UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x☒ Filed by a Party other than the Registrant ¨☐
Check the appropriate box:
| Preliminary Proxy Statement |
| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| Definitive Proxy Statement |
| Definitive Additional Materials |
| Soliciting Material under § 240.14a-12 |
Quotient Technology 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):
| No fee required. |
| 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) | Aggregate number of securities to which transaction applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of transaction: |
| (5) | Total fee paid: |
| Fee paid previously with preliminary materials. |
| 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. |
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| (4) | Date Filed: |
QUOTIENT TECHNOLOGY INC.
400 LOGUE AVENUE
MOUNTAIN VIEW, CA 94043
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held at 10:00 a.m. Pacific Daylight Time on Wednesday,Monday, June 8, 20165, 2017
TO THE HOLDERS OF COMMON STOCKSTOCKHOLDERS OF QUOTIENT TECHNOLOGY INC.:
The Annual Meeting of Stockholders of Quotient Technology Inc., a Delaware corporation (“Quotient” or the “Company”), will be held on Wednesday,Monday, June 8, 2016,5, 2017, at 10:00 a.m. Pacific Daylight TimePDT, at Quotient’s headquarters located at 400 Logue Avenue, Mountain View, California 94043, for the following purposes as more fully described in the accompanying proxy statement:
| 1. | To elect two Class |
| 2. | To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, |
| 3. | To transact such other business as may properly come before the meeting or any adjournments or postponements thereof. |
The Board of Directors of Quotient has fixed the close of business on April 11, 2016 as the record date for the Annual Meeting. Only stockholders of record of our common stock at the close of business on April 11, 2016 are19, 2017 (the “Record Date”) will be entitled to notice of and to vote at the Annual Meeting.Meeting and any adjournments thereof. Further information regarding voting rights and the matters to be voted upon is presented in our proxy statement.
In accordance with Securities and Exchange Commission rules, we sent a Notice of Internet Availability of Proxy Materials on or about April 24, 2017, and provide access to our proxy materials over the Internet on or before that date, to the holders of record of our common stock as of the close of business on the Record Date.
If you have any questions regarding this information or the proxy materials, please visit our website at www.quotient.com or contact our investor relations department at (650) 605-4600 (option 7). Our Annual Report on Form 10-K for the year ended December 31, 20152016 and our 20162017 Proxy Statement are available at http://www.astproxyportal.com/ast/18720.
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting of Stockholders, we urge you to submit your vote via the Internet, telephone or mail.
We appreciate your continued support of Quotient and look forward to receiving your proxy.
By order of the Board of Directors,
Connie Chen
General Counsel and Secretary
Mountain View, California
April 22, 201624, 2017
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PROPOSAL NO. 2—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
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Stockholder Recommendations for Nominations to the Board |
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Stockholder and Other Interested Party Communications with the Board |
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Potential Payments upon Termination, Change of Control or Certain Other Events |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
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As used in this proxy statement, the terms “Quotient,” the “Company,” “we,” “us,” and “our” mean Quotient Technology Inc. and its subsidiaries unless the context indicates otherwise.
400 Logue Avenue
Mountain View, CA 94043
PROXY STATEMENT
FOR 20162017 ANNUAL MEETING OF STOCKHOLDERS
to be held on Wednesday,Monday, June 8, 20165, 2017 at 10:00 a.m. PDT
This proxy statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our Board of Directors (the “Board”) for use at the annual meeting of stockholders to be held at 10:00 a.m. PDT on Wednesday,Monday, June 8, 2016,5, 2017, and any postponements or adjournments thereof, which we refer to as the Annual Meeting. The Annual Meeting will be held at Quotient’s headquarters located at 400 Logue Avenue, Mountain View, California 94043. This proxy statement and the accompanying form of proxy are first being mailed to stockholders on or about April 22, 2016.24, 2017. Our annual report for the year ended December 31, 20152016 is enclosed with this proxy statement. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the Annual Meeting. Please read it carefully.
The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this proxy statement. You should read this entire proxy statement carefully. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this proxy statement and references to our website address in this proxy statement are inactive textual references only.
What matters am I voting on?
You will be voting on:
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a proposal for the election of two Class III directors to hold office until the 2020 Annual Meeting of Stockholders and until their successors are elected and qualified, subject to earlier resignation or removal;
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a proposal to ratify the appointment of Ernst & Young LLP, as our independent registered public accounting firm for the year ending December 31, 2017; and
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any other business that may properly come before the Annual Meeting.
How does the Board of Directors recommend I vote on these proposals?
The Board of Directors recommends a vote:
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FOR the election of Andrew J. Gessow and Scott D. Raskin, as Class III directors to hold office until the 2020 Annual Meeting of Stockholders and until their successors are elected and qualified, subject to earlier resignation or removal; and
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FOR the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2017.
Who is entitled to vote?
Holders of our common stock as of the close of business on April 11, 2016, the record date,19, 2017 (the “Record Date”), may vote at the Annual Meeting. As of the record date,Record Date, we had 82,174,79190,303,447 shares of common stock outstanding. In deciding all matters at the Annual Meeting, each holder of common stock of Quotient will be entitled to one vote for each share of common stock held as of the close of business on the record date.Record Date. We do not have cumulative voting rights for the election of directors.
Registered Stockholders. If your shares are registered directly in your name with our transfer agent, you are considered the stockholder of record with respect to those shares, and the proxy materials were provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote in person at the Annual Meeting.
Street Name Stockholders. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name and the proxy materials were forwarded to you by your broker or nominee who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker or nominee how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting. However, since beneficial owners are not stockholders of record, you may not vote your shares in person at the Annual Meeting unless you follow your broker’s procedures for obtaining a legal proxy. If you request a printed copy of the proxy materials by mail, your broker or nominee will provide a voting instruction card for you to use. Throughout this proxy, we refer to stockholders who hold their shares through a broker, bank or other nominee as “street name holders.”
