: Election of Director – Nominees Forfor Term Ending at the 20202023 Annual Meeting of Stockholders.”

Kyle Huebner "

Jeff Carberryhas beenserved as our chief financial officer since 2004 and on January 13, 2012 was also elected as our co-president.July 31, 2017. Previously, Mr. HuebnerCarberry was our vice president, of marketingfinance from 2001April 2014 to 2004, our vice president of corporate strategy from 2000 to 2001, andJuly 2017, our senior director of corporate strategyfinance from 1999April 2011 to 2000.April 2014 and our director of finance from July 2008 to April 2011. Prior to joining us,Stamps.com, Mr. Carberry was an investment banking associate in the Leveraged Finance division of CIBC World Markets from 2007 to 2008 and was an investment banking associate at RBC Capital Markets from 2005 to 2007, and held the positions of manager, senior and staff in the audit practice of Ernst & Young LLP from 1997 to 1999,2003. Mr. Huebner was a management consultant at Bain & Company. From 1992 to 1995, Mr. Huebner served as a research analyst for J.P. Morgan, Inc. Prior to 1992, Mr. Huebner held various management positions with Melville Corporation. Mr. Huebner received his B.A. in Mathematics from Dartmouth College and hisCarberry holds an M.B.A. from Harvard University.

Michael Biswas the University of Chicago Booth School of Business and is a Certified Public Accountant.

Jonathan Bourgoine has been our chief technology officer since February 26, 2018. Before joining our company, Mr. Bourgoine served as VP and Chief Technology Officer of Mattel, the largest toy manufacturer in the world, from 2011 to 2018. Previously, Mr. Bourgoine served as VP of Infrastructure Engineering and later as SVP of Operations for Youbet.com, the leading parimutuel horse racing e-commerce gaming website and totalizator platform from 2004 to 2011. Mr. Bourgoine holds an M.B.A. from California Coast University and a B.S. in Information Technology from Western Governors University.
Sebastian Buerba has served as our chief marketing officer since January 2012. From February 2007 to January 2012, hePreviously, Mr. Buerba served as our vice president, of development. Mr. Biswas was also our vice president of information technologymarketing from 2005April 2009 to 2007, vice president of operations during part of 2005January 2012, as director, marketing from April 2006 to April 2009, and our director of customer supportas product strategy manager from 2003July 2004 to 2005.April 2006. Prior to joining us, from 2001 to 2003Stamps.com, Mr. Biswas servedBuerba worked as director of operations for Provicent Corp., as director of operations for Allbusiness.com from 1999 to 2001, and as operationsmarketing product manager for TeleTech TelecommunicationTelecom Argentina Stet-France Telecom S.A. from 19961998 to 1999.

James Bortnak 2002.

John Clemhas been our co-president and corporate & business developmentchief product officer since January 2012. From February 2010 to January 2012 heJuly 2016. Previously, Mr. Clem served as our senior vice president, corporate & business development. Mr. Bortnak was previously our chief marketing officer from 2004 to 2009. Mr. Bortnak served as our vice president, business development from 2002 to 2004, and as a senior member of our Business Development group since joining us in 1999. Prior to joining us, Mr. Bortnak practiced business law, focusing in the area of technology and start-up companies. Mr. Bortnak holds an LLB from the University of British Columbia and has been a member of the California Bar since 1997.

John Clem has been our chief product & strategy officer sincefrom January 2012.2012 to July 2016. Mr. Clem was our vice president, product and service operations from March 2006 to January 2012. Previously, Mr. Clem served as the director of corporate strategy from March 2003 to February 2004 and as a director of marketing from March 2004 to February 2006. Prior to joining us, Mr. Clem worked as an engineer and manager in the petrochemical and utilities industries and a management consultant at Booz Allen & Hamilton. Mr. Clem received his Bachelor’s Degree, with honors, in Mechanical Engineering from California State Polytechnic University at Pomona and his M.B.A., with honors, from the Ross School of Business at The University of Michigan.


J. Nathan Jones joined ShipStation as its chief executive officer in February 2013 and has been the chief executive officer of our ShipStation subsidiary since we acquired it on June 10, 2014. Our Board determined on July 25, 2018 that Mr. Jones was an executive officer of the company within the meaning of Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934.  Prior to joining ShipStation, Mr. Jones was the founder and CEO of AcademicSuperstore from 1998 to 2008 until it was acquired by Journey Education Marketing. Thereafter, he served as the President of Journey Education until its acquisition by Digital River in 2010. Mr. Jones received his B.A. in Finance from the University of Texas.
Amine Khechfehas been our chief strategy officer since July 20, 2016.  From November 18, 2015 to July 20, 2016, he served as the general manager of PSI Systems, Inc. (“Endicia”), our wholly owned subsidiary. From July 1, 2007 to November 18, 2015, Mr. Khechfe served as general manager of Endicia, then a wholly owned subsidiary of Newell Rubbermaid, Inc. Mr. Khechfe co-founded Endicia in 1999, and prior to July 1, 2007, Mr. Khechfe held a variety of management roles at Endicia in engineering, management consulting, software development, marketing, business development and sales engineering over the course of his career. Mr. Khechfe earned a Bachelor of Science degree in Engineering from Worcester Polytechnic Institute and a Master of Science in Engineering from Stanford University.

Matt Lipson has been our chief legal officer and secretary since January 15, 2018. Previously, Mr. Lipson served as our vice president and general counsel from May 2017 to January 2018, deputy general counsel from April 2016 until May 2017, associate general counsel from 2006 until April 2016 and senior counsel from 2002 through 2006. Prior to joining the company, Mr. Lipson was an associate at Irell & Manella LLP and Morrison & Foerster LLP. Mr. Lipson holds a law degree from the University of Michigan Law School and a bachelor’s degree in History from University of California, Los Angeles.

14

Steve Rifaihas been our chief sales officer since April 19, 2017. Previously, Mr. Rifai served as our senior VP of sales and customer development sincefrom July 20, 2016.2016 to April 2017.  From November 18, 2015 to July 20, 2016, he served as the VP of customer development of Endicia, our wholly owned subsidiary. Prior to our acquisition of Endicia, from October 2015 to November 18, 2015, Mr. Rifai served as VP of customer development of Endicia, from October 2010 to October 2015 he served as managing director of Endicia, and from April 2000 to October 2010 he served as director of marketing for Endicia. Mr. Rifai held the role of Director of R&D for Ansys, Inc. from April 1999 through April 2000, and several positions at Centric Engineering Systems, Inc. from 1989 through April 1999. Mr. Rifai holds a PhD in Engineering from Stanford University.

Seth Weisberg has been our chief legal officer since 2008 and our secretary since 2001. Mr. Weisberg was our general counsel from 2001 to 2008 and our senior director, IP & licensing from 1999 until 2001. Mr. Weisberg previously was an associate at Irell & Manella LLP, worked as a software developer and founder at Shortcut Software, created physical computer models at RAND Corporation and was a high school teacher in the Mississippi Teacher Corps. Mr. Weisberg holds a law degree from Columbia Law School, a master's degree in History from Harvard University, a bachelor's degree in Physics and Astronomy from Harvard University and a General Course Certificate from the London School of Economics. Mr. Weisberg is a registered patent attorney.


15

EXECUTIVE COMPENSATION
   

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis provides qualitative information and context for the information presented in the Summary Compensation Table and other tables and narratives that follow. As discussed above in Proposal Two, in 2016 our2019 the advisory vote on our named executive officer compensation was approved by approximately ninety-fiveeighty-nine percent (95%(89%) of the votes cast. Theseshares present and entitled to vote. The Compensation Committee has reviewed these results represented majority support forand considers these results supportive of our named executive officer compensation.compensation policies and decisions. We took the percent of approval into account when determining that no specific changes/changes or revisions would be made to our executive officer compensation structure.structure for fiscal 2019. However, we continually strive to understand and respond to our stockholders’ opinions and concerns regarding our named executive officer compensation structure and will continue to do so in the future.
Our named executive officers for 2019, who consist of our current principal executive officer, our current principal financial officer, and our three other most highly compensated officers, are:
•Ken McBride, chief executive officer and chairman of the board of directors.
•Jeff Carberry, chief financial officer;
•Sebastian Buerba, chief marketing officer;
•John Clem, chief product officer; and
•Nathan Jones, chief executive officer of our ShipStation subsidiary.
Company Performance Highlights

Despite the discontinuation of our package business incentive agreement with the USPS at the end of 2018, our total revenue was down only 3% year-over-year to $572 million in 2019. In 2019, we achieved GAAP net income of $59.2 million, compared to $168.6 million in the prior year, and GAAP net income per fully diluted share of $3.33, compared to $8.99 in the prior year. In 2019, our non-GAAP adjusted income was down 54% to $102 million, non-GAAP adjusted EBITDA was down 36% to $164 million, and non-GAAP adjusted income per fully diluted share was down 51% to $5.73. Our 2019 total revenue and 2019 non-GAAP adjusted EBITDA results were in line with the top of the range of guidance issued by us on February 21, 2019, when we stated that we expected 2019 revenue to be in a range of $540 million to $570 million, and 2019 non-GAAP adjusted EBITDA to be in a range of $145 million to $165 million. Non-GAAP adjusted income, non-GAAP adjusted EBITDA and non-GAAP adjusted income per fully diluted share are described further, and are reconciled to their corresponding GAAP measures, in Annex C.
During 2019 we made a significant strategic decision to diversify our carrier relationship away from the exclusive focus on the USPS relationship. While the decision was a difficult one, we felt strongly that diversification of our major strategic partnerships with carriers was in the best interest of our long-term stockholders. Through management's efforts in 2019, we were able to sign a new partnership agreement with UPS, which we announced in October 2019. We also had several other accomplishments during 2019, including:
1)We generated our highest level of annual new customer acquisition in the company's history;
2)We drove our total postage volume from $6.5 billion in 2018 to $6.6 billion in 2019;
3)We added a significant number of new strategic partnerships;
4)We continued to expand the features and functionality of our solutions, such as expanding our split shipment and multi-warehouse functionality to support more complex shipping workflows and higher volume shippers, releasing scan based workflows which allow shippers to run their shipping operations more automatically using a scanner, and adding inventory functionality to our mobile applications;

5)We grew our total revenue under the Globalpost and Global Advantage programs by 45%;
6)We continued to execute on our plans to expand outside the U.S with our ShipStation and ShipEngine brands, and ShipStation’s 2019 shipments by international customers grew 87%;
7)We continued to expand our partnerships and carrier relationships outside the US;
8)On the MetaPack side, we expanded into the US in 2019 by signing our first two major US customers utilizing our US Sales team, we also developed a strong US pipelines of deals, and we continued to win a large number of new customers in Europe and we expand existing customers into new countries and added new carriers for their solutions; and
9)Metapack launched a new tracking portal product in 2019 called "Delivery Tracker," which includes retailer branding, tracking for 470 Carriers, 5,500 services, and 350,000 pick up/drop off locations, translation to 17 languages and many other features.
We believe the compensation program for the named executive officers has been instrumental in helping us achieve our strong performance.
Compensation Philosophy and Objectives

The goals of our named executive managementofficer compensation program are to attract executives who have the skills and experience necessary to achieve our corporate goals, to align management’s interests with those of long-term stockholders, and to attract and retain executive management talent by providing overall compensation that is comparable to what is available through other employment opportunities for those individuals. Our named executive managementofficer compensation program is designed to reward our executive team for delivering both short and long term financial results, including annual growth in revenue and adjusted EBITDA thoughthrough our non-equity incentive plans, and growth in long term stockholder value through our equity incentive plans.

Company Performance Highlights

We had an extraordinary year in 2016. Total revenue rose 70% to a record $364.3 million. Mailing and shipping revenue, which includes service, product and insurance revenue but excludes customized postage and other revenue, was up 70% year-over-year to a record $350.6 million. The strong performance in our mailing and shipping business contributed to record earnings with GAAP net income of $75.2 million, compared to a GAAP net loss of $5.3 million in the prior year, and GAAP net income per fully diluted share of $4.12, compared to a GAAP net loss of $0.26 per share in the prior year. In 2016, our non-GAAP adjusted income was up 106% to $158.8 million, non-GAAP adjusted EBITDA was up 111% to $174.4 million, and non-GAAP adjusted income per fully diluted share up 96% to $8.70. Non-GAAP adjusted income, non-GAAP adjusted EBITDA and non-GAAP adjusted income per fully diluted share are described further, and are reconciled to their corresponding GAAP measures, in Annex C.

We believe the compensation program for the named executive officers has been instrumental in helping us achieve our strong financial performance.

Overall Methodology of Setting Compensation


The Compensation Committee sets all compensation for, and awards to, our chief executive officer and all corporate officers, which includes our chief financial officer, and co-president, our chief strategyproduct officer, our senior vice presidentchief marketing officer, and the chief executive officer of sales and customer development and our chief legal officer.ShipStation subsidiary. The Compensation Committee reviews the performance and compensation of our chief executive officer and establishes his compensation level. For the remaining corporate officers, our chief executive officer makes recommendations to the Compensation Committee, and the Compensation Committee may or may not make adjustments to the recommendations of our chief executive officer before setting the final executive officer compensation.

For executives who are not also corporate officers, our chief executive officer and chief financial officer and co-president set the base salary and bonus compensation based on comparable benchmarks and performance of the executive and performance of the company, and such compensation is disclosed to the Compensation Committee. However, for equity awards to executives who are not also corporate officers, our chief executive officer makes recommendations to the Compensation Committee and the Compensation Committee sets the specific equity award based on comparable benchmarks and performance of the executive and performance of the company.

With respectiverespect to equity compensation, the Compensation Committee reviews the performance and equity compensation of our chief executive officer and establishes his equity compensation level. For the remaining corporate officers, our chief executive officer makes recommendations to the Compensation Committee, and the Compensation Committee may or may not make adjustments to the recommendations of our chief executive officer before setting the final executive officer equity compensation.

For executives who are not corporate officers, our chief executive officer and chief financial officer set the base salary and bonus compensation based on comparable benchmarks and performance of the executive and based on performance of the company. For equity awards to executives who are not corporate officers, our chief executive officer makes recommendations to the Compensation Committee and the Compensation Committee sets the specific equity award based on comparable benchmarks and performance of the executive and based on performance of the company.

16

We do not believe our compensation structure and policies are reasonably likely to have a material adverse effect on us, and we seek to maintain a compensation structure that discourages excessive risk taking by our executives. We do this by aligningaligns the interests of our management closely with long-term stockholders. A significant portion of executive management compensation is in equity, and our stock option grants encourage results over a longer period of time because of the typical three year vesting period and 10 year10-year life of the options awarded to executive management. This encourages our executive management team to focus on managing our company for long term results.


The majority of our compensation decisions are generally made in March or April each year, when the Compensation Committee meets to determine the final incentive compensation for the prior year and establishes the base salaries, equity grants (when applicable), and non-equity incentive compensation plan for the coming year for corporate officers. The Compensation Committee may also meet at other times of the year to address equity grants.

On April 15, 2016,5, 2019, the Compensation Committee approved the final incentive compensation for 2015,2018, established the base salaries for 2016,2019, and established an incentive compensation plan for 20162019 (all decisions collectively, the “2016“2019 Compensation Decisions”). In doing so, the Compensation Committee and the chief executive officer utilized reports and data from Equilar, Inc. (“Equilar”), a company that provides standardized data based on U.S. proxy data from all publicly traded companies.

ForEquilar.

With regard to 2019, for each executive manager, a benchmark group (collectively, the benchmark groups for all of our executive management are referred to as the “2016“2019 Equilar Benchmarks”) was created using individuals that have similar titles and responsibilities at companies (i) having market capitalization of at least $1 billion to $3 billion; (ii) located anywhere in the United States;with revenue between $100 million and $750 million; (iii) in the technology sector. These parameters, which increased for 2016 from those used in 2015 to reflect the increase in the size of our company’s market capitalization, provided companies for our benchmarks that are consistent with the size of our company and the general scope of responsibilities of our executive management. Individuals at other companies who were founders, who were interim, who had resigned, or that had received no cash bonus during the last year (e.g., those that received stock in lieu of cash or whose performance did not warrant a cash bonus) as of the date of their companies' proxy statements were excluded from the analysis. Only proxies filed after January 1, 2015 or later were included, and compensation was time-adjusted using industry average compensation increases or budgeted increases from company surveys available from Culpepper and Associates (for example, the Compensation Committee assumed a 3.0% average annual increase for time adjusting prior year compensation numbers). The criteria for inclusion of a company in our benchmark groups were generally the same for our 2016 Compensation Decisions as for the compensation decisions that were made in 2015, except that (i) a higher market capitalization range of $1 billion to $3 billion was used to reflect the increase in size of our market capitalization during 2015; (ii) revenue was eliminated as a selector as very few companies had revenue in the range of our company and simultaneously had market capitalization in line with our company; and (iii) all U.S. geographies were included to increase the number of companies we had for each executive, where it was noted that the vast majority of comparable companies were located in areas where the cost of living is at or below that of our company. The aforementioned criteria resulted in companies of a size and for which the scope of responsibility for the executive management were generally similar to our company at the time that the 2016 Compensation Decisions were made. Furthermore, the Compensation Committee noted that, when examining the 114 companies that constitute the complete list of all companies across all titles in the 2016 Equilar Benchmarks for all of our executives, at the time of the 2016 Compensation Decisions, Stamps.com Inc. had a similar market capitalization of $1.6 billion versus the median market capitalization for the 114 companies of $1.7 billion. Furthermore, Stamps.com Inc. ranks very highly in several key financial ratios as compared to the 114 companies, including the 88th percentile for return on equity, the 93rd percentile for return on assets, and the 94th percentile for return on revenue. A list of companies included in the 2016 Equilar Benchmarks for each of our named executive officers in connection with the 2016 Compensation Decisions is included in Annex B.

On April 19, 2017, the Compensation Committee approved the final incentive compensation for 2016, established the base salaries for 2017, and established an incentive compensation plan for 2017 (all decisions collectively, the “2017 Compensation Decisions”). In doing so, the Compensation Committee and the chief executive officer utilized reports and data from Equilar.

