SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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Sohu.com Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other than Registrant)
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Chief Executive Officer
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
SOHU.COM INC.
TO BE HELD June 19, 2009
10:00 A.M. BEIJING TIME
1) | To elect four directors, who shall serve for a two-year term or until their earlier death, resignation or removal; |
2) | To ratify the appointment of PricewaterhouseCoopers Zhong Tian CPAs Limited Company as our independent auditors for the fiscal year ending December 31, 2009; and |
3) | To consider and act upon all other matters which may properly come before the Annual Meeting or any adjournment or postponement thereof. |
Secretary
PROXY STATEMENT | 1 | |||||
PROPOSAL I. ELECTION OF DIRECTORS | 2 | |||||
GENERAL INFORMATION RELATING TO OUR BOARD OF DIRECTORS | 4 | |||||
BENEFICIAL OWNERSHIP OF COMMON STOCK | 6 | |||||
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | 7 | |||||
TRANSACTIONS WITH RELATED PERSONS | 7 | |||||
AUDIT COMMITTEE REPORT | 9 | |||||
EXECUTIVE COMPENSATION | 10 | |||||
EXECUTIVE OFFICERS | 10 | |||||
COMPENSATION DISCUSSION AND ANALYSIS | 10 | |||||
COMPENSATION COMMITTEE REPORT | 17 | |||||
SUMMARY COMPENSATION TABLE | 18 | |||||
GRANTS OF PLAN-BASED AWARDS | 19 | |||||
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | 21 | |||||
OPTION EXERCISES AND STOCK VESTED | 21 | |||||
PENSION BENEFITS | 22 | |||||
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL | 22 | |||||
DIRECTOR COMPENSATION | 25 | |||||
PROPOSAL II. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS | 26 | |||||
PRINCIPAL ACCOUNTANT FEES, SERVICES AND PRE-APPROVAL PROCESS | 27 | |||||
MISCELLANEOUS | 28 |
Level 12, Sohu.com Internet Plaza
No. 1 Unit Zhongguancun East Road, Haidian District
Beijing 100084, People’s Republic of China
(011) 8610-6272-6666
TO BE HELD June 19, 2009
10:00 A.M. BEIJING TIME
PROXY STATEMENT
auditors. Under our Amended and Restated By-laws, the presence in person or by proxy of a majority of the shares of our common stock outstanding on the record date is required for a quorum. Abstentions and broker non-votes are each included for purposes of determining the presence or absence of a sufficient number of shares to constitute a quorum for the transaction of business. With respect to the approval of any particular proposal, abstentions and broker non-votes are not counted in determining the number of votes cast. The election of directors requires a plurality of the votes cast in person or by proxy. The nominees receiving the highest number of affirmative votes of the shares present or represented and voting on the election of the directors at the Annual Meeting will be elected as directors. The ratification of the appointment of PricewaterhouseCoopers as our independent auditors requires the affirmative vote of the holders of a majority of the shares of our common stock that are present in person or by proxy at the Annual Meeting.
Proposal I. | Election of Directors |
Dr. Charles Zhang Chairman of our Board and Chief Executive Officer. 44 years old. Director since 1996. | Dr. Zhang is our Founder and has been Chairman of our Board and Chief Executive Officer since August 1996. Dr. Zhang also served as our President from August 1996 to July 2004. Prior to founding Sohu.com Inc., Dr. Zhang worked for Internet Securities Inc. and helped to establish its China operations. Prior to that, Dr. Zhang worked as Massachusetts Institute of Technology’s liaison officer with China. Dr. Zhang has a Ph.D in experimental physics from Massachusetts Institute of Technology (“MIT”) and a Bachelor of Science degree from Tsinghua University in Beijing. Dr. Zhang is a native of the People’s Republic of China. Dr. Zhang is also the Chairman of the Board of Changyou.com Limited, our publicly-traded massively multi-player online role-playing game, or MMORPG, subsidiary. | Dr. Zhang’s term expires at the 2009 Annual Meeting. |
Mr. Charles Huang Chief Executive Officer and Chairman of Netbig Education Holdings Ltd. 39 years old. Director since 2001. (1)(3) | Mr. Huang is the Founder, Chief Executive Officer and Chairman of Netbig Education Holdings Ltd., a leading education enterprise in China. Prior to founding Netbig in 1999, Mr. Huang served as Executive Director and Head of Asia Securitization Group of Deutsche Bank, New York and Hong Kong, as well as Senior Vice President of Prudential Securities Inc., New York. He holds a Master of Science degree in Computer Science from MIT and a Bachelor of Science degree from the University of Science and Technology of China. Mr. Huang is also a Chartered Financial Analyst. | Mr. Huang’s term expires at the 2009 Annual Meeting. | ||||||||
Dr. Dave Qi Professor of Accounting and Associate Dean, the Cheung Kong Graduate School of Business. 45 years old. Director since 2005. (1)(2)(3) | Dr. Qi is a Professor of Accounting and the Associate Dean of the Cheung Kong Graduate School of Business. He began teaching at the Cheung Kong Graduate School of Business in 2002 and was the founding Director of the Executive MBA program. Before joining the Cheung Kong Graduate School of Business, Dr. Qi was an Associate Professor at the School of Accounting of the Chinese University of Hong Kong. Dr. Qi has published many articles and research essays on accounting, financial reporting, capital market and other related topics. He has a Ph.D. in accounting from the Eli Broad Graduate School of management of Michigan State University, a Master of Business Administration from the University of Hawaii at Manoa and a Bachelor of Science and a Bachelor of Arts degree from Fudan University. Dr. Qi is currently a member of the American Accounting Association. | Dr. Qi’s term expires at the 2009 Annual Meeting. | ||||||||