How do I vote?
If you are a stockholder of record, there are four ways to vote:
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vote by Internet— visit http://www.voteproxy.com, 24 hours a day, seven days a week, until 11:59 p.m. EDT on June 4, 2017 (have your proxy card in hand when you visit the website)
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vote by telephone—call toll-free at 1-800-PROXIES (1-800-776-9437) (have your proxy card in hand when you call); or
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vote by mail—simply complete, sign and date the enclosed proxy card and return it before the Annual Meeting in the envelope provided.
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vote in person—we will provide a ballot to stockholders who attend the Annual Meeting and wish to vote in person;
Street name holders may submit their voting instructions by Internet or telephone using the information provided by their respective brokers or other nominees and may complete and mail voting instruction forms to their respective brokers or nominees. However, street name holders may not vote by written ballot at the Annual Meeting unless they obtain a legal proxy from their respective brokers or nominees.
Can I change my vote?
Yes. If you are a stockholder of record, you can change your vote or revoke your proxy any time before the Annual Meeting by:
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entering a new vote by Internet or by telephone (until 11:59 p.m. EDT on June 4, 2017);
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returning a later-dated proxy card so that it is received prior to the Annual Meeting;
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notifying the Secretary of Quotient, in writing, at the address listed on the front page; or
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completing a written ballot at the Annual Meeting.
Street name holders may change their voting instructions by submitting new instructions by Internet or by telephone or returning a later-dated voting instruction form to their respective brokers or nominees. In addition, street name holders who obtain a legal proxy from their respective brokers or nominees may change their votes by completing a ballot at the Annual Meeting.
What do I need to do to attend the Annual Meeting in person?
Seating will begin at 9:30 a.m. PDT and the meeting will begin at 10:00 a.m. PDT. On the day of the meeting, each stockholder will be required to present valid picture identification such as a driver’s license or passport. Street name holders will also be required to present proof of beneficial ownership as of April 11, 2016, the record date,Record Date, such as your most recent account statement reflecting your stock ownership prior to April 11, 2016,the Record Date, along with a copy of the voting instruction card provided by your broker, bank, trustee or other nominee or similar evidence of ownership.
Use of cameras, recording devices, computers and other personal electronic devices will not be permitted at the Annual Meeting. Photography and video are prohibited at the Annual Meeting.
Please allow ample time for check-in. Persons will be subject to search.
What is the effect of giving a proxy?
Proxies are solicited by and on behalf of our Board of Directors.Board. Steven R. Boal and Connie Chen have been designated as proxies by our Board of Directors.Board. When proxy votes are properly dated, executed and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions are
given, however, the shares will
be voted in accordance with the recommendations of our Board of Directors as described above. If any matters not described in the Proxy Statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote your shares. If the Annual Meeting is adjourned, the proxy holders can vote your shares at the adjourned meeting date as well, unless you have properly revoked your proxy instructions, as described above.
What is a quorum?
A quorum is the minimum number of shares required to be present at the Annual Meeting for the meeting to be properly held under our Amended and Restated Bylaws (our “Bylaws”), and Delaware state law. The presence, in person or by proxy, of a majority of the voting power of the shares of stock entitled to vote at the meeting will constitute a quorum at the meeting. A proxy submitted by a stockholder may indicate that the shares represented by the proxy are not being voted (“stockholder withholding”) with respect to a particular matter. In addition, a broker may not be permitted to vote on shares held in street name on a particular matter in the absence of instructions from the beneficial owner of the stock (“broker non-vote”). The shares subject to a proxy which are not being voted on a particular matter because of either stockholder withholding or broker non-votes will count for purposes of determining the presence of a quorum. Abstentions are counted in the determination of a quorum.
How many votes are needed for approval of each matter?
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Proposal No. 1: The election of directors requires a plurality of the votes cast by the holders of shares represented in person or by proxy at the meeting and entitled to vote thereon to be approved. “Plurality” means that the nominees who receive the largest number of votes cast “FOR” are elected as directors. As a result, any shares not voted “FOR” a particular nominee (including as a result of stockholder withholding or a broker non-vote) will not be counted in such nominee’s favor.
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Proposal No. 2: The ratification of the appointment of Ernst & Young LLP must receive the affirmative vote of a majority of the votes cast by the holders of shares represented in person or by proxy at the meeting and entitled to vote thereon to be approved. Abstentions are considered votes present and entitled to vote on this proposal, and thus have the same effect as a vote “AGAINST” the proposal.
How are proxies solicited for the Annual Meeting?
The Board of Directors is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by Quotient. We will reimburse brokers or other nominees for reasonable expenses that they incur in sending these proxy materials to you if a broker or other nominee holds your shares.
How may my brokerage firm or other intermediary vote my shares if I fail to provide timely directions?
Brokerage firms and other intermediaries holding shares of common stock in street name for customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker will have discretion to vote your shares on our sole routine matter—the proposal to ratify the appointment of Ernst & Young LLP (Proposal No. 2). Your broker will not have discretion, absent direction from you, to vote on the election of directors (Proposal No. 1), which is considered a “non-routine” matter.
Why did I receive a one-page notice in the mail regarding the internet availability of proxy materials instead of a full set of proxy materials?
Quotient uses the internet as the primary means of furnishing proxy materials to stockholders. We are sending a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) to our stockholders with instructions on how to access the proxy materials online or request a printed copy of the materials.
Stockholders may follow the instructions in the Notice of Internet Availability to elect to receive future proxy materials in print by mail or electronically by email. We encourage stockholders to take advantage of the availability of the proxy materials online to help reduce the environmental impact of our annual meetings, and reduce Quotient’s printing and mailing costs.
I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?