For each executive manager, a benchmark group (collectively, the benchmark groups for all of our executive management are referred to as the “2017 Equilar Benchmarks”) was created using individuals that have similar

17

titles and responsibilities at companies (i) having market capitalization of $1 billion to $3 billion; (ii) with corporate headquarters in the United States; and (iii)(iv) operating in the technology sector. These parameters resulted in a set of companies for our benchmarks that are consistent with the size of our company and resulted in a set of individual managers within those companies that have the same general scope of responsibilities as our executive management. Individuals at other companies who were founders, who were interim, who had resigned, that had unusual compensation, or that had received no cash bonus during the last year (e.g., those that received stock in lieu of cash or whose performance did not warrant any cash bonus) as of the date of their companies' proxy statements were excluded from the analysis. Only proxies filed afteron January 1, 20162018 or later were included, and compensation was time-adjusted using industry average compensation increases or budgeted increases from company surveys available from Culpepper and Associates (for example, the Compensation Committee assumed a 3.0% average annual increase for time adjusting prior year compensation numbers). For our 2019 Compensation Decisions, in selecting our comparable companies, the Compensation Committee eliminated the $5 billion market capitalization limit for our comparable companies but added a requirement that such companies have revenue in the range of $100 million to $750 million. The Compensation Committee felt this provided a set of companies for each executive manager that had comparable revenue and market capitalization. All other criteria for inclusion of a company and executive manager in one of our benchmark groups was the same for our 2019 Compensation Decisions as for the compensation decisions that we made in 2018. Lists of those companies included in the 2019 Equilar Benchmarks identified as having an executive with similar titles and responsibilities as each of our named executive officers in connection with the 2019 Compensation Decisions are included in Annex B.

On April 3, 2020, the Compensation Committee approved the final incentive compensation for 2019, established the base salaries for 2020, and established an incentive compensation plan for 2020 (all decisions collectively, the “2020 Compensation Decisions”). In doing so, the Compensation Committee and the chief executive officer utilized reports and data from Equilar.
For each executive manager, a benchmark group (collectively, the benchmark groups for all of our executive management are referred to as the “2020 Equilar Benchmarks”) was created using individuals that have similar titles and responsibilities at companies (i) having market capitalization greater than $1 billion; (ii) with revenue between $100 million and $1 billion; (iii) with corporate headquarters in the United States; and (iv) operating in the technology sector. These parameters resulted in a set of companies for our benchmarks that are consistent with the size of our company and resulted in a set of individual managers within those companies that have the same general scope of responsibilities as our executive management. Individuals at other companies who were founders, who were interim, who had resigned, that had unusual compensation, or that had received no cash bonus during the last year (e.g., those that received stock in lieu of cash or whose performance did not warrant any cash bonus) as of the date of their companies' proxy statements were excluded from the analysis. Only proxies filed on January 1, 2019 or later were included, and compensation was time-adjusted using industry average compensation increases or budgeted increases from company surveys available from Culpepper and Associates (for example, the Compensation Committee assumed a 3.0% average annual increase for time adjusting prior year compensation numbers). The maximum revenue criteria for inclusion of a company and executive manager in one of our benchmark groups was increased from $750 million in 2019 to $1 billion in 2020. All other criteria for inclusion of a company and executive manager in one of our benchmark groups was the same for our 20162020 Compensation Decisions as for the compensation decisions2019 Compensation Decisions. In setting the 2020 Equilar Benchmarks, the Compensation Committee also examined the relative financial performance of our Company on key financial ratios versus the comparable companies, and the Committee found that were madewhen examining the 139 companies that constitute the complete list of all companies across all titles in 2015. A listthe 2020 Equilar Benchmarks for all of our executives, Stamps.com

ranks at the 94th percentile for net income, the 94th percentile for return on equity, the 96th percentile for return on assets, and the 96th percentile for return on revenue.
Lists of those companies included in the 20172020 Equilar Benchmarks foridentified as having an executive with similar titles and responsibilities as each of our named executive officers in connection with the 20172020 Compensation Decisions is alsoare included in Annex B.

Each Element of Compensation, Why We Pay It, and How We Determine Amounts


We currently compensate our executive management, which consists of eightnine members, including our named executive officers, through three main elements: base salary, incentive pay and equity participation. Certain members of our executive management also have post-termination compensation arrangements.

•Base Salary. We pay a base salary to each member of our executive management (each, an “executive manager”) in order to allow the executive manager to cover his living expenses and in order to compete with other employers. We generally establish base salaries for each individual on an annual basis based on (i) the responsibilities of the individual’s position, (ii) the individual’s salary history, performance and perceived ability to influence our financial performance in the short and long-term, (iii) the compensation of our other employees, and (iv) an evaluation of salaries for similar positions in our benchmark group and other competitive factors. We generally seek to set individual base salaries within a reasonable range versus comparable individuals in our benchmark group, taking into account factors such as individual performance and seniority, and taking into account the performance of our company relative to comparable companies under the 2017 Equilar Benchmarks.
Base Salary. We pay a base salary to each member of our executive management (each, an “executive manager”) in order to allow the executive manager to cover his or her living expenses and in order to compete with other employers. We generally establish base salaries for each individual on an annual basis based on (i) the responsibilities of the individual’s position, (ii) the individual’s salary history and performance with us and perceived ability to influence our financial performance in the short and long-term, (iii) the compensation of our other employees, and (iv) an evaluation of salaries for similar positions in our benchmark group and other competitive factors. We generally seek to set individual base salaries within a reasonable range versus comparable individuals in our benchmark group, taking into account factors such as individual performance and seniority, and taking into account the performance of our company relative to comparable companies under the 2020 Equilar Benchmarks.

2016


2019 Base Salaries

Each corporate officer at the time of the April 15, 2016 Compensation Committee action had his 2016


For 2019, each executive officer's base salary was set by the Compensation Committee in a range between the 3851st and 99th and 66th percentile versus the 20162019 Equilar Benchmarks. In particular, the base salaries for our chief executive officer and our chief financial officer for 2019 were set at approximately the 99th and 76th percentiles, respectively, versus the 2019 Equilar Benchmarks. In addition, the salary for our chief product officer, our chief marketing officer and the chief executive officer of our ShipStation subsidiary were set at the 89th, 89th and 99th percentiles, respectively, versus the 2019 Equilar Benchmarks.

The Compensation Committee believes that the range of base salaries it set is reasonable.

2020 Base Salaries

For 2020, each executive officer's base salary was set by the Compensation Committee in a range between the 70th and 99th percentile versus the 2020 Equilar Benchmarks. In particular, the salaries for our chief executive officer and our chief financial officer and co-president, for 20162020 were set at approximately the 5295ndth percentile and 90th percentiles, respectively, versus their respective 20162020 Equilar Benchmarks. In addition, the salary for our chief legalproduct officer, waschief marketing officer, and the chief executive officer of our ShipStation subsidiary were set at the 5193strd percentile, 88th and 96th percentiles, respectively, versus the applicable 20162020 Equilar Benchmark. Mr. Khechfe’s and Mr. Rifai’s 2016 base salaries were initially those that had already been established for them prior to our acquisition of Endicia in November 2015, and were adjusted when those individuals were promoted to our executive management in July 2016.

TheBenchmarks.


Based on the benchmarking analysis described above, the Compensation Committee believes that the range of base salaries it set is reasonable. In setting the 2016 base salaries of executive management, the Compensation Committee noted that when examining the 114 companies that constitute the complete list of all companies across all titles in the 2016 Equilar Benchmarks for all of our executives, Stamps.com Inc. ranks very highly in several key financial ratios, including the 88th percentile for return on equity, the 93rd percentile for return on assets, and the 94th percentile for return on revenue.

2017 Base Salaries

For 2017, each corporate officer’s base salary was set by the Compensation Committee between the 50th and 81st percentile versus the 2017 Equilar Benchmarks. In particular, the salaries for our chief executive officer, and our chief financial officer and co-president, for 2017 were set at approximately the 55th and 64th percentiles, respectively, versus the 2017 Equilar Benchmarks. In addition, the salaries for our chief strategy officer, senior VP of sales and customer development and chief legal officer were set at the 50th, 76th and 74th percentiles, respectively, versus the 2017 Equilar Benchmarks.


18


The Compensation Committee believes that the range of base salaries it set is reasonable.

The following table sets forth the base salaries for our named executive officers established by the Compensation Committee for 2017.

Name and
Principal Position
2017 Base
Salary
Percent Increase from
2016 Base Salary
2017 Base Salary Percentile
Versus 2017 Equilar Benchmark
Ken McBride
$
720,958
 
 
10
%
55th percentile
Chief Executive Officer and Chairman of the Board of Directors
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kyle Huebner
$
437,938
 
 
10
%
64th percentile
Chief Financial Officer and Co-President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amine Khechfe
$
362,500
 
 
30
%
50th percentile
Chief Strategy Officer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Steve Rifai
$
362,500
 
 
37
%
76th percentile
Senior VP of Sales and Customer Development
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seth Weisberg
$
407,160
 
 
11
%
74th percentile
Chief Legal Officer and Secretary
 
 
 
 
 
 
 
2019 and 2020.

Name and
Principal Position
 2019 Base Salary 2020 Base Salary Percent Increase from 2019 Base Salary 2020 Base Salary Percentile Versus 2020 Equilar Benchmark
Ken McBride $845,518 $888,000 5.0% 
95th percentile
Chief Executive Officer and Chairman of the Board of Directors        
         
Jeff Carberry $425,000 $450,000 5.9% 
90th percentile
Chief Financial Officer        
         
Sebastian Buerba $445,814 $475,000 6.5% 
88th percentile
Chief Marketing Officer        
         
John Clem $450,000 $475,000 5.6% 
93rd percentile
Chief Product Officer        
         
Nathan Jones $462,000 $490,000 6.1% 
96th percentile
CEO of our ShipStation subsidiary        

For information concerning the base salaries paid to each of our named executive officers for 2014, 20152017, 2018 and 2016,2019, see “Summary Compensation Table.”


Non-Equity Incentive Plan Compensation. We pay non-equity incentive plan compensation to our corporate officers in order to provide incentives for them to drive the business toward annual goals that are set by the Compensation Committee. Our incentive-based compensation for fiscal 20162019 was based on a group bonus pool. The total bonus pool begins with a base pool amount, which is then adjusted based on a formula using our actual performance relative to certain financial targets for the year. (The Compensation Committee also retains the right to adjust the pool for other factors.) Once the final group bonus pool is set after year end, the Compensation Committee allocates it to individual members of executive management based on (i) individual performance and contributions during the year and (ii) individual total compensation relative to the compensation benchmarks. No individual executive manager has an individual bonus guarantee, and in order to earn and receive a bonus, an executive manager must be employed on the date of the Compensation Committee meeting where the final bonus plan outcome is determined.

On April 15, 2016,5, 2019, the Compensation Committee approved a non-equity incentive plan for 20162019 (the “2016“2019 Plan”) under which membersour corporate officers, including some of our executive management, including our named executive officers, are eligible for cash bonus awards to be paid in 2017.2020. The 20162019 Plan setsets a base level aggregate bonus pool of $2.3$4.9 million (the “2016“2019 Base Pool”) and providedprovides that the actual bonus pool for 20162019 could range from zero to twice the 20162019 Base Pool based on our performance in 20162019 relative to pre-set targets for revenue and non-GAAP adjusted EBITDA (which, as publicly reported by the company, typically excludes non-recurring and / or non-cash items such as ASC 718-related expenses, litigation charges, non-recurring adjustments, changes in non-cash contingent consideration valuation, corporate development / acquisition expenses, and other one-time and non-recurring items). In 2015, theThe Compensation Committee had set the amount of the aggregate bonus pool2019 Base Pool equal the 2018 Base Pool, but with adjustments to reflect the net increase in the number of participants for 2015 (the “2015 Base Pool”) at $1.8 million, so that, if2019. If executive management performedperforms at a reasonable level and is able to generate results at the midpoint of the guidance range, as a group they would receive a total cash compensation for 2015 slightly above2019 at the median level (at the 7183strd percentile) versus the Equilar benchmarks identified by the Compensation Committee for 2015. The Compensation Committee increased the size percentile of the 2016 Base Pool to $2.3 million from the $1.8 million 2015 Base Pool because of the overall increasethose companies in the size of our company and the scope

2019 Equilar Benchmark.


19

of responsibilities of our executive management. If the executive management were to achieve performance that would result in the 2016 bonus pool being set at the $2.3 million level, the 2016 Plan would represent approximately 45% of the total fiscal 2016 compensation for the participants in the 2016 Plan.

The Compensation Committee had established revenue and non-GAAP adjusted EBITDAtargets for purposes of the 20162019 Plan based on the latest publicly available guidance at the time of the 20162019 Compensation Decisions were made – that is the guidance issued by us was on February 25, 2016,21, 2019, when we stated that we expected 20162019 revenue to be in a range of $290$540 million to $310$570 million, and 20162019 non-GAAP net earnings per fully diluted shareadjusted EBITDA to be in a range of $5.00$145 million to $5.50.$165 million. The final 20162019 financial results were revenue of $364.3$571.9 million, and non-GAAPnon-


GAAP adjusted EBITDA of $174.4 million, and non-GAAP adjusted income per fully diluted share of $8.70.$164.4 million. Under the 20162019 Plan, the revenue result generated an increase to the 20162019 bonus pool of 33.3%10.0%, and the non-GAAP adjusted EBITDA result generated an increase to the 20162019 bonus pool of 66.7%15.0%, and the two factors were added together to generate a total increase of 100%25.0% to the 2019 Base Pool (i.e. double the amount of the 2016 Base Pool).

Pool.


Prior to making the final decision on the 20162019 Plan, the Compensation Committee discussed individual performance of the executive managers, the performance of Mr. McBride in his overall leadership of our company, and the overall company performance. Mr. McBride and the executive management team generated very positive 2016 financial results including: (i) total revenue of $364.3 million, up 70% versus 2015; (ii) non-GAAP adjusted EBITDA of $174.4 million, up 111% versus 2015; (iii) non-GAAP net income from operations of $169.8 million up 115% versus 2015; (iv) non-GAAP adjusted income per fully diluted share of $8.70 up 96% versus 2015; (v) paid customers growth from 633,000 to 681,000 during 2016; and (vi) total postage printed growth of 106% to $5.5 billion for 2016. In lightAll of the aforementioned positive factors,accomplishments were discussed. After considering the company and individual executive management performance, the Compensation Committee decided to set the final 20162019 Plan bonus to $4.6bonuses at the amount yielded by the formula included in the 2019 Plan, or $6.125 million, or 200%an increase of 25.0% over the 20162019 Base Pool.


Once the Compensation Committee established the 20162019 Plan bonus pool level, the Compensation Committee discussed allocation of the bonus pool for the individual executive managers. The Compensation Committee believed that mostall of the executive managers performed well in 2016.

2019.


20

Based on these factors and an assessment that each of the named executive officers had satisfied his individual goals and objectives, the Compensation Committee set the individual allocation of the 20162019 bonus pool. The compensation was as follows:

Name and
Principal Position
2016 Non-Equity
Incentive Plan
(To Be Paid in
May 2017)
2016 Bonus
Compensation (1)
2016 Total Base
Salary plus 2016
Non-Equity
Incentive Plan plus
2016 Bonus
Compensation
2016 Total Base
Salary plus
Non-Equity
Incentive Plan
Compensation Plus
2016 Bonus
Compensation Versus
2017 Equilar
Benchmarks
Ken McBride
$
1,620,000
 
 
—
 
$
2,274,796
 
82nd percentile
Chief Executive Officer and Chairman of the Board of Directors
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kyle Huebner
$
794,000
 
 
—
 
$
1,191,748
 
99th percentile
Chief Financial Officer and Co-president
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amine Khechfe (1)
 
—
 
$
236,650
 
$
515,467
 
51st percentile
Chief Strategy Officer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Steve Rifai (1)
 
—
 
$
278,500
 
$
544,022
 
51st percentile
Senior VP of Sales and Customer Development
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seth Weisberg
$
611,000
 
 
—
 
$
977,668
 
99th percentile
Chief Legal Officer and Secretary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
All other executive officers
$
1,545,000
 
 
—
 
$
2,601,409
 
Not meaningful
 
 
 
 
 
 
 
 
 
 
 
Total (2)
$
4,570,000
 
$
515,150
 
$
8,105,110
 
88th percentile
(1)Messrs. Khechfe and Rifai were not executive officers at the time the 2016 Plan was established, and did not participate in the 2016 Plan. Both such executive officers received discretionary bonuses for 2016 separate from the 2016 Plan, but are expected to participate in the 2017 Plan.
Name and Principal Position 
2019 Non-Equity
Incentive Plan
(To Be Paid in
May 2020)
 
2019 Total Base
Salary plus 2019
Non-Equity
Incentive Plan
 2019 Total Base Salary plus Non-Equity Incentive Plan Compensation Versus 2019 Equilar Benchmarks
Ken McBride $1,995,000
 $2,832,930
 
86th percentile
Chief Executive Officer and Chairman of the Board of Directors      
       
Jeff Carberry $555,000
 $966,808
 
92nd percentile
Chief Financial Officer      
       
Sebastian Buerba $715,000
 $1,156,813
 
99th percentile
Chief Marketing Officer      
       
John Clem $725,000
 $1,170,475
 
99th percentile
Chief Product Officer      
       
Nathan Jones $600,000
 $1,057,854
 
90th percentile
Chief Executive Officer of our ShipStation subsidiary      
       
All other executive officers (4 persons) participating in the 2019 Plan $1,535,000
 $3,158,250
 Not meaningful
       
Total $6,125,000
 $10,343,130
 
90th percentile
(2)$30,000 of the 2016 bonus pool was awarded to an individual who was an executive officer at the time the 2016 Plan was established and participated in the 2016 Plan, but was not an executive officer at the end of the fiscal year.

For additional information concerning the compensation of each of our named executive officers for 2016,2019, see “Summary Compensation Table.”


On April 19, 2017,3, 2020, the Compensation Committee approved a non-equity incentive plan for 20172020 (the “2017“2020 Plan”) under which our corporate officers, including some of our named executive officers, are eligible for cash bonus awards to be paid in 2018.2021. The 20172020 Plan sets a base level aggregate bonus pool of $3.25$5.0 million (the “2017“2020 Base Pool”) and provides that the actual bonus pool for 20172020 could range from zero to twice the 20172020 Base Pool based on our performance in 20172020 relative to pre-set targets for revenue and non-GAAP adjusted EBITDA (which, as publicly reported by the company, typically excludes non-recurring and / or non-cash items such as ASC 718-related expenses, litigation charges, non-recurring adjustments, changes in non-cash contingent consideration valuation, corporate development / acquisition expenses, and other one-time and non-recurring items). The Compensation

21

Committee set the amount of the 20172020 Base Pool at $3.25$5.0 million so that, ifto provide an approximately 2% increase to the 2019 Base Pool. If executive management performs at a reasonable level and is able to generate results at the midpointbottom end of the guidance range, then as a group they would receive a total cash compensation for 2017 slightly above2020 at the median level (at the 6782thnd percentile) percentile of those companies in the 20172020 Equilar Benchmark.


The latest publicly available guidance issued by us was on February 23, 2017,19, 2020, when we stated that we expected 20172020 revenue to be in a range of $400$570 million to $425$600 million, and 20172020 non-GAAP adjusted EBITDA to be in a range of $200$135 million to $220$155 million. The Compensation Committee considered the potential negative impact of the COVID-19 pandemic on the Company's 2020 results, and proposed a bonus plan schedule where no increase would be applied to the 20172020 Base Pool if the company achieves performance consistent with the mid-pointbottom end of its public guidance range. The Compensation Committee further proposed a 30% decreaseincrease be applied to the 20172020 Base Pool if the company achieves performance at the low endmidpoint of its guidance range. The Compensation Committee further proposed a 30%60% increase be applied to the 20172020 Base Pool if the company achieves performance at the hightop end of its guidance range. To illustrate some possible outcomes of the 20172020 Plan, the following table (i) shows the potential aggregate pool resulting under the 20172020 Plan if the company achieves a financial outcome at the topbottom end, midpoint, and bottomtop end of our guidance range and (ii) compares the resulting executive management team total cash compensation to the total cash compensation of the 20172020 Equilar benchmarks:

Company Performance vs.
Public Guidance
(1)
Total Resulting
Bonus Pool
(1)
Total Executive
Team Compensation (2)
Change in Total
Executive Team
Compensation versus
2016 Total Executive
Team Compensation
(2)
Total Team
Compensation vs.
2017 Equilar
Benchmarks (3)
Bottom End of Guidance Range
($400 million revenue, $200 million Non-GAAP adjusted EBITDA)
$
2,275,000
 
$
5,712,000
 
 
-30
%
52nd percentile
 
 
 
 
 
 
 
 
 
 
 
Midpoint of Guidance Range
($412.5 million revenue, $210 million Non-GAAP adjusted EBITDA)
$
3,250,000
 
$
6,687,000
 
 
-17
%
67th percentile
 
 
 
 
 
 
 
 
 
 
 
Top End of Guidance Range
($425 million revenue, $220 million Non-GAAP adjusted EBITDA)
$
4,225,000
 
$
7,662,000
 
 
-5
%
82nd percentile
Benchmarks:

Company Performance vs. Public Guidance
(1)		 Total Resulting Bonus Pool
(1)		 Total Executive Team Compensation (2) Change in Total Executive Team Cash Compensation versus 2019 Total Executive Team Cash Compensation (2) Total Team Compensation vs. 2020 Equilar Benchmarks (3)
Bottom End of Guidance Range
($570 million revenue, $135 million Non-GAAP adjusted EBITDA)
 $5,000,000 $9,481,000 -8% 
82nd percentile
         
Midpoint of Guidance Range
($585 million revenue, $145 million Non-GAAP adjusted EBITDA)
 $6,500,000 $10,981,000 6% 
92nd percentile
         
Top End of Guidance Range
($600 million revenue, $155 million Non-GAAP adjusted EBITDA)
 $8,000,000 $12,481,000 20% 
100th percentile


(1)The Compensation Committee retains the right to change the actual bonus pool in its discretion.
(2)Total executive management team cash compensation is projected total base salary plus total incentive-based cash compensation for all current executive managers as a group, including all named executive officers and others.
(3)Total executive management team cash compensation versus 20172020 Equilar benchmarksBenchmarks is the ranking of total projected executive management team cash compensation versus the total of all 20172020 Equilar benchmarksBenchmarks for all executive managers that are included under the 20172020 Bonus Plan.

This table merely illustrates certain potential outcomes, and does not represent any statement that the guidance given in February 20172020 continues to be valid. Our actual results may vary from our prior guidance, and those differences may be material.

•Equity Incentives

Equity Incentives. We generally grant equity participation to our executive managers in order to provide direct incentives for them to guide the business toward our long-term goal of increasing stockholder value. Historically, the primary form of equity participation that we awarded our executive management consisted of incentive stock options (ISOs) and non-qualified stock options. We selected this form of equity participation because of the favorable accounting and tax treatments (particularly in order to provide direct incentives for them to guide the business toward our long-term goal of increasing stockholder value. Historically, the primary form of equity participation that we awarded our executive management consisted of incentive stock options (ISOs) and non-qualified stock options. We selected this form of equity participation because of the favorable accounting and tax treatments (particularly in

22

past years), and the prevailing convention within the software and technology industry, in which we compete for talent, of providing stock options to executive management employees. When we grant stock options, our practice is for our chief executive officer to meet with the Compensation Committee to discuss appropriate levels of stock option grants for each executive manager. Timing of stock option grants typically relates to (i) new employee hires, (ii) promotions of existing employees, (iii) year-end performance reviews of employees, or (iv) company-wide option grants as deemed appropriate by the Compensation Committee.



At its April 5, 2019 meeting, the Compensation Committee examined equity grant practices over the three fiscal years ending in 2018 at 58 public companies (the "2019 Option Benchmarks"): (i) having market capitalization of at least $1 billion; (ii) with revenue between $100 million and $750 million; (iii) operating in the technology sector; and (iv) excluding companies that underwent unusual transactions, such as their initial public offering or acquisitions or restructurings during the analysis period, or had differentiating structural features, such as holding companies and closely held companies. For each 2019 Option Benchmark that issued full-value awards during the measurement period, the Compensation Committee adjusted the full-value awards based on the ratio of the fair value of a full-value award to the fair value of an option to reflect the higher dilutive nature of full-value awards as compared to options. In each individual company case the company-specific ratios were calculated for each company based on information from Equilar and the respective 10-K of each company. This was calculated as the raw value of the option granted (i.e. options multiplied by strike price) divided by the reported fair value of the option grant. A 2.0:1 ratio was assumed where Equilar data was unavailable; this assumption was deemed reasonable as there is a 2.3:1 median where Equilar data was available and our 2010 Plan establishes a 2.0:1 ratio.

The Compensation Committee then decided to issue a company-wide option grant of 1.65 million total options. The Compensation Committee instructed Mr. McBride to develop a recommended allocation for such company-wide option grant and to return to the Compensation Committee with his recommendation. The proposed 1.65 million targeted company-wide option grant was meant to be a retention grant to all existing employees, including executive managers, for the next three years. The proposed 1.65 million company-wide option grant would result in the company granting, in the aggregate, slightly less than the amount of options, measured as a percentage of the number of outstanding shares and options, as were granted by the median of the 2019 Option Benchmarks during the periods reviewed. On June 3, 2019, our Compensation Committee granted a total of 1.675 million options pursuant to the company-wide option grant. Each of our executive officers was awarded a stock option, and our executive management team received an aggregate of 770,000 options, pursuant to such company-wide option grant.

We currently do not have specific equity ownership goals relative to benchmarks for our named executive officers. In determining the number of options to be granted to executive officers, the Compensation Committee generally takes into account such factors as the individual’s position and scope of responsibility; the vesting period (and thus, retention value) remaining on the executive’s existing options; the executive’s ability to affect profitability and stockholder value; the individual’s historic and recent job performance; equity compensation for similar positions at comparable companies; and the value of stock options in relation to other elements of total compensation.

•Post-Termination Compensation Arrangements. We provide post-termination compensation arrangements to certain members of our executive management as we believe that it is important to give them some limited protection in the event they are terminated without cause or terminated following a change in control. Further, it is our belief that the interests of stockholders will be best served if the interests of our executive management are aligned with them, and providing change in control benefits is designed to eliminate, or at least reduce, any reluctance of executive management to pursue potential change in control transactions that may be in the best interests of stockholders, but potentially adverse to management’s employment interests. The cash components of all of our executive management post-termination compensation arrangements, if any, range from three to six months of base salary, and typically also include continuing health benefits during the same period. For example, our chief executive officer and our chief financial officer and co-president would each receive six months of base salary following his termination without cause or termination following a change in control. In addition, all unvested options under our stock option plans, including those held by executive management, vest on involuntary termination of employment within 18 months following a change of control.

Post-Termination Compensation Arrangements. We provide post-termination compensation arrangements to certain members of our executive management as we believe that it is important to give them some limited protection in the event they are terminated without cause or terminated following a change in control. Further, it is our belief that the interests of stockholders will be best served if the interests of our executive management are aligned with them, and providing change in control benefits is designed to eliminate, or at least reduce, any reluctance of executive management to pursue potential change in control transactions that may be in the best interests of stockholders, but potentially adverse to management’s employment interests. The cash components of our executive management post-termination compensation arrangements, for executives who have any, are up to six months of base salary, and typically also include continuing health benefits during the same period. For example, our chief executive officer would receive six months of base salary following his involuntary termination without cause or his resignation or termination following a change in control. In addition, all unvested options under our stock option plans, including those held by executive management, vest on involuntary termination of employment within 18 months following a change of control.

For information concerning the post termination compensation of our named executive officers, see “Potential Payments Upon Termination or Change-In-Control.”

•Clawback Policy. On April 24, 2015, our Compensation Committee adopted and has communicated to our executive officers, a “clawback” policy to further align the interests of our executives with stockholders. Under our clawback policy, our Compensation Committee may, in certain cases reduce or cancel, or require recovery of, any executive officer’s annual bonus or long-term incentive compensation award, or portions thereof, if the Board determines that such award should be adjusted because that executive officer has engaged in intentional misconduct that has led to a material restatement of the company’s financial statements.

Clawback Policy. On April 24, 2015, our Compensation Committee adopted and has communicated to our executive officers, a “clawback” policy to further align the interests of our executives with stockholders. Under our clawback policy, our Compensation Committee may, in certain cases reduce or cancel, or require recovery of, any executive officer’s annual bonus or long-term incentive compensation award, or portions thereof, if the Board determines that such award should be adjusted because that executive officer has engaged in intentional misconduct that has led to a material restatement of the company’s financial statements.

Other Benefits


As reflected in the Summary Compensation Table, we generally do not provide specialsignificant perquisites to our executive management. Executive management participates in our standard benefit plans on the same terms as other employees. These plans include medical and dental insurance, 401(k), life insurance, charitable gift matching (limited to 50% matching of up to $200 per employee per year) and our employee stock purchase plan. Relocation benefits for executive officers may also be reimbursed but are individually negotiated when they occur.

On April 5, 2019, the Compensation Committee approved a program whereby employees who retire as C-level officers after at least 20 years of service may continue to participate in our health plans. Participating executive retirees must pay 100% of the applicable premiums, and the program may be canceled or modified at any time by our Compensation Committee in its sole discretion.

Tax and Accounting Considerations.


We record cash compensation as an expense at the time the obligation is accrued. Under Section 162(m) of the Internal Revenue Code, compensation in excess of $1,000,000 paid in any one year to any named executive officers (other than our chief financial officer and co-president)or persons who were named executive officers for taxable years beginning on or after January 1, 2017 (collectively "Covered Persons"), is not tax deductible by us.  We incurred an aggregate of approximately $2,450,000 of compensation expense for tax purposes in 2019 to us unless certain requirements are met. Our current program for the payment of non-equity incentive compensation and additional bonuses does not meet the Section 162(m) requirements necessary to be considered “performance-based,” and,

23

as a result, is included in compensation subject to theour Covered Persons that exceeded $1 million limitation on deductibility. Except for approximately $1,275,417 in excess of $1 million paid to our chairman of the board and chief executive officer, the cash compensation paid to each, of our named executive officers in 2016 was less than $1 million, and, therefore, the deductibility of such excess compensation was not affectedtax deductible by the limitations ofus under Section 162(m). We retain the flexibility to pay compensation which is not deductible for tax purposes because we believe that doing so permits us to take into consideration factors that are consistent with good corporate governance and the best interests of our stockholders.

In general, income recognized by employees upon the exercise of nonqualified stock options is tax-deductible fortax deductible by us, subject to any limitations that may be imposed by Section 162(m). Gain with respect to such options that are granted or modified after November 2, 2017. Income recognized by an employee with respect to an incentive stock option will not be tax deductible by us unless there is a “disqualifying disposition” of the shares by the employee. A disqualifying disposition occurs when an employee sells or disposes of incentive stock option shares within two years after the grant date or within one year after the exercise date. TheUpon a disqualifying disposition, the employee is taxed on a portion of the gain, based on stock value at the time of exercise of the incentive stock option, at ordinary income tax rates. rates, and such portion of the gain may be tax deductible by us.
In addition, ifgeneral, income recognized by employees upon the vesting of stock awards is tax deductible to the employer, subject to limitations of Section 162(m).  If in the future we grant restricted stock or restricted stock unit awards to named executive officers, that vest on a time basisincome recognized by such employees upon grant or otherwise are not performance-based for purposes of Section 162(m), theyvesting may not be fully tax deductible by us at the time the award is otherwise taxable to the employee.

employee as a result of the Section 162(m) limitation.

As a result of her becoming a named executive officer in 2018, the value of the shares issued to the former chief executive officer of our ShippingEasy subsidiary pursuant to the Management Incentive Plan in 2019 are included in calculating the amount of her compensation subject to the Section 162(m) limitation on tax deductibility to us.
We account for equity compensation paid to our executives and employees under the rules of ASC 718, which requires us to estimate and record a non-cash expense over the term of the equity compensation award. The value of a total of 982,667 options granted under the 2014 amendment to our 2010 Equity Incentive Plan (the “2014 Amendment”) and approved by the Board in 2014, subject to stockholder approval (the “Contingent Grants”), was not included in the compensation expense for 2014, because such options had no value, as computed in accordance with ASC 718, until the stockholder approval upon which they were contingent was obtained in June 2015. Accordingly, although the Contingent Grants were made in 2014, we valued the expense based on our stock price in June 2015 when such Contingent Grants were approved by our stockholders. Due to the increase in our stock price between the date of grant and the date of stockholder approval, the Contingent Grants were valued at $42.66 per share, as compared to the $11.84 per share valuation for the other options granted on the same date. The Contingent Grants will result in an aggregate stock-based compensation expense of up to approximately $41.9 million, amortized over the vesting period from October 2015 through September 2017 (up to $5.2 million, $21.0 million and $15.7 million in each of fiscal 2015, 2016 and 2017, respectively).

Forward-Looking Statements

This proxy statement contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to expectations concerning matters that are not historical facts. You can identify many (but not all) of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “projects,” “seeks,” “intends,” “plans,” “could,” “would,” “may” or other similar expressions in this proxy statement. We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995. We caution you that any forward-looking statements presented in this proxy statement, or that we may make orally or in writing from time to time, are based on beliefs and assumptions made by, and information currently available to, us. Such statements are based on assumptions, and the actual outcome will be affected by known and

unknown risks, trends, uncertainties and other factors, many of which are beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance, and some will inevitably prove to be incorrect. As a result, our actual future results may differ from our expectations, and those differences may be material. We do not undertake any obligation to release publicly any revisions or updates to forward-looking statements.

Please refer to the risk factors under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 1A. Risk Factors” of our 20162019 Annual Report on Form 10-K as well as those described elsewhere in our public filings. The risks included are not exhaustive, and additional factors could adversely affect our business and financial performance. We operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, one should avoid undue reliance on forward-looking statements.


24

COMPENSATION COMMITTEE REPORT

The information contained in this Compensation Committee Report shall not be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing (except to the extent that we specifically incorporate this information by reference) and shall not otherwise be deemed “soliciting“soliciting material” or “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934 (except to the extent that we specifically request that this information be treated as soliciting material or specifically incorporate this information by reference).


The Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” section of this proxy statement with management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the “Compensation Discussion and Analysis” section be included in this proxy statement.

Submitted by the Compensation Committee:
Mohan P. Ananda
David C. Habiger
Lloyd I. Miller, III


25


Submitted by the Compensation Committee:

Mohan P. Ananda

David C. Habiger

SUMMARY COMPENSATION TABLE

The following summary compensation table indicates the total compensation earned during 2016, 20152019, 2018 and 2014,2017, respectively, by our chief executive officer, our chief financial officer and co-president and each of our other three highest compensated executive officers whose total compensation exceeded $100,000 during 2016.2019. The listed individuals are referred to in this proxy statement as the “named executive officers.”