Mr. Shi Wang Chairman of China Vanke Co., Ltd. 58 years old. Director since 2005. (3) | Mr. Wang is the Chairman of the Board of Directors of China Vanke Co., Ltd., of which he also served as General Manager from 1991 to 1999. Mr. Wang founded the Shenzhen Exhibition Center of Modern Science and Education Equipment in 1984, which is the predecessor of China Vanke Co., Ltd. Mr. Wang is the Executive Manager of the China Real Estate Association and is Deputy Director of the City Housing Development Council of the China Real Estate Association. | Mr. Wang’s term expires at the 2009 Annual Meeting. | ||||||||
Dr. Edward B. Roberts Professor of Management of Technology at Massachusetts Institute of Technology’s Alfred P. Sloan School of Management. 73 years old. Director since 1996. (2)(3) | Dr. Roberts is the David Sarnoff Professor of Management of Technology at MIT’s Alfred P. Sloan School of Management. Dr. Roberts chaired MIT’s research and educational programs in the management of technological innovation from 1967 to 1993 and also founded and chairs the MIT Entrepreneurship Center. Dr. Roberts is currently a director of Medical Information Technology, Inc. Dr. Roberts has authored over 160 articles and eleven books, one of which is Entrepreneurs in High Technology (Oxford University Press, 1991). Dr. Roberts received four degrees from MIT, including a Ph.D in 1962. | Dr. Roberts’ term expires at the 2010 Annual Meeting. | ||||||||
Dr. Zhonghan Deng Chairman and Chief Executive Officer of Vimicro Corporation. 41 years old. Director since 2007. (1)(3) | Dr. Deng is the Chief Executive Officer and Chairman of the Board of Directors of Vimicro Corporation (NASDAQ: VIMC), which he co-founded in 1999. Dr. Deng received a Ph.D. in electrical engineering and computer sciences, a Master of Science degree in economics and a Master of Science degree in physics from the University of California, Berkeley. After graduating from Berkeley, Dr. Deng worked as a research scientist for International Business Machines Corporation at the T.J. Watson Research Center in Yorktown Heights, New York. | Dr. Deng’s term expires at the at 2010 Annual Meeting. |
(1) | member of our Audit Committee |
(2) | member of our Compensation Committee |
(3) | member of our Nominating Committee |
OUR BOARD OF DIRECTORS
and approves restricted stock unit and stock option grants under our 2000 Stock Incentive Plan, as amended, and otherwise determines compensation levels and performs such other functions regarding compensation as our Board may delegate to our Compensation Committee. Our Compensation Committee does not have a written charter. Our Compensation Committee designed an executive compensation program in order to reward excellent performance and retain talented executive officers through a combination of cash and equity incentive awards. The Compensation Discussion and Analysis below provides additional information regarding the Compensation Committee’s determination of named executive officer and director compensation levels and our Compensation Committee’s policies and procedures in making such determinations.
• | The candidate’s name, age, business address, residence address, principal occupation or employment, the class and number of shares of our capital stock the candidate beneficially owns, a brief description of any direct or indirect relationships with us and other information that would be required in a proxy statement soliciting proxies for the election of the candidate as a director; |
• | A signed consent of the nominee to being named as a nominee, to cooperate with reasonable background checks and personal interviews and to serve as a director, if elected; and |
• | As to the stockholder proposing such nominee, that stockholder’s name and address, the class and number of shares of our capital stock the stockholder beneficially owns, a description of all arrangements or understandings between the stockholder and the candidate and any other person or persons (including their names) pursuant to which the recommendation is being made, a list of all other companies that the stockholder has recommended the candidate to for election as a director in that fiscal year, and a representation that the stockholder intends to appear in person or by proxy at the meeting to nominate the person named in its notice. |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percent of Class(1) | ||||||||||||
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Charles Zhang | 7,418,000 | (2) | 19.34 | % | ||||||||||
Edward Roberts | 747,869 | (3) | 1.95 | % | ||||||||||
Carol Yu | 78,125 | (4) | * | |||||||||||
Yu Gong | 27,313 | (5) | * | |||||||||||
Charles Huang | 59,894 | (6) | * | |||||||||||
Xin (Belinda) Wang | 47,500 | (7) | * | |||||||||||
Shi Wang | 20,894 | (8) | * | |||||||||||
Dave Qi | 20,894 | (9) | * | |||||||||||
Zhonghan Deng | 4,871 | (10) | * | |||||||||||
All directors, nominees and executive officers as a group (8 persons) | 8,425,360 | (11) | 21.91 | % | ||||||||||
Photon Group Limited | 6,737,000 | (12) | 17.61 | % | ||||||||||
FMR LLC | 3,857,500 | (13) | 10.08 | % | ||||||||||
Coatue Management LLC | 2,788,226 | (14) | 7.29 | % |
* | Less than 1%. |
(1) | Includes the number of shares and percentage ownership represented by such shares determined to be beneficially owned by a person in accordance with the rules of the SEC. The number of shares beneficially owned by a person includes shares of common stock subject to options, restricted stock units, convertible debt or warrants held by that person that are currently exercisable or convertible or exercisable or convertible within 60 days of April 15, 2009. Such shares are deemed outstanding for the purpose of computing the percentage of outstanding shares owned by that person. Such shares are not deemed outstanding, however, for the purpose of computing the percentage ownership of each other person. |