We haveQuotient has adopted a procedure called “householding,“householding.” which the Securities and Exchange Commission (“SEC”) has approved. Under this procedure, weQuotient may deliver a single copy of our proxy materialsthe Notice of Internet Availability and, if you requested printed versions by mail, this Proxy Statement and the Annual Report to multiple
stockholders who share the same address, unless we haveQuotient has received contrary instructions from one or more of the stockholders. This procedure reduces the environmental impact of our annual meetings, and reduces Quotient’s printing costs,and mailing costs, and fees.costs. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, weQuotient will deliver promptly a separate copy of our proxy materialsthe Notice of Internet Availability and, if you requested printed versions by mail, this Proxy Statement and the Annual Report to any stockholder at a shared addressthat elects not to which we delivered a single copyparticipate in householding.
To receive, free of any of these materials. To receivecharge, a separate copy of the Notice of Internet Availability and, if you requested printed versions by mail, this Proxy Statement or if a stockholder is receiving multiplethe Annual Report, or separate copies to request that we only send a single copy of ourany future notice, proxy materials, such stockholderstatement, or annual report, you may contact uswrite or call Quotient at the following address:email address, physical address, or phone number:
IR@quotient.com
Quotient Technology Inc.
Attention: Investor Relations
400 Logue Avenue
Mountain View, California 94043
(650) 605-4600 (option 7)
If you are receiving more than one copy of the proxy materials at a single address and would like to participate in householding, please contact Quotient at the email address, physical address, or phone number above. Stockholders who beneficially ownhold shares of our common stock held in street name“street name” may contact their brokerage firm, bank, broker-dealer, or other similar organization to request information about householding.
Is my vote confidential?
Proxy instructions, ballots, and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within Quotient or to third parties, except as necessary to meet applicable legal requirements, to allow for the tabulation of votes and certification of the vote, or to facilitate a successful proxy solicitation.
Stockholders may present proper proposals for inclusion in our proxy statement and for consideration at the next annual meeting of stockholders by submitting their proposals in writing to our Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for our 20172018 Annual Meeting of Stockholders, our Secretary must receive the written proposal at our principal executive offices not later than December 23, 2016.25, 2017. In addition, stockholder proposals must comply with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended, regarding the inclusion of stockholder proposals in Company-sponsored proxy materials. Stockholder proposals should be addressed to:
Quotient Technology Inc.
Attention: Investor Relations
400 Logue Avenue
Mountain View, California 94043
Our Bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Our Bylaws provide that the only business that may be conducted at an annual meeting is business that is (i) specified in our proxy materials with respect to such meeting, (ii) otherwise properly brought before the annual meeting by or at the direction of our Board, of Directors, or (iii) otherwise properly brought before the annual meeting by a stockholder of record entitled to vote at the annual meeting who has delivered timely written notice to our Secretary, which notice must contain the information specified in our Bylaws. To be timely for our 20172018 Annual Meeting of Stockholders, our Secretary must receive the written notice at our principal executive offices:
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no earlier than February 5, 2018; and
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no later than the close of business on March 7, 2018.
In the event that we hold our 20172018 Annual Meeting of Stockholders more than 30 days before or more than 30 days after the one-year anniversary of the Annual Meeting, then notice of a stockholder proposal that is not intended to be included in our proxy statement must be received no earlier than the close of business on the 120th day before such annual meeting and no later than the close of business on the later of the following two dates:
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the 90th day prior to such annual meeting; or
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the 10th day following the day on which public announcement of the date of such annual meeting is first made.
If a stockholder who has notified us of his, her or its intention to present a proposal at an annual meeting does not appear to present his, her or its proposal at such annual meeting, we are not required to present the proposal for a vote at such annual meeting.
Nomination of Director Candidates
You may propose director candidates for consideration by our Nominating and Corporate Governance Committee. Any such recommendations should include the nominee’s name and qualifications for membership on our Board of Directors and should be directed to our Secretary at the address set forth above. For additional information regarding stockholder recommendations for director candidates, see “Board of Directors and Corporate Governance—Stockholder Recommendations for Nominations to the Board of Directors.Board.”
In addition, our Bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by our Bylaws. In addition, the stockholder must give timely notice to our Secretary in accordance with our Bylaws, which, in general, require that the notice be received by our Secretary within the time period described above under “Stockholder Proposals” for stockholder proposals that are not intended to be included in a proxy statement.
You may contact our Secretary at our principal executive offices for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.
ELECTION OF DIRECTORS
Our Board of Directors have the authority to establish the authorized number of directors from time to time by resolution. Our Board of Directors currently consists of fiveseven members. Our Amended and Restated Certificate of Incorporation (our “Restated Certificate”) and our Bylaws provide for a classified Board of Directors consisting of three classes of directors, with directors serving staggered three-year terms.
Directors in a particular class will be elected for a three-year term at the annual meeting of stockholders in the year in which their terms expire. As a result, only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year term. Each director’s term continues until the election and qualification of his or her successor, or his or her earlier death, resignation or removal. The initial class of each director is set forth in the table below.
The nominees and the directors who are serving for terms that end following the Annual Meeting, and their ages, occupations and length of board service as of April 11, 2016,24, 2017, are provided in the table below. Additional biographical descriptions of each nominee and director are set forth in the text below the table. These descriptions include the primary individual experience, qualifications, qualities and skills of our nominees and directors that led to the conclusion that each person should serve as a member of our Board of Directors.Board.