Name and Principal Position
Year
Base
Pay
Bonus
(1)(2)
Non-Equity
Incentive
Plan
Compensation (2)
Option
Awards
(3)(4)
All Other
Compensation
(5)
Total(4)
Ken McBride
 
2016
 
$
654,796
 
$
0
 
$
1,620,000
 
$
0
 
$
5,300
 
$
2,280,096
 
Chairman of the Board and
 
2015
 
$
595,833
 
$
100,000
 
$
1,033,000
 
$
8,371,014
 
$
5,300
 
$
10,105,147
 
Chief Executive Officer
 
2014
 
$
532,667
 
$
59,542
 
$
590,458
 
$
986,663
 
$
5,200
 
$
2,174,530
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kyle Huebner
 
2016
 
$
397,748
 
$
0
 
$
794,000
 
$
0
 
$
5,300
 
$
1,197,048
 
Chief Financial Officer and
 
2015
 
$
364,583
 
$
50,000
 
$
520,000
 
$
4,896,500
 
$
5,300
 
$
5,836,383
 
Co-President
 
2014
 
$
342,667
 
$
30,229
 
$
299,771
 
$
592,000
 
$
5,200
 
$
1,269,867
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amine Khechfe
 
2016
 
$
278,817
 
$
236,650
 
$
0
 
$
2,171,400
 
$
5,300
 
$
2,692,167
 
Chief Strategy Officer (6)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Steve Rifai
 
2016
 
$
265,522
 
$
278,500
 
$
0
 
$
1,085,700
 
$
4,560
 
$
1,634,282
 
Senior VP of Sales and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer Development (7)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seth Weisberg
 
2016
 
$
366,668
 
$
0
 
$
611,000
 
$
0
 
$
5,300
 
$
982,968
 
Chief Legal Officer and
 
2015
 
$
320,000
 
$
50,000
 
$
440,000
 
$
3,917,200
 
$
5,300
 
$
4,732,500
 
Secretary
 
2014
 
$
297,833
 
$
16,947
 
$
168,053
 
$
473,600
 
$
5,200
 
$
961,633
 
Name and Principal Position Year Base Pay 
Bonus
(1)
 Non-Equity Incentive Plan Compensation 
Option Awards
(2)
 All Other Compensation (3) Total
Ken McBride 2019 $837,930 $0 $1,995,000 $2,879,850 $36,696 $5,749,476
Chairman of the Board and 2018 $791,740 $0 $1,900,000 $0 $5,602 $2,697,342
Chief Executive Officer 2017 $720,020 $0 $1,800,000 5,601,350 $5,400 $8,126,770
               
Jeff Carberry 2019 $411,808 $0 $555,000 $1,631,915 $5,702 $2,604,425
Chief Financial Officer (4) 2018 $334,996 $0 $525,000 $0 $6,164 $866,160
  2017 $240,609 $400,000 $0 $3,171,228 $3,567 $3,815,404
               
Sebastian Buerba 2019 $441,813 $0 $715,000 $1,727,910 $6,995 $2,891,718
Chief Marketing Officer (5) 2018 $417,459 $0 $675,000 $0 $5,512 $1,097,971
  2017 $372,431 $0 $628,000 $2,704,100 $5,195 $3,709,726
               
John Clem 2019 $445,475 $0 $725,000 $1,919,900 $265,192 $3,355,567
Chief Product Officer 2018 $416,155 $0 $685,000 $0 $51,567 $1,152,722
  2017 $378,457 $0 $622,000 $2,704,100 $5,400 $3,709,957
               
J. Nathan Jones 2019 $457,854 $0 $600,000 $1,439,925 $11,302 $2,509,081
Chief Executive Officer of our 2018 $432,615 $500,000 $0 $3,707,820 $11,102 $4,651,537
ShipStation subsidiary (6)             


(1)Bonuses for 2016 paid to corporate officers who were not participants in the 2016Non-Equity Incentive Plan for the applicable year, such as Messrs. KhechfeMr. Jones in 2018 and Rifai,Mr. Carberry in 2017, consisted of discretionary bonuses awarded by the Compensation Committee.
(2)Bonuses paid to corporate officers and other executive management for 2015 consisted of payments under the non-equity incentive plan (the “2015 Plan”) and a special one-time bonus related to the signing of the definitive agreement to acquire Endicia for certain of our executives and other key employees, in the aggregate amount of $280,000 (the “Endicia Deal Bonus”). These bonuses were not covered under the 2015 Plan but rather were special one-time bonuses to recognize extraordinary efforts in the completion of the definitive agreement to acquire Endicia. Pursuant to the 2015 Plan, an aggregate bonus pool of $3,584,000 would have been allocated to the executive management team to be paid out in May 2016. However, at the chief executive officer’s recommendation, the Compensation Committee determined that the $280,000 Endicia Deal Bonus be treated as an advance against the 2015 Plan (even though $20,000 of the Endicia Deal Bonus was not paid to our executive officers), thereby reducing the amount to be paid out in May 2016 by $280,000. Although the $280,000 amount is reflected as a “bonus” in our Summary Compensation Table, the amount of this discretionary bonus was ultimately earned by our executive management under the terms of the 2015 Plan.
(3)(2)The amounts in this column generally represent the aggregate grant date fair value of option awards granted during the relevant year, computed in accordance with ASC 718. The assumptions for these amounts are included in Note 2 to our audited financial statements included in our Annual Report on Form 10-K for 2016. However, the value of the options granted under the 2014 Amendment and approved by the Board in 2014 (the “Contingent Grants”) was not included in the compensation line for 2014, because such options had no value, as computed in accordance with ASC 718, until the stockholder approval upon which they were contingent was obtained in June 2015. Although the Contingent Grants were made in 2014, we valued the expense based on our stock price in June 2015 when such Contingent Grants were approved by our stockholders.2019.

26

(4)
(3)Due to the increase in our stock price between the date of grant and the date of stockholder approval, the Contingent Grants were valued at $42.66 per share, as compared to the $11.84 per share valuation for the other options granted on the same date. As a result, the Contingent Grants to Messrs. McBride, Huebner and Weisberg accounted for $7,110,014, $4,266,000 and $3,412,800, respectively, of their option award amounts in 2015. In the aggregate, the Contingent Grants resulted in stock-based compensation expense of up to approximately $41.9 million, including the $14.8 million attributable to our named executive officers.
(5)Consists ofIncludes contributions to our 401(k) plan that we made on behalf of each named executive officer to match a portion of his elective deferred contributions to such plan. For Mr. Clem, other compensation for 2018 includes $36,766 for costs of his relocation to the UK (and a $6,198 gross-up to cover related taxes), and other compensation for 2019 includes $50,847 for company-paid rent, $34,043 for travel for Mr. Clem and his family, $126,323 in tax equalization payments (and a further $13,839, $15,259 and $18,178 in gross-ups to cover taxes thereon) in connection with his working abroad. For Mr. McBride, other compensation for 2019 includes $16,400 for a company-paid physical health review and a related $10,697 gross-up to cover related taxes. For Messrs. McBride and Buerba, other compensation includes $2,000 and $1,000 for gifts commemorating 20 and 15 years of service, respectively, to the company (and gross-ups to cover related taxes of $896 and $449). Other compensation includes $1,000 paid to each of Mr. McBride and Mr. Clem in 2019, and $3,000 paid to Mr. Clem in 2018, related to patent inventor bonuses. Other compensation for each named executive officer also includes a $100 holiday gift card and a related tax gross-up of $2. In 2018, Mr. Clem received an additional holiday gift card, which was denominated in Great British Pounds, having a taxable value of $127 (and a related tax gross-up of $3).
(6)
(4)Mr. KhechfeCarberry was appointed as our chief strategyfinancial officer on July 20, 2016.31, 2017. Prior to that, he served as the general manager of Endiciaour vice president, finance and was not an executive officer of ourthe company. The table reflects Mr. Khechfe’sCarberry’s total compensation from us for 2016,each of 2017, 2018 and 2019, in all capacities.
(7)
(5)Although Mr. Rifai was appointed asBuerba has been our Senior VP of Sales and Customer Development on July 20, 2016. Prior to that,chief marketing officer since January 2012, he served as VP of Customer Development of Endicia and was not an executive officer of the company until he began reporting directly to our company.chief executive officer on July 31, 2017. The table reflects Mr. Rifai’sBuerba’s total compensation from us for 2016,each of 2017, 2018 and 2019, in all capacities.

(6)Although Mr. Jones has been the chief executive officer of our ShipStation subsidiary since we acquired it in 2014, he was not determined to be an executive officer of the company by our board of directors until July 25, 2018. The table reflects Mr. Jones’s total compensation from us for 2018 and 2019, in all capacities.


GRANTS OF PLAN-BASED AWARDS

The following table provides information with respect to grants of plan-based awards made during 20162019 to the named executive officers.

 
 
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards (1)
Option Awards:
Number of
Securities
Underlying
Option
(#)(5)
Exercise or
Base Price
of Option
Awards
($/Sh)
Grant Date
Fair Value
of Stock
and Option
Awards(6)
Name
Grant
Date
Threshold
($)(2)
Target
($)(3)
Maximum
($)(4)
Ken McBride
4/15/2016
$
709,238
 
$
840,849
 
$
1,462,346
 
 
—
 
 
—
 
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kyle Huebner
4/15/2016
$
356,810
 
$
423,022
 
$
735,690
 
 
—
 
 
—
 
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amine Khechfe
2/5/2016
 
—
 
 
—
 
 
—
 
 
70,000
 
$
87.88
 
$
2,171,400
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Steve Rifai
2/5/2016
 
—
 
 
—
 
 
—
 
 
35,000
 
$
87.88
 
$
1,085,700
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seth Weisberg
4/15/2016
$
306,731
 
$
363,650
 
$
632,435
 
 
—
 
 
—
 
 
—
 
    
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards (1)(2)
 
Option Awards:
Number of Securities Underlying Option
(#)(6)
 Exercise or Base Price of Option Awards ($/Sh) Grant Date Fair Value of Stock and Option Awards(7)
Name 
Grant
Date
 
Threshold
($)(3)
 
Target
($)(4)
 
Maximum
($)(5)
 
Ken McBride 4/5/2019 $1,206,852 $1,724,074 $3,448,148      
  6/3/2020       150,000 $35.04 $2,879,850
               
Jeff Carberry 4/5/2019 $333,472 $476,389 $952,778      
  6/3/2020       85,000 $35.04 $1,631,915
               
Sebastian Buerba 4/5/2019 $428,750 $612,500 $1,243,148      
  6/3/2020       90,000 $35.04 $1,727,910
               
John Clem 4/5/2019 $435,102 $621,574 $1,225,000      
  6/3/2020       100,000 $35.04 $1,919,900
               
Nathan Jones 4/5/2019 $247,016 $352,881 $705,761      
  6/3/2020       75,000 $35.04 $1,439,925
               

(1)
Under the 20162019 Plan, seventen members of our management at the time the 2019 Plan was adopted, including each of our chiefnamed executive officer, our chief financial officer and co-president and our chief legal officer,officers, were eligible for cash bonus awards to be paid in 2017.2020. The 20162019 Plan set a base level aggregate bonus pool, the 20162019 Base Pool, and provided that the actual bonus pool for 20162019 could range from zero to twice the 20162019 Base Pool, based on our performance in 20162019 relative to targets for revenue and adjusted EBITDA (which, as we have publicly reported, typically excludes non-recurring and / and/or non-cash items such as ASC 718-related expenses, litigation charges, non-recurring adjustments, changes in non-cash contingent consideration valuation, corporate development / development/acquisition expenses, and other one-time and non-recurring items). In 2015, theThe Compensation Committee had set the amountsize of the aggregate bonus pool for 2015 (the “20152019 Base Pool”)Pool at $1.8$4.9 million so that, if executive management performedperforms at a reasonable level and is able to generate results at the midpoint of the guidance range, as a group they would receive a total cash compensation for 2015 slightly above2019 at the median level (at the 7183strd percentile) versus the Equilar benchmarks identified by the Compensation Committee for 2015. The Compensation Committee increased the size percentile of the 2016 Base Pool to $2.3 million from the $1.8 million 2015 Base Pool because of the overall increasethose companies in the size of our company and the scope of responsibilities of our executive management.2019 Equilar Benchmark. Pursuant to the 20162019 Plan, and based on our actual 20162019 financial results, the total bonus pool for 20162019 ended up 200%125% of the 20162019 Base Pool. For additional information about the 20162019 Plan, see “—“Executive Compensation—Compensation Discussion and Analysis—Non-equity Incentive Plan Compensation,” and for actual amounts to be paid under the 20162019 Plan for 2016,2019, which will be paid in May 2017,the second quarter of 2020, see “—“Executive Compensation—Summary Compensation Table.”

27

(2)Each of the named executive officers was eligible for an award under the 2019 Plan.
(3)The amounts in this column assumeassume: (i) an aggregate bonus pool equal to 97%70% of the 20162019 Base Pool, which would have resulted from an actual 20162019 financial outcome at the low-end of our February 201621, 2019 public guidance range for revenue and non-GAAP adjusted income per fully diluted share and the resulting equivalent non-GAAP adjusted EBITDA (note that our public guidance range was subsequently changed at various times throughout fiscal 2016)2019), and this would have been equivalent to $290$540 million in total revenue and $5.00$145 million in non-GAAP adjusted income per fully diluted share and the resulting equivalent non-GAAP adjusted EBITDA; and (ii) that each named executive officer receivedof Messrs. McBride, Carberry, Buerba and Clem would receive the same percentage share of the bonus pool that he received under the 20152018 bonus plan.plan; and (iii) that Mr. Jones, who did not participate in the 2018 bonus plan, would receive a one-ninth share of the amount of the 2019 bonus pool that is not assumed paid to Mr. McBride as described above. However, each officer’s bonus may vary based on achievement of individual

goals, and no individual executive officer was guaranteed any minimum amount, so the amount could in fact be zero.
(3)
(4)The amounts in this column assume (i) an aggregate bonus pool equal to 115%100% of the 20162019 Base Pool, which would have resulted from an actual 20162019 financial outcome at the mid-pointmidpoint of our February 201621, 2019 public guidance range of $300$555 million in total revenue and $5.25$155 million in non-GAAP adjusted income per fully diluted share and the resulting equivalent non-GAAP adjusted EBITDA (note that our public guidance range was subsequently changed at various times throughout fiscal 2016)2019); and (ii) that each named executive officer receivedof Messrs. McBride, Carberry, Buerba and Clem would receive the same percentage share of the bonus pool that he received under the 20152018 bonus plan. However, no individual named executive officer was guaranteed any minimum amount, soplan; and (iii) that Mr. Jones, who did not participate in the 2018 bonus plan, would receive a one-ninth share of the amount could in fact be zero.of the 2019 bonus pool that is not assumed paid to Mr. McBride as described above.
(4)
(5)The amounts in this column assume the maximum possible bonus pool of 200% of the 20162019 Base Pool, and that each named executive officer receivedof Messrs. McBride, Carberry, Buerba and Clem would receive the same percentage share of the bonus pool that he received under the 20152018 bonus plan.plan, and that Mr. Jones would receive a one-ninth share of the amount of the 2019 bonus pool that is not assumed paid to Mr. McBride. However, in the unlikely event that no other member of executive management received any bonus, and the Compensation Committee did not adjust the bonus pool as a result, any individual named executive officer could in theory be awarded the total amount of the bonus pool.
(5)
(6)These option awardsThe options awarded to the named executive officers in 2019 were all issued under theour 2010 Equity Incentive Plan, as amended, as part of the company-wide option grants described above under "Executive Compensation—Compensation Discussion and Analysis—Each Element of Compensation, Why We Pay It, and How We Determine Amounts—Equity Incentives." Such options vest with respect to 25%one-third of the shares on the first anniversary of the date of grant date, and with respect to the remaining 75% of shares in 24 approximately equal monthly installments overthereafter, provided the 36 months immediately thereafter.optionee remains employed by us.
(6)
(7)The amounts in this column represent the aggregate grant date fair value of option awards granted during 20162019 computed in accordance with ASC 718. The assumptions for these amounts are included in Note 2 to our audited financial statements included in our Annual Report on Form 10-K for 2016.
2019.


28

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END


The following table provides information on outstanding stock options held by the named executive officers at December 31, 2016:

 
Option Awards
Name
Number of
Securities
Underlying
Unexercised
Options
(#)
Number of
Securities
Underlying
Unexercised
Options
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
Exercisable
Unexercisable
Ken McBride
 
26,755
 
 
—
 
 
12.55
 
5/20/2021
 
 
80,248
(1)
 
—
 
 
32.41
 
9/19/2024
 
 
101,065
(2)
 
62,517
(2)
 
32.41
 
9/19/2024
 
 
18,055
(3)
 
31,945
(3)
 
66.28
 
4/9/2025
 
 
 
 
 
 
 
 
 
 
 
Kyle Huebner
 
16,338
 
 
—
 
 
12.55
 
5/20/2021
 
 
46,915
(1)
 
—
 
 
32.41
 
9/19/2024
 
 
59,405
(2)
 
37,510
(2)
 
32.41
 
9/19/2024
 
 
9,027
(3)
 
15,973
(3)
 
66.28
 
4/9/2025
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amine Khechfe
 
—
 
 
70,000
(4)
 
87.88
 
2/5/2026
 
 
 
 
 
 
 
 
 
 
 
Steve Rifai
 
—
 
 
35,000
(4)
 
87.88
 
2/5/2026
 
 
 
 
 
 
 
 
 
 
 
Seth Weisberg
 
31,915
(1)
 
—
 
 
32.41
 
9/19/2024
 
 
46,907
(2)
 
30,008
(2)
 
32.41
 
9/19/2024
 
 
7,222
(3)
 
12,778
(3)
 
66.28
 
4/9/2025
2019: 
Option AwardsStock Awards
NameNumber of Securities Underlying Unexercised Options (#) ExercisableNumber of Securities Underlying Unexercised Options (#) UnexercisableOption Exercise Price ($)Option Expiration DateEquity Incentive plan awards: number of unearned shares that have not vested (#)Equity Incentive plan awards: market or payout value of unearned shares that have not vested ($)
Ken McBride50,000 (1)
—
66.28
4/9/2025
108,746 (2)
36,254 (2)
112.00
4/25/2027
—
150,000 (3)
35.04
6/3/2029
Jeff Carberry10,000 (4)
—
45.35
2/2/2025
10,000 (5)
—
58.25
3/2/2025
46,665 (6)
13,335 (6)
152.15
8/1/2027
—
85,000 (3)
35.04
6/3/2029
Sebastian Buerba1,112 (1)
—
66.28
4/9/2025
27,221 (2)
17,502 (2)
112.00
4/25/2027
—
90,000 (3)
35.04
6/3/2029
John Clem36,915 (7)
—
32.41
9/19/2024
18,492 (1)
—
66.28
4/9/2025
52,498 (2)
17,502 (2)
112.00
4/25/2027
—
100,000 (3)
35.04
6/3/2029
Nathan Jones28,438 (8)
—
70.51
8/3/2025
2,604 (9)
209 (9)
87.88
2/5/2026
21,874 (10)
28,126 (10)
192.25
3/1/2028
—
75,000 (3)
35.04
6/3/2029


(1)These performance-based option awards issued under the 2010 Equity Incentive Plan, as amended, vested in equal monthly installments over a 12 month period from October 19, 2014 through September 19, 2015.
(2)These option awards issued under the 2014 Amendment vest monthly in equal monthly installments over a 24 month period and the first vesting date was October 19, 2015. The grants will fully vest on September 19, 2017.
(3)These performance-based option awards issued under the 2014 Amendment vest and become exercisable in equal monthly installments on the last day of each month over the 36 months following the November 18, 2015 close of the Endicia acquisition. The grants will fully
(2)These option awards issued under the 2010 Equity Incentive Plan, as amended, vest in 36 approximately equal monthly installments of approximately 4,028 shares beginning with October 1, 2017.
(3)These option awards issued under the 2010 Equity Incentive Plan, as amended, vest with respect to one-third of the shares on November 18, 2018.June 3, 2020, and with respect to the remaining two-thirds of the shares, in 24 approximately equal monthly installments thereafter.
(4)These option awards issued under the 2010 Equity Incentive Plan, as amended, vested in 36 approximately equal monthly installments beginning on March 2, 2015.
(5)These option awards issued under the 2010 Equity Incentive Plan, as amended, vested in 36 approximately equal monthly installments beginning on April 2, 2015.
(6)These option awards issued under the 2010 Equity Incentive Plan, as amended, vest in 36 approximately equal monthly installments of approximately 1,667 shares beginning with September 1, 2017.

(4)
(7)These option awards issued under the 2010 Equity Incentive Plan, as amended, vested in 24 monthly installments of approximately 1,667 shares beginning October 19, 2015.
(8)These option awards issued under the 2010 Equity Incentive Plan, as amended, vested with respect to 25% of the shares on the first anniversary of their February 5,August 3, 2016, grant date, and with respect to the remaining 75% of the shares, will vest in 36 approximately equal monthly installments over the 36 months immediately thereafter.
(9)
These option awards issued under the 2010 Equity Incentive Plan, as amended, vest with respect to 25% of the shares (i.e. 1,250 shares) on February 5, 2017, and with respect to the remaining 75% of the shares, in 36 approximately equal monthly installments of approximately 104 shares thereafter.
(10)These option awards issued under the 2010 Equity Incentive Plan, as amended, vest in 48 monthly installments of approximately 1,042 shares beginning April 1, 2018.

29

OPTION EXERCISES AND STOCK VESTED


The following table sets forth the number of shares acquired and the value realized upon exercise of stock options and the vesting of other stock awards during 20162019 by each of our named executive officers. None of our named executive officers holds any restricted shares of our common stock.

 
Option Awards
Name
Number of
Shares
Acquired
on Exercise
(#)
Value
Realized
on Exercise
($)(1)
Ken McBride
 
7,194
 
$
479,602
 
Kyle Huebner
 
14,138
 
$
1,060,814
 
Amine Khechfe
 
—
 
 
—
 
Steve Rifai
 
—
 
 
—
 
Seth Weisberg
 
14,181
 
$
1,276,685
 
Option AwardsStock Awards
NameNumber of
Shares
Acquired
on Exercise
(#)		Value
Realized
on Exercise
($)(1)		Number of shares acquired on vesting (#)Value realized on vesting ($)
Ken McBride—
$—
Jeff Carberry—
$—
Sebastian Buerba—
$—
John Clem—
$—
Nathan Jones—
$—

(1)Value realized on exercise is based on the fair market value of our common stock on the date of exercise minus the exercise price and does not necessarily reflect proceeds actually received by the named executive officer.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL

Messrs.

Mr. McBride Huebner and Weisbergthe company have entered into separation agreements with us suchagreed that, in the event of (i) an involuntary termination by us without cause or (ii) a resignation by the executive or termination by us following a change of control, these officershe will receive six months’ salary and benefits. The change of control payment will occur upon (y) any involuntary termination of Mr. McBride's employment following the change of control or (z) his resignation within two to nine months following the change of control by these named executive officers.control. Except in the event of a change of control, no amounts would be due to any of our named executive officers in the event of a resignation or a termination with cause. The information below reflects the estimated value of the compensation to be paid by us to each of these officersany named executive officer in the event of an involuntary termination without cause or a termination or resignation following a change in control. The amounts shown below assume that the triggering events occurred on December 31, 2016.2019. The actual amounts that would be paid can only be determined at the time of the actual triggering event.

Name
Payment Upon Termination without
Cause or Termination or Resignation
Following Change in
Control
(1)
Ken McBride
$
344,829
 
Kyle Huebner
$
214,204
 
Seth Weisberg
$
199,999
 
Name Payment Upon Termination without Cause or Termination or Resignation Following Change in
Control (1)
Ken McBride $431,377
(1)Assumes a monthly value of $2,013$1,436 for continued benefits.benefits and a monthly payment of $70,460 in respect of Mr. McBride's base salary at the rate in effect on December 31, 2019.


In addition, our stock option plans provide that any optionee, including our named executive officers, whose service is “involuntarily terminated” within 18 months following a “change in control”, will have any unvested options that were assumed by the successor corporation become fully exercisable.

A “change in control” is defined as the first to occur of: (i) any one person or entity or more than one person or entity acting as a group becoming the “beneficial owner” (as used in Section 13(d) of the Exchange Act) of more than 50% of the voting power of our capital stock; (ii) our Board ceasing to include a majority of members who either were on our Board two years prior to the relevant date or whose appointment, or nomination for election, to our Board was approved by a vote of a majority of the directors then in office; and (iii) any person, entity or group, subject to certain exceptions, acquiring, during any twelve month period, assets from us that have a fair market value greater than 50% of the total fair market value of all of our assets immediately before the acquisition or

acquisitions.


30

acquisitions. “Involuntary“Involuntary termination” is generally defined as the optionee’s involuntary dismissal or discharge by us for reasons other than misconduct, or the optionee’s voluntary resignation following: (i) a change in his or her position with us which materially reduces his or her responsibilities; (ii) a reduction in his or her level of compensation by more than 15%; or (iii) a relocation of the optionee’s place of employment by more than 50 miles, and this change, reduction or relocation is effected without the optionee’s consent.


Assuming triggering events occurred on December 31, 2016,2019, the following amounts would then be acceleratedearned as a result of the accelerationaccelerated vesting of stock options for our named executive officers based on a closing stock price of $114.65$83.52 on December 30, 2016.

Name
Options Accelerated Upon Involuntary
Termination following Change in
Control (1)
Ken McBride
$
6,686,578
 
Kyle Huebner
$
3,857,436
 
Amine Khechfe
$
1,873,900
 
Steve Rifai
$
936,950
 
Seth Weisberg
$
3,085,930
 
31, 2019.
Name Options Accelerated Upon Involuntary Termination following Change in
Control (1)
Ken McBride $7,272,000
Jeff Carberry $4,120,800
Sebastian Buerba $4,363,200
John Clem $4,848,000
Nathan Jones $3,636,000

(1)Based on theth3.e fair market value of our common stock on December 31, 20162019 minus the exercise price and does not reflect proceeds that might actually be received by the named executive officer.

CEO PAY RATIO

We are required by SEC rules and regulations to disclose a reasonable estimate of the ratio of the annual total compensation for our chief executive officer to the annual total compensation of our median employee. For the year ended December 31, 2019, the annual total compensation for our chief executive officer as reported in the Summary Compensation Table was $5,749,476, and the annual total compensation for our median employee was $82,928. For 2019, the annual total compensation of our chief executive officer was approximately 69 times that of our median employee.

For purposes of identifying our median employee, we examined our entire employee population as of our 2019 fiscal year end, which consisted of 1,310 total employees. As we did in 2018, we chose to identify our 2019 median employee de novo. To determine our median employee, we used total compensation consisting of (i) base salary (or hourly wages including overtime) for the year ending December 31,

2019, (ii) bonuses paid in 2019, (iii) the grant date fair value of option awards granted in 2019 and (iv) the value of other compensation and perquisites, as our compensation measure that we applied consistently to all employees. For employees paid in a foreign currency, we converted amounts at the prevailing foreign exchange rates on December 31, 2019. We annualized the base salary amounts for permanent employees who commenced employment during 2019. For our UK-based employees who earn bonuses on a quarterly rather than annual basis, we only measured the bonuses earned in the second, third and fourth quarters and annualized those, since the first quarter data would have imposed an undue burden for us to access. We also annualized bonus payments for our Non-U.S. employees who commenced employment during 2019 and earned quarterly bonuses.
For consistency, after identifying our median employee, except as described below, we calculated annual total compensation for our median employee on the same basis as annual total compensation is calculated for our named executive officers in the Summary Compensation Table (including the grant date fair value of awards granted in 2019 under our 2010 Equity Incentive Plan), accordingly, we did not include the cost of employer-sponsored health and welfare benefits in the calculation of either our chief executive officer’s or our median employee’s total annual compensation. Due to the timing of our annual employee review and bonus process, in calculating annual total compensation for our median employee, we used the bonus amounts paid to such employee in 2019, as opposed to amounts earned in 2019 some or all of which may not be paid until 2020.
As it has been our general practice to grant awards of stock options to our executive management team every three years, we expect that, historically, our CEO pay ratio would be significantly higher in years when our chief executive officer receives such grants and lower in the intervening years (although we may make smaller more frequent awards of stock options to executives in the future, which would result in a more consistent CEO pay ratio, and we may make option grants at other times, such as the company-wide option grant made in June 2019). For example, excluding the value of options granted in 2019, our chief executive officer’s annual compensation was $2,869,626, or approximately 36 times the annual compensation of our median employee (excluding, for this purpose, the value of options granted to such employee in 2019) of $80,048.


BENEFICIAL OWNERSHIP OF SECURITIES

The following table sets forth certain information known to us with respect to the beneficial ownership of our common stock as of April 17, 2017,13, 2020, by (i) all persons who are beneficial owners of more than 5% or more of our common stock, (ii) each director and nominee for director, (iii) our named executive officers and (iv) all current directors and executive officers as a group. We have relied upon information provided to us by our directors and executive officers and copies of documents sent to us that have been filed with the SEC by others for purposes of determining the number of shares each person beneficially owns. Unless otherwise indicated, each of the stockholders has sole voting and investment power with respect to the shares beneficially owned, subject to community property laws, where applicable. Unless otherwise indicated, the address of each beneficial owner listed below is c/o Corporate Secretary, Stamps.com Inc., 1990 E. Grand Avenue, El Segundo, CA 90245. The percentage of ownership is based on 17,012,385 17,093,178shares of our common stock issued and outstanding on April 17, 2017.13, 2020. Shares of our common stock issuable upon exercise of stock options that are currently exercisable or will become exercisable within 60 days after April 17, 201713, 2020 are deemed outstanding for computing the percentage of the person or group holding such options, but are not deemed outstanding for computing the percentage of any other person or group.

Name of Beneficial Owner
Number of Shares
Beneficially Owned
Percentages of
Shares Beneficially
Owned
Ken McBride (1)
 
189,789
 
 
1.10
%
Kyle Huebner (2)
 
16,751
 
 
 
*
Amine Khechfe (3)
 
23,505
 
 
 
*
Steve Rifai (4)
 
14,582
 
 
 
*
Seth Weisberg (5)
 
123,057
 
 
 
*
Mohan P. Ananda (6)
 
746,524
 
 
4.23
%
David C. Habiger (7)
 
5,000
 
 
 
*
G. Bradford Jones (8)
 
97,286
 
 
 
*
Lloyd I. Miller (9)
 
462,890
 
 
2.72
%
Theodore R. Samuels, II (10)
 
6,000
 
 
 
*
 
 
 
 
 
 
 
Other 5% Stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
FMR LLC (11)
 
2,557,860
 
 
15.04
%
82 Devonshire Street
 
 
 
 
 
 
Boston, Massachusetts 02109
 
 
 
 
 
 
 
 
 
 
 
 
 
BlackRock, Inc. (12)
 
1,761,086
 
 
10.35
%
40 East 52nd Street
 
 
 
 
 
 
New York, NY 10022
 
 
 
 
 
 
 
 
 
 
 
 
 
The Vanguard Group (13)
 
1,328,600
 
 
7.81
%
100 Vanguard Blvd.
 
 
 
 
 
 
Malvern, PA 19355
 
 
 
 
 
 
 
 
 
 
 
 
 
All directors and executive officers as a group (13 people) (14)
 
1,961,209
 
 
11.08
%
Name of Beneficial Owner Number of Shares Beneficially Owned Percentages of Shares Beneficially Owned
Ken McBride (1) 234,688 1.35%
Jeff Carberry (2) 114,947 *
Sebastian Buerba (3) 70,503 *
John Clem (4) 158,781 *
Nathan Jones (5) 85,206 *
Mohan P. Ananda (6) 658,524 3.73%
David C. Habiger (7) 20,572 *
G. Bradford Jones (8) 75,286 *
Kate Ann May (9) 49,111 *
Theodore R. Samuels, II (10) 21,000 *
     
Other 5% Stockholders:    
     
BlackRock, Inc. (11) 2,491,293 14.57%
40 East 52nd Street    
New York, NY 10022    
     
The Vanguard Group (12) 1,753,650 10.26%
100 Vanguard Blvd.    
Malvern, PA 19355    
     
David E. Shaw (13) 1,230,384 7.20%
1166 Avenue of the Americas, 9th Flr.    
New York, NY 10036    
     
Fisher Investments (14) 1,079,633 6.32%
5525 NW Fisher Creek Drive    
Camas, WA 98607    
     
All directors and executive officers as a group (14 people) (15) 1,742,459 9.62%

*Represents beneficial ownership of less than 1% of the outstanding shares of common stock.
(1)Includes 187,783232,412 shares issuable upon exercise of options directly held by Mr. McBride that are presently exercisable or will become exercisable within 60 days of April 17, 2017.13, 2020.

(2)Includes 14,671104,715 shares issuable upon exercise of options directly held by Mr. HuebnerCarberry that are presently exercisable or will become exercisable within 60 days of April 17, 2017.13, 2020.

32

(3)Includes 23,33369,699 shares issuable upon exercise of options directly held by Mr. KhechfeBuerba that are presently exercisable or will become exercisable within 60 days of April 17, 2017.13, 2020.
(4)Includes 14,582152,571 shares issuable upon exercise of options directly held by Mr. RifaiClem that are presently exercisable or will become exercisable within 60 days of April 17, 2017.13, 2020.
(5)Includes 100,48584,125 shares issuable upon exercise of options directly held by Mr. WeisbergNathan Jones that are presently exercisable or will become exercisable within 60 days of April 17, 2017.13, 2020.
(6)Includes 25,00020,000 shares issuable upon exercise of options directly held by Mr. Ananda that are presently exercisable or will become exercisable within 60 days of April 17, 2017.13, 2020. Includes: 548 shares held by Mr. Ananda; 464,500 shares held by Mr. Ananda in the Ananda Small Business Trust; 27,000 shares held by the Ananda Foundation; 144,077 shares held in trust for the benefit of Mr. Ananda's family; and 2,399 shares held beneficially for Mr. Ananda's children.
(7)Includes 5,00020,000 shares issuable upon exercise of options directly held by Mr. Habiger that are presently exercisable or will become exercisable within 60 days of April 17, 2017.13, 2020.
(8)Includes 30,00035,000 shares issuable upon exercise of options directly held by Mr.Brad Jones that are presently exercisable or will become exercisable within 60 days of April 17, 2017.13, 2020.
(9)The 462,890 shares beneficially owned includes: 195,269 shares held directly by Mr. Miller; 25,000Includes 37,957 shares issuable upon exercise of options directly held by Mr. MillerMs. May that are presently exercisable or will become exercisable within 60 days of April 17, 2017; 105,350 of the shares beneficially owned by Mr. Miller are owned of record by Trust A-4; 38,019 of the shares beneficially owned by Mr. Miller are owned of record by Milfam I L.P.; 58,565 of the shares beneficially owned by Mr. Miller are owned of record by Milfam II L.P.; 1,000 of the shares beneficially owned by Mr. Miller are owned of record by Lloyd IV UGMA; 1,000 of the shares beneficially owned by Mr. Miller are owned of record by AMIL; 29,306 of the shares beneficially owned by Mr. Miller are owned of record by a Trust Account; and 9,381 of the shares beneficially owned by Mr. Miller are owned of record by Trust C.13, 2020.
(10)Includes 5,00020,000 shares issuable upon exercise of options directly held by Mr. Samuels that are presently exercisable or will become exercisable within 60 days of April 17, 2017.13, 2020. Includes 1,000 shares held by the Ted and Lori Samuels Family Trust, dated July 3, 1996. Mr. Samuels disclaims beneficial ownership of the shares held by the trust, except to the extent of his pecuniary interest therein.
(11)Information regarding FMR LLC’s beneficial ownership is based solely on a Schedule 13G/A it filed with the SEC on February 14, 2017. Abigail P. Johnson, as Director, Vice Chairman, CEO and President of FMR LLC, as well as through her family’s ownership of 49% of the voting power of FMR LLC and her being party to a shareholders’ voting agreement among all holders of FMR LLC’s Series B voting common shares, may be deemed to share beneficial ownership of the shares of our common stock held by FMR LLC.
(12)(11)Information regarding Blackrock, Inc.’s beneficial ownership is based solely on a Schedule 13G/A it filed with the SEC on January 17, 2017.February 4, 2020. BlackRock, Inc. shares beneficial ownership with a number of its subsidiaries, none of which individually beneficially owns 5% or more of our outstanding common stock, except for BlackRock Fund Advisors.
(13)
(12)Information regarding The Vanguard Group’s beneficial ownership is based solely on a Schedule 13G/A it filed with the SEC on February 10, 2017.12, 2020. Various registered investment companies advised by The Vanguard Group, Inc. have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, our common stock, although no single such company’s interest in our common stock is more than five percent of the total outstanding.
(13)Information regarding David E. Shaw’s beneficial ownership is based solely on a Schedule 13G/A it filed with the SEC on February 14, 2020. By virtue of David E. Shaw’s position as President and sole shareholder of D. E. Shaw & Co., Inc., which is the general partner of D. E. Shaw & Co., L.P., which in turn is the investment adviser of D. E. Shaw Valence Portfolios, L.L.C. and D. E. Shaw Oculus Portfolios, L.L.C. and the managing member of D. E. Shaw Investment Management, L.L.C. and D. E. Shaw Adviser, L.L.C., which in turn is the investment adviser of D. E. Shaw Asymptote Portfolios, L.L.C., and by virtue of David E. Shaw’s position as President and sole shareholder of D. E. Shaw & Co. II, Inc., which is the managing member of D. E. Shaw & Co., L.L.C., which in turn is the manager of D. E. Shaw Valence Portfolios, L.L.C. and D. E. Shaw Oculus Portfolios, L.L.C. and the managing member of D. E. Shaw Manager, L.L.C., which in turn is the manager of D. E. Shaw Asymptote Portfolios, L.L.C., David E. Shaw may be deemed to have the shared power to vote or direct the vote of 1,162,870 shares, and the shared power to dispose or direct the disposition of 1,230,384 shares. Each of D. E. Shaw & Co., L.P. and D. E. Shaw & Co., Inc. may also the deemed the beneficial owner of such 1,230,384 shares. David E. Shaw disclaims beneficial ownership of such 1,230,384 shares.
(14)Information regarding Fisher Investments’s beneficial ownership is based solely on a Schedule 13G it filed with the SEC on February 6, 2020.
(15)Includes an aggregate of 695,8021,028,558 shares issuable upon exercise of options that are presently exercisable or will become exercisable within 60 days of April 17, 2017.13, 2020.

33

AUDIT COMMITTEE REPORT

The information contained in this section shall not be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing (except to the extent that we specifically incorporate this information by reference) and shall not otherwise be deemed “soliciting material” or “filed”“filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934 (except to the extent that we specifically request that this information be treated as soliciting material or specifically incorporate this information by reference).


The following is the report of the Audit Committee with respect to our audited financial statements for the fiscal year ended December 31, 20162019 included in our Annual Report on Form 10-K for that year.

Review with Management

The Audit Committee has reviewed and discussed these audited financial statements with our management.

Review and Discussions with Independent Auditors

The Audit Committee has discussed with our independent auditors, Ernst & Young LLP, the matters required to be discussed under Auditing Standard No. 61, as amended, (AICPA, Professional Standards Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

Board.

The Audit Committee has received the written disclosures and the letter from Ernst & Young LLP required by the Public Company Accounting Oversight Board Ethics and Independence Rule 3526, Communication with Audit Committees, regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with Ernst & Young LLP the independence of Ernst & Young LLP from the Company.

Conclusion

Based on the review and discussions referred to above in this report, 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, 2016,2019, for filing with the Securities and Exchange Commission.


Submitted by the Audit Committee
of the Board of Directors


Mohan Ananda
G. Bradford Jones
Theodore R. Samuels, II



34

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Procedures for Review and Ratification of Related Party Transactions

We have an informal policy requiring that all related party transactions be submitted to our Audit Committee members not involved in the transaction for review and advance approval. The Audit Committee is empowered to collect and review all material facts and all necessary data for each related party transaction. After review, the Audit Committee will only approve or ratify the transactions that are in, or are not inconsistent with, our best interests and the best interests of our stockholders, as the Audit Committee determines in good faith.

Transactions with Mr. Ananda

Under our initial agreements with Mr. Ananda, we own all of the intellectual property developed by Mr. Ananda during the course of his employment and all of the intellectual property he developed for us before his formal employment began. Mr. Ananda resigned as our chief executive officer on January 1, 1999. In May 1999, we entered into a separation agreement and a license agreement with Mr. Ananda to formalize his resignation and to redefine his intellectual property rights. The license agreement reaffirms our ownership of the intellectual property invented by Mr. Ananda prior to and during his employment. In addition, the license agreement clarifies and narrows Mr. Ananda’s field of use restrictions to limit his license to a few narrowly defined electronic commerce applications that do not compete with our Internet postage service.

Management Incentive Plan
 In connection with our acquisition of ShippingEasy, Inc., we entered into a Management Incentive Plan, dated as of July 1, 2016, by and among ShippingEasy, Inc., us and Ms. May as the Participant Representative (the "MIP"). The MIP was filed as an exhibit to the Company's Form 10-Q filed with the SEC on August 9, 2016. At the time we entered into the MIP, Ms. May was not a related person within the meaning of Item 404(a) of Regulation S-K. Pursuant to the MIP, among other things, we issued to Ms. May 10,892 shares, 28,319 shares and 4,356 shares of the Company's common stock in each of March 2017, March 2018 and March 2019 valued at approximately $1,293,980, $5,646,921 and $380,042, respectively, on the dates of issuance. A portion of each stock issuance under the MIP was retained by us for tax withholding purposes.
Consulting Agreement with Ms. May
On January 17, 2020, we entered into a consulting agreement with Ms. May for her to provide consulting services to us, as pre-approved by our chief executive officer, for an initial period of 12 months commencing January 21, 2020. The consulting agreement provides that Ms. May shall be compensated at an hourly rate for actual hours worked, and the total fees for the 12 month term will not exceed $360,000. In connection with entering into the consulting agreement, Ms. May agreed to forfeit the unvested portion of each stock option award she had received from us prior to the date of such agreement other than the portion of the stock options granted on June 3, 2019 which is scheduled to vest on June 3, 2020. In the aggregate, Ms. May forfeited unvested options to purchase 16,876, 11,667 and 33,500 shares of common stock of the Company at exercise prices of $192.25, $196.05 and $35.04, respectively.
Indemnification of Directors and Officers

In addition to the indemnification provisions contained in our certificate of incorporation and bylaws, we entered into separate indemnification agreements with certain of our directors and officers. These agreements require us, among other things, to indemnify our directors and officers against expenses (including attorneys’ fees), judgments, fines and settlements paid by those individuals in connection with any action, suit or proceeding arising out of their status or service as our director or officer (other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest) and to advance expenses incurred in connection with any proceeding against them with respect to which they may be entitled to indemnification by us.



DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

REPORTS

The members of our Board, our executive officers and persons who hold more than 10% of our outstanding common stock are subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, which requires them to file with the SEC reports with respect to their ownership of our common stock and their transactions in our common stock and to furnish us with copies of those reports. Based solely on a review of copies of reports filed with the SEC under Section 16(a) and submitted to us and on written representations by certain of our directors and executive officers, we believe that all of our directors, executive officers and greater-than-10% stockholders filed all such required reports on a timely basis during 2019, except as set forth below.
One Form 4 was filed late on behalf of Mohan P. Ananda on March 11, 2019, to report a stock sale transaction effected on March 6, 2019. One Form 4 was filed late on behalf of Kate Ann May on April 12, 2019, to report the issuance of certain shares to her on March 18, 2019, pursuant to the Management Incentive Plan entered into in connection with our acquisition of ShippingEasy in 2016.


OTHER MATTERS

Other Matters to be Presented for Voting at the Annual Meeting

We know of no other matters that will be presented for consideration for voting at the Annual Meeting. If any other matters properly come before the Annual Meeting, it is the intention of the persons named in the enclosed form of proxy to vote the shares they represent as our Board may recommend. Subject to SEC rules, discretionary authority with respect to other matters is granted by the execution of the enclosed proxy, unless you specifically withhold that power.

Annual Report

A copy of our annual report for 20162019 has been mailed concurrently with this proxy statement to all stockholders entitled to notice of and to vote at the Annual Meeting. The annual report is not incorporated into this proxy statement and is not considered proxy solicitation material. Our annual report shall not be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,

35

whether made before or after the date hereof and irrespective of any general incorporation language in any such filing (except to the extent that we specifically incorporate this information by reference) and shall not otherwise be deemed “soliciting material” or “filed” with the Securities and Exchange Commission.

Form 10-K

We filed an annual report on Form 10-K for 20162019 with the SEC on March 1, 2017.2, 2020. You may obtain a copy of that report, without charge, by writing to Investor Relations at Stamps.com Inc., 1990 E. Grand Avenue, El Segundo, CA 90245, or you can access copies of all our Securities and Exchange Commission filings on our website at http://investor.stamps.com/edgar.cfm.

By Order of the Board of Directors:

/s/ Ken McBride

Ken McBride,
Chief Executive Officer

May 8, 2017

4, 2020



36

Annex A

(Board of Directors Compensation Peer Groups)

2014 Benchmarks

The following companies were included in our compensation benchmark group used for our 2016 Board of Directors compensation, as determined in April 2014:

Company Name
AMERICAN SOFTWARE INC
APPLIED MICRO CIRCUITS CORP
BLACK DIAMOND INC
CALAMP CORP.
CAVIUM INC.
COMMUNICATIONS SYSTEMS INC
DICE HOLDINGS INC
DSP GROUP INC
EBIX INC
ELECTRO SCIENTIFIC INDUSTRIES INC
EXAR CORP
HURCO COMPANIES INC
ICG GROUP INC
INCONTACT INC
INNOTRAC CORP
KEYNOTE SYSTEMS INC
KEYW HOLDING CORP
KVH INDUSTRIES INC
LIMELIGHT NETWORKS INC
LTX-CREDENCE CORP
MATTSON TECHNOLOGY INC
MINDSPEED TECHNOLOGIES INC
MONOLITHIC POWER SYSTEMS INC
PARK ELECTROCHEMICAL CORP
PLX TECHNOLOGY INC
RUDOLPH TECHNOLOGIES INC
SEACHANGE INTERNATIONAL INC
SIGMA DESIGNS INC
SOURCEFIRE INC
ULTRATECH INC
VASCO DATA SECURITY INTERNATIONAL INC
VICOR CORP
VITESSE SEMICONDUCTOR CORP
VOCUS INC
VOLTERRA SEMICONDUCTOR CORP
XO GROUP INC
ZHONE TECHNOLOGIES INC
ZYGO CORP


A-1

2017 Benchmarks

The following companies were included in our compensation benchmark group used in April 2017 to determine our Board of Directors cash compensation to become effective May 1, 2017:

Company Name
Company Name
8X8 INC /DE/
ATLANTIC TELE NETWORK INC /DE
AVG TECHNOLOGIES N.V.
BADGER METER INC
BROOKS AUTOMATION INC
CALLIDUS SOFTWARE INC
CUBIC CORP /DE/
CVENT INC
DESCARTES SYSTEMS GROUP INC
ENGHOUSE SYSTEMS LTD.
ESCO TECHNOLOGIES INC
EVOLENT HEALTH, INC.
FABRINET
FIDESSA GROUP PLC
GENERAL COMMUNICATION INC
GIGAMON INC
GTT Communications, Inc.
GoPro, Inc.
INVENSENSE INC
IXIA
Interactive Intelligence Group, Inc.
KINAXIS INC.
KULICKE & SOFFA INDUSTRIES INC
METHODE ELECTRONICS INC
Marketo, Inc.
NETGEAR, INC
OCLARO, INC.
OMNICELL, Inc
OSI SYSTEMS INC
POLYCOM INC
PREMIER, INC.
PROGRESS SOFTWARE CORP /MA
Q2 Holdings, Inc.
QLOGIC CORP
QUALYS, INC.
RAMBUS INC
RUCKUS WIRELESS INC
SUPER MICRO COMPUTER, INC.
SYKES ENTERPRISES INC
SYNAPTICS INC
SYNTEL INC
VEECO INSTRUMENTS INC

VONAGE HOLDINGS CORP
2U, INC.
ACI WORLDWIDE, INC.

A-2

Company Name
ACXIOM CORP
AMBARELLA INC
BOX INC
BRADY CORP
CABOT MICROELECTRONICS CORP
CELESTICA INC
COMMVAULT SYSTEMS INC
CREE INC
Cornerstone OnDemand Inc
DIEBOLD NIXDORF, INC
EBIX INC
ELECTRONICS FOR IMAGING INC
FAIRCHILD SEMICONDUCTOR INTERNATIONAL INC
FRONTIER COMMUNICATIONS CORP
Fleetmatics Group plc
GENERAC HOLDINGS INC.
GameStop Corp.
Groupon, Inc.
HUBSPOT INC
II-VI INC
INPHI Corp
Inovalon Holdings, Inc.
LIFELOCK, INC.
MAXLINEAR INC
MERCURY SYSTEMS INC
MacDonald, Dettwiler and Associates Ltd.
Manitoba Telecom Services Inc.
NEUSTAR INC
PLANTRONICS INC /CA/
PLEXUS CORP
RINGCENTRAL INC
SEMTECH CORP
SOLARCITY CORP
VIAVI SOLUTIONS INC.
ZYNGA INC
ADVANCED ENERGY INDUSTRIES INC
CACI INTERNATIONAL INC /DE/
FINISAR CORP
FIRST SOLAR, INC.
InterDigital, Inc.
LEXMARK INTERNATIONAL INC /KY/
REALPAGE INC
SANMINA CORP
SILICON LABORATORIES INC
VERINT SYSTEMS INC
YELP INC

A-3


A - 2



Annex B
(Selected Compensation Peer Groups)

2016


2019 Equilar Benchmarks


The following companies are included in our compensation benchmark groups used for our 20162019 Compensation Decisions (all data from Equilar as of April 2016)March 2019).


For our chairman and chief executive officer:
Company
COMMVAULT SYSTEMS INC
EBIX INC
Company
ENGHOUSE SYSTEMS LTD.
Aspen Technology, Inc.
FAIRCHILD SEMICONDUCTOR INTERNATIONAL INC
Boingo Wireless, Inc.
FIREEYE, INC.
Bottomline Technologies, Inc.
FLEETMATICS GROUP PLC
Commvault Systems, Inc.
IMPERVA INC
Coupa Software Incorporated
LITTELFUSE INC /DE
Ebix, Inc.
MENTOR GRAPHICS CORP
Enghous Systems Limited
PLEXUS CORP
InterXion Holding N.V.
SHENANDOAH TELECOMMUNICATIONS CO
Qualys, Inc.
SUNPOWER CORP
RealPage, Inc.
WESCO INTERNATIONAL INC
Shenandoah Telecommunications Company
Webjet Limited


For our chief financial officer and co-president:officer:
Company
2U, INC.
ACI WORLDWIDE, INC.
Company
ACXIOM CORP
2U Inc
ADVENT SOFTWARE INC /DE/
8x8, Inc.
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
Ambarella, Inc.
AMBARELLA INC
AppFolio, Inc.
AMKOR TECHNOLOGY INC
Aspen Technology, Inc.
ANIXTER INTERNATIONAL INC
Avalara, Inc.
ASPEN TECHNOLOGY INC /DE/
Alarm.com Holdings, Inc.
ATLANTIC TELE NETWORK INC /DE
Altair Engineering Inc.
AVX CORP
Badger Meter, Inc.
BELDEN INC.
Boingo Wireless, Inc.
BENCHMARK ELECTRONICS INC
Bottomline Technologies, Inc.
BGC PARTNERS, INC.
Brooks Automation, Inc.
CACI INTERNATIONAL INC /DE/
Callidus Software Inc.
CELESTICA INC
Commvault Systems, Inc.
CIENA CORP
CyberArk Software Ltd.
CIRRUS LOGIC INC
Cloudera, Inc.
COHERENT INC
Cornerstone OnDemand, Inc.
COMMVAULT SYSTEMS INC
Coupa Software Incorporated
CONSOLIDATED COMMUNICATIONS HOLDINGS,
Domo, Inc.
Ellie Mae, Inc.
EVERTEC, Inc.
Forescout Technologies, Inc.