(2) | Includes (i) 87,438 shares of our common stock subject to options exercisable within 60 days of April 15, 2008 and (ii) 6,737,000 shares of our common stock beneficially owned by Photon Group Limited. Dr. Zhang is a Director of Photon Group Limited and therefore may be deemed to be a beneficial owner of shares owned by it. Dr. Zhang disclaims beneficial ownership of such shares. Dr. Zhang’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(3) | Includes (i) 24,000 shares of our common stock subject to options held by Dr. Edward B. Roberts which are exercisable within 60 days of April 15, 2009; (ii) 166,722 shares of our common stock held by the Dr. Edward B. Roberts Trust — 2003, dated as of October 3, 2003; and (iii) 309,000 shares of our common stock held by the Nancy H. Roberts Trust — 2003, dated as of October 3, 2003. Dr. Roberts and his wife, Nancy Roberts, are the trustees of both trusts. Dr. Roberts’s address is 300 Boylston Street, Boston, Massachusetts 02116, U.S.A. |
(4) | Includes 2,500 shares of our common stock subject to options exercisable within 60 days of April 15, 2009. Ms. Yu’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing, People’s Republic of China 100084. |
(5) | Includes 2,813 shares of our common stock subject to options exercisable within 60 days of April 15, 2009. Dr. Gong resigned as our Chief Operating Officer effective January 2009. Dr. Gong’s options to purchase 2,813 shares of our common stock continued to vest through April 15, 2009 in accordance with the applicable vesting schedules and these options, and all vested options he holds that have vested, are exercisable by him until June 30, 2009. Dr. Gong’s address is Department of Automation, Tsinghua University, Haidian District, Beijing, People’s Republic of China. |
(6) | Includes 49,000 shares of our common stock subject to options exercisable within 60 days of April 15, 2009. Mr. Huang’s address is Suite 5206, Central Plaza, 18 Harbour Road, Hong Kong. |
(7) | Includes 8,126 shares of our common stock subject to options exercisable within 60 days of April 15, 2009. Ms. Wang’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(8) | Includes 10,000 shares of our common stock subject to options exercisable within 60 days of April 15, 2009. Mr. Wang’s address is Vanke Architecture Research Center, No. 68 Meilin Road, Futian District, Shenzhen 518049, People’s Republic of China. |
(9) | Includes 10,000 shares of our common stock subject to options exercisable within 60 days of April 15, 2009. Dr. Qi’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(10) | Dr. Deng’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(11) | Includes 193,877 shares of our common stock that such persons have the right to acquire pursuant to currently exercisable options or options that may be exercised within 60 days of April 15, 2009. |
(12) | Includes 1,300,000 shares of our common stock pledged to Credit Suisse pursuant to a variable pre-paid forward contract maturing May 9, 2011. Photon Group Limited’s address is c/o Sohu.com Inc., Level 12, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(13) | FMR LLC’s address is Fidelity Management & Research Company (“Fidelity”), 82 Devonshire Street, Boston, Massachusetts 02109, U.S.A. |
(14) | Coatue Management LLC’s address is 126 East 56th Street, New York, New York 10022, U.S.A. |
deciding whether to approve or ratify a related person transaction, our Audit Committee considers the following factors:
• | the nature of the related person’s interest in the transaction; |
• | the material terms of the transaction, including, without limitation, the amount and type of transaction; |
• | the importance of the transaction to the related person and to us; |
• | whether the transaction would impair the judgment of any of our directors or executive officers to act in our best interest; |
• | whether the terms of the transaction are substantially equal to or more favorable to us and no more favorable to the related person than if we had negotiated similar arrangements with non-affiliated third parties; and |
• | any other matters our Audit Committee deems appropriate. |
• | discussed and considered the independence of PricewaterhouseCoopers, reviewing as necessary all relationships and services which might bear on PricewaterhouseCoopers’s objectivity as independent auditors; |
• | received a formal written statement from PricewaterhouseCoopers describing relationships between PricewaterhouseCoopers and Sohu in accordance with the applicable requirements of the Public Company Accounting Oversight Board regarding outside auditors’ communications with audit committees concerning independence and has discussed with PricewaterhouseCoopers the auditors’ independence from Sohu and Sohu’s management; |
• | received written affirmation from PricewaterhouseCoopers that it is in fact independent; |
• | discussed the overall audit process, receiving and reviewing all reports of PricewaterhouseCoopers; |
• | provided to PricewaterhouseCoopers full access to the Audit Committee and the full Board to report on all appropriate matters; and |
• | discussed with PricewaterhouseCoopers all matters required to be reviewed under The Public Company Accounting Oversight Board standards. |
Mr. Charles Huang
Dr. Zhonghan Deng
• | Cash compensation, which includes an annual salary and the opportunity to earn an annual performance-based cash bonus; |
• | Equity incentive compensation, in the form of stock options and restricted stock units; |
• | Other benefits, in the form of housing allowances, tax equalization, tuition/training reimbursement and premiums paid for health, life and disability insurance; and |
• | Severance benefits. |
situated named executive officers at our peer companies; (2) the responsibilities of our named executive officers; and (3) other factors such as the exchange rate of U.S. dollars to Chinese RMB. Neither we, nor our Compensation Committee, nor any named executive officer has any contractual arrangement with any compensation consultant who has a role in determining or recommending the amount or form of compensation paid to our named executive officers or any non-employee member of our Board.