Nominees |
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| Director Since |
| Current Term Expires |
| Expiration of Term For Which Nominated |
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| Age |
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| Director Since |
| Current Term Expires |
| Expiration of Term For Which Nominated |
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Steven R. Boal |
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| Chief Executive Officer and Director |
| 1998 |
| 2016 |
| 2019 |
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Dawn Lepore |
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| 2012 |
| 2016 |
| 2019 |
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Andrew J. Gessow |
| III |
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| 2013 |
| 2017 |
| 2020 |
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Scott D. Raskin |
| III |
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| Director |
| 2017 |
| 2017 |
| 2020 |
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Continuing Directors |
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Andrew Jody Gessow |
| III |
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| Director |
| 2013 |
| 2017 |
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Steve Horowitz |
| I |
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| 2015 |
| 2018 |
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Steven R. Boal |
| II |
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| CEO, Director and Chairman |
| 1998 |
| 2019 |
| — |
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Dawn G. Lepore |
| II |
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| 2012 |
| 2019 |
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Mir M. Aamir |
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| President, COO and Director |
| 2017 |
| 2018 |
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Steve M. Horowitz |
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| 2015 |
| 2018 |
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David E. Siminoff |
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| 2010 |
| 2018 |
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| Director and Lead Independent Director |
| 2010 |
| 2018 |
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Nominees for Director
Andrew J. Gessow has served on our Board since May 2013. Mr. Gessow is currently a senior advisor and private equity investor at Divco West Real Estate Services, Inc., a real estate investment firm, which he joined in January 2012. From May 2007 through December 2011, Mr. Gessow was the West Coast Partner and Managing Director of One Equity Partners LLC, the private equity platform of J.P. Morgan Chase & Co. Previously, Mr. Gessow served as a member of the board of directors of Mandiant Corporation and the TV Guide Network. Mr. Gessow holds a B.B.A. in Business Administration from Emory University and an M.B.A. from Harvard University. We have determined that Mr. Gessow is qualified to serve as a member of our Board because of his experience in both managing and evaluating companies as an executive officer, board member and investor.
Scott D. Raskin has served on our Board since February 2017. Since June 2006, Mr. Raskin has served as the President and Chief Executive Officer at Spigit Inc. (formerly known as Mindjet), a provider of innovation management software. Prior to joining Spigit, Mr. Raskin served as President and Chief Operating Officer (from March 2001 to June 2006) at Telelogic AB, a publicly traded, international software company. Additionally, Mr. Raskin currently serves as the Chairman of the board of directors of MariaDB, a Finnish private company (since January 2015), and as a member of the board of directors of Temporary Housing, Inc., an Arizona private company (since October 2015). From January 2012 to July 2014, Mr. Raskin also served on the board of directors of Cision AB, a Swedish, publicly traded company, where he was also a member of the compensation committee of its board of directors. Mr. Raskin holds a Bachelors in Business Administration (B.B.A.) from the University of Texas. We have determined that Mr. Raskin is qualified to serve as a member of our Board because of his experience in both managing and evaluating companies as an executive officer and as a board member.
Continuing Directors
Steven R. Boal founded Quotient and has served (i) as our Chief Executive Officer and on our Board since our inception in 1998 and (ii) as the Chairman of the Board since February 2017. Mr. Boal served as our President from our inception to September
2015. Prior to founding Quotient, Mr. Boal served as Vice President of Business Development for Integral Development Corporation, a privately held financial software company. Mr. Boal holds a B.A. from the State University of New York at Albany. We have determined that Mr. Boal’s perspective, operational and historical expertise gained from his experience as our founder, former President, Chief Executive Officer and one of our largest stockholders, make him a critical member of our Board of Directors.Board.
Dawn G. Lepore has served on our Board of Directors since February 2012. Since January 2013, Ms. Lepore has been Chief Executive Officer of Lake Bay Partners, a consulting firm. Ms. Lepore served as Interim Chief Executive Officer of Prosper Marketplace, Inc., an online peer-to-peer lending platform, from March 2012 to January 2013 and as Chairman and Chief Executive Officer of drugstore.com, inc., an online retailer of health and beauty care products from October 2004 until its sale to Walgreen Co. in June 2011. Ms. Lepore currently serves as a member of the board of directors of RealNetworks, Inc. Ms. Lepore previously served on the boards of directors of AOL Inc. from October 2012 to June 2015, The TJX Companies, Inc. from 2013 to 2014, eBay Inc. from 1999 to January 2013, The New York Times Company from 2008 to 2011, drugstore.com, inc. from 2004 to 2011 and Wal-Mart Stores Inc. from 2001 to 2004. Ms. Lepore holds a B.A. from Smith College. We have determined that Ms. Lepore is qualified to serve as a member of our Board of Directors because of the breadth of her operational background and experience as an executive and director at a diverse range of online consumer, Internet technology and retail companies.
Andrew Jody Gessow has served on our Board of Directors since May 2013. Mr. Gessow is currently a senior advisor and private equity investor at Divco West Real Estate Services, Inc., a real estate investment firm, which he joined in January 2012. From May 2007 through December 2011, Mr. Gessow was the West Coast Partner and Managing Director of One Equity Partners LLC, the private equity platform of J.P. Morgan Chase & Co. Previously, Mr. Gessow served as a member of the board of directors of Mandiant Corporation and the TV Guide Network. Mr. Gessow holds a B.B.A. in Business Administration from Emory University and an M.B.A. from Harvard University. We have determined that Mr. Gessow is qualified to serve as a member of our Board of Directors because of his experience in both managing and evaluating companies as an executive officer, board member and investor.
Steve M. Horowitz has served on our Board of Directors since June 2015. Mr. Horowitz is currently Vice President of EngineeringHardware at Snapchat,Snap Inc., a social messaging application, and has been there since January 2015. Before joining Snapchat,Snap, Mr. Horowitz served as Senior Vice President of Software Engineering at Motorola Mobility, LLC, formerly a Google company, from December 2012 through January 2015. From January 2009 through November 2012, Mr. Horowitz served as our Chief Technology Officer. Prior to that he worked at Google, Microsoft and Apple. Mr. Horowitz holds a Bachelor of Arts degree from the University of Michigan, Ann Arbor. We have determined that Mr. Horowitz is qualified to serve as a member of our Board of Directors because of his significant industry and company experience.