B - 1


B-1

Company
INC.
CONVERGYS CORP
FormFactor, Inc.
CRAY INC
Fidessa Group PLC
CREE INC
Grubhub Inc.
CSG SYSTEMS INTERNATIONAL INC
HealthEquity, Inc.
CUBIC CORP /DE/
HubSpot, Inc.
CYPRESS SEMICONDUCTOR CORP /DE/
Instructure, Inc.
DESCARTES SYSTEMS GROUP INC
Iridium Communications Inc.
EBIX INC
InterDigital, Inc.
ELLIE MAE INC
Kinaxis Inc
ENDURANCE INTERNATIONAL GROUP HOLDINGS, INC.
LivePerson, Inc.
ENTEGRIS INC
Manhattan Associates, Inc.
EVERTEC, INC.
Mercury Systems, Inc.
FAIRCHILD SEMICONDUCTOR INTERNATIONAL INC
MicroStrategy Incorporated
FIREEYE, INC.
MongoDB, Inc.
FLEETMATICS GROUP PLC
Monolithic Power Systems, Inc.
GODADDY INC.
Medidata Solutions, Inc.
GRUBHUB INC.
Newmont Mining Corporation
HUBSPOT INC
New Relic, Inc.
IMPERVA INC
NextGen Healthcare, Inc.
INFINERA CORP
NIC Inc.
INOVALON HOLDINGS, INC.
Novanta Inc.
INSIGHT ENTERPRISES INC
Omnicell, Inc.
INTEGRATED DEVICE TECHNOLOGY INC
Progress Software Corporation
INTERDIGITAL, INC.
Proofpoint, Inc.
INTERSIL CORP/DE
PROS Holdings, Inc.
J2 GLOBAL, INC.
Q2 Holdings, Inc.
LIFELOCK, INC.
Qualys, Inc.
LITTELFUSE INC /DE
Rambus Inc.
LOGITECH INTERNATIONAL SA
RealPage, Inc.
LOGMEIN, INC.
RingCentral, Inc.
LORAL SPACE & COMMUNICATIONS INC.
Semtech Corporation
M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
Shenandoah Telecommunications Company
MACDONALD, DETTWILER AND ASSOCIATES LTD.
SolarEdge Technologies, Inc.
MANITOBA TELECOM SERVICES INC.
SolarWinds Corporation
MANTECH INTERNATIONAL CORP
SPS Commerce, Inc.
MEDASSETS INC
SailPoint Technologies Holdings, Inc.
MEDIDATA SOLUTIONS, INC.
SecureWorks Corp.
MELLANOX TECHNOLOGIES, LTD.
Descartes Systems Group Inc.
MENTOR GRAPHICS CORP
TiVo Corporation
METHODE ELECTRONICS INC
Webjet Limited
MICROSTRATEGY INC

B-2

Company
Workiva Inc.
MKS INSTRUMENTS INC
Xperi Corporation
MONOLITHIC POWER SYSTEMS INC
Yext, Inc.
NETSCOUT SYSTEMS INC
NIC INC
OMNIVISION TECHNOLOGIES INC
OSI SYSTEMS INC
Orbitz Worldwide,Zendesk, Inc.
PEGASYSTEMS INC
PLANTRONICS INC /CA/
PLEXUS CORP
PMC SIERRA INC
POLYCOM INC
PREMIER, INC.
PROOFPOINT INC
QLOGIC CORP
RAMBUS INC
RINGCENTRAL INC
ROVI CORP
RUCKUS WIRELESS INC
SANMINA CORP
SCANSOURCE INC
SCIENCE APPLICATIONS INTERNATIONAL CORP
SEMTECH CORP
SHENANDOAH TELECOMMUNICATIONS CO/VA/
SHUTTERFLY INC
SILICON LABORATORIES INC
SOHU COM INC
STRATASYS LTD.
SUNPOWER CORP
SUPER MICRO COMPUTER, INC.
SYKES ENTERPRISES INC
SYNCHRONOSS TECHNOLOGIES INC
TECH DATA CORP
TESSERA TECHNOLOGIES INC
TRULIA, INC.
UNIVERSAL DISPLAY CORP \PA\
VERINT SYSTEMS INC
VIAVI SOLUTIONS INC.
VIRTUSA CORP
VISHAY INTERTECHNOLOGY INC
WEBMD HEALTH CORP.
WESCO INTERNATIONAL INC


B-3



B - 2


For our chief legalmarketing officer and secretary:
Company
ACXIOM CORP
ADVANCED ENERGY INDUSTRIES INC
Company
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
2U Inc
AMKOR TECHNOLOGY INC
Anaplan, Inc.
ASPEN TECHNOLOGY INC /DE/
Apptio, Inc.
ATLANTIC TELE NETWORK INC /DE
Avalara, Inc.
BENCHMARK ELECTRONICS INC
Boingo Wireless, Inc.
CELESTICA INC
Cabot Microelectronics Co.
CIENA CORP
Coupa Software Incorporated
COHERENT INC
CyberArk Software Ltd.
CONVERGYS CORP
Elastic N.V.
CSG SYSTEMS INTERNATIONAL INC
Electro Scientific Industries Inc.
FAIRCHILD SEMICONDUCTOR INTERNATIONAL INC
Elli Mae
FIREEYE, INC.
Glu Mobile Inc.
GOPRO, INC.
Grubhub Inc.
GRUBHUB INC.
Imperva, Inc.
INFINERA CORP
Iridium Communications Inc.
INOVALON HOLDINGS, INC.
MongoDB, Inc.
INTERDIGITAL, INC.
Monolithic Power Systems, Inc.
ITRON INC /WA/
RealPage, Inc.
LITTELFUSE INC /DE
SailPoint Technologies Holdings, Inc.
TiVo Corporation

For our chief product officer:
LOGMEIN, INC.
LORAL SPACE & COMMUNICATIONS INC.
MICROSTRATEGY INC
Company
OSI SYSTEMS INC
Commvault Systems, Inc.
Orbitz Worldwide,Cornerstone OnDemand, Inc.
PMC SIERRA INC
Etsy, Inc.
POLYCOM INC
EVERTEC, Inc.
RAMBUS INC
HubSpot, Inc.
RINGCENTRAL INC
Mercury Systems, Inc.
ROVI CORP
NextGen Healthcare, Inc.
RUCKUS WIRELESS INC
NIC Inc.
SCANSOURCE INC
RingCentral, Inc.
SCIENCE APPLICATIONS INTERNATIONAL CORP
SPS Commerce, Inc.



B - 3


For the chief executive officer of our ShipStation subsidiary:
SEMTECH CORP
SOLARCITY CORP
SYKES ENTERPRISES INC
Company
TECH DATA CORP
Bottomline Technologies, Inc.
TRULIA, INC.
Brooks Automation, Inc.
UNIVERSAL DISPLAY CORP \PA\
Cornerstone OnDemand, Inc.
VERINT SYSTEMS INC
EVERTEC, Inc.
WESCO INTERNATIONAL INC
Monolithic Power Systems, Inc.
Newmont Mining Corporation
Omnicell, Inc.
Progress Software Corporation
Proofpoint, Inc.
RealPage, Inc.
Semtech Corporation
Shenandoah Telecommunications Company
Stratasys Ltd.
TiVo Corporation
Universal Display Corporation
Xperi Corporation


B-4


2017B - 4



2020 Equilar Benchmarks


The following companies are included in our compensation benchmark groups used for our 20172020 Compensation Decisions (all data from Equilar as of April 2017)March 2020).


For our chairman and chief executive officer:
Company
BADGER METER INC
CREE INC
Company
EBIX INC
Anaplan, Inc.
ENGHOUSE SYSTEMS LTD.
Blackbaud, Inc.
ESCO TECHNOLOGIES INC
BlackBerry Limited
FAIRCHILD SEMICONDUCTOR INTERNATIONAL INC
Ceridian HCM Holding Inc.
FINISAR CORP
Commvault Systems, Inc.
Fleetmatics Group plc
Enghouse Systems Ltd.
II-VI INC
ESCO Technologies Inc.
KINAXIS INC.
InterXion Holding N.V.
PLEXUS CORP
Proofpoint, Inc.
REALPAGE INC
RealPage, Inc.
SHENANDOAH TELECOMMUNICATIONS CO/VA/
Shenandoah Telecommunications Company
WEST CORP
SolarWinds Corporation
Tenable Holdings, Inc.


For our chief financial officer and co-president:officer:
Company
8X8 INC /DE/
ACXIOM CORP
Company
ADVANCED ENERGY INDUSTRIES INC
2U, Inc.
AMBARELLA INC
Acacia Communications, Inc.
ATLANTIC TELE NETWORK INC /DE
Advanced Energy Industries, Inc.
AVG TECHNOLOGIES N.V.
Alarm.com Holdings, Inc.
AVX Corp
Altair Engineering Inc.
CALLIDUS SOFTWARE INC
Alteryx, Inc.
BADGER METER INC
AppFolio, Inc.
BROADSOFT, INC.
ASM International NV
BROOKS AUTOMATION INC
Aspen Technology, Inc.
BENCHMARK ELECTRONICS INC
Avalara, Inc.
CACI INTERNATIONAL INC /DE/
Badger Meter, Inc.
CELESTICA INC
Bandwidth Inc.
COMMVAULT SYSTEMS INC
Blackbaud, Inc.
CREE INC
BlackBerry Limited
CSG SYSTEMS INTERNATIONAL INC
BlackLine, Inc.
CUBIC CORP /DE/
Bottomline Technologies (de), Inc.
DIEBOLD NIXDORF, INC
Brooks Automation, Inc.
DIODES INC /DEL/
Carbon Black
ENDURANCE INTERNATIONAL GROUP HOLDINGS, INC.
Cardlytics, Inc.
ESCO TECHNOLOGIES INC
Ceridian HCM Holding Inc.
Cision Ltd.
Cloudera Inc.
Commvault Systems, Inc.
Cornerstone OnDemand, Inc.
Coupa Software Incorporated

B - 5


Cray Inc.
CrowdStrike Holdings, Inc.
CSG Systems International, Inc.
CyberArk Software Ltd.
DocuSign, Inc.
Dynatrace, Inc.
Elastic N.V.
Enphase Energy, Inc.
ESCO Technologies Inc.
Etsy, Inc.
Everbridge, Inc.
EVERTEC, Inc.
FireEye, Inc.
Five9, Inc.
Forescout Technologies, Inc.
GCI Liberty, Inc.
Guidewire Software
HealthEquity, Inc.
HubSpot, Inc.
Infinera Corporation
Innoviva, Inc.
Inovalon Holdings, Inc.
Inphi Corporation
Instructure, Inc.
InterDigital, Inc.
Iridium Communications Inc.
Kinaxis
Knowles Corporation
Kulicke and Soffa Industries, Inc.
LiveRamp Holdings, Inc.
MACOM Technology Solutions Holdings, Inc.
Manhattan Associates, Inc.
Medidata Solutions Inc.
Mercury Systems, Inc.
MicroStrategy Incorporated
MongoDB, Inc.
Monolithic Power Systems, Inc.
NetScout Systems, Inc.
New Relic, Inc.
NIC Inc.
Novanta Inc.
Okta, Inc.
Omnicell, Inc.
Onto Innovation Inc.
PagerDuty, Inc.
Paycom Software, Inc.
Paylocity Holding Corporation
Pegasystems Inc.
Pinterest, Inc.

B-5


B - 6


Company
FAIRCHILD SEMICONDUCTOR INTERNATIONAL INC
FINISAR CORP
Plug Power Inc.
FIRST SOLAR, INC.
Pluralsight, Inc.
FITBIT INC
Power Integrations, Inc.
Fleetmatics Group plc
Progress Software Corporation
FABRINET
Proofpoint, Inc.
GameStop Corp.
PROS Holdings, Inc.
GIGAMON INC
Q2 Holdings, Inc.
GRUBHUB INC.
Qualys, Inc.
HUBSPOT INC
Rambus Inc.
II-VI INC
Rapid7, Inc.
INNOVIVA, INC.
RealPage, Inc.
ITRON INC /WA/
RingCentral, Inc.
IXIA
Roku, Inc.
InterDigital, Inc.
Semtech Corporation
LORAL SPACE & COMMUNICATIONS INC.
Silicon Laboratories Inc.
KINAXIS INC.
Slack Technologies, Inc.
MANTECH INTERNATIONAL CORP
SolarEdge Technologies, Inc.
METHODE ELECTRONICS INC
SolarWinds Corporation
Marketo,SPS Commerce, Inc.
MERCURY SYSTEMS INC
Sunrun Inc.
INSIGHT ENTERPRISES INC
SVMK Inc.
NEUSTAR INC
Switch, Inc.
NETGEAR, INC
Teladoc Health, Inc.
NIC INC
Tenable Holdings, Inc.
OCLARO, INC.
The Descartes Systems Group Inc.
OMNICELL, Inc
The Trade Desk, Inc.
OSI SYSTEMS INC
Tyler Technologies, Inc.
PLEXUS CORP
Universal Display Corporation
POLYCOM INC
Varonis Systems, Inc.
PREMIER, INC.
Veeva Systems Inc.
REALPAGE INC
Vicor Corporation
RINGCENTRAL INC
Wix.com, Ltd.
ROGERS CORP
Workiva Inc.
SANMINA CORP
Yelp Inc.
SOLARCITY CORP
Yext, Inc.
SEMTECH CORP
Zendesk, Inc.
SYNCHRONOSS TECHNOLOGIES INC
Zscaler, Inc.
SILICON LABORATORIES INC
SYKES ENTERPRISES INC
SYNAPTICS INC
TELEPHONE & DATA SYSTEMS INC /DE/
TIVO CORP
TTM TECHNOLOGIES INC
Zynga Inc.

B-6


CompanyB - 7
2U, INC.
VEECO INSTRUMENTS INC
VERINT SYSTEMS INC
VISHAY INTERTECHNOLOGY INC
VONAGE HOLDINGS CORP
WEST CORP
WINDSTREAM HOLDINGS, INC.
WebMD Health Corp.
XPERI CORP


For our chief legal officer and secretary:marketing officer:
Company
ADVANCED ENERGY INDUSTRIES INC
AMKOR TECHNOLOGY INC
Company
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
2U, Inc.
ATLANTIC TELE NETWORK INC /DE
Alteryx, Inc.
BENCHMARK ELECTRONICS INC
Brooks Automation, Inc.
BOX INC
Coupa Software Incorporated
BRADY CORP
CyberArk Software Ltd.
DIEBOLD NIXDORF, INC
Elastic N.V.
ESCO TECHNOLOGIES INC
Enphase Energy, Inc.
FAIRCHILD SEMICONDUCTOR INTERNATIONAL INC
Kinaxis
FINISAR CORP
Lattice Semiconductor Corporation
FIREEYE, INC.
New Relic, Inc.
FITBIT INC
Omnicell, Inc.
GRUBHUB INC.
Paycom Software, Inc.
Groupon,SailPoint Technologies Holdings, Inc.
INFINERA CORP
Semtech Corporation
ITRON INC /WA/
Smartsheet Inc.
KULICKE & SOFFA INDUSTRIES INC
Teladoc Health, Inc.
LORAL SPACE & COMMUNICATIONS INC.
Tenable Holdings, Inc.
NETGEAR, INC
The Descartes Systems Group Inc.
NEUSTAR INC
The Trade Desk, Inc.
OCLARO, INC.
Wix.com, Ltd.
OSI SYSTEMS INC
PLANTRONICS INC /CA/
PLEXUS CORP
RAMBUS INC
ROGERS CORP
RUCKUS WIRELESS INC
SHENANDOAH TELECOMMUNICATIONS CO/VA/
SYKES ENTERPRISES INC
SYNCHRONOSS TECHNOLOGIES INC
SYNTEL INC
Workiva Inc.

B-7


CompanyB - 8
TIVO CORP
WINDSTREAM HOLDINGS, INC.
WebMD Health Corp.
WebMD Health Corp.
ZYNGA INC


For our chief strategyproduct officer:
Company
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
BROOKS AUTOMATION INC
Company
DIEBOLD NIXDORF, INC
Advanced Energy Industries, Inc.
OMNICELL, Inc
BlackLine, Inc.
Manitoba Telecom ServicesBox, Inc.
Carbon Black
Ceridian HCM Holding Inc.
CrowdStrike Holdings, Inc.
Enphase Energy, Inc.
EVERTEC, Inc.
Guidewire Software
HubSpot, Inc.
Knowles Corporation
Mercury Systems, Inc.
Mimecast Limited
MongoDB, Inc.
Paycom Software, Inc.
Paylocity Holding Corporation
Plug Power Inc.
Rapid7, Inc.
RealPage, Inc.
RingCentral, Inc.
Shenandoah Telecommunications Company
SPS Commerce, Inc.
Sunrun Inc.
SVMK Inc.
The Descartes Systems Group Inc.
The Trade Desk, Inc.
Zendesk, Inc.
Zynga Inc.


B - 9


For the chief executive officer of our senior VP of sales and customer development:ShipStation subsidiary:
Company
8X8 INC /DE/
AVX Corp
Company
COGENT COMMUNICATIONS HOLDINGS, INC.
Blackbaud, Inc.
COMMVAULT SYSTEMS INC
Bottomline Technologies (de), Inc.
Brooks Automation, Inc.
Cision Ltd.
Cornerstone OnDemand, IncInc.
GIGAMON INC
Five9, Inc.
INFINERA CORP
Knowles Corporation
INPHI Corp
LiveRamp Holdings, Inc.
INVENSENSE INC
Manhattan Associates, Inc.
KULICKE & SOFFA INDUSTRIES INC
Monolithic Power Systems, Inc.
MELLANOX TECHNOLOGIES, LTD.
Progress Software Corporation
METHODE ELECTRONICS INC
Proofpoint, Inc.
NETGEAR, INC
Rogers Corporation
SEMTECH CORP
Silicon Laboratories Inc.
SYNAPTICS INC
SolarWinds Corporation
SYNCHRONOSS TECHNOLOGIES INC
TELADOC, INC.
VISHAY INTERTECHNOLOGY INC
Zynga Inc.


B-8


B - 10



Annex C
   
(Non-GAAP Financial Measures)

2016


2019 Detailed Results

2016


2019 total revenue was $364.3$571.9 million, up 70%down 3% compared to 2015. 20162018. 2019 Mailing and Shipping revenue (which includes service, product and insurance revenue but excludes Customized Postage and Other revenue) was $350.6$557.1 million, up 70%down 2% versus 2015. 20162018. 2019 Customized Postage revenue was $13.6$14.7 million, up 88%down 25% versus 2015.

20162018.

2019 GAAP income from operations was $120.2$93.6 million, and GAAP net income was $75.2 million.$59.2 million, and GAAP net income per share was $4.12$3.33 based on 18.317.8 million fully diluted shares outstanding. This compares to a 20152018 GAAP lossincome from operations of $5.3$194.4 million, GAAP net income of $168.6 million, and a GAAP net lossincome per share of $4.2 million or a net loss of $0.26 per share$8.99 based on fully diluted shares outstanding of 16.418.8 million. 20162019 GAAP income from operations, GAAP net income and GAAP income per fully diluted share percent changes on adecreased by 52%, 65%, and 63% year-over-year, basis are not meaningful given the GAAP net loss in 2015.

2016respectively.

2019 GAAP income from operations included $33.9$42.9 million of non-cash stock-based compensation expense $14.6and $22.2 million of non-cash amortization of acquired intangibles. 2019 GAAP net income also included $374 thousand of non-cash amortization of debt issuance cost. 2019 GAAP income tax expense was $31.5 million and non-GAAP income tax expense was $54.3 million resulting in a non-GAAP tax expense adjustment of $22.8 million. The non-GAAP tax expense adjustment primarily reflects the tax impact from higher non-GAAP income as compared to GAAP income at the effective tax rate for fiscal 2019. See the section later in this Annex C entitled “About Non-GAAP Financial Measures” for more information on how non-GAAP taxes are calculated. Excluding the non-cash stock-based compensation expense and non-cash amortization of acquired intangibles, 2019 non-GAAP income from operations was $158.7 million. Also excluding non-cash amortization of debt issuance and including the non-GAAP tax expense adjustment, 2019 non-GAAP adjusted income was $102.0 million or $5.73 per share based on 17.8 million fully diluted shares outstanding.
2018 GAAP income from operations included $36.3 million of non-cash stock-based compensation expense, $18.3 million of non-cash amortization of acquired intangibles, and $1.1$3.1 million of transaction related expenses associated with the MetaPack acquisition and legal settlement expense related to the ShippingEasy acquisition. 2016class action wage and hours case filed against us in February 2018. 2018 GAAP net income also included $374 thousand of non-cash amortization of debt issuance costs and $33.6$1.0 million of non-cashforeign currency loss related to the MetaPack acquisition. 2018 GAAP income tax expense.expense was $22.3 million and non-GAAP income tax expense was $29.2 million resulting in a non-GAAP tax expense adjustment of $6.9 million. The non-GAAP tax expense adjustment primarily reflects the tax impact from higher non-GAAP income as compared to GAAP income at the effective tax rate for fiscal 2018. See the section later in this Annex C entitled “About Non-GAAP Financial Measures” for more information on how non-GAAP taxes are calculated. Excluding the non-cash stock-based compensation expense, non-cash amortization of acquired intangibles, and acquisitiontransaction related expenses 2016associated with the MetaPack acquisition, and legal settlement expense, 2018 non-GAAP income from operations was $169.8$252.2 million. Also excluding non-cash amortization of debt issuance costs and non-cash incomeforeign currency loss related to the MetaPack acquisition, and including the non-GAAP tax expense 2016adjustment, 2018 non-GAAP adjusted income was $158.8$220.9 million or $8.70$11.78 per share based on 18.318.8 million fully diluted shares outstanding.

2015 GAAP income from operations included $17.2 million of non-cash stock-based compensation expense, $3.6 million of non-cash amortization of acquired intangibles, $17.2 million of expenses including litigation settlements and expenses related to the acquisition of Endicia and $46.1 million of non-cash contingent consideration charge which resulted from changes in the fair value of the contingent consideration related to the ShipStation acquisition that was driven primarily by the increase in the Company's stock price during 2015. 2015 GAAP net income also included $2.8 million of non-cash income tax benefit. Excluding the non-cash stock-based compensation expense, non-cash amortization of acquired intangibles, legal settlement expense and acquisition related expenses and non-cash contingent consideration charge, 2015

Therefore, 2019 non-GAAP income from operations, was $78.8 million. Also excluding non-cash income tax expense, 2015 non-GAAP adjusted income was $77.2 million or $4.43and non-GAAP adjusted income per share based on 17.4 million fully diluted shares outstanding.

share decreased by 37%, 54% and 51% year-over-year, respectively.

Non-GAAP income from operations, non-GAAP adjusted income and non-GAAP adjusted income per share are described further in the “About Non-GAAP Financial Measures” section of this Annex C and are reconciled to the corresponding GAAP measures in the following tables (unaudited):

C-1


C - 1



Reconciliation of Non-GAAP to GAAP Financial Measures (2016)

For the Year Ended December 31, 2016
All amounts in millions except
per share data:
GAAP
Amounts
Stock-Based
Compensation
Expense
Intangible
Amortization
Expense
Acquisition
Related
Expenses
Debt
Amortization
Expense
Income Tax
Benefit
(Expense)
Non-GAAP
Amounts
Cost of Revenues
$
62.97
 
$
1.83
 
$
—
 
$
—
 
$
—
 
$
—
 
$
61.14
 
Research & Development
 
35.16
 
 
6.63
 
 
—
 
 
—
 
 
—
 
 
—
 
 
28.52
 
Sales & Marketing
 
78.83
 
 
7.19
 
 
—
 
 
—
 
 
—
 
 
—
 
 
71.64
 
General & Administrative
 
67.12
 
 
18.29
 
 
14.56
 
 
1.08
 
 
—
 
 
—
 
 
33.20
 
Total Expenses
 
244.08
 
 
33.95
 
 
14.56
 
 
1.08
 
 
—
 
 
—
 
 
194.50
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (Loss) from Operations
 
120.22
 
 
(33.95
)
 
(14.56
)
 
(1.08
)
 
—
 
 
—
 
 
169.80
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and Other Income (Loss)
 
(3.25
)
 
—
 
 
—
 
 
—
 
 
(0.37
)
 
—
 
 
(2.87
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefit (Expense) for Income Taxes*
 
(41.74
)
 
—
 
 
—
 
 
—
 
 
—
 
 
(33.62
)
 
(8.12
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Income (Loss)
 
75.23
 
 
(33.95
)
 
(14.56
)
 
(1.08
)
 
(0.37
)
 
(33.62
)
 
158.81
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On a diluted per share basis
$
4.12
 
$
(1.86
)
$
(0.80
)
$
(0.06
)
$
(0.02
)
$
(1.84
)
$
8.70
 
(2019)

*For 2016, the Company incurred approximately $33.6 million in deferred income tax expense based on its GAAP income measures. In addition, the Company would have incurred an additional approximately $14 million of deferred income tax expense based on its non-GAAP income measures.
For the Year Ended December 31, 2019   Stock-Based Intangible Debt    
All amounts in millions except GAAP Compensation Amortization Amortization Income Tax Non-GAAP
per share data: Amounts Expense Expense Expense Adjustments Amounts
             
Cost of Revenues $155.22
 $3.08
 $—
 $—
 $—
 $152.13
Research & Development 78.04
 10.52
 —
 —
 —
 67.52
Sales & Marketing 134.23
 9.72
 —
 —
 —
 124.51
General & Administrative 110.80
 19.62
 22.20
 —
 —
 68.99
Total Expenses 478.29
 42.94
 22.20
 —
 —
 413.15
             
Income (Loss) from Operations 93.56
 (42.94) (22.20) —
 —
 158.70
             
Interest and Other Income (Loss) (2.81) —
 —
 (0.37) —
 (2.44)
             
Benefit (Expense) for Income Taxes (31.52) —
 —
 —
 22.75
 (54.27)
             
Adjusted Income (Loss) 59.23
 (42.94) (22.20) (0.37) 22.75
 101.98
             
On a diluted per share basis $3.33
 $(2.41) $(1.25) $(0.02) $1.28
 $5.73
             
Shares used in per share calculation 17.80
 17.80
 17.80
 17.80
 17.80
 17.80




C - 2


Reconciliation of Non-GAAP to GAAP Financial Measures (2015)

(2018)

For the Year Ended
December 31, 2015
All amounts in millions except per share data:
GAAP
Amounts
Stock-Based
Compensation
Expense
Intangible
Amortization
Expense
Acquisition
Related
Expenses
Contingent
Consideration
Charge
Debt
Amortization
Expense
Litigation
Settlement
Expense
Income Tax
Benefit
(Expense)
Non-GAAP
Amounts
For the Year Ended December 31, 2018For the Year Ended December 31, 2018 Stock-Based Intangible Acquisition and Debt   
All amounts in millions except GAAP Compensation Amortization Litigation Amortization Income Tax Non-GAAP
per share data: Amounts Expense Expense Settlement Expense Adjustments Amounts
 Expenses 
 
Cost of Revenues
$
43.94
 
$
0.99
 
$
—
 
$
—
 
$
—
 
$
—
 
$
—
 
$
—
 
$
42.94
 
  $ 126.91  $ 2.95 0 0 0 0  $ 123.95
Research & Development
 
20.71
 
 
3.15
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
17.56
 
           56.59             8.12 0 0 0 0           48.47
Sales & Marketing
 
56.14
 
 
4.55
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
51.60
 
         112.08             6.89 0 0 0 0         105.19
General & Administrative
 
88.49
 
 
8.53
 
 
3.60
 
 
7.22
 
 
46.09
 
 
—
 
 
—
 
 
—
 
 
23.04
 
           96.95           18.38           18.29             3.14 0 0           57.13
Litigation Settlement
 
10.00
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
10.00
 
 
—
 
 
—
 
Total Expenses
 
219.28
 
 
17.23
 
 
3.60
 
 
7.22
 
 
46.09
 
 
—
 
 
10.00
 
 
—
 
 
135.14
 
         392.53           36.35           18.29             3.14 0 0         334.75
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (Loss) from Operations
 
(5.32
)
 
(17.23
)
 
(3.60
)
 
(7.22
)
 
(46.09
)
 
—
 
 
(10.00
)
 
—
 
 
78.82
 
         194.40 (36.35) (18.29)           (3.14) 0 0         252.18
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and Other Income (Loss)
 
(0.25
)
 
—
 
 
—
 
 
—
 
 
—
 
 
(0.03
)
 
—
 
 
—
 
 
(0.22
)
           (3.49) 0 0           (1.03)           (0.37) 0           (2.08)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefit (Expense) for Income Taxes *
 
1.37
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
2.82
 
 
(1.44
)
Benefit (Expense) for Income Taxes          (22.27) 0 0 0 0             6.91          (29.18)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Income (Loss)
 
(4.20
)
 
(17.23
)
 
(3.60
)
 
(7.22
)
 
(46.09
)
 
(0.03
)
 
(10.00
)
 
2.82
 
 
77.15
 
         168.64          (36.35) (18.29)           (4.17) (0.37)             6.91         220.93
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On a diluted per share basis **
$
(0.26
)
$
(1.05
)
$
(0.22
)
$
(0.44
)
$
(2.80
)
$
(0.00
)
$
(0.61
)
$
0.17
 
$
4.43
 
On a diluted per share basis  $ 8.99  $ (1.94)  $ (0.98)  $ (0.22)  $ (0.02)  $ 0.37  $ 11.78
 
Shares used in per share calculation           18.76           18.76           18.76           18.76           18.76           18.76           18.76

*For 2015, the Company incurred approximately $2.8 million in deferred income tax benefit based on its GAAP income measures. In addition, the Company would have incurred an additional approximately $43 million of deferred income tax expense based on its non-GAAP income measures.
**Common equivalent shares are excluded from the GAAP diluted earnings per share calculation as their effect is anti-dilutive.

C-2

20162019 GAAP Net Income and Non-GAAP Adjusted EBITDA

2016


2019 GAAP net income was $75.2$59.2 million, down 65% compared to a $4.2$168.6 million net loss in 2015.

20162018.

2019 non-GAAP adjusted EBITDA was $174.4$164.4 million, up 111%down 36% compared to $82.6$258.0 million in 2015.

2018.


C - 3


Adjusted EBITDA is a non-GAAP financial measure which is described further in the “About Non-GAAP Financial Measures” section of this Annex C and is reconciled to GAAP net income in the following table (unaudited):

Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA to GAAP Net Income (Unaudited)

All amounts in millions
Twelve Months ended
December 31,
 
2016
2015
GAAP Net Income (Loss)
$
75.23
 
$
(4.20
)
 
 
 
 
 
 
 
Depreciation and Amortization expense
$
19.17
 
$
7.70
 
Interest & Other Expense (Income), net
$
3.25
 
$
(0.07
)
Income Tax Expense (Benefit), net
$
41.74
 
$
(1.37
)
 
 
 
 
 
 
 
Stock-based Compensation Expense
$
33.95
 
$
17.23
 
Contingent Consideration Charge
$
—
 
$
46.09
 
Acquisition Related Expenses
$
1.08
 
$
17.22
 
 
 
 
 
 
 
 
Adjusted EBITDA
$
174.41
 
$
82.59
 

  Twelve Months ended
All amounts in millions December 31,
  2019 2018
     
GAAP Net Income (Loss) $59.23 $168.64
     
Depreciation and Amortization expense $27.87 $24.10
Interest & Other Expense (Income), net $2.81 $3.49
Income Tax Expense (Benefit), net $31.52 $22.27
     
Stock-based Compensation Expense $42.94 $36.35
Acquisition and Litigation Settlement Expenses $ -- $3.14
     
Adjusted EBITDA $164.38 $257.99


About Non-GAAP Financial Measures


To supplement the Stamps.com Inc.’s (the “Company’s”)Company’s condensed consolidated financialbalance sheets and consolidated statements of income presented in accordance with GAAP, the Company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP income from operations, non-GAAP adjusted income, non-GAAP adjusted income per fully diluted share and adjusted EBITDA.
Non-GAAP financial measures are provided to enhance investors’ overall understanding of the Company’s financial performance and prospects for the future and as a means to evaluate period-to-period comparisons. The Company believes the non-GAAP measures, which: (1) exclude certain non-cash items including stock-based compensation expense, amortization of acquired intangibles, amortization of debt issuance costs, and contingent consideration charges; (2) exclude certain expenses and gains such as acquisition related expenses, litigation settlement expenses, executive consulting expenses, and insurance proceeds; and (3) include income tax adjustments, provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be reflective of our underlying operating performance.
Non-GAAP adjusted income is calculated as GAAP net income plus the cumulative impact of the adjustments outlined in the paragraph immediately above.
Non-GAAP adjusted income per fully diluted share is calculated as adjusted non-GAAP netadjusted income divided by fully diluted shares. Prior to
Non-GAAP income tax expense for the first, second and third quarters of our fiscal year are calculated by multiplying the projected annual effective tax rate in that quarter 2016,by the Company referred to non-GAAP adjusted income asbefore taxes for the quarter. The projected annual effective tax rate does not reflect potential future employee option exercises in the remaining quarters of the fiscal year due to the inherent difficulty in forecasting employee option exercises. The projected annual effective tax rate also considers other factors including the Company’s tax structure and its tax positions in various jurisdictions where the Company operates. The actual annual effective tax rate realized for the

C - 4


fiscal year could differ materially from our projected annual effective tax rate used in the first, second and third quarters.
Non-GAAP income tax expense for the fourth quarter of the fiscal year is calculated by multiplying the actual effective tax rate for the fiscal year by the non-GAAP netadjusted income before taxes for the fiscal year and subtracting the non-GAAP income tax expense or benefit reported in the first, second and third quarters. As a result, the fourth quarter reflects the tax impact of reconciling the first, second and third quarter projected annual effective rates to the actual effective tax rate for the fiscal year.
The projected non-GAAP full-year tax rate for 2020 is 40%. The increase in our estimated effective tax rate for 2020 is primarily driven by a reduction in projected pre-tax book income.
Adjusted EBITDA as calculated by the Companyin this Proxy Statement represents earnings before interest and other expense, net, interest and other income, net, income tax expense or benefit, depreciation and amortization and excludes certain items, such as stock-based compensation expense (described in the Company’s press release issued on February 23, 2017 and exhibited to the Company’s Current Report on Form 8-K filed on March 1, 2017), used to reconcile GAAP to non-GAAP income from operations. expense.
The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. These non-GAAP financial measures may differ from similarly titled measures used by other companies. Reconciliation of non-GAAP financial measures usedincluded in this Proxy Statement to the corresponding GAAP measures can be found in the financial tables inof this Annex C.

Non-GAAP financial measures are provided to enhance investors’ overall understanding of the Company’s financial performance and prospects for the future and as a means to evaluate period-to-period comparisons. The Company believes the non-GAAP measures that exclude certain non-cash items including stock-based compensation expense, amortization of acquired intangibles, amortization of debt issuance costs, contingent consideration charges and income tax adjustments, and exclude certain expenses such as acquisition related expenses and litigation settlement expenses, provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be reflective of core business operating results. C.

The Company believes that non-GAAP financial measures, when viewed with GAAP results and the accompanying reconciliation, enhance the comparability of operating results against prior periods and allow for greater transparency of financialoperating results. Management uses non-GAAP financial measures in making financial, operating, compensation and planning decisions. The Company believes non-GAAP financial measures facilitate management and investors comparison ofin comparing the Company’s financial performance to that of prior periods as well as in performing trend analysis over time.


C - 5


FORM OF PROXY CARD

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement, Annual Report and Form 10-K are available at www.proxyvote.com


STAMPS.COM INC.
Annual Meeting of Stockholders
June 10, 2020 10:00 AM
This proxy is solicited on behalf of the Board of Directors
The undersigned stockholder of Stamps.com Inc. hereby revokes all previous proxies, acknowledges receipt of the Notice of the Annual Meeting of Stockholders to be held June 10, 2020 and the Proxy Statement, each dated May 4, 2020, and hereby appoints each of Jeff Carberry and Matthew A. Lipson, or either of them, as proxy and attorney-in-fact of the undersigned, with full power of substitution and revocation, on behalf and in the name of the undersigned, to represent the undersigned at the 2020 Annual Meeting of Stockholders and to vote all shares of common stock of STAMPS.COM INC. (the “Company”) that the undersigned is entitled to vote, either on his or her own behalf or on behalf of any entity or entities, at the 2020 Annual Meeting of Stockholders to be held via a virtual on-line platform accessible at www.virtualshareholdermeeting.com/STMP2020, at 10:00 a.m. Pacific Daylight Savings Time on Wednesday, June 10, 2020, and at any adjournment or postponement thereof, with the same force and effect as the undersigned might or could do if personally present thereat. The shares represented by this Proxy shall be voted in the manner set forth on this proxy card.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED (I) FOR THE ELECTION OF THE DIRECTOR NOMINEES LISTED ON THE REVERSE, (II) FOR APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF THE COMPENSATION OF THE COMPANY'S NAMED EXECUTIVE OFFICERS, AND (III) FOR THE RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR 2020. THIS PROXY ALSO CONFERS DISCRETIONARY AUTHORITY ON THE PROXIES TO VOTE AS TO ANY OTHER MATTER THAT MAY PROPERLY BE BROUGHT BEFORE THE ANNUAL MEETING OF WHICH THE BOARD OF DIRECTORS DID NOT HAVE NOTICE PRIOR TO FEBRUARY 13, 2020.




Continued and to be signed on reverse side

VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/STMP2020
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
CONTROL # --->

C-3

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x
KEEP THIS PORTION FOR YOUR RECORDS

DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
For AllWithhold AllFor All ExceptTo withhold authority to vote for any individual nominee, mark "For All Except" and write the number of such nominee on the line below.
The Board of Directors recommends you vote FOR the following:
ooo
1.
To elect two Class III directors to serve for a three-year term ending at the Company's 2023 annual meeting or until his successor is duly elected and qualified.
Nominees
1a. Kenneth T. McBride 1b. Theodore R. Samuels, II
The Board of Directors recommends you vote FOR the following proposals:ForAgainstAbstain
2. To approve, on a non-binding advisory basis, the compensation of the Company's named executive officers;ooo
3. To ratify the appointment of Ernst & Young LLP as independent auditors of the Company for 2020.ooo
NOTE:  This proxy confers discretionary authority to vote on such other business as may properly come before the meeting or any adjournment thereof.

 







Please indicate if you plan to attend this meeting    ¨
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.
Signature [PLEASE SIGN WITHIN BOX]DateSignature [PLEASE SIGN WITHIN BOX]Date