• | A discretionary annual performance-based cash bonus that is based on an assessment of the named executive officer’s performance against pre-determined quantitative and qualitative measures within the context of our overall performance as a company and the performance of each business segment for which the named executive officer is responsible to oversee; and |
• | Equity incentive compensation in the form of stock options or restricted stock units, the value of which is contingent upon the performance of our common stock in the public trading market, and which are subject to vesting schedules that require continued service. |
• | SINA Corporation; |
• | NetEase.com, Inc.; |
• | Baidu.com, Inc.; |
• | Shanda Interactive Entertainment Ltd.; |
• | The9 Limited; |
• | KongZhong Corporation; and |
• | Ctrip.com International, Ltd. |
• | Key financial measurements such as revenue, operating profit, earnings per share and operating margins; |
• | Revenue growth percentage compared with selected competitors to indicate our growth or loss in market share; |
• | Promoting commercial excellence by launching new or continuously improving products or services; |
• | Becoming or remaining as a leading market player and attracting and retaining customers; |
• | Achieving excellence in each named executive officer’s business area of responsibility; and |
• | Supporting our values by promoting a culture of integrity and adherence to our code of conduct. |
2008 Increase | ||||||||||||||||||
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Name | 2007 Base Salary | Amount | Percentage | 2008 Base Salary Effective January 1, 2008 | ||||||||||||||
Charles Zhang | $ | 250,000 | $ | 30,000 | 12.00 | % | $ | 280,000 | ||||||||||
Carol Yu | $ | 230,000 | $ | 20,000 | 8.70 | % | $ | 250,000 | ||||||||||
Xin (Belinda) Wang | $ | 150,000 | $ | 20,000 | 13.33 | % | $ | 170,000 | ||||||||||
Yu Gong(1) | $ | 150,000 | $ | 20,000 | 13.33 | % | $ | 170,000 |
(1) | Dr. Gong was a named executive officer for the year ended December 31, 2008. Dr. Gong resigned as Chief Operating Officer effective January 2009. |
Name | 2008 Threshold Bonus Opportunity (as a % of base salary) | 2008 Targeted Bonus Opportunity (as a % of base salary) | 2008 Maximum Bonus Opportunity (as a % of base salary) | |||||||||||
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Charles Zhang | 0 | % | 47.20 | % | 104.70 | % | ||||||||
Carol Yu | 0 | % | 47.55 | % | 105.68 | % | ||||||||
Xin (Belinda) Wang | 0 | % | 46.50 | % | 102.75 | % | ||||||||
Yu Gong | 0 | % | 47.20 | % | 104.70 | % |
2008 Performance Bonus Components | |||||||||||||||||||||||
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Name | Overall Corporate Performance Results | Advertising Results | Non-Advertising Results | Technology, Product and Olympic Project Results | Total | ||||||||||||||||||
Charles Zhang | 50 | % | 20 | % | 10 | % | 20 | % | 100 | % | |||||||||||||
Carol Yu | 50 | % | 0 | % | 20 | % | 30 | % | 100 | % | |||||||||||||
Xin (Belinda) Wang | 40 | % | 60 | % | 0 | % | 0 | % | 100 | % | |||||||||||||
Yu Gong | 40 | % | 20 | % | 20 | % | 20 | % | 100 | % |
35%), (ii) Non-GAAP Net Income (weighted 35%) and (iii) our GAAP Revenue growth, as a percentage, compared with the GAAP Revenue growth, as a percentage, of our peers which are identified above (weighted 30%). Non-GAAP Net Income is calculated by taking the GAAP Net Income from our audited financial statements and adding back in the compensation cost of the share-based awards granted to employees under the Statement of Financial Accounting Standards 123 (revised 2004), Share-Based Payment (“SFAS 123R”). We used Non-GAAP Net Income because the amount of share-based compensation expense cannot be anticipated by our management and business line leaders and is not included in our annual budgets and quarterly forecasts. In addition, share-based compensation expense does not involve any upfront or subsequent cash outflow, and therefore we do not factor this in when evaluating and approving expenditures or when determining the allocation of our resources to business segments. As a result, our performance measures are based on non-GAAP financial measures that exclude share-based compensation expense. With respect to the objectives in (i) and (ii) above, the total bonus opportunity (e.g., with respect to Dr. Zhang, 35% of the overall corporate performance component was tied to our achieving certain levels of GAAP Revenue and 35% of that component was tied to our achieving certain levels of Non-GAAP Net Income) was subject to a sliding scale, determined by our Compensation Committee, whereby the named executive officer was eligible to receive anywhere from 0% to 140% of the bonus component based on the actual performance of our company. With respect to the objective in (iii) above, the total bonus opportunity (e.g., with respect to Dr. Zhang, 30% of the overall corporate performance component) was subject to a sliding scale, determined by our Compensation Committee, whereby the named executive officer was eligible to receive anywhere from 70% to 130% of the bonus component based on the actual performance of us vis-|$$|Aga-vis our peers.
in the twelve months prior to the employee’s termination) multiplied by the number of years the employee has been employed with us, plus an additional month’s salary if thirty days’ prior notice of such termination is given. However, if the average monthly compensation to be received by the terminated employee exceeds three times the average monthly salary of the employee’s local area as determined and published by the local government, such average monthly compensation shall be capped at three times the average monthly salary of the employee’s local area. However, we believe that it is important, for recruiting and retention, to provide certain of our named executive officers with severance benefits beyond those required by Chinese law to help minimize the financial stress in the event of job loss. As a result, we provide additional severance pay and benefit continuation to certain of our named executive officers to help bridge the time until they secure new employment.
Dr. Dave Qi
Name and Principal Position | Year | Salary ($) | Option Awards ($)(2) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | |||||||||||||||||||||||
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Charles Zhang | 2008 | $ | 280,000 | $ | 34,101 | $ | 233,629 | $ | 199,185 | $ | 247,207 | $ | 994,122 | |||||||||||||||||
Chairman of the Board and | 2007 | $ | 250,000 | $ | 68,030 | $ | 336,427 | $ | 134,269 | $ | 230,926 | $ | 1,019,652 | |||||||||||||||||
Chief Executive Officer | 2006 | $ | 230,000 | $ | 161,918 | $ | 19,752 | $ | 139,932 | $ | 217,247 | $ | 768,849 | |||||||||||||||||
Carol Yu | 2008 | $ | 250,000 | $ | 84,461 | $ | 169,202 | $ | 250,000 | $ | 73,645 | $ | 827,308 | |||||||||||||||||
Co-President and Chief | 2007 | $ | 230,000 | $ | 280,030 | $ | 246,258 | $ | 157,333 | $ | 148,606 | $ | 1,062,227 | |||||||||||||||||
Financial Officer | 2006 | $ | 230,000 | $ | 572,163 | $ | 19,752 | $ | 137,448 | $ | 60,168 | $ | 1,019,531 | |||||||||||||||||
Xin (Belinda) Wang | 2008 | $ | 170,000 | $ | 27,506 | $ | 204,388 | $ | 129,668 | $ | 41,528 | $ | 573,090 | |||||||||||||||||
Co-President and Chief | 2007 | $ | 150,000 | $ | 61,627 | $ | 298,717 | $ | 110,370 | $ | 34,229 | $ | 654,943 | |||||||||||||||||
Marketing Officer | 2006 | $ | 120,000 | $ | 117,637 | $ | 30,047 | $ | 70,308 | $ | 56,386 | $ | 394,378 | |||||||||||||||||
Yu Gong | 2008 | $ | 170,000 | $ | 37,948 | $ | 21,838 | (6) | $ | 85,000 | (5) | $ | 41,731 | $ | 356,517 | |||||||||||||||
Chief Operating | 2007 | $ | 150,000 | $ | 108,895 | $ | 289,067 | $ | 89,843 | $ | 34,229 | $ | 672,034 | |||||||||||||||||
Officer | 2006 | $ | 120,000 | $ | 221,189 | $ | 24,038 | $ | 70,308 | $ | 20,000 | $ | 455,535 |
(1) | All 2008 annual cash bonuses paid to our named executive officers are reflected in the non-equity incentive plan compensation column of this table and were earned pursuant to our 2008 Executive Bonus Plan. |
(2) | Amounts shown represent the compensation cost for financial reporting purposes of option awards and stock awards recognized as expense for the years ended December 31, 2008, 2007 and 2006 under SFAS 123R, rather than an amount paid to or realized by the named executive officer. For 2008, the amount represents expense recognized with respect to stock options and restricted stock units, as applicable, granted from January 1, 2002 through December 31, 2008, in accordance with SFAS 123R. For awards granted in 2008, see the “Grants of Plan-Based Awards Table” below. See Note 19, “Shareholders’ Equity” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 for the relevant assumptions we used to determine the valuation of our stock and option awards in 2008. |
(3) | All compensation earned in 2008 under our 2008 Executive Bonus Plan was paid on April 20, 2009. |
(4) | The table below shows the components of this column for 2008, which include housing allowances, tax equalization and premiums paid for health, life and disability insurance. |
(5) | Dr. Gong will be entitled to receive a 2008 bonus in accordance with the 2008 senior management bonus plan after the Board approves the bonuses for our executive officers. The evaluation process will commence August 1, 2009. The bonus amount shown above is the target bonus. |
6) | Includes 6,250 restricted stock units which will vest on July 31, 2009 if Dr. Gong complies with all of the provisions of the letter agreement and his employee non-competition, non-solicitation, confidential information and work product agreement.. |
Name | Housing Allowances | Tax Equalization | Health, Life, Travel and Disability Insurance | Total | ||||||||||||||
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Charles Zhang | $ | 60,000 | $ | 173,698 | $ | 13,509 | $ | 247,207 | ||||||||||
Carol Yu | $ | 60,000 | $ | — | $ | 13,645 | $ | 73,645 | ||||||||||
Xin (Belinda) Wang | $ | 25,000 | — | $ | 10,846 | $ | 35,846 | |||||||||||
Yu Gong | $ | 25,000 | — | $ | 11,050 | $ | 36,050 |
Estimated Payouts Under Non-Equity Incentive Plan Awards(1) | ||||||||||||||||||||||||||
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Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | Grant Date Fair Value of Stock and Options Awards | ||||||||||||||||||||
Charles Zhang | $ | 0 | $ | 132,160 | $ | 293,160 | — | — | ||||||||||||||||||
N/A | — | — | — | $ | ||||||||||||||||||||||
Carol Yu | $ | 0 | $ | 118,875 | $ | 264,188 | — | — | ||||||||||||||||||
N/A | — | — | — | — | $ | |||||||||||||||||||||
Xin (Belinda) Wang | $ | 0 | $ | 79,050 | $ | 174,675 | — | — | ||||||||||||||||||
N/A | — | — | — | — | $ | |||||||||||||||||||||
Yu Gong | $ | 0 | $ | 80,240 | $ | 177,990 | — | — | ||||||||||||||||||
N/A | — | — | — | — | $ |
(1) | The amounts shown represent the range of non-equity incentive bonus opportunities for each named executive officer under our 2008 Executive Bonus Plan. The plan is described in detail in the “Compensation Discussion and Analysis” above. Payment of bonuses under our 2008 Executive Bonus Plan was made on April 20, 2009, and actual payments are reflected in the “Summary Compensation Table” in the column titled “Non-Equity Incentive Plan Compensation.” |
(2) | All stock awards were granted under our 2000 Stock Incentive Plan, as amended and relate to our common stock. The stock awards were granted in the form of restricted stock units. The terms of the restricted stock units are described in the section below entitled “Terms of Stock Option and Restricted Stock Unit Awards Granted under our 2000 Stock Incentive Plan, as amended.” |
• | payments equal to the named executive officer’s monthly base salary (which includes his or her housing allowance) in effect on the date of termination for the shorter of (i) six months and (ii) the remainder of the term of the named executive officer’s employment agreement; and |
• | insurance benefits for so long as we are obligated to pay severance. |
Termination or Change-in-Control”) of us, except as noted below, all of the named executive officer’s stock options and other stock awards will become immediately exercisable.