David E. Siminoff has served on our Board of Directors since December 2010.2010 and as Lead Independent Director since February 2017. Mr. Siminoff is the Founder and has been Chief Creative Officer at Shmoop University, Inc., an educational digital publication company, since December 2008 and was Chief Investment Officer and Co-Portfolio Manager at Thompson Peak Capital, LLC from January 2009 to December 2011. From February 2007 to November 2008, Mr. Siminoff was a partner at Venrock, a venture capital firm. Mr. Siminoff holds a B.A. from Stanford University, an M.F.A. from University of Southern California and an M.B.A. from Stanford Graduate School of Business. We have determined that Mr. Siminoff is qualified to serve as a member of our Board of Directors because of his substantial operational and financial expertise gained from holding executive positions at various technology companies and from his experience in the venture capital industry.
Mir M. Aamir has served on our Board since February 2017. Mr. Aamir has served as our President since September 2015 and our Chief Operating Officer since October 2013. From October 2013 to September 2015, Mr. Aamir served as our Chief Financial Officer. From March 2011 to October 2013, Mr. Aamir served as President of Customer Loyalty and Digital Technologies at Safeway, Inc. From January 2008 to February 2011, Mr. Aamir served as Senior Vice President of Marketing Strategy and Financial Planning and Analysis and Pricing and Shopper Card at Safeway, Inc. From May 2005 to December 2007, Mr. Aamir served as Group Vice President, Financial Planning and Analysis for all of Safeway’s U.S. business units. Mr. Aamir holds a B.B.A. and an M.B.A. from the Institute of Business Administration, University of Karachi and an M.B.A. from the University of Chicago Booth School of Business. We have determined that Mr. Aamir is qualified to serve as a member of our Board because of his significant industry and company expertise gained from his experience as President, Chief Operating Officer and Chief Financial Officer of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH
OF THE NOMINEES NAMED ABOVE.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors (the “Audit Committee”) has appointed the firm of Ernst & Young LLP (“Ernst & Young”) as our independent registered public accounting firm to audit our financial statements for the year ending December 31, 2016.2017. During our previous fiscal year ended December 31, 2015,2016, Ernst & Young served as our independent registered public accounting firm.
At the Annual Meeting, the stockholders are being asked to ratify the appointment of Ernst & Young as our independent registered public accounting firm for the year ending December 31, 2016.2017. Our Audit Committee is submitting the selection of Ernst & Young to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Representatives of Ernst & Young will be present at the Annual Meeting and they will have an opportunity to make statements and will be available to respond to appropriate questions from stockholders. If this proposal does not receive the affirmative approval of a majority of the votes cast on the proposal, the Audit Committee would reconsider the appointment.
Notwithstanding its selection and even if our stockholders ratify the selection, our Audit Committee, in its discretion, may appoint another independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interests of Quotient and its stockholders.
Fees Paid to the Independent Registered Public Accounting Firm
The following table presents fees billed or to be billed by Ernst & Young for professional services rendered with respect to the years ended December 31, 20152016 and 2014.2015. All of these services rendered were preapproved by the Audit Committee.
|
| 2015 |
|
| 2014 |
|
| 2016 |
|
| 2015 |
| ||||
Audit Fees(1) |
| $ | 1,617,621 |
|
| $ | 1,393,528 |
|
| $ | 1,570,400 |
|
| $ | 1,617,621 |
|
Audit-Related Fees(2) |
|
| 42,813 |
|
|
| — |
|
|
| — |
|
|
| 42,813 |
|
Tax Fees(3) |
|
| 296,687 |
|
|
| 15,001 |
|
|
| 128,427 |
|
|
| 296,687 |
|
All Other Fees(4) |
|
| 1,995 |
|
|
| 1,655 |
|
|
| 1,995 |
|
|
| 1,995 |
|
TOTAL |
| $ | 1,959,116 |
|
| $ | 1,410,184 |
|
| $ | 1,700,822 |
|
| $ | 1,959,116 |
|
(1) | “Audit fees” consist of fees for professional services provided in connection with the audit of our annual consolidated financial statements, the review of our quarterly consolidated financial statements, and audit services that are normally provided by our independent registered public accounting firm in connection with regulatory filings. |
(2) | “Audit-related fees” include fees for professional services related to due-diligence services for the acquisition of Shopmium S.A. |
(3) | “Tax fees” include fees for professional services related to tax advice. Tax advice fees encompass permissible services mainly related to technical tax advice related to federal, state and international tax compliance, acquisitions and international tax planning. |
(4) | “All Other fees” include subscription services related to obtaining access to Ernst & Young’s online accounting library. |
Auditor Independence
Under its charter, the Audit Committee pre-approves all services rendered by our independent registered public accounting firm, Ernst & Young. The Audit Committee has determined that the rendering of non-audit services by Ernst & Young was compatible with maintaining their independence.
Pre-Approval Policies and Procedures.
Consistent with requirements of the SEC and the Public Company Accounting Oversight Board (the “PCAOB”) regarding auditor independence, our Audit Committee is responsible for the appointment, compensation and oversight of the work of our independent registered public accounting firm. In recognition of this responsibility, our Audit Committee (or a member of the Audit Committee delegated by the Audit Committee) pre-approves all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION
OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
DIRECTORSCORPORATE GOVERNANCE AND CORPDIRECTORS
Our Corporate Governance Guidelines, together with the Board’s committee charters, provide the framework for the corporate governance of the Company. Following is a summary of our Corporate Governance Guidelines. Our Corporate Governance Guidelines, as well as the charters of each of our Board committees, are available on our website at ORATE GOVERNANCEwww.quotient.com, on the Governance page under the Investor section.
Our business and affairs are managed under the direction of our Board of Directors (the “Board”).Board. Our Board currently consists of fiveseven members, fourfive of whom qualify as “independent” under the listing standards of the New York Stock Exchange (the “NYSE”). The authorized number of directors may be changed only by resolution of our Board. This classification of our Board into three classes with staggered three-year terms may have the effect of delaying or preventing changes in our control of our Company or management.
The Board believes that it is in the best interests of Quotient that the same person holds both the offices of Chairman of the Board and Chief Executive Officer (“CEO”). Mr. Boal has served as the Chairman of the Board since February 2017. The Board believes that having Mr. Boal serving in the combined role of Chairman of the Board and CEO is the most effective structure for Quotient at this time. Our Board believes that the current Board leadership structure, coupled with a strong emphasis on Board independence, provides effective independent oversight of management while allowing the Board and management to benefit from Mr. Boal’s leadership and years of experience as an executive in the technology industry. The Board believes that Mr. Boal’s combined role enables strong leadership, creates clear accountability and enhances our ability to communicate our message and strategy clearly and consistently to stockholders.
In addition, the Board has a Lead Independent Director and it believes this role addresses the need for independent leadership and an organizational structure for the independent directors. The Lead Independent Director coordinates the activities of the other independent directors, presides over meetings of the Board at which the Chairman of the Board is not present and at each executive session, serves as liaison between the Chairman of the Board and the independent directors, and is available for consultation and direct communication if requested by major stockholders.
Mr. Siminoff has served as our Lead Independent Director since February 7, 2017. Prior to Mr. Siminoff’s designation as Lead Independent Director our Board did not formally designate a Lead Independent Director. Previously, the independent directors rotated chairing executive sessions as Lead Independent Director based upon such director’s expertise in the matters for Board discussion. The Lead Independent Director for each session serves as a liaison between our non-independent directors and our independent directors and performs such additional duties as our Board may otherwise determine and delegate.
Our Board has undertaken a review of the independence of each director, including Michael Walsh, our Chief Security Officer, who in 2015 served as a director until June 2015.director. Based on information provided by each director concerning his or her background, employment and affiliations, our Board has determined that Messrs. Gessow, Horowitz, Raskin and Siminoff and Ms. Lepore do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the applicable rules and regulations of the SEC and the listing standards of the NYSE.
Our Board believes that open communication between management and the Board is essential for effective risk management and oversight. Our Board meets with our Chief Executive OfficerCEO and other members of the senior management team at quarterly Board meetings, where, among other topics, they discuss strategy and risks in the context of reports from the management team and evaluates the risks inherent in significant transactions. While our Board is ultimately responsible for risk oversight, our Board committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. The Audit Committee of our Board (the “Audit Committee”) assists our Board in fulfilling its oversight responsibilities with respect to risk management in the areas of internal control(s) over financial reporting and disclosure controls and procedures. The Compensation Committee of our Board (the “Compensation Committee”), assists our Board in assessing risks created by the incentives inherent in our compensation policies. The Nominating and Corporate Governance Committee of our Board (the “Nominating and Corporate Governance Committee”) is charged with assisting our Board in fulfilling its oversight responsibilities with respect to the management of risk associated with Board membership and corporate governance.
Code of Business ConductConduct and Ethics
We have adopted a written code of business conduct and ethics (the “Code of Business Conduct and Ethics”), which outlines the principles of legal and ethical business conduct under which we do business. The code is applicable to all of our directors, officers and employees. We intend to disclose any amendments to our code of business conduct and ethics, or waivers of its requirements, on our website or in filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to the extent required by applicable rules and exchange requirements. The full text of our Code of Business Conduct and Ethics is posted under the “Governance” portion of the “Investor Relations” sectionavailable on our website at http://investors.quotient.com/investors/governance/governance-documents/default.aspx.www.quotient.com, on the Governance page under the Investor section.
Board Leadership and Lead Independent Director Ownership Guidelines
We believe that the structure of our Board of Directors and its committees provides strong overall management of our Company. Although our Board of Directors has not formally designated a Chairman, Steven Boal, our Chief Executive Officer, acts in such capacity. Our Board adopted in 2016 stock ownership guidelines for our CEO, executive officers, and non-employee directors. Under the guidelines, non-employee directors are expected to own shares of Directors believesQuotient common stock that have a value equal to three times their annual cash retainer for serving as a director. Shares may be owned directly by the current Board leadership structure, coupledindividual, owned jointly with a strong emphasis on Board independence, provides effective independent oversightor separately by the individual’s spouse, or held in trust for the benefit of management while allowingthe individual, the individual’s spouse or children. Each non-employee director is required to satisfy the stock ownership guidelines by October 24, 2021, or within five years after first becoming subject to the guidelines. Other than Mr. Raskin, who joined the Board of Directors and management to benefit from Mr. Boal’s leadership and years of experience as an executive inon February 7, 2017, each non-employee director has already satisfied the technology industry. The Board of Directors believes that Mr. Boal’s combined role enables strong leadership, creates clear accountability and enhances our ability to communicate our message and strategy clearly and consistently to stockholders.stock ownership guidelines.
In addition, the independent directors of the Company meet in executive session without management on a regularly scheduled basis. Our Board of Directors has not formally designated a Lead Independent Director. The independent directors rotate chairing executive sessions as Lead Independent Director based upon such director’s expertise in the matters for Board discussion. The Lead Independent Director for each session serves as a liaison between our non independent directors and our independent directors and performs such additional duties as our Board of Directors may otherwise determine and delegate.
Meetings of the Board of DirectorsBoard
Our Board met fiveeight times and acted by written consent two timesone time during 2015.2016. No director attended fewer than 75% of the total number of meetings of the Board and of any Board committees of which he or she was a member during 2015.2016.