• | the named executive officer will not be entitled to any further payments from us; |
• | any insurance or other benefits that have continued will terminate immediately; and |
• | the named executive officer must reimburse us for any severance payments previously made by us to the named executive officer. |
Option Awards(1) | Stock Awards(1) | |||||||||||||||||||||||||||||
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Name | Number of Securities Underlying Unexercised Options Exercisable(5) (#) | Number of Securities Underlying Unexercised Options Unexercisable(5) (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | ||||||||||||||||||||||||
Charles Zhang | 10,938 | (2) | — | $ | 1.18 | 1/30/2012 | 2,000 | (6) | $ | 94,680 | ||||||||||||||||||||
37,500 | (3) | — | $ | 8.39 | 1/9/2013 | 22,500 | (8) | $ | 1,065,150 | |||||||||||||||||||||
9,000 | (4) | — | $ | 34.51 | 1/2/2014 | |||||||||||||||||||||||||
28,125 | 1,875 | $ | 22.86 | 7/25/2015 | ||||||||||||||||||||||||||
Carol Yu | 0 | 2,500 | $ | 20.78 | 7/25/2015 | 2,000 | (6) | $ | 94,680 | |||||||||||||||||||||
$ | 15,750 | (8) | $ | 745,605 | ||||||||||||||||||||||||||
Xin (Belinda) Wang | 625 | 0 | $ | 16.84 | 7/26/2014 | 2,500 | (7) | $ | 118,350 | |||||||||||||||||||||
5,626 | 1,875 | $ | 17.65 | 3/29/2015 | 18,750 | (8) | $ | 887,625 | ||||||||||||||||||||||
Yu Gong | 313 | 0 | $ | 16.84 | 7/26/2014 | 2,000 | (7) | $ | 94,680 | |||||||||||||||||||||
34,438 | 2,813 | $ | 17.65 | 3/29/2015 | 18,750 | (8) | $ | 887,625 |
(1) | Options and restricted stock unit awards were granted under our 2000 Stock Incentive Plan, as amended, and relate to our common stock. |
(2) | These options became fully vested on January 31, 2006. |
(3) | These options became fully vested on January 10, 2007. |
(4) | These options were granted to Dr. Zhang in consideration of his services as our director and they became fully vested on January 2, 2005. |
(5) | 25% of the initial option grant vests on the first anniversary of the grant date and 6.25% of the options vests quarterly thereafter. The grant date of each option is listed on the table below by reference to the expiration date set forth in the above table. |
Grant Date | Expiration Date | |||||
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1/31/2002 | 1/30/2012 | |||||
1/10/2003 | 1/9/2013 | |||||
1/2/2004 | 1/2/2014 | |||||
3/30/2005 | 3/29/2015 | |||||
7/26/2005 | 7/25/2015 |
(6) | 25% of the restricted stock units vest each year beginning on the first anniversary of July 25, 2006, the grant date. |
(7) | 25% of the restricted stock units vest each year beginning on the first anniversary of July 9, 2006, the grant date. |
(8) | 25% of the restricted stock units vest each year beginning on the first anniversary of February 28, 2007, the grant date. |
Option Awards | Stock Awards(1) | ||||||||||||||||||
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Name | Number of Shares Acquired On Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||||||||||
Charles Zhang | 0 | $ | 0 | 8,500 | $ | 427,550 | |||||||||||||
Carol Yu | 217,500 | $ | 10,873,013 | 6,250 | $ | 324,140 | |||||||||||||
Xin (Belinda) Wang | 31,874 | $ | 2,058,686 | 7,500 | $ | 375,375 | |||||||||||||
Yu Gong | 33,999 | $ | 1,580,759 | 7,250 | $ | 357,750 |
(1) | Reflects shares received pursuant restricted stock units granted under our 2000 Stock Incentive Plan. |
• | willful misconduct or gross negligence by the named executive officer, or any willful or grossly negligent omission to perform any act, resulting in injury to us; |
• | misconduct or negligence of the named executive officer that results in gain or personal enrichment of the named executive officer to our detriment; |
• | breach of any of the named executive officer’s agreements with us, including, but not limited to, the repeated failure to perform substantially the named executive officer’s duties to us, excessive absenteeism or dishonesty; |
• | any attempt by the named executive officer to assign or delegate his or her employment agreement or any of the rights, duties, responsibilities, privileges or obligations thereunder without our prior consent (except in respect of any delegation by the named executive officer of his employment duties thereunder to our other employees in accordance with our usual business practice); |
• | the named executive officer’s indictment or conviction for, or confession of, a felony or any crime involving moral turpitude under the laws of the U.S. or any State thereof, or under the laws of China or Hong Kong; |
• | declaration by a court that the named executive officer is insane or incompetent to manage his or her business affairs; |
• | habitual drug or alcohol abuse which materially impairs the named executive officer’s ability to perform his or her duties; or |
• | filing of any petition or other proceeding seeking to find the named executive officer bankrupt or insolvent. |
• | any person (within the meaning of Section 13(d) or Section 14(d)(2) of the Securities Exchange Act of 1934) other than us, any trustee or other fiduciary holding securities under an employee benefit plan of Sohu or any corporation owned, directly or indirectly, by our stockholders in substantially the same proportion as their ownership of our common stock, becomes the direct or beneficial owner of securities representing 50% or more of the combined voting power of our then-outstanding securities; |
• | during any period of two consecutive years after the date of the named executive officer’s employment agreement, individuals who at the beginning of such period constitute our Board, and all new directors (other than directors designated by a person who has entered into an agreement with us to effect a transaction |
described in the first, third and fourth bullet point of this definition) whose election or nomination to our Board was approved by a vote of at least two-thirds of the directors then in office, cease for any reason to constitute at least a majority of the members of our Board; |
• | the effective date of a merger or consolidation of us with any other entity, other than a merger or consolidation which would result in our voting securities outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; |
• | our complete liquidation or the sale or disposition by us of all or substantially all of our assets; or |
• | there occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Securities and Exchange Act of 1934, whether or not we are then subject to such reporting requirements. |
• | any significant change in the duties and responsibilities of the named executive officer inconsistent in any material and adverse respect with the name executive officer’s title and position (including status, officer positions and reporting requirements), authority, duties or responsibilities as contemplated by the named executive officer’s employment agreement. |
• | any material breach by us of the employment agreement with the named executive officer, including without limitation any reduction of the named executive officer’s base salary or our failure to pay to the named executive officer any portion of his or her compensation; or |
• | the failure, in the event of a change-in-control in which we are not the surviving entity, of the surviving entity or the successor to our business to assume the named executive officer’s employment agreement pursuant to its terms or to offer the named executive officer employment on substantially equivalent terms to those set forth in such employment agreement. |
Involuntary Termination | Change in Control | ||||||||||||||||||||||||||||||||||
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Involuntary Termination within 12 months | |||||||||||||||||||||||||||||||||||
Name | | Compensation Element | | Voluntary Resignation for Good Reason | | Death or Disability | | Without Cause | | For Cause | | Voluntary Resignation for Good Reason | | Without Cause | | For Cause | |||||||||||||||||||
Charles Zhang | Severance Pay (1) | $ | 258,051 | (2) | $ | 0 | $ | 258,051 | (2) | $0 | $ | 258,051 | (2) | $ | 258,051 | (2) | $0 | ||||||||||||||||||
Housing Allowance (1) | $ | 60,000 | $ | 0 | $ | 60,000 | $0 | $ | 60,000 | $ | 60,000 | $0 | |||||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $0 | $ | 0 | (3) | $ | 0 | (3) | $0 | ||||||||||||||||||
Benefits | $ | 6,754 | $ | 0 | $ | 6,754 | $0 | $ | 6,754 | $ | 6,754 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Stock Options and Restricted Stock Unit Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 196,544 | $0 | |||||||||||||||||||||||
Total | $ | 324,805 | $ | 0 | $ | 324,805 | $0 | $ | 324,805 | $ | 521,349 | $0 | |||||||||||||||||||||||
Carol Yu | Severance Pay (1) | $ | 125,000 | $ | 0 | $ | 125,000 | $0 | $ | 125,000 | $ | 125,000 | $0 | ||||||||||||||||||||||
Housing Allowance(1) | $ | 30,000 | $ | 0 | $ | 30,000 | $0 | $ | 30,000 | $ | 30,000 | $0 | |||||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $0 | $ | 0 | (3) | $ | 0 | (3) | $0 | ||||||||||||||||||
Benefits | $ | 6,823 | $ | 0 | $ | 6,823 | $0 | $ | 6,823 | $ | 6,823 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Stock Options and Restricted Stock Unit Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 148,988 | $0 | |||||||||||||||||||||||
Total | $ | 161,823 | $ | 0 | $ | 161,823 | $0 | $ | 161,823 | $ | 310,811 | $0 | |||||||||||||||||||||||
Xin (Belinda) Wang | Severance Pay (1) | $ | 121,801 | (2) | $ | 0 | $ | 121,801 | (2) | $0 | $ | 121,801 | (2) | $ | 121,801 | (2) | $0 | ||||||||||||||||||
Housing Allowance(1) | $ | 19,792 | $ | 0 | $ | 19,792 | $0 | $ | 19,792 | $ | 19,792 | $0 | |||||||||||||||||||||||
Bonus | $ | 0 | (3) | $ | 0 | (4) | $ | 0 | (3) | $0 | $ | 0 | (3) | $ | 0 | (3) | $0 | ||||||||||||||||||
Benefits | $ | 8,264 | $ | 0 | $ | 8,264 | $0 | $ | 8,264 | $ | 8,264 | $0 | |||||||||||||||||||||||
Accelerated Vesting of Stock Options and Restricted Stock Unit Awards | $ | 0 | $ | 0 | $ | 0 | $0 | $ | 0 | $ | 165,191 | $0 | |||||||||||||||||||||||
Total | $ | 149,857 | $ | 0 | $ | 149,857 | $0 | $ | 149,857 | $ | 315,048 | $0 |
(1) | Severance payments are made ratably over the severance period according our standard payroll practices. |
(2) | Both Dr. Zhang and Ms. Wang would have been entitled to the severance benefits under Chinese law as these benefits would have been greater than their severance benefits under their employment agreement with us. |
(3) | In the event of a voluntary resignation for good reason or an involuntary termination without cause, our named executive officers are each entitled to receive payments of the bonus for the remainder of the year of the termination, but only to the extent that the bonus would have been earned had the named executive officers continued in employment through the end of such year, as determined in good faith by our Chief Executive Officer, Board or our Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses were paid for such fiscal year to other similarly situated employees. The payment of the entire 2008 bonus rests on the assumption that each of the named executive officers voluntarily resigned for |
good reason and/or was terminated without cause as of December 31, 2008 and that no additional bonus would have been due as a result of the termination. |
(4) | In the event of a termination of named executive officer’s employment by reason of death or disability, they or their estates or representatives, as applicable, are entitled to receive the bonus for the year in which the death or disability occurs to the extent that a bonus would have been earned had named executive officers continued in employment through the end of such year, as determined in good faith by our Chief Executive Officer, Board or our Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees. The payment of the entire 2008 bonus rests on the assumption that each of the named executive officers voluntarily resigned for good reason and/or was terminated without cause as of December 31, 2008 and that no additional bonus would have been due as a result of the termination. |
Name | Option Awards ($)(2)(3) | Stock Awards ($)(2)(4) | Total ($) | |||||||||||
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Dave Qi | — | $ | 96,943 | $ | 96,943 | |||||||||
Shi Wang | — | $ | 96,943 | $ | 96,943 | |||||||||
Edward B. Roberts | — | $ | 96,943 | $ | 96,943 | |||||||||
Charles Huang | — | $ | 96,943 | $ | 96,943 | |||||||||
Zhonghan Deng | — | $ | 96,407 | $ | 96,407 |
(1) | Dr. Zhang has been omitted from this table because he receives no compensation for serving on our Board. All compensation paid to Dr. Zhang in fiscal year 2008 was paid to him in his capacity as Chief Executive Officer and is reported in the “Summary Compensation Table.” |
(2) | Amounts shown represents expense recognized with respect to restricted stock units and stock options, as applicable, granted from January 1, 2002 through December 31, 2008, in accordance with SFAS 123R. See Note 19, Shareholders’ Equity” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 for the relevant assumptions we used to determine the valuation of our stock and option awards. |
(3) | As of December 31, 2008, each of our non-employee directors had the following number of outstanding stock options: Dave Qi: 10,000; Shi Wang: 10,000; Edward B. Roberts: 24,000; Charles Huang: 49,000; and Zhonghan Deng: 0. |
(4) | The grant date fair value of the 2008 restricted stock units granted to each of Dave Qi, Shi Wang, Edward B. Roberts, Charles Huang and Zhonghan Deng, computed in accordance with SFAS 123R, was $96,407. |
THE SELECTION OF PRICEWATERHOUSECOOPERS AS INDEPENDENT AUDITORS.
April 30, 2009
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| FOR all nominees | WITHHOLD AUTHORITY | *EXCEPTIONS |
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1. Election of two directors to | o | o | o | |||
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Nominees: |
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| 01 Dr. Charles Zhang |
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| 02 Mr. Charles Huang |
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| 03 Dr. Dave Qi |
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| 04 Mr. Shi Wang |
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(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the “Exceptions” box and write that nominee’s name in the space provided below.) | ||||||
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*Exceptions ____________________________________________________ |
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| FOR | AGAINST | ABSTAIN |
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| 2. | To ratify the appointment of PricewaterhouseCoopers Zhong Tian CPAs Limited Company as our independent auditors for the fiscal year ending December 31, 2009; and |
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| 3. | To consider and act upon all other matters which may properly come before the Annual Meeting or any adjournment or postponement thereof. |
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| Mark Here for Address | o |
Signature | Signature | Date | ||||
Note: Please sign as your name(s) is (are) shown on the certificates to which the Proxy applies. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership or limited liability company, please sign in partnership or limited liability company name by authorized person. | ||||||
5 FOLD AND DETACH HERE 5 |
WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING,
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet and telephone voting are available through 11:59 PM Eastern Time
the day prior to annual meeting day.
SOHU.COM INC. | INTERNET ORhttp://www.eproxy.com/sohu Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site. TELEPHONE 1-866-580-9477 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card. |
Important notice regarding the Internet availability of
proxy materials for the Annual Meeting of shareholders
The Proxy Statement and the 2008 Annual Report to
Stockholders are available at:
http://bnymellon.mobular.net/bnymellon/sohu
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| SOHU.COM INC. |
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| The person or entity signed on the reverse side of this proxy card hereby appoints Dr. Charles Zhang and Ms. Carol Yu and each of them, as proxy or proxies for such person or entity, with full power of substitution, who may act by unanimous vote of said proxies or their substitutes as shall be present at the meeting, or, if only one be present, then the one shall have all the powers hereunder, to represent and to vote, as designated on the other side (if no direction is made, this Proxy will be voted FOR Proposals I and II), all of the shares of common stock, par value $0.001 per share, of Sohu.com Inc. standing in the name of such person or entity on April 17, 2009 at the Annual Meeting of Stockholders of Sohu.com Inc. to be held on Friday, June 19, 2009 at 10:00 a.m., Beijing time, and any adjournment thereof. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. |
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| (Continued, and to be marked, dated and signed, on the other side.) |
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BNY MELLON SHAREOWNER SERVICES P.O. BOX 3550 SOUTH HACKENSACK, NJ 07606-9250 |
| Address Change/Comments (Mark the corresponding box on the reverse side) |
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5 FOLD AND DETACH HERE 5 |
You can now access your BNY Mellon Shareowner Services account online.
Access your BNY Mellon Shareowner Services shareholder/stockholder account online via Investor ServiceDirect®(ISD).
The transfer agent for Sohu.com Inc. now makes it easy and convenient to get current information on your shareholder account.
· | View account status |
| · | View payment history for dividends |
· | View certificate history |
| · | Make address changes |
· | View book-entry information |
| · | Obtain a duplicate 1099 tax form |
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| · | Establish/change your PIN |
Visit us on the web at http://www.bnymellon.com/shareowner/isd
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
****TRY IT OUT****
www.bnymellon.com/shareowner/isd
Investor ServiceDirect®
Available 24 hours per day, 7 days per week
ChooseMLinkSM for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on toInvestor ServiceDirect® atwww.bnymellon.com/shareowner/isd where step-by-step instructions will prompt you through enrollment. |
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