Attendance at Annual Stockholder Meetings by the Board
It is our policy that directors are invited and encouraged to attend our annual meetings of stockholders. Directors Andrew JodyJ. Gessow and Steven R. Boal attended Quotient’s 20152016 Annual Meeting of Stockholders.Stockholders in person; and Directors Dawn G. Lepore, David E. Siminoff and Steve M. Horowitz attended telephonically.
Committees of the Board of Directors
Our Board has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. Members serve on these committees until their resignation or until otherwise determined by our Board. The following table provides membership information for 20152016 for each of our Board committees:
Name |
| Audit |
| Compensation |
| Nominating and |
|
|
|
|
|
|
|
Andrew |
|
|
|
| ||
|
|
|
|
|
|
|
Steve M. Horowitz* | ||||||
Dawn G. Lepore |
|
|
| |||
Scott D. Raskin** | ||||||
|
|
|
|
|
|
|
David E. Siminoff |
|
|
|
|
= Chairperson |
| = Member |
*Mr. Horowitz has served on the Nominating and Corporate Governance Committee since April 3, 2017.
**Mr. Raskin joined the Board on February 7, 2017 and has served on the Compensation Committee since February 7, 2017.
Effective upon and subject to the election of our Class IIIII directors at the Annual Meeting, the composition of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee is expected to remain the same as it is currently comprised.
Our Audit Committee is comprised of Messrs. Gessow and Siminoff and Ms. Lepore, with Mr. Siminoff serving as our Audit Committee chairperson. Our Board has determined that all of the members of the Audit Committee possess the level of financial literacy and sophistication required under the listing standards of the NYSE, and that Mr. Siminoff is an audit committee financial expert as defined by SEC rules. Our Board has also determined that Messrs. Gessow and Siminoff and Ms. Lepore satisfy the independence requirements of Audit Committee members under the applicable rules and regulations of the SEC and the listing standards of the NYSE. Our Audit Committee met five times and acted by written consent four times during 2016.
Our Audit Committee is responsible for, among other things:
appointing, compensating, retaining and overseeing our independent registered public accounting firm;
approving the audit and non-audit services to be performed by our independent registered public accounting firm;
reviewing, with our independent registered public accounting firm, all critical accounting policies and procedures;
reviewing with management the adequacy and effectiveness of our internal control structure and procedures for financial reports;
reviewing and discussing with management and our independent registered public accounting firm our annual audited financial statements and any certification, report, opinion or review rendered by our independent registered public accounting firm;
reviewing and investigating conduct alleged to be in violation of our code of conduct;
reviewing and approving related party transactions;
preparing the audit committee report required in our annual proxy statement; and
reviewing and evaluating, at least annually, its own performance and the adequacy of the committee charter.
The Audit Committee operates under a written charter that was adopted by our Board and satisfies the applicable standards of the SEC and the NYSE. A copy of the Audit Committee charter is posted under the “Governance” portion of the “Investor Relations” section on our website at http://investors.quotient.com/investors/governance/governance-documents/default.aspx.
Compensation Committee
Our Compensation Committee is comprised of Ms. Lepore and Messrs. Siminoff and Raskin, with Ms. Lepore serving as our Compensation Committee chairperson. Each member of our Compensation Committee satisfies the independence requirements under the applicable rules and regulations of the SEC and the listing standards of the NYSE. In addition, each member of our Compensation Committee qualifies as a “non-employee director” as defined pursuant to Rule 16b-3 promulgated under the Exchange Act and an “outside director” for purposes of Section 162(m) of the Internal Revenue Code (the “Code”). Our Compensation Committee met eight times and acted by written consent five times during 2016.
Our Compensation Committee is responsible for, among other things:
reviewing and approving corporate goals and objectives relevant to compensation of our Chief Executive Officer and other executive officers;
reviewing and approving the following compensation for our Chief Executive Officer and our other executive officers: salaries, bonuses, incentive compensation, equity awards, benefits and perquisites;
recommending the establishment and terms of our incentive compensation plans and equity compensation plans, and administering such plans;
recommending compensation programs for directors;
preparing disclosures regarding executive compensation and any related reports required by the rules of the SEC;
making and approving grants of options and other equity awards to all executive officers, directors and all other eligible individuals; and
reviewing and evaluating, at least annually, its own performance and the adequacy of the committee charter.
In carrying out these responsibilities, the Compensation Committee reviews all components of executive compensation for consistency with our compensation philosophy and with the interests of our stockholders.
In 2016, our Compensation Committee retained an independent compensation consultant, Compensia, Inc., to assist in 2015.reviewing and assessing for 2017 our compensation philosophy, broad-based equity strategy and executive compensation. The Compensation Committee assessed the independence of Compensia pursuant to SEC and NYSE rules and concluded that no conflict of interests exists that would prevent Compensia from independently advising the Compensation Committee.
The Compensation Committee has delegated in accordance with applicable law, rules and regulations, and our certificate of incorporation and bylaws, authority to an equity awards committee comprised of certain executive officers of our Company to make certain types of equity awards to any employee below the rank of vice president or who is not an executive or director under our Company’s 2013 Equity Incentive Plan pursuant to the terms of such plan and the equity award guidelines approved by our Compensation Committee.
The Compensation Committee operates under a written charter that was adopted by our Board and satisfies the applicable standards of the SEC and the NYSE. A copy of the Compensation Committee charter is posted under the “Governance” portion of the “Investor Relations” section on our website at http://investors.quotient.com/investors/governance/governance-documents/default.aspx.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee is comprised of Ms. Lepore, Messrs. Gessow and Horowitz, with Ms. Lepore serving as our Nominating and Corporate Governance Committee chairperson, each of whom satisfies the independence requirements under applicable rules and regulations of the SEC and the listing standards of the NYSE. Our Nominating and Corporate Governance Committee met four times and did not act by written consent during 2016.
Our Nominating and Corporate Governance Committee is responsible for, among other things:
assisting our Board in identifying qualified director nominees and recommending nominees for each annual meeting of stockholders;
developing, recommending and reviewing corporate governance principles and a code of conduct applicable to us;
assisting our Board in its evaluation of the performance of our Board and each committee thereof; and
reviewing and evaluating, at least annually, its own performance and the adequacy of the committee charter.
The Nominating and Corporate Governance Committee operates under a written charter that was adopted by our Board and satisfies the applicable standards of the SEC and the NYSE. A copy of the Nominating and Corporate Governance Committee charter is posted under the “Governance” portion of the “Investor Relations” section on our website at http://investors.quotient.com/investors/governance/governance-documents/default.aspx.
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee is currently or has been at any time one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or Compensation Committee.
Considerations in Evaluating Director Nominees
The Nominating and Corporate Governance Committee is responsible for identifying, evaluating and recommending candidates to the Board for Board membership. A variety of methods are used to identify and evaluate director nominees, with the goal of maintaining and further developing a diverse, experienced and highly qualified Board. The Nominating and Corporate Governance Committee does consider the diversity of its directors and nominees in terms of knowledge, experience, background, skills, expertise and other demographic factors. Candidates may come to our attention through current members of our Board, professional search firms, stockholders or other persons.
The Nominating and Corporate Governance Committee will recommend to the Board for selection all nominees to be proposed by the Board for election by the stockholders, including approval or recommendation of a slate of director nominees to be proposed by the Board for election at each annual meeting of stockholders, and will recommend all director nominees to be appointed by the Board to fill interim director vacancies.
The Nominating and Corporate Governance Committee also reviews and recommends to the Board for determination the desired qualifications, expertise and characteristics of Board members, with the goal of developing a diverse, experienced and highly qualified Board. The Nominating and Corporate Governance Committee and the Board believe that candidates for director should have certain minimum qualifications, including, without limitation:
the highest personal and professional ethics and integrity;
proven achievement and competence in the candidate’s field and ability to exercise sound business judgment;
skills that are complementary to those of the existing Board;
the ability to assist and support management and make significant contributions to the Company’s success;
an understanding of the fiduciary responsibilities that is required of a member of the Board and the commitment of time and energy necessary to diligently carry out those responsibilities;
ability to read and understand financial statements and other financial information pertaining to Quotient;
commitment to enhancing stockholder value;
willingness to act in the interest of all stockholders; and
for non-employee directors, independence under NYSE listing standards and other applicable rules and regulations.
In the context of the Board’s existing composition, other requirements that are expected to contribute to the Board’s overall effectiveness and meet the needs of the Board and its committees may be considered.
Stockholder Recommendations for Nominations to the Board
The Nominating and Corporate Governance Committee will consider properly submitted stockholder recommendations for candidates for our Board who meet the minimum qualifications as described above. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. A stockholder of record holding at least three percent of the fully diluted capitalization of the Company continuously for at least twelve (12) months prior to the date of the submission of the recommendation can recommend a candidate for nomination to the Board by complying with our Bylaws and our Restated Certificate and applicable laws, rule and regulations, included those promulgated by the SEC. Any eligible stockholder who wishes to directly submit a nomination should review the requirements in Section 2.15 of the Bylaws on nominations by stockholders. Any recommendation or nomination should be sent in writing to the General Counsel, Quotient Technology Inc., 400 Logue Avenue, Mountain View, California 94043. Submissions must include the full name of the proposed nominee, home and business contact information, detailed biographical data, relevant qualifications, a signed letter from the candidate confirming willingness to serve, information regarding any relationships between the candidate and Quotient, other information specified in our Bylaws, and evidence of the recommending stockholder’s ownership of Company stock in the amount and for the time period required. These candidates are evaluated at meetings of the Nominating and Corporate Governance Committee, and may be considered at any point during the year. If any materials are provided by a stockholder in connection with the recommendation of a director candidate, such materials are forwarded to the Nominating and Corporate Governance Committee.
All proposals of stockholders that are intended to be presented by such stockholder at an annual meeting of Stockholders must be in writing and notice must be delivered to the Secretary at the principal executive offices of Quotient not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred and twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting. Stockholders are also advised to review our Bylaws, which contain additional requirements with respect to advance notice of stockholder proposals and director nominations.
Non-Employee Director Compensation
Non-employee directors receive compensation in the form of equity granted under the terms of our 2013 Equity Incentive Plan (the “2013 Plan”), and cash, as described below:
Equity Compensation
Initial grant. Upon appointment to our Board each non-employee director is granted a stock option to purchase shares of our common stock (the “Initial Option”). The number of shares subject to the Initial Option is determined by dividing $250,000 by the
closing price of our stock on the date of grant or as computed in accordance with such other methodology as our Board or Compensation Committee may determine. The shares underlying the Initial Option vest and, if applicable, become exercisable, as to 25% of the shares of our common stock subject to the Initial option on each annual anniversary of the date of grant.
Annual award. On the date of each annual meeting of our stockholders, each non-employee director will be granted a stock option to purchase shares of our common stock (the “Annual Option”). The number of shares subject to the Annual Option is determined by dividing $150,000 by the closing price of our stock on the date of the annual stockholder meeting or as computed in accordance with such other methodology as our Board or Compensation Committee may determine. All of the shares underlying the Annual Option will vest and become exercisable upon the earlier of (i) the day prior to the next year’s annual meeting of stockholders or (ii) one year from the grant date, subject to continued service as a director through the applicable vesting date.
The exercise price per share of each stock option granted under the outside director compensation policy will be the fair market value of a share of our common stock, as determined in accordance with our 2013 Plan, on the date of the option grant.
Cash compensation.
Each non-employee director receives an annual retainer of $30,000 in cash for serving on our Board and the lead independent director will receive an additional annual retainer of $15,000 in cash.
The chairperson and members of the three standing committees of our Board are entitled to the following additional annual cash retainers: