UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the
Registrant ☒ Filed by a Party other than the
Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Under Rule 14a-12
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AMBER ROAD, 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):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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3)
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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):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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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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1)
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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Notice of Annual Meeting of Stockholders
To be held on May 1, 2018
To the Stockholders of Amber Road, Inc.
NOTICE IS HEREBY GIVEN that the 2018 Annual Meeting of Stockholders, or Annual Meeting, of Amber Road, Inc., a Delaware corporation,
will be held on Tuesday, May 1, 2018, at 9:30 A.M. local time, at the Conference Center, One Meadowlands Plaza, East Rutherford, New Jersey 07073, for the following purposes:
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To elect two directors to the Board of Directors of Amber Road for a three-year term of office expiring at the 2021 Annual Meeting of Stockholders, with the nominees for election being current director, Mr. James
Preuninger, and newly appointed director, Mr. Ralph Faison;
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To ratify the selection of KPMG LLP as our independent registered public accountants for the fiscal year ending December 31, 2018; and
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To transact such other business as may properly come before the Annual Meeting or any continuation, postponement or adjournment thereof.
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The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice of Annual Meeting of Stockholders.
The Board of Directors has fixed the close of business on March 9, 2018 as the record date for the determination of stockholders
entitled to notice of, and to vote at, this Annual Meeting and any continuation, postponement or adjournment thereof. Whether or not you plan on attending the Annual Meeting, we encourage you to submit your proxy as soon as possible using one of
three convenient methods (i) by accessing the Internet site described in the voting instruction form provided to you, (ii) by calling the toll-free number in the voting instruction form provided to you, or (iii) by signing, dating and
returning any proxy card or instruction form provided to you.
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By Order of the Board of Directors,
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Bradley D. Holmstrom
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General Counsel & Corporate Secretary
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East Rutherford, New Jersey
March 26, 2018
PROXY STATEMENT SUMMARY
Table of Contents
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on May 1, 2018
The Proxy Statement and Annual Report to Stockholders are available at www.cstproxy.com/amberroad/2018 and at
www.investor.amberroad.com
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PROXY STATEMENT SUMMARY
You may vote in the following ways:
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Using the Internet at
http://www.proxyvote.com
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Calling
1-800-579-1639
if in
the United States and Canada
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Mailing your signed and dated
proxy card or voting instruction form
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For telephone and Internet voting, you will need the
16-digit
control number included on your Notice, proxy card or voting instruction form that accompanied your
proxy materials. Internet and telephone voting is available through 11:59 p.m. EST on April 30, 2018 for all shares.
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PROXY STATEMENT SUMMARY
Proxy Statement Summary
This summary contains highlights about the upcoming 2018 Annual Meeting of Stockholders. This summary does not contain all of the information
that you should consider in advance of the meeting and we encourage you to read the entire Proxy Statement before voting.
2018 Annual Meeting of
Stockholders
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Date and Time:
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Tuesday, May 1, 2018 at 9:30 A.M., local time
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Location:
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Conference Center, One Meadowlands Plaza, East Rutherford, New Jersey 07073
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Record Date:
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March 9, 2018
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Mail Date:
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We intend to mail the proxy materials to our stockholders on or about March 26, 2018
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Voting Matters and Board Recommendations
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Matter
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Our Board Vote Recommendation
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Election of Two Nominees to the Board of Directors (page 12)
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FOR each Director Nominee
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Ratification of Selection of Independent Registered Public Accountants (page 26)
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FOR
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INFORMATION CONCERNING VOTING AND SOLICITATION
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Proxy Statement
Information Concerning Voting and Solicitation
The enclosed proxy is solicited on
behalf of the Board of Directors, or Board, of Amber Road, Inc., a Delaware corporation, for use at our 2018 Annual Meeting of Stockholders, to be held on Tuesday, May 1, 2018, at 9:30 A.M., local time, or
at any continuation, postponement or adjournment thereof, for the purposes discussed in this Proxy Statement and any business properly brought before the Annual Meeting. Amber Road, Inc. may also be referred to as Amber Road, the
Company, we, us or our in this Proxy Statement. Proxies are solicited to give all stockholders of record an opportunity to vote on matters properly presented at the Annual Meeting. The Annual Meeting will be held at the Conference Center, One
Meadowlands Plaza, East Rutherford, New Jersey 07073.
Our proxy materials are available electronically at
www.cstproxy.com/amberroad/2018
. At this website, you will find a complete set of the proxy materials including the Proxy Statement, 2017 Annual Report and form proxy card. You are encouraged to access and review all of the information
contained in the proxy materials before submitting a proxy or voting at the meeting.
What You are Voting On
You will be entitled to vote on the following proposals at the Annual Meeting:
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The election of two directors to serve on our Board for a three-year term of office expiring at the 2021 Annual Meeting of Stockholders;
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The ratification of the selection of KPMG LLP as our independent registered public accountants for the fiscal year ending December 31, 2018; and
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Any other business as may properly come before the Annual Meeting.
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INFORMATION CONCERNING VOTING AND SOLICITATION
What are the Boards Recommendations
Our Board recommends that you vote:
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FOR
the election of the two nominees listed in this Proxy Statement to serve on our Board for a three-year term of office expiring at the 2021 Annual Meeting of Stockholders;
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FOR
the ratification of the selection of KPMG LLP as our independent registered public accountants for the fiscal year ending December 31, 2018.
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Who Can Vote
The Board
has set March 9, 2018 as the record date for the Annual Meeting. You are entitled to notice and to vote if you were a stockholder of record of our common stock, $.0001 par value per share, or common stock, as of the close of business on
March 9, 2018. You are entitled to one vote on each proposal for each share of common stock you held on the record date. Your shares may be voted at the Annual Meeting only if you are present in person or your shares are represented by a valid
proxy.
Difference between a Stockholder of Record and a Street Name Holder
If your shares are registered directly in your name, you are considered the stockholder of record with respect to those shares.
If your shares are held in a stock brokerage account or by a bank, trust or other nominee, then the broker, bank, trust or other nominee is
considered to be the stockholder of record with respect to those shares. However, you are still considered to be the beneficial owner of those shares, and your shares are said to be held in street name. Street name holders generally
cannot submit a proxy or vote their shares directly and must instead instruct the broker, bank, trust or other nominee how to vote their shares.
Shares Outstanding and Quorum
At the close of business on March 9, 2018, there were 27,321,849 shares of our common stock outstanding and entitled to vote at the
Annual Meeting. The presence of the holders of a majority of the outstanding shares of our common stock entitled to vote constitutes a quorum, which is required to hold and conduct business at the Annual Meeting. Shares are counted as present at the
Annual Meeting if:
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you are present in person at the Annual Meeting; or
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your shares are represented by a properly authorized and submitted proxy (submitted by mail, by telephone or over the Internet).
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If you are a record holder and you submit your proxy, regardless of whether you abstain from voting on one or more matters, your shares will
be counted as present at the Annual Meeting for the purpose of determining a quorum. If your shares are held in street name, your shares are counted as present for purposes of determining a quorum if your broker, bank, trust or other
nominee submits a proxy covering your shares. Your broker, bank, trust or other nominee is entitled to submit a proxy covering your shares as to certain routine matters such as ratification of independent registered public accountants, even if you
have not instructed your broker, bank, trust or other nominee on how to vote on those matters. Please see the subsection If You Do Not Specify How You Want Your Shares Voted below. In the absence of a quorum, the Annual Meeting may be
adjourned, from time to time, by vote of the holders of a majority of the shares represented, but no other business shall be transacted at such meeting.
Voting Your Shares
You may vote using
any of the following methods:
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By Mail Stockholders of record may submit proxies by completing, signing and dating their proxy cards and mailing them in the accompanying
pre-addressed
envelopes. Amber
Road stockholders who hold shares beneficially in street name may provide voting instructions by mail by completing, signing and dating the voting instruction forms provided by their brokers, banks or other nominees and mailing them in the
accompanying
pre-addressed
envelopes.
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INFORMATION CONCERNING VOTING AND SOLICITATION
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By Internet Stockholders of record may submit proxies by following the Internet voting instructions on their proxy cards. Most Amber Road stockholders who hold shares beneficially in street name may provide
voting instructions by accessing the website specified on the voting instruction forms provided by their brokers, banks or nominees. Please check the voting instruction form for Internet voting availability.
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By Telephone Most Amber Road stockholders who hold shares beneficially in street name and live in the United States or Canada may provide voting instructions by telephone by calling the number specified on the
voting instruction forms provided by their brokers, banks or nominees. Please check the voting instruction form for telephone voting availability.
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In Person at the Annual Meeting Shares held in your name as the stockholder of record may be voted in person at the Annual Meeting. Shares held beneficially in street name may be voted in person only if you
obtain a legal proxy from the broker, bank or nominee that holds your shares giving you the right to vote the shares.
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if you plan to attend the Annual Meeting, we recommend that you also submit your proxy or voting instructions by mail, telephone, or Internet so that your vote will be counted if you later decide not to attend the Annual Meeting. The Internet and
telephone voting facilities will close at 7:00 P.M. EST (for stockholders of record) and 11:59 P.M. EST (for shares held beneficially in street name) on April 30, 2018. Stockholders who submit a proxy by Internet or telephone need not return a
proxy card or the form forwarded by your broker, bank, trust or other holder of record by mail.
Changing Your Vote
As a stockholder of record, if you submit a proxy, you may revoke that proxy at any time before it is voted at the Annual Meeting.
Stockholders of record may revoke a proxy prior to the Annual Meeting by (i) delivering a written notice of revocation to the attention of the Corporate Secretary at our offices at One Meadowlands Plaza, East Rutherford, New Jersey 07073,
(ii) duly submitting a later-dated proxy over the Internet, by mail or by telephone, or (iii) attending the Annual Meeting in person and voting in person. Attendance at the Annual Meeting will not, by itself, revoke a proxy. If your shares
are held in the name of a broker, bank, trust or other nominee, you may change your voting instructions by following the instructions of your broker, bank, trust or other nominee.
If You Receive More Than One Proxy Card or Notice
If you receive more than one set of proxy materials, it means you hold shares that are registered in more than one account. To ensure that all
of your shares are voted, sign and return each proxy card or, if you submit a proxy by telephone or the Internet, submit one proxy for each proxy card you receive.
How Will Your Shares Be Voted
Stockholders of record as of the close of business on March 9, 2018 are entitled to one vote for each share of our common stock held on
all matters to be voted upon at the Annual Meeting. All shares entitled to vote and represented by properly submitted proxies received before the polls are closed at the Annual Meeting, and not revoked or superseded, will be voted at the Annual
Meeting in accordance with the instructions indicated on those proxies.
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INFORMATION CONCERNING VOTING AND SOLICITATION
If You Do Not Specify How You Want Your Shares Voted
As a stockholder of record, if you submit a signed proxy card or submit your proxy by telephone or Internet and do not specify how you want your shares voted,
the person named in the proxy will vote your shares:
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FOR
the election of the two nominees listed in this Proxy Statement to serve on our Board for a three-year term of office expiring at the 2021 Annual Meeting of Stockholders; and
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FOR
the ratification of the selection of KPMG LLP as our independent registered public accountants for the fiscal year ending December 31, 2018.
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A broker
non-vote
occurs when a nominee holding shares for a beneficial owner has not
received voting instructions from the beneficial owner and the nominee does not have discretionary authority to vote the shares. If you hold your shares in street name and do not provide voting instructions to your broker or other nominee, your
shares will be considered to be broker
non-votes
and will not be voted on any proposal on which your broker or other nominee does not have discretionary authority to vote. Shares that constitute broker
non-votes
will be counted as present at the Annual Meeting for the purpose of determining a quorum, but will not be considered entitled to vote on all the proposals in question. Brokers generally have discretionary
authority to vote on the ratification of the selection of KPMG LLP as our independent registered public accountants, which is considered a routine matter under New York Stock Exchange (NYSE) rules. Brokers, however, do not
have discretionary authority to vote on the election of directors to serve on our Board, which matter is considered
non-routine
under NYSE rules.
In their discretion, the proxy holders named in the proxy are authorized to vote on any other matters that may properly come before the Annual
Meeting and at any continuation, postponement or adjournment thereof. The Board knows of no other items of business that will be presented for consideration at the Annual Meeting other than those described in this Proxy Statement. No stockholder
proposal or nomination was received prior to the deadline set forth in our Amended and Restated Bylaws, and accordingly, no such matters may be brought to a vote at the Annual Meeting.
Inspector of Election and Counting of Votes
All votes will be tabulated as required by Delaware law, the state of our incorporation, by the inspector of election appointed for the Annual
Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker
non-votes.
Shares held by persons attending the Annual Meeting but not voting, shares represented by proxies that
reflect abstentions as to one or more proposals and broker
non-votes
will be counted as present for purposes of determining a quorum.
Election of Directors.
Vote by a plurality of the shares voting is required for the election of directors under Proposal 1. You
may vote FOR all nominees, WITHHOLD your vote as to all nominees, or FOR all nominees except those specific nominees from whom you WITHHOLD your vote. There is no against option. The nominees receiving the most FOR votes will be elected.
A properly executed proxy marked WITHHOLD with respect to the election of one or more directors will not be voted with respect to the director or directors indicated. Proxies may not be voted for more than two directors and stockholders may not
cumulate votes.
Ratification of Auditors.
The ratification of the selection of KPMG LLP requires the affirmative vote of
the holders of a majority of the shares present or represented by proxy at the Annual Meeting and entitled to vote on the matter. You may vote FOR, AGAINST or ABSTAIN. If you ABSTAIN from voting on Proposal 2, the abstention will have the same
effect as an AGAINST vote.
Solicitation of Proxies
We will bear the entire cost of solicitation of proxies, including preparation, assembly and mailing of this Proxy Statement, the proxy, the
Notice and any additional information furnished to stockholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding shares of our common stock in their names that are beneficially owned
by others to forward to those beneficial owners. We may reimburse persons representing beneficial owners for their costs of forwarding the solicitation materials to the beneficial owners. Original solicitation of proxies may be supplemented by
telephone, facsimile, electronic mail or personal solicitation by our directors, officers or staff members. No additional compensation will be paid to our directors, officers or staff members for such services. A list of stockholders entitled to
vote at the Annual Meeting will be available for examination by any stockholder for any purpose germane to the Annual Meeting during ordinary business hours at our principal executive offices at One Meadowlands Plaza, East Rutherford, New Jersey
07073 for the ten days prior to the Annual Meeting and also at the Annual Meeting.
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CORPORATE GOVERNANCE
Corporate Governance
Board of Directors Corporate Governance Highlights
Our Board of Directors is governed by
our Corporate Governance Guidelines, which are amended from time to time to incorporate certain current best practices in corporate governance. Our Corporate Governance Guidelines may be found on our website at
www.investor.amberroad.com/corporate-governance
and are available in print upon written request to the Companys Secretary at our principal executive offices at Amber Road, One Meadowlands Plaza, East Rutherford, New Jersey 07073.
Highlights of our Corporate Governance Guidelines include the following:
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Independent Chairperson.
Although our Guidelines do not require an independent Chairperson, we have maintained an independent Chairperson since prior to becoming a public company.
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Independent Directors.
All of our directors qualify as independent under NYSE regulations, with the exception of our Chief Executive Officer.
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Independent Committees.
The Board has three standing committeesAudit, Compensation and Nominating and Corporate Governance. Each committee is comprised solely of independent directors.
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Regular Executive Sessions of Independent Directors.
Our independent directors meet privately at every Board meeting with our independent Chairperson presiding over such meetings.
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Board Access to Management.
We afford our directors ready access to our management. Key members of management attend Board and committee meetings to present information concerning various aspects of the
Company, its operations and results.
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Board Authority to Retain Outside Advisors.
Our Board and committees have the authority to retain outside advisors.
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Succession Planning.
The Board, on an annual basis, reviews and updates the Companys succession plan.
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Director Changes in Circumstances Evaluated.
If a director has a substantial change in principal business or professional affiliation or responsibility, including a change in principal occupation, he or
she must notify the Chairperson and then it is within the decision of the Nominating and Corporate Governance Committee to determine whether resignation is in the best interest of the Company and stockholders.
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Director Outside Relationships Require
Pre-Approval.
Without the prior approval of disinterested members of the Board, directors should not enter into any
transaction or relationship with the Company in which they will have a financial or a personal interest or any transaction that otherwise involves a conflict of interest.
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Director Conflicts of Interest.
If an actual or potential conflict of interest arises for a director or a situation arises giving the appearance of an actual or potential conflict, the director must
promptly inform the Chairperson. All directors will recuse themselves from any discussion or decision found to affect their personal, business or professional interests.
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Regular Board and Committee Evaluations.
The Board has an annual evaluation process which focuses on its role and effectiveness, including that of its committees, as well as fulfillment of its fiduciary
duties. The results of the evaluations are reported to and reviewed by the full Board. For 2017, the Board was satisfied with its performance and considered itself to be operating effectively.
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Retirement.
No Board member may be nominated to a new term if he or she would be age 75 or older on the date the election is held.
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Overboarding.
The Companys policy is that (i) a
non-employee
Company director may serve on no more than five publicly-traded companies boards in
addition to the Companys Board, and (ii) an employee Company director, who is also a full-time employee of Company, may serve on no more than one publicly-traded companys board in addition to the Companys Board.
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CORPORATE GOVERNANCE
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Stock Ownership Guidelines.
The Companys Stock Ownership Guidelines provide that our
non-employee
directors and our Chief Executive Officer shall attain an
investment position in our common stock having a value that is at least equal to two times total annual compensation and five times base salary, respectively.
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Recoupment Policy.
Under our Compensation Recoupment Policy, we expressly reserve the right to claw-back or recoup incentive-based or other compensation (including equity-based compensation) paid to any
named executive officer if we are required to prepare an accounting restatement as a result of our material noncompliance with any financial reporting regulations.
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Director Qualifications and Diversity
Our Nominating and Corporate
Governance Committee is responsible for identifying, evaluating and recommending candidates to the Board for election as a director of the Company. The Committee may use outside consultants to assist in identifying candidates and will also consider
advice and recommendations from stockholders, management, and others as it deems appropriate.
In its evaluation of director candidates,
the Nominating and Corporate Governance Committee will consider the following:
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Nominees should have a reputation for integrity, honesty and adherence to high ethical standards.
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Nominees should have demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to the current and long-term objectives of the Company, and should be willing and able to
contribute positively to the decision-making process of the Company.
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Nominees should have a commitment to understand the Company and its industry and to regularly attend meetings of the Board and its committees.
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Nominees should have the interest and ability to understand the sometimes conflicting interests of the various constituencies of the Company, which include stockholders, employees, customers, creditors and the general
public, and to act in the interests of all stockholders.
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Nominees should not have, nor appear to have, a conflict of interest that would impair the nominees ability to represent the interests of all the Companys stockholders and to fulfill the responsibilities of
a director.
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Nominees will not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability or any other basis proscribed by law.
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The
re-nomination
of existing directors is not viewed as automatic, but will be based on continuing
qualification under the criteria set forth above. In addition, the Committee will consider the existing directors performance on the Board and any committee, which may include consideration of the extent to which the directors undertook
continuing director education. The backgrounds and qualifications of the directors considered as a group should provide a significant breadth of experience, knowledge and abilities that will assist the Board in fulfilling its responsibilities.
The Nominating and Corporate Governance Committee will also consider (i) any specific minimum qualifications that it believes must be met
by a nominee for a position on the Board, (ii) any specific qualities or skills that it believes are necessary for one or more of the Board members to possess, and (iii) the desired qualifications, expertise and characteristics of Board
members, with the goal of developing an experienced and highly qualified Board. In making its recommendations, the Committee will consider the number of other public company boards and other boards (or comparable governing bodies) on which a
prospective nominee is a member, as well as his or her other professional responsibilities.
Among other things, Board members should
possess demonstrated breadth and depth of management and leadership experience, financial and/or business acumen or relevant industry or scientific experience, integrity and high ethical standards, sufficient time to devote to the Companys
business, the ability to oversee, as a director, the Companys business and affairs for the benefit of our stockholders, and a demonstrated ability to think independently and work collaboratively. In addition, although the Nominating and
Corporate Governance Committee does not maintain a diversity policy, the Committee considers diversity in its determinations. Diversity includes race, ethnicity, age and gender and is also broadly construed to take into consideration many other
factors, including industry knowledge, operational experience, scientific and academic expertise, geography and personal backgrounds. Currently, our Board members hail from different areas of the United States and one from Europe and include one
woman.
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CORPORATE GOVERNANCE
Leadership Structure
The positions of Chairperson of the Board and Chief Executive Officer are held by two separate individuals. Mr. Williams has served as
Chairperson of the Board since 2004. Mr. Preuninger serves as Chief Executive Officer of the Company. While the Board retains the discretion to combine the roles in the future, as it deems appropriate, the Board believes that with an
independent director serving as Chairperson, the interests of the stockholders are well represented and that proper governance is maintained. The Company believes that the Chairperson can provide support and advice to the Chief Executive Officer;
collaborate with the Chief Executive Officer on setting a strategic direction for the Company; preside over executive or independent sessions of the Board when management, including the Chief Executive Officer, is not present; and, lead the Board in
fulfilling its responsibilities. This leadership structure also provides the Company the advantage of different viewpoints and backgrounds. The Company believes that the current leadership structure of the Board is appropriate at the present time
and allows the Board to fulfill its duties effectively and efficiently based on the Companys current needs.
Board
Committees and Charters
The Board has three standing committeesAudit Committee, Compensation Committee and Nominating and Corporate Governance Committee. The
Board maintains charters for each of these standing committees. To view the charters of our standing Board committees, please visit our website at
www.investor.amberroad.com/corporate-governance
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Audit Committee
Our Audit Committee is comprised of Rudy Howard (Chair), Pamela Craven and John Malone, each of whom is an independent director and satisfies
the additional independence requirements for members of the Audit Committee imposed by NYSE rules and Rule
10A-3(b)(1)
of the Securities Exchange Act of 1934, as amended. Each of the members of our Audit
Committee meets the requirements for financial literacy under applicable rules and regulations of the Securities and Exchange Commission (SEC) and the NYSE and does not serve on more than three audit committees of public companies. Our
Board of Directors has determined that Mr. Howard qualifies as an audit committee financial expert, as defined by applicable rules of the SEC. The Audit Committee met five times in 2017. The Audit Committee assists our Board of
Directors in its oversight of:
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the audit and integrity of our financial statements;
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our compliance with applicable law, risk assessment and risk management;
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the qualification and independence of our independent registered public accounting firm;
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the establishment and performance of our internal audit function and independent registered public accounting firm; and
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the annual Audit Committee report.
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Under our Audit Committee charter, the Audit Committee:
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has direct responsibility for the appointment, compensation, retention, termination and oversight of the work of our independent registered public accounting firm;
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oversees the independence of our independent registered public accounting firm;
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establishes and implements policies and procedures for the
pre-approval
of all audit services and all permissible
non-audit
services
provided by our independent registered public accounting firm;
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reviews and discusses with management and our independent registered public accounting firm our internal control over financial reporting, the internal audit function, and changes in accounting and financial reporting
principles;
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reviews and discusses with management and our independent registered public accounting firm the overall adequacy and effectiveness of our Code of Conduct and Business Ethics and compliance with applicable laws,
regulations and internal compliance programs; and
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reviews with management and our independent registered public accounting firm any correspondence with regulators or governmental agencies and any employee complaints or published reports, which raise material issues
regarding our financial statements or accounting policies.
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CORPORATE GOVERNANCE
Compensation Committee
Our Compensation Committee is comprised of Pamela Craven (Chair), Barry Williams, John Malone (until December 1, 2017) and Ralph Faison
(from December 1, 2017), each of whom is an independent director and satisfies the additional independence requirements of the SEC and the NYSE. Mr. Malone was a member of the Compensation Committee until he joined the Nominating and
Corporate Governance Committee on December 1, 2017. Each member is also an outside director as defined under Section 162(m) under the Internal Revenue Code of 1986, as amended (Code). Our Compensation Committee
oversees our overall compensation program. The Compensation Committee met twelve times in 2017. Our Compensation Committee charter provides that the Compensation Committee shall, among other responsibilities:
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oversee the Companys overall compensation philosophy, compensation plans and benefit programs;
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review, evaluate and approve executive officer compensation and performance on an annual basis;
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approve equity grants to executive officers, or, if the Compensation Committee deems appropriate, recommend them to the full Board for approval;
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review and approve any consulting arrangements, employment contracts or severance agreements with any executive officer;
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assess whether the compensation structure encourages undue risk-taking;
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adopt or modify any incentive compensation plan, or, if this action would require stockholder approval, recommend it to the full Board for approval and proposal to the stockholders;
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review and recommend to our Board of Directors any director compensation programs for our independent directors;
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have power to engage compensation consultants, advisors or legal counsel; and
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generally review the Companys overall compensation strategy to ensure that it aligns with the interests of the Companys stockholders, supports the Companys objectives, and provides appropriate rewards
and incentives to serve the long-term best interests of the Company.
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None of the current members of our Compensation
Committee serve, or has at any time 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 of Directors or Compensation Committee.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee is comprised of John Malone (Chair from March 1, 2018, member from December 1,
2017), Kenneth Harvey (Chair until March 1, 2018, member after March 1, 2018), Barry Williams and Rudy Howard, each of whom is an independent director. The Nominating and Corporate Governance Committee met five times in 2017. Our
Nominating and Corporate Governance Committee charter provides that the Nominating and Corporate Governance Committee shall:
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search for, identify and evaluate individuals qualified to become Board members and recommend individuals to be nominated for election to our Board of Directors;
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develop, maintain and oversee the Corporate Governance Guidelines and Code of Conduct applicable to members of the Board of Directors and for monitoring the independence of the Board;
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advise our Board of Directors regarding appropriate corporate governance policies, and changes thereto, and assist our Board of Directors in achieving them;
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have sole discretion to retain a search firm for the purpose of identifying director candidates;
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review the performance of each director who is standing for
re-election
and the independence of each director;
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have responsibility for succession planning for executive officers; and
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review and consider actual and potential conflicts of interest of management and directors.
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11
CORPORATE GOVERNANCE
Board Role in Risk Oversight
Risk assessment and oversight are integral parts of our governance and management processes. Our Board encourages management to promote a
culture that incorporates risk management into our corporate strategy and
day-to-day
business operations. Management discusses strategic and operational risks at regular
management meetings and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing us. From time to time, senior executives review these risks with our Board at regular
Board meetings as part of management presentations that focus on particular business functions, operations or strategies and presents the steps taken by management to address such risks. Our Board does not have a standing risk management committee,
but rather administers this oversight function directly through our Board as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight.
Our Board oversees an enterprise-wide approach to risk management, which is designed to support the achievement of the Companys
objectives, including the strategic objective to improve long-term financial and operational performance and enhance stockholder value. Our Board believes that a fundamental part of risk management is understanding the risks that we face, monitoring
these risks and adopting appropriate control and mitigation of these risks.
Of growing importance to the Board of Directors, as well as
to the SaaS industry in general, are the risks associated with cyberattacks and security and privacy breaches. In the course of our service engagements with clients, we have access to confidential customer and personal information. Any breach of
security or privacy, unauthorized access or usage, viruses or similar breach or disruption could cause serious damage to our reputation, early termination of our contracts, invite regulatory investigation and cause us to incur significant costs
associated with litigation, indemnification and remediation, all adversely impacting our results of operations and financial condition. The Board is managing this risk through education, greater direct communication with, and periodic Board
reporting from, the Chief Information Officer, and was in full support of the Companys recently created position of Director of Global Information Security & Compliance.
The Board discusses risks with our senior management on a regular basis, including as a part of its strategic planning process, annual budget
review and approval, and through reviews of compliance issues in the appropriate committees of our Board. While the Board has the ultimate oversight responsibility for the risk management process, various committees of the Board are structured to
oversee specific risks, as follows:
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Committee
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Primary Risk Oversight Responsibility
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Audit Committee
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Oversees financial risk, including capital risk, financial
compliance risk, internal controls over financial reporting and reporting of violations involving financial risk, internal controls and other
non-compliance
with our Code of Conduct.
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Nominating and Corporate Governance Committee
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Oversees the assessment of each Board members independence to
avoid conflict, determine effectiveness of the Board and committees, and maintain good governance practices through our Corporate Governance Guidelines and Code of Conduct.
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Compensation Committee
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Oversees our compensation policies and practices to ensure
compensation appropriately incentivizes and retains management and determines whether such policies and practices balance risk-taking and reward in an appropriate manner.
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At each regular meeting, or more frequently as needed, the Board considers reports from each of the committees set forth above, which reports
may provide additional detail on risk management issues and managements response.
Code of Conduct and Business Ethics
Our Board has adopted a Code of Conduct and Business Ethics that applies to our directors as well as all of our staff members, including our
executive officers. To view our Code of Conduct and Business Ethics, please visit our website at
www.investor.amberroad.com/corporate-governance.
We intend to disclose future amendments to certain provisions of our Code of Conduct and
Business Ethics, or waivers of these provisions with respect to executive officers on our website or in our public filings with the SEC. There were no waivers of the Code of Conduct and Business Ethics in 2017.
12
CORPORATE GOVERNANCE
Certain Relationships and Related Transactions
There have been no transactions since January 1, 2017 to which we have been a participant in which the amount involved exceeded or will
exceed $120,000, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or any members of their immediate family, had or will have a direct or indirect material interest, other than compensation
arrangements which are described under Executive Compensation and Director Compensation, and other than the transactions described below. For a description of severance and change in control arrangements that we have entered
into with some of our executive officers, see the Section of this Proxy Statement entitled Management Severance Policy and Change in Control Agreements.
Indemnification Agreements
Our Amended and Restated Certificate of Incorporation contains provisions limiting the liability of directors and our Amended and Restated
Bylaws provide that we will indemnify each of our directors to the fullest extent permitted under Delaware law. Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws also provides our Board of Directors with
discretion to indemnify our officers and employees when determined appropriate by the Board. In addition, we have entered into indemnification agreements with each of our independent directors.
Related Person Transaction Policy
We have adopted a related person transaction policy that sets forth our procedures for the identification, review, consideration and approval
or ratification of related person transactions. For purposes of our policy only, (i) a related person is any person who is an executive officer, director, director nominee, or a beneficial owner of more than 5% of any class of our voting
securities, or any immediate family member of any such persons, and (ii) a related person transaction, subject to certain exceptions, is any transaction, arrangement or relationship, or any series of similar transactions, arrangements or
relationships in which we were or will be a participant, where the amount involved exceeds $120,000, and a related person had or will have a direct or indirect material interest in the transaction.
Under the policy, if a transaction has been identified as a related person transaction it must be reported to our General Counsel, and be
reviewed and approved by the Audit Committee of our Board of Directors. No member of the Audit Committee can participate in any review, consideration or approval of any related party transaction involving such member or any of his or her immediate
family members, except that such member is required to provide all material information concerning the related party transaction to the Audit Committee. In addition, under our Code of Conduct and Business Ethics, our employees and directors have an
affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest. In considering related person transactions, our Audit Committee will take into account the relevant
available facts and circumstances including, but not limited to:
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the related persons interest in the related person transaction;
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the approximate dollar value of the amount involved in the related person transaction;
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the approximate dollar value of the amount of the related persons interest in the transaction without regard to the amount of any profit or loss;
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whether the transaction was undertaken in the ordinary course of our business;
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whether the transaction with the related person is proposed to be, or was, entered into on terms no less favorable to us than terms that could have been reached with an unrelated third party;
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the purpose of, and the potential benefits to us of, the transaction; and
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any other information regarding the related person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular
transaction.
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The policy requires that, in determining whether to approve, ratify or reject a related person transaction,
our Audit Committee will review all relevant information available to it about the related person transaction. The Audit Committee may approve or ratify the related person transaction only if the Audit Committee determines that, under all of the
circumstances, the transaction is in, or is not inconsistent with, our best interests. The Audit Committee may, in its sole discretion, impose such conditions as it deems appropriate on us or the related person in connection with approval of the
related person transaction.
13
CORPORATE GOVERNANCE
Director Independence
At least annually, the Nominating and Corporate Governance Committee reviews the independence of each
non-employee
director and makes recommendations to the Board and the Board affirmatively determines whether each director qualifies as independent. No director qualifies as independent unless the
Board affirmatively determines that the director has no material relationship with the Company (either directly or as a stockholder or officer of an organization that has a relationship with the Company). In addition, in affirmatively determining
the independence of any director who will serve on the Compensation Committee, the Board must consider all factors specifically relevant to determining whether a director has a relationship to the Company which is material to that directors
ability to be independent from management in connection with the duties of a Compensation Committee member. Each director must keep the Nominating and Corporate Governance Committee fully and promptly informed as to any development affecting a
directors independence.
The Board has determined that each of our
non-employee
directors is
independent under the listing standards of the NYSE and the requirements of the SEC. Mr. Preuninger is not independent based on his service as our CEO. Mr. Preuninger is the only director who also serves us in a management
capacity. In making its independence determinations, the Board reviewed direct and indirect transactions and relationships between each director, or any member of his or her immediate family, and us or one of our subsidiaries or affiliates
based on information provided by the director, our records and publicly available information. None of our directors directly or indirectly provides any professional or consulting services to us.
Board Meetings
The Board held twelve meetings in
2017 and all of the directors attended at least 75% of the total number of meetings of the Board and committees on which they served. The independent directors met in executive session without management at all regularly scheduled meetings of the
Board, with the independent Chairperson presiding over such sessions. We, and the Board, expect all current directors to attend our annual meetings of stockholders barring unforeseen circumstances or irresolvable conflicts. All of the members
of the Board were present at our 2017 Annual Meeting of Stockholders.
Communication with the Board
Our Annual Meeting of Stockholders provides an opportunity each year for stockholders to ask questions of, or otherwise communicate directly
with, members of the Board on appropriate matters. In addition, any interested party may communicate in writing with any particular director, including our Chairperson, any committee of the Board, or the directors as a group, by sending such written
communication to our Corporate Secretary at our principal executive offices at Amber Road, Inc., One Meadowlands Plaza, East Rutherford, New Jersey 07073. Copies of written communications received at such address will be provided to the Board or the
relevant director unless such communications are considered, in the reasonable judgment of our Corporate Secretary, to be inappropriate for submission to the intended recipient(s). The Corporate Secretary or his designee may analyze and prepare a
response to the information contained in communications received and may deliver a copy of the communication to other Company staff members or agents who are responsible for analyzing or responding to complaints or requests. Communications
concerning potential director nominees submitted by any of our stockholders will be forwarded to the Chair of the Nominating and Corporate Governance Committee.
Corporate Governance Materials Available on the Amber Road Website
Our corporate governance principles are intended to provide a set of flexible guidelines for the effective functioning of the Board of Directors and are
reviewed regularly and revised as necessary or appropriate in response to changing regulatory requirements, evolving best practices and other considerations. Many of these principles and policies relating to corporate governance at Amber Road are
available on the Corporate Governance section of our website, www.investor.amberroad.com/corporate-governance, including:
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Corporate Governance Guidelines
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Amended and Restated Certificate of Incorporation
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14
CORPORATE GOVERNANCE
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Amended and Restated Bylaws
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Audit Committee Charter
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Compensation Committee Charter
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Nominating and Corporate Governance Committee Charter
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Guidelines for Director Qualification
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Code of Conduct and Business Ethics
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You may obtain copies of these materials, free of charge,
by sending a written request to: Corporate Secretary, Amber Road, Inc., One Meadowlands Plaza, East Rutherford, New Jersey 07073. Please specify which documents you would like to receive.
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PROPOSAL 1 ELECTION OF DIRECTORS
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Proposal 1 -
Election of Directors
Our Board of Directors currently
consists of seven members: James Preuninger, Pamela Craven, Kenneth Harvey, Rudy Howard, John Malone, Barry Williams and Ralph Faison. Mr. Harveys term ends as of the 2018 Annual Meeting and he has decided to not stand for
re-election.
In accordance with our Amended and Restated Certificate of Incorporation, our Board of Directors is divided into three classes with staggered three-year terms. At each Annual Meeting of Stockholders, a
class of directors is elected for a three-year term to succeed the directors of the same class whose terms are then expiring. Under NYSE rules, our classes must be of approximately equal size. As of the 2017 Annual Meeting of Stockholders, our
classes were not of approximately equal size, so Mr. Howard was immediately
re-classified
as a Class II director. Our directors are currently divided among the three classes as follows:
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Class
I
Mr. Preuninger and Mr. Harvey are the Class I directors whose terms expire at this 2018 Annual Meeting of Stockholders. Mr. Harvey is not standing for
re-election.
Mr. Preuninger has been nominated for
re-election
and Mr. Faison has been nominated for election at this 2018 Annual Meeting for three-year terms
expiring at the 2021 Annual Meeting of Stockholders.
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Class
II
Mr. Malone and Mr. Howard are the Class II directors whose terms expire at the 2019 Annual Meeting of Stockholders.
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Class
III
Ms. Craven and Mr. Williams are the Class III directors whose terms expire at the 2020 Annual Meeting of Stockholders.
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The current Board of Directors, committee involvement and certain other relevant information is set forth below:
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Director
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Age
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Director
Since
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Nominating &
Corporate
Governance
Committee
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Audit
Committee
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Compensation
Committee
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James Preuninger, Chief Executive Officer
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58
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2002
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Barry Williams, Chairperson of the Board
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71
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2004
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✓
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✓
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John Malone
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56
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2014
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Chairperson
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✓
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Pamela Craven
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64
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2014
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✓
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Chairperson
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Rudy Howard
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60
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2012
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✓
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Chairperson
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Ken Harvey
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57
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2008
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✓
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Ralph Faison
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59
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2017
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✓
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15
PROPOSAL 1 ELECTION OF DIRECTORS
Pursuant to our Amended and Restated Certificate of Incorporation, only our Board of
Directors will be able to fill any vacancies on our Board of Directors until the next succeeding Annual Meeting of Stockholders. In accordance with NYSE rules, any additional directorships resulting from an increase in the number of directors will
be distributed among the three classes so that, as nearly as possible, each class will consist of
one-third
of the directors. Each directors term continues until the election and qualification of such
directors successor, or such directors earlier death, resignation or removal.
It is proposed to elect two Class I
directors to serve for a three-year term expiring at our Annual Meeting of Stockholders in 2021. Upon recommendation of our Nominating and Corporate Governance Committee, the Board has nominated Mr. Preuninger for
re-election
and Mr. Faison for election, as Class I directors. Biographical information about each of the nominees and each director whose term will continue after the Annual Meeting is set forth
below. Each nominee is currently serving as a director of our Company. If any nominee should become unavailable for election prior to the Annual Meeting, an event that currently is not anticipated by the Board, the proxies will be voted in
favor of the election of a substitute nominee proposed by the Board or the number of directors may be reduced accordingly. Each nominee has agreed to serve if elected and the Board has no reason to believe that any nominee will be unable to serve.
With respect to Proposal 1, you may vote FOR all nominees, WITHHOLD your vote as to all nominees, or FOR all nominees except those
specific nominees from whom you WITHHOLD your vote. The nominees receiving the most FOR votes will be elected. A properly executed proxy marked WITHHOLD with respect to the election of one or more directors will not be voted with respect to the
director or directors indicated. Proxies may not be voted for more than two directors and stockholders may not cumulate votes in the election of directors.
Nominees for Election at this Annual Meeting -
Set forth below is biographical
information for each nominee and a summary of the specific qualifications, attributes, skills and experiences which led our Board to conclude that each nominee should serve on the Board at this time. All of our nominees meet the qualifications and
skills of our Board of Directors Corporate Governance Guidelines Criteria for Director Nomination. There are no family relationships among any of our nominee directors or among any of our nominee directors and our executive officers.
James W. Preuninger
Mr. Preuninger is a
co-founder
of our Company and has served as Chief Executive Officer and a member of our Board of Directors since 2002. As Chief Executive Officer, Mr. Preuninger oversees sales and marketing, finance, data
center operations, general and administrative staff, and corporate development. He is responsible for opening new markets and expanding our portfolio of solutions through strategic partnerships and acquisitions. Mr. Preuninger began his career
at IBM Corporation, where he held several positions in sales and marketing. The Nominating and Corporate Governance Committee believes that Mr. Preuningers background as a
co-founder
of our Company
and long service as our Chief Executive Officer provides the Board with invaluable insight into the inner workings of our Company, enhances the efficiency of the Boards oversight function and qualifies him to serve on our Board of Directors.
Ralph Faison
Mr. Faison became a director in
2017 and most recently served, from 2011 to 2014, as the President, Chief Executive Officer and Chairman of the Board of publicly-traded Pulse Electronics Corporation, a worldwide leader in electronic component design and manufacture with a broad
international customer base. From 2002 to 2007, Mr. Faison served as Chief Executive Officer and director of publicly-traded Andrew Corporation, a manufacturer of communications equipment and systems, where he also served for a time as its
Chief Operating Officer prior to its acquisition by CommScope, Inc. in 2007. Mr. Faisons prior experience also includes serving as President and Chief Executive Officer of Celiant Corporation, prior to it being acquired by Andrew
Corporation; Vice President of the New Ventures Group at Lucent Technologies; and, various positions with AT&T. Mr. Faison has also served on the Board of Directors of NETGEAR, Inc. since 2003, where he is the former chair of its
Compensation Committee and currently is a member of its Nominating and Corporate Governance Committee and Cyber Security Committee.
16
PROPOSAL 1 ELECTION OF DIRECTORS
He also serves on the Board of Directors of Giga IO Networks, a privately held
start-up
providing interconnect performance to cluster based computing. The
Nominating and Corporate Governance Committee believes that Mr. Faisons experience as a public company CEO, his experience with multi-national companies and his public company directorships qualifies him to serve on our Board of
Directors.
THE BOARD RECOMMENDS A VOTE
FOR
EACH OF THE TWO NOMINEES NAMED ABOVE
PROXIES WILL BE VOTED
FOR
THE ELECTION OF THE NOMINEES UNLESS OTHERWISE SPECIFIED
Directors Continuing in Office
The following Class II and III
directors shall continue in office:
Pamela F. Craven
Ms. Craven became a director in
March 2014 upon the completion of our initial public offering. Beginning in 2000, Ms. Craven served as General Counsel of Avaya Inc., a global organization that develops, manufactures, sells and services communications products and software for
enterprises. Since 2007, she also served as Chief Administrative Officer of the organization, responsible for over 300 employees across functions including Internal Audit, Enterprise Risk Management, Security & Business Continuity, Board
Governance and Administration, Human Resources, Real Estate, Compliance, Global Trade, Government Affairs and Law & Contracting. She also served as a member of the Avaya Executive Committee and Chief Compliance Officer. Ms. Craven
ceased to be an executive officer of Avaya on June 30, 2014 and retired from Avaya on December 31, 2014. Ms. Craven previously served on the boards of directors of Avaya Inc. Global Connect, Ltd. (20092010), a publicly traded
Indian company, and Avaya-Tenovis GmbH (20042006). She is currently active at the Penn Law Board of the University of Pennsylvania Law School, having completed her
10-year
term as overseer in October
2014. She is now a member of the board of the New Jersey Chapter of the National Association of Corporate Directors and a member of the board of the New Jersey Women Lawyers Association and a member of the American Law Institute. We believe
Ms. Cravens background as an executive of a technology company in the fields of law, corporate governance, compliance, governance, transactions and business administration qualifies her to serve on our Board of Directors.
Rudy C. Howard
Mr. Howard has served as a
director since 2012. Mr. Howard is the Chief Financial Officer of vTv Therapeutics, a publicly held, clinical-stage pharmaceutical company. Prior to joining vTv, he spent over five years as CFO at SciQuest, Inc., an international
spend-management software company. He has also served as CFO for a number of other public and private multi-national companies in the life sciences and software industries, including MDS Pharma Services and Pharmaceutical Product Development (PPD).
Mr. Howard spent the first half of his career in public accounting, where he became an assurance partner with PricewaterhouseCoopers. He served clients in the pharmaceutical, biotechnology, high technology and financial services industries.
Among his areas of expertise were public company disclosure compliance, including guiding a number of clients through the IPO process, and merger and acquisition consulting. Mr. Howard is a certified public accountant and received his B.A. in
accounting from North Carolina State University. In addition, since 2012, Mr. Howard has served as a director and member of the audit and compensation committees of Metabolon, Inc., a privately-held diagnostics and services company. We believe
Mr. Howards extensive experience with financial and accounting matters and his background as an executive officer at several public companies qualifies him to serve on our Board of Directors.
Barry M. V. Williams
Mr. Williams has served as Chairman of our Board
of Directors since 2004. Previously, Mr. Williams held numerous executive-level positions at P&O Nedlloyd, the second largest ocean carrier in the world prior to its acquisition by A.P. Moller Maersk. Mr. Williams career at
P&O Nedlloyd spanned over 35 years, culminating in his service as chief executive officer and as a member of the executive committee. As the leader of P&O Nedlloyd, he successfully consolidated its back office operations in China and India,
diversified into freight forwarding and supply chain management services, and implemented the companys strategic
e-commerce
systems. From
17
PROPOSAL 1 ELECTION OF DIRECTORS
2007 through 2011, and since 2013, Mr. Williams has served as chairman of
ESS-Databridge
Exchange Limited, a provider of electronic shipping and trade
documentation and data solutions. We believe Mr. Williams management experience in the shipping and supply chain management industries and his experience with strategic growth companies in the global trade management industry qualifies
him to serve on our Board of Directors.
John Malone
Mr. Malone became a director in
March 2014 upon the completion of our initial public offering. From 2008 until its sale in 2013 to Haystax Technology, Inc., Mr. Malone served as the executive chairman of Digital Sandbox, Inc., an organization that provides threat and risk
analysis and monitoring software in the national and homeland security arenas. From 2009 until its successful sale in 2012 to Acronis International GmbH, Mr. Malone served as executive chairman of Group Logic, Inc., an organization that
provides digital content collaboration solutions in the enterprise and in the cloud. From 2003 to 2007, Mr. Malone served as Senior Vice President of Sales and Business Development for Neustar, Inc., a provider of real-time information and
analytics for the Internet, telecommunications, entertainment, and marketing industries. During his tenure at Neustar, which included the companys transition from a private enterprise to a New York Stock Exchange listed company, the
companys revenue grew from $80 million to more than $420 million. We believe Mr. Malones general executive experience, including his experience with strategic acquisitions, qualifies him to serve on our Board of Directors.
EXECUTIVE COMPENSATION DISCUSSION
Executive Compensation Discussion
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Amber Road, Inc.
2017 Named Executive Officers (NEOs)
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Compensation Committee Report on Executive Compensation:
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James
Preuninger
Chief Executive Officer
Thomas Conway
Chief Financial
Officer
Nathan Pieri
Chief Product Officer
Albert C. Cooke III
Vice
President, Global Sales
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The Compensation Committee (Committee) has reviewed and discussed this Report on Executive Compensation for the fiscal year ended
December 31, 2017 with management. In reliance on the reviews and discussions with management relating to this Report on Executive Compensation, the Committee has recommended to the Board, and the Board has approved, that this Report on
Executive Compensation be included in this Proxy Statement.
Compensation Committee
of the Board of Directors,
Pamela Craven (Chair)
Barry Williams
Ralph Faison
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Executive Compensation Policies and Practices
This discussion of executive compensation provides a detailed description of our compensation philosophy, policies, practices and the factors
and process used in making compensation decisions for our NEOs and other executive management (collectively, Executive Management). We strive to implement sound executive compensation policies, including compensation-related corporate
governance standards. During fiscal 2017, we maintained the following executive compensation policies and practices, which we believe drive
18
EXECUTIVE COMPENSATION DISCUSSION
performance and prohibit or minimize behaviors that we do not believe serve our stockholders long-term interests or encourage undue or inappropriate risk-taking on the part of Executive
Management or other employees:
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Policy/Practice
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Summary
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Recoupment (Claw-Back) Policy
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Under our Compensation Recoupment Policy, we expressly reserve the right to claw-back or recoup incentive-based or other compensation (including equity-based compensation) paid to any NEO if we are required to prepare an accounting
restatement as a result of our material noncompliance with any financial reporting laws or regulations.
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No Excise Tax Payments or
Gross-Ups
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We have not and will not enter into any change in control agreement or arrangement with an NEO that provides for an excise tax
gross-up
payment. We do not provide any tax
gross-ups,
except for business-related payments such as reimbursement of certain moving and relocation expenses for newly-hired and current executives who agree to relocate to work on the Companys
behalf.
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Limited Perquisites
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We provide limited perquisites or other personal benefits to our NEOs and provide air and other travel for our NEOs for business purposes only.
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Anti-Hedging Policy
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Our employees, including our NEOs, and directors are not permitted to hedge their economic exposure to our equity securities or enter into any other transaction in which they profit if the value of the Companys common stock
falls.
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Incentive Compensation Amounts Subject to Thresholds and Maximums
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Our annual incentive cash performance bonuses have threshold performance requirements that must be achieved to receive payment and are also subject to maximum payment caps, decelerators, and
accelerators to decrease risk.
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Stock Ownership Requirements
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Our Stock Ownership Guidelines provide that our
non-employee
directors and our Chief Executive Officer shall attain an investment position in our common stock having a value that is at least
equal to two (2x) times total annual compensation and five (5x) times base salary, respectively.
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Independent Compensation Consultant
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Pearl Meyer Partners, LLC (Pearl Meyer) is retained directly by the Committee, advises the Committee on pay decisions regarding our NEOs, other Executive Management and
non-employee
directors, and keeps the Committee apprised of compensation trends and best practices. Pearl Meyer performs no other services for us.
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Compensation Risk Assessment
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The Committee conducts an annual risk assessment of our compensation policies and practices to ensure that our programs are not reasonably likely to have a material adverse effect on us.
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Long-Term Equity Awards
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Our long-term equity awards for employees as well as
non-employee
directors are generally granted based on a specific target percent of base compensation, are generally awarded during a set
period of time following our fiscal
year-end
results and with valuation and exercise price corresponding directly to the grant date.
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No Single Triggers
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We do not have single-trigger equity vesting acceleration upon a change in control for restricted stock units (RSUs), stock options or other equity awards. In the event of a change in control, a qualifying
termination of employment, or double-trigger, is required for accelerated vesting of equity awards.
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Performance Awards
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Under our 2012 Omnibus Incentive Compensation Plan (2012 Plan), performance stock units (PSUs) earned upon a change in control are based on a
pro-rated
performance
period.
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Minimum Vesting Requirements
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Under our 2012 Plan, equity awards are granted with a minimum vesting period of one year, with full vesting generally over four years.
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Peer Group Analysis
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The Committee reviews total direct compensation (base salary, annual cash incentive and long-term equity incentive awards) and the mix of compensation components for the NEOs relative to our peer group as one of the factors in
determining if compensation is appropriate and adequate to attract, motivate and retain executive officers.
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19
EXECUTIVE COMPENSATION DISCUSSION
Executive Compensation Philosophy and Control
Philosophy
The
Company is a leading provider of cloud-based global trade management (GTM) software, trade content and training, helping companies all over the world create value through their global supply chain by improving margins, achieving greater agility and
lowering riska very specialized industry. Accordingly, the Companys Executive Management must have the skills and experience to manage and motivate an organization spread over several countries with varying business and complex
regulatory environments. The market for these talented individuals is highly competitive. The Companys compensation philosophy focuses on attracting, retaining and rewarding the right candidates for their contributions.
The Committee strives to establish an executive compensation program offering competitive total direct compensation opportunities, which are
aligned with stockholder return through established performance criteria. The Committee is guided by the following principles in establishing and assessing compensation programs and policies for the Executive Management, including the NEOs:
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Individual annual cash incentive and equity-based awards should be closely tied to the performance of the Company as a whole, or one or more of its divisions or business units, as well as to the individuals
performance;
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The interests of Executive Management and the Companys stockholders should be aligned through direct ownership of Company common stock and by providing a portion of the Executive Managements total direct
compensation in the form of equity-based incentives; and
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Total direct compensation must be competitive with our peer group, as well as broader industry survey data.
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To accomplish the above objectives, our compensation practices generally include three elements: Base Salary,
Short-Term (Annual Cash) Incentive Awards and Long-Term (Equity) Incentive Awards. For 2017, the majority of target compensation for each NEO was
at-risk,
variable and based on the Companys
performance, with 87% of our CEOs direct compensation and 79% of our other NEOs direct compensation, earned based on our performance and paid in the form of annual cash incentives, as well as stock options, restricted stock units and
performance stock units. The following chart generally illustrates the 2017 allocation of target total variable and
at-risk
compensation for the CEO and the other NEOs under our compensation
philosophy.
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Objective Input
Compensation is the collective responsibility of many individuals. Ensuring that each group is making effective decisions based on appropriate
metrics will result in achieving our philosophy that coincides with our stockholders long-term interests.
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Responsible Party
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Primary Roles and Responsibilities
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Compensation Committee -
(Comprised solely of independent
directors and
reports
to the Board)
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Leads the process for the evaluation by the Board of the performance of the CEO
within the context of the financial and operational performance of the Company and qualitative criteria determined by the Board; provides feedback to the CEO on performance and objectives.
Determines and approves compensation packages for our Executive Management and reports to the full
Board.
Reviews and approves all compensation programs in which our Executive Management
participate.
Oversees the Boards relationship with and response to stockholders on
executive compensation matters.
Exercises the sole authority to select, retain and/or obtain
advice from compensation consultants, legal counsel and other outside advisors and assesses the independence of each, taking into consideration the factors set forth in the SEC rules and NYSE listing
standards.
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20
EXECUTIVE COMPENSATION DISCUSSION
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Consultant to the
Compensation
Committee-
(Pearl Meyer,
independent
consultant
retained directly
by the
Compensation Committee)
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Attends certain Committee meetings, including meeting in executive session with
the Committee.
Provides advice on the appropriateness and competitiveness of our compensation
program relative to market practice, including advising the Committee on NEO compensation and the selection of our peer group.
Consults on various compensation matters, trends and developments, and recommends compensation
program designs and practices to support our business strategy and objectives.
Cooperates with
management to compile market data and review the appropriateness of such data.
Works with the
Committee to assess the potential risks arising from our compensation policies and practices.
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CEO -
(Assisted by Company
staff)
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Conducts performance reviews for the
other Executive Management and makes recommendations to the Committee with respect to compensation of Executive Management other than himself.
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Use of Independent Advisor
The Committee retains compensation consultants to assist it in assessing the competitiveness of Executive Management compensation. For fiscal
2017, the Committee retained Pearl Meyer. Pursuant to the factors set forth in Item 407 of Regulation
S-K
of the Exchange Act, the Committee has reviewed the independence of Pearl Meyer and conducted a
conflicts of interest assessment (taking into consideration factors specified in the SEC rules and NYSE listing standards) and has concluded that Pearl Meyer is independent. No other fees were paid to Pearl Meyer except fees related to its services
to the Committee.
Use of a Peer Group
The Committee does not target or position NEO pay levels at a specific percentile level relative to a peer group. Rather, the Committee
reviews total direct compensation and the mix of the compensation components relative to the peer group as one of the factors in determining if compensation is adequate to attract and retain executive officers with the unique set of skills necessary
to manage and motivate our global trade management software enterprise.
Precise information regarding executive officer compensation
practices among the Companys competitor group is sometimes difficult to obtain. In addition, even when such data is available, meaningful differences in size, location, maturity, business model and organizational structure among the
Companys peer group make direct comparisons of compensation practices challenging and require exercise of judgment. In assessing the competitiveness of the Companys NEO compensation, the Committee relies on information obtained from the
proxy statements of publicly-traded competitors, information derived from data obtained from other public sources with respect to competitor organizations, and the general knowledge of the Committee and its compensation consultant with regard to the
market for executive management positions. During fiscal 2017, the Committee used the following companies as a peer group:
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2017 Peer Group
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Companies
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Performance
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Bazaarvoice, Inc.
Brightcove, Inc.
Callidus
Software Inc.
Carbonite, Inc.
ChannelAdvisor Corp.
Descartes Systems Group
Everbridge, Inc.
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Five9, Inc.
Kinaxis
Halogen
Software
LivePerson, Inc.
PROS Holdings, Inc.
Q2
Holdings, Inc.
SPS Commerce, Inc.
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Market Capitalization
*
Peer Group Median: $833M
Amber
Road: $183M
Revenues
*
Peer Group Median: $197M
Amber
Road: $79M
*approximate average as of November 30,
2017
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Note: Halogen Software was removed from the peer group
mid-year
after it was acquired.
Bazaarvoice Inc. was removed from the peer group in February 2018 when it went private. TechTarget, Inc. and Limelight Networks, Inc. were added to the peer group for 2018.
21
EXECUTIVE COMPENSATION DISCUSSION
This peer group was primarily selected based upon criteria such as industry, business lines,
operating model, customer base, revenue, market capitalization and entities with which the Company competes for stockholder investment. The Committee reviews the peer group on an annual basis and makes adjustments as needed due to, for example,
merger and acquisition activity during the year. While the Committee does not target a particular position relative to its peer group in determining the salary, annual cash incentive and long-term incentive levels for each NEO, the Committee
does consider the range of salary, annual cash incentive and long-term incentive levels that the peer group provides to similarly situated executives and intends that the levels provided to each NEO fall within that range. The salary, annual cash
incentive and long-term incentive levels for fiscal 2017 generally fell within this range and are generally intended to be within the 35
th
to 65
th
percentile of the range.
Elements of Compensation
The following table summarizes the key elements of our fiscal 2017 executive compensation program:
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Compensation Category
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Description of Compensation
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Rationale
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Influencing Factors
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Base Salary
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Fixed compensation delivered in cash; reviewed annually and adjusted if appropriate.
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Provides base amount of market competitive pay.
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Experience, market data, individual role and responsibilities, and individual performance.
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Short-Term (Annual Cash)
Incentive Awards
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Variable cash compensation based on performance against annual goals of Revenue, Annual Subscription Value and Adjusted EBITDA.
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Motivates and rewards achievement of key financial results for the fiscal year.
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Annual target bonus opportunity determined annually based on market data and individual role and responsibilities; payout based on Company performance.
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Long-Term
(Equity)
Incentives
Awards
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Restricted
Stock
Units (RSUs)
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Variable compensation with payout in shares with time-based vesting; award vests over four years.
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Directly aligns interests of Executive Management with long-term stockholder value creation and promotes retention.
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Target value of all long-term incentive awards from our 2012 Plan is based on individual role and responsibilities and market data; payout based on Companys common stock priceat time of settlement (for RSUs),
upon exercise (for stock options) and achievement of performance metrics (for PSUs).
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Stock Options
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Variable compensation based on
increase in stock price from date of grant, subject to exercise for right of ownership; award vests over four years.
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Directly aligns interests of Executive Management with long-term stockholder value creation and provides upside potential over a ten year option term; also
promotes retention.
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Performance-Based Stock
Units (PSUs)
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Variable compensation with payout in shares based on multi-year
financial metrics or milestones attained generally during a two to three-year performance period.
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Directly aligns interests of
Executive Management with long-term stockholder value creation by linking potential payouts to multi-year financial metrics or milestones; also promotes retention.
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Base Salary
Base salary is intended to compensate Executive Management for services rendered during the fiscal year and to provide sufficient fixed cash
income for retention and recruitment purposes. Executive Management base salary levels are reviewed on an annual basis by the Committee. In addition to competitive data from the peer group, the Committee also incorporates its perspective and the
market knowledge of its compensation consultant related to Executive Management positions in assessing base salary levels. Further, the Committee takes into consideration individual performance of each of the Executive Management and, with respect
to Executive Management other than the Chief Executive Officer, input from the Chief Executive Officer.
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EXECUTIVE COMPENSATION DISCUSSION
Short-Term (Annual Cash) Incentive Program
The Short-Term (Annual Cash) Incentive Program is intended to motivate and reward Executive Management for achieving financial and strategic
execution goals over a
one-year
period. The Committee has the latitude to determine annual cash incentive amounts based upon a number of factors including corporate financial goals, strategic execution
objectives, competitive data and individual performance. While the Committee primarily bases annual cash incentive awards on performance against these objectives for the year, it retains discretion in determining actual bonus payouts. Annual cash
incentive awards are typically paid in cash, but the Committee has discretion to pay a portion of the annual cash incentive awards in equity or other long-term incentives, or not at all.
For fiscal 2017, the Committee, for the reasons set forth below, selected the following financial performance metrics as the general set of
metrics upon which to base the annual cash incentives:
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Revenue
Revenue as reported in the Companys Annual Report on Form
10-K
filed on March 9, 2018. The Committee believes that Revenue is one of the most
recognizable and objective measures of corporate growth and performance.
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Annual Subscription Value (ASV)
Annual Subscription Value is the
one-year
value of subscription agreements signed by the Company during the fiscal year.
The Committee believes that ASV is one of the most important performance metrics associated with growth in the
Software-as-a-Service
industry.
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Adjusted EBITDA
EBITDA is generally defined as net income (loss) plus depreciation and amortization, interest expense (income) and income tax expense. We use Adjusted EBITDA to remove from our operating
results the impact of our capital structure, with an
add-back
for stock compensation. The Committee believes that Adjusted EBITDA is an important metric in measuring operating performance exclusive of capital
structure costs and expenses and the method by which assets were acquired. However, for 2017, the Adjusted EBITDA metric was designed as a deferred
two-year
performance target to be determined at fiscal
year-end
2018 and compensated in PSUs.
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The above three performance metrics, for most of
the Executive Management, were weighted equally
(one-third
each) with the exception of Mr. Al Cooke and one other Executive Manager for whom 50% of their target award was based on the Companys sales
incentive program. As stated above, the Adjusted EBITDA metric was a deferred
two-year
target and not intended to be awarded in 2017. Achieving Revenue at 97% was the hurdle for payment of any incentive
compensation under any metric in the program. Thereafter, for award of the other two metrics, Executive Management had to achieve the Revenue and ASV thresholds at 97% and 80%, respectively, for any payout in relation to each such metric to be
earned. Payouts for the attainment of goals for Revenue and ASV are capped at 110% and 125%, respectively. In order to be entitled to any payment under the 2017 Short-Term (Annual Cash) Incentive Program, the executive must be an employee of the
Company on the date of payment, except to the extent otherwise provided by the Company. If the executives employment with the Company is terminated for any reason prior to the payment date, the executive will not be eligible for the cash
incentive for the applicable period, and the executive will forfeit all rights to such payment, except to the extent otherwise provided by the Company.
The 2017 Short-Term (Annual Cash) Incentive Program provided a bonus target as a percentage of base salary for James Preuninger, Thomas Conway
and Nathan Pieri of 80%, 40% and 40%, respectively. Mr. Cookes target awards are based 50% on each of the Incentive Program and on the Companys sales incentive program. In accordance with the 2012 Plan, the Committee decided to
settle the short-term incentives in cash, with the exception of the Adjusted EBITDA metric that would be awarded in PSUs, if performance was attained as of December 31, 2018. For Messrs. Preuninger, Pieri, Conway and Cooke, the Committee
awarded Short-Term (Annual Cash) Incentive Program awards as follows: Mr. Preuninger $77,263; Mr. Pieri$29,788; Mr. Conway$29,416; and, Mr. Cooke$25,832 (Mr. Cooke also received $87,825 from the
Companys sales incentive program for a total annual incentive of $113,657).
Long-Term (Equity) Incentive Program
The Long-Term (Equity) Incentive Program is intended to align the interests of Executive Management with those of stockholders and encourage
the achievement of the long-term goals of the Company. Long-term equity incentives are also designed to motivate and help retain top talent. To accomplish these objectives, the Committee has discretion to make grants of stock options, time-based
restricted stock, performance-based awards, as well as other types of grants authorized by our 2012 Plan.
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EXECUTIVE COMPENSATION DISCUSSION
The Committee determines awards under the Long-Term (Equity) Incentive Program based upon a
number of factors including competitive data, total overall compensation provided to Executive Management, Company performance during the fiscal year preceding the year of grant and historic grants. The various factors are not given specific weights
and the Committee retains discretion to consider items as it deems appropriate. For fiscal year 2017, under the Long-Term (Equity) Incentive Program, there were 525,754 RSUs, 198,442 PSUs and 1,050,654 stock options awarded to employees (not
including
non-employee
directors), each having a fair value corresponding to the date of grant that will vest and/or become exercisable according to the following vesting schedule: (i) RSUs will vest 25%
on each of the first, second, third and fourth anniversaries of the date of grant; (ii) Stock Options will vest 25% on the first anniversary of the date of grant, and then 6.25% at the end of each three-month period thereafter; and
(iii) PSUs will vest according to certain Adjusted EBITDA performance metrics as of December 31, 2018.
Pursuant to the 2017
Long-Term (Equity) Incentive Program, (i) Mr. Preuninger received an award of 97,013 RSUs, 232,038 Stock Options, 28,745 PSUs (as target compensation for performance achievement of the
two-year
Adjusted EBITDA metric under the 2017 Short-Term (Annual Cash) Incentive Program, discussed above) and 107,792 PSUs (to be considered in recognition of his
non-receipt
of a 2016 Long-Term (Equity) Incentive
Program award (as disclosed in the 2017 Proxy Statement, due to the limited number of shares remaining in the Companys 2012 Plan for 2016)) and based on performance achievement of the
two-year
Adjusted
EBITDA metric under the Short-Term (Annual Cash) Incentive Program, discussed above); (ii) Mr. Conway received an award of 139,448 RSUs, 94,353 Stock Options, and 10,909 PSUs (as target compensation for performance achievement of the
two-year
EBITDA metric under the 2017 Short-Term (Annual Cash) Incentive Program, discussed above); (iii) Mr. Pieri received an award of 139,448 RSUs, 94,353 Stock Options and 11,082 PSUs (as target
compensation for performance achievement of the
two-year
EBITDA metric under the 2017 Short-Term (Annual Cash) Incentive Program, discussed above); and, (iv) Mr. Cooke received an award of 31,792
RSUs, 76,041 Stock Options, and 9,610 PSUs (as target compensation for performance achievement of the
two-year
EBITDA metric under the 2017 Short-Term (Annual Cash) Incentive Program, discussed above).
2012 Omnibus Incentive Compensation Plan
The purpose of the 2012 Omnibus
Incentive Compensation Plan (2012 Plan) is to stimulate the efforts of employees, officers,
non-employee
directors and consultants, in each case who are selected to be grantees, by heightening the
desire of such persons to continue working toward and contributing to the success and progress of the Company. The 2012 Plan covers the grant of awards to our employees (including officers),
non-employee
consultants and
non-employee
directors and those of our subsidiaries and affiliates. The Compensation Committee administers the 2012 Plan and may delegate any or all of its administrative authority to our
Chief Executive Officer or to a management committee, except with respect to awards to executive officers who are subject to Section 16 of the Exchange Act. In addition, the full Board of Directors must serve as the committee with respect to
any awards to our
non-employee
directors.
The 2012 Plan imposes certain annual
per-grantee
award limits. Subject to changes in the Companys capitalization, (i) the aggregate number of shares that may be granted pursuant to awards during any calendar year to any one grantee will not
exceed 668,000, (ii) the maximum value of all awards to be settled in cash or property other than our common stock that may be granted to any grantee in a single calendar year may not exceed $1.0 million, and (iii) the aggregate dollar
value of shares underlying awards granted during any calendar year to any one
non-employee
director will not exceed $400,000 in value (determined as of the date of grant). These limitations apply to the
calendar year in which the awards are granted and not the year in which such awards settle.
The maximum number of shares of common stock
available for future awards granted under the 2012 Plan as of December 31, 2017 is 3,141,931; provided that (i) any shares issued under stock options or stock appreciation rights will be counted against this limit on a
one-for-one
basis; and (ii) any shares issued as awards other than stock options or stock appreciation rights will be counted against this limit as 1.67 shares for every
1 share subject to such award.
For purposes of the foregoing share limit, the aggregate number of shares issued under the 2012 Plan at
any time will equal only the number of shares actually issued upon exercise or settlement of an award. Notwithstanding the foregoing, shares subject to an award under the 2012 Plan may not again be made available for issuance under the 2012 Plan if
such shares are: (1) shares that were subject to an exercised stock appreciation right (regardless of whether such stock appreciation right settles in cash or stock), (2) shares delivered to or withheld by the Company to pay the exercise price
of an option, (3) shares delivered to or withheld by the Company to pay the withholding taxes related to an award, or (4) shares repurchased on the open market with the proceeds of an option exercise. Shares subject to awards that have
been canceled,
24
EXECUTIVE COMPENSATION DISCUSSION
expired, forfeited or otherwise not issued under an award and awards (other than stock appreciation rights) that are settled in cash will not count as shares issued under the 2012 Plan. Any
shares that again become available for grant pursuant to the foregoing will be added back as one share if such shares were subject to any award granted prior to March 10, 2017 or subject to any award of options or stock appreciation rights
granted under the 2012 Plan on or after March 10, 2017, and each such share will be added back as 1.67 shares if such share was subject to an award granted on or after March 10, 2017 other than an option or stock appreciation right.
The 2012 Plan permits the granting of any or all of the following types of awards to all grantees:
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stock options, including incentive stock options (ISOs);
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stock appreciation rights (SARs);
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deferred stock and restricted stock units;
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performance units and performance shares;
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dividend equivalents; and
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other stock-based awards.
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Grants made under the 2012 Plan after March 10, 2017 have a
minimum vesting requirement of one (1) year and customarily have a full vesting schedule of four (4) years. The 2012 Plan does not permit an equity award to vest or become exercisable (a) earlier than twelve months after the grant
date of the award or (b) solely as a result of a corporate transaction that does not constitute a change in control (as defined in the 2012 Plan); provided, however, that (i) if an award vests or becomes exercisable solely on the basis of
time, such award may vest or become exercisable as a result of a change in control but only if the surviving company does not assume the award or replace the award with an equivalent award granted by the surviving company; and (ii) if an award
vests or becomes exercisable in whole or in part upon achievement of specified performance goals, the award may vest or become exercisable upon a change in control but only (x) to the extent that the performance goals have been achieved based
on actual performance through the date of change in control or (y) on a pro rata basis based on the period of time within the performance period that has elapsed from the grant date through the date of change in control. The 2012 Plan provides
for a double-trigger prohibiting the accelerated vesting of an equity award that is assumed by the surviving company or replaced with an equivalent award granted by the surviving company after a change in control unless the
grantees employment is terminated without cause, or by the grantee for good reason (as those terms are defined in the applicable award agreement), within one year following a change in control.
Other Compensation Agreements
and Policies
Employment Agreement with James
Preuninger
In March 2014, in connection with the completion of our initial public offering, we entered into an employment
agreement with James Preuninger, our Chief Executive Officer. The employment agreement had a
two-year
term expiring March 3, 2016. The agreement provided for a base salary of $350,000. On August 5,
2014, after conducting a comprehensive review of compensation for our executive officers with our independent compensation consultant, the Committee approved an increase in Mr. Preuningers annual base salary to $415,000.
Under the employment agreement, Mr. Preuninger was eligible to receive an annual cash incentive with a target amount equal to no less
than 100% of his base salary. The actual annual bonus amount depended on the achievement of performance goals set for that year, as determined by the Compensation Committee. In addition, Mr. Preuninger was eligible to receive an executive
equity award based on his performance across a wide range of criteria, with a target number of shares of our common stock that would cause such annual grant of equity awards to have a fair value as of the date of grant of such equity award equal to
100% of his base salary in effect on the date of grant of the equity award.
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EXECUTIVE COMPENSATION DISCUSSION
Pursuant to the employment agreement, if we terminated Mr. Preuningers employment
without cause or he resigned for good reason, he would be entitled to the following, (i) his accrued but unpaid annual bonus, if any, for the fiscal year ended prior to his termination date, (ii) if his date of termination occurred during
the Post-Change in Control Period (as defined in the agreement), 100% of his outstanding equity awards would become fully vested and exercisable, (iii) a
lump-sum
cash payment, payable within five days
after such termination becomes final, in an amount equal to two years of his base salary then in effect, and (iv) coverage of COBRA premiums, if any, paid by Mr. Preuninger for continuation of coverage for him and his spouse and dependents
under the Companys group health, dental and vision plans for the lesser of two years or the maximum permissible COBRA continuation period. The employment agreement contained a covenant not to compete during the employment term and for one year
thereafter.
On May 5, 2016, the Company, after a comprehensive review, entered into an amended employment agreement with
Mr. Preuninger, which replaced his prior employment agreement dated March 3, 2014, which had expired on March 3, 2016. The May 5, 2016 employment agreement is identical to the March 3, 2014 employment agreement in all
material respects, with certain exceptions, in that the May 5, 2016 employment agreement includes, (i) a term of employment through December 31, 2018 with successive
two-year
extensions unless
either party provides written notice of
non-renewal
at least six (6) months before the end of the then-current term of employment, (ii) a base salary adjustment to reflect the prior 2014 increase,
(iii) specified compensation owed Mr. Preuninger for termination (by Mr. Preuninger for good reason or by Company without cause) or upon
non-renewal
by Company, (iv) provisions for
claw-back and recoupment, and (v) modification of the Confidential Information, Assignment of Rights,
Non-Solicitation
and
Non-Competition
Agreement between the
Company and Mr. Preuninger to increase the time window for
non-solicitation
and
non-competition,
upon any expiration or termination, from twelve (12) months to
twenty-four (24) months.
Management Severance Policy
The Company maintains a Management Severance Policy. The Severance Policy is intended to provide eligible Executive Management of the Company
and its wholly-owned subsidiaries with severance pay and other benefits upon a participants involuntary termination of employment. We believe that reasonable severance benefits for our Executive Management are important because it may be
difficult for them to find comparable employment within a short period of time following termination of employment. We also believe that it is important to protect our Executive Management in the event of a change in control transaction involving
our Company, as a result of which such officers might have their employment terminated. In addition, we believe that the interests of Executive Management should be aligned with those of our stockholders as much as possible, and we believe that
providing protection upon a change in control is an appropriate counter to any disincentive such officers might otherwise perceive in regard to transactions that may be in the best interests of our stockholders.
The Severance Policy provides for severance pay and benefits upon (a) involuntary termination of employment (i.e., termination by the
Company without Cause or by the participant for Good Reason (as defined in the Severance Policy)), and (b) the participants execution of a binding release of claims against the Company. Severance benefits provided
to participants covered under the Severance Policy include 130% of annual base salary payable semi-monthly over a twelve month period commencing at termination of employment, plus twelve months of COBRA coverage at our expense, subject to a
claw-back provision whereby repayment of all severance pay and benefits (net of taxes) is required if the participant violates any confidential information,
non-solicitation
or
non-competition
agreement with us. Our Chief Executive Officer is not eligible to participate in the policy while his employment agreement is in effect. The Board of Directors or Compensation Committee may
amend or terminate the Severance Policy, but any amendment or termination that results in a reduction in the amount of severance pay or severance benefits will not be effective until one year after the Board of Directors or Compensation Committee
approves the amendment or termination. In November 2015, the Compensation Committee amended the Severance Policy so that a new participant (i) will not be eligible for such benefits until one year from the initial hire date, and (ii) will
receive 100%, instead of 130%, of annual base salary as severance pay.
An eligible participant will not be eligible to receive any
benefits under the Severance Policy if the participant is party to a change in control agreement and has a termination of employment following a change in control of our Company, provided that in those circumstances, the terms and conditions for
payment of any severance pay or benefits shall be determined in accordance with the terms of such change in control agreement.
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EXECUTIVE COMPENSATION DISCUSSION
Change in Control Agreements
Upon employment, the Company enters into change in control agreements with each of its Executive Management, other than Mr. Preuninger.
Each agreement provides that if within twelve months following a Change in Control (as defined below) (i) the executive terminates his or her employment with us for Good Reason (as defined below) or (ii) we
terminate the executives employment without Cause (as defined below), the executive is entitled to receive the following severance benefits from us:
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a single lump sum severance payment in an amount equal to twelve months salary, payable no later than sixty days following termination;
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subject to the terms of equity award grant agreements and the provisions of the 2012 Plan, immediate vesting of 100% of the executives then outstanding and unvested equity awards as of the date of their
termination of employment; and
|
|
|
|
payment by us of the premiums for the executives group health continuation coverage for the twelve-month period following the executives termination of employment or until the date that the executives
COBRA continuation coverage expires.
|
Receipt of the severance benefits is subject to execution by the executive of release
of claims in a form reasonably acceptable to us. In the event that the benefits provided for in the agreements constitute parachute payments, subject to excise tax, then the executives benefits may be adjusted so as to result in
receipt by the executive, on an
after-tax
basis, of the greatest amount of benefits. As defined in the agreements:
|
|
|
Cause means (i) the executives willful and continued failure to perform his or her duties and responsibilities after receipt of written demand for performance from us describing the basis for our
belief that the executive has not substantially performed his or her duties and providing a reasonable period (not to exceed between 15 and 30 days) to take corrective action, (ii) any material act of personal dishonesty taken by the executive
in connection with his responsibilities as an employee with the intention that such action may result in the substantial personal enrichment of the executive, (iii) the executives conviction of, or plea of nolo contendere to, a felony
that our Chief Executive Officer reasonably believes has had or will have a material detrimental effect on our reputation or business, or (iv) a material breach of any agreement by and between the executive and us, which material breach has not
been cured within 15 to 30 days of written notice from us.
|
|
|
|
Good Reason means the occurrence of any of the following, without the executives express written consent: (i) a material reduction of the executives authority, duties or responsibilities;
(ii) a material reduction in the executives base and/or variable compensation; (iii) a material change in the geographic location at which the executive must perform his or her services greater than 50 miles; (iv) our failure to
obtain the assumption of the agreements by any of our successors; or (v) any material breach or violation of a material provision of the agreements by us.
|
|
|
|
a Change in Control occurs on the date that any one person or group acquires (i) assets from us that have a total gross fair market value equal or greater than 80 percent of our Company, or
(ii) ownership of our stock that constitutes more than 50 percent of the total fair market value or total voting power of our stock. A Change in Control shall not include any transaction effected primarily for the purpose of financing us
with cash or the initial public offering of our common stock or for reincorporation purposes.
|
Stock Ownership
Guidelines
The Companys Stock Ownership Guidelines provide that all
non-employee
directors are required to own two (2x) times their annual total compensation (including cash and equity) in Company common stock and the Chief Executive Officer is required to own five (5x) times his/her annual base salary in Company common stock.
Stock ownership includes direct stock ownership but does not include unvested stock awards. Pursuant to the Stock Ownership Guidelines, the stock ownership level will be calculated annually on the day of the Companys annual meeting of
stockholders based on the prior
thirty-day
average closing stock price as reported by the NYSE. As of our last Annual Meeting of Stockholders on May 2, 2017, our Chief Executive Officer and all of our
then
non-employee
directors were in compliance with the Stock Ownership Guidelines.
Compensation Recoupment Policy
The Company has adopted a Compensation Recoupment Policy applicable to all or part of any bonus or other compensation paid, or equity awards
granted, to an executive officer that was based upon the achievement of financial results that were subsequently restated. Pursuant to the policy, in the event that the Board determines there has been an accounting restatement due to material
noncompliance with any financial reporting requirement under the securities
27
EXECUTIVE COMPENSATION DISCUSSION
laws or other applicable regulations, the Board will review all applicable incentive payments and if such payments would have been lower had they been calculated based on such restated results,
the Board may, to the extent permitted by governing law, seek to recoup for the benefit of the Company such payments to and/or equity awards held by NEOs or other designated Executive Management who are found personally responsible for the material
restatement, as determined by the Board.
Policy Prohibiting Hedging and Speculative Trading
The Company has adopted a policy related to hedging that prohibits officers, directors and employees from (i) purchasing any financial
instrument that is designed to hedge or offset any decrease in the market value of the Companys common stock, (ii) engaging in short sales related to the Companys common stock, or (iii) entering into any other transaction in
which they profit if the value of the Companys common stock falls.
Retirement and Savings Plan - 401(k)
We maintain a defined contribution employee savings plan, or 401(k) Plan, for our employees. All of our employees in the United States are
eligible to participate in the 401(k) Plan as of the first day of the month following the later of the employees employment commencement date or the date the employee attains age 21. Participants are able to defer up to 90% of their eligible
compensation subject to applicable annual Code limits. Participant contributions may be made on a
pre-tax
basis (401(k) contributions) or on an
after-tax
basis (Roth
401(k) contributions). The 401(k) Plan permits us to make profit sharing contributions and/or matching contributions to eligible participants, although such contributions are not required. We have not made any profit sharing contributions or
matching contributions during the years ended December 31, 2017, 2016 or 2015. Participants
pre-tax
401(k) contributions and Roth 401(k) contributions are allocated to each participants
individual account and are then invested in selected investment alternatives according to the participants directions. Contributions that we make, if any, are subject to vesting in 20% annual increments starting after the participant has
completed two years of service; employees are immediately and fully vested in their own
pre-tax
401(k) contributions and
after-tax
Roth 401(k) contributions. The 401(k)
Plan is intended to qualify under Sections 401(a) and 501(a) of the Code. As a
tax-qualified
retirement plan, contributions to the 401(k) Plan and earnings on those contributions are not taxable to the
employees until distributed from the 401(k) Plan and all contributions are deductible by us when made.
Section
162(m) of the
Internal Revenue Code
Section 162(m) of the Internal Revenue Code, through December 31, 2017, limited the tax deduction of public companies for
compensation in excess of $1.0 million paid to their CEO and the three most highly compensated executive officers (other than the CFO) at the end of any fiscal year unless the compensation qualified as performance-based
compensation. For tax years after 2017, the recently enacted Tax Cuts and Jobs Act of 2017 amended Section 162(m) to eliminate the performance-based exception and now restricts deductibility for federal income tax purposes of
annual individual compensation in excess of $1.0 million, to the group defined above, subject to a transition rule for written binding contracts in effect on November 2, 2017 that are not modified in any material respect on or after such
date. Our Compensation Committees policy with respect to Section 162(m) is to make a reasonable effort to cause compensation to be deductible by us while simultaneously providing our executives with appropriate rewards for their
performance. However, our Compensation Committee may approve compensation or changes to plans, programs or awards that may cause the compensation or awards to exceed the limitation under Section 162(m) if it determines that such action is
appropriate and in our best interests. The Compensation Committee is continuing to assess the impact of Section 162(m) of the Code, as amended, on our compensation programs, including the transition rule for written binding contracts with
respect to 2018 equity awards that were granted in 2017.
28
EXECUTIVE COMPENSATION DISCUSSION
Executive Compensation Tables
Summary Compensation Table
The following table and notes set forth information for the fiscal years ended December 31, 2017, 2016 and 2015, concerning the
compensation awarded to, earned by or paid to: (i) our principal executive officer during the fiscal year ended December 31, 2017, and (ii) the three most highly compensated executive officers, other than the principal executive
officer, who received compensation in excess of $100,000 during the fiscal year ended December 31, 2017 and were serving as executive officers on December 31, 2017 (collectively, the Named Executive Officers). Under the
SECs rules,
non-equity
awards are reported in the performance year in which they are earned, while equity-based awards are reported in the year in which they are granted.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Fiscal
Year
|
|
|
Salary
($)
|
|
|
Stock
Awards
1
($)
|
|
|
Option
Awards
2
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
3
($)
|
|
|
All Other
Compensation
4
($)
|
|
|
Total ($)
|
|
James Preuninger,
|
|
|
2017
|
|
|
|
415,000
|
|
|
|
2,122,970
|
|
|
|
759,377
|
|
|
|
77,263
|
|
|
|
4,700
|
|
|
|
3,379,310
|
|
Chief Executive Officer
|
|
|
2016
|
|
|
|
415,000
|
|
|
|
|
5
|
|
|
|
|
|
|
271,896
|
|
|
|
4,700
|
|
|
|
691,596
|
|
|
|
|
2015
|
|
|
|
415,000
|
|
|
|
754,470
|
|
|
|
688,162
|
|
|
|
|
|
|
|
4,700
|
|
|
|
1,862,332
|
|
Thomas Conway,
|
|
|
2017
|
|
|
|
315,000
|
|
|
|
1,223,920
|
|
|
|
275,935
|
|
|
|
29,416
|
|
|
|
3,593
|
|
|
|
1,847,864
|
|
Chief Financial Officer
|
|
|
2016
|
|
|
|
315,000
|
|
|
|
289,801
|
|
|
|
|
|
|
|
103,517
|
|
|
|
3,593
|
|
|
|
711,911
|
|
|
|
|
2015
|
|
|
|
315,000
|
|
|
|
286,339
|
|
|
|
261,170
|
|
|
|
39,500
|
|
|
|
3,593
|
|
|
|
905,602
|
|
Nathan Pieri,
|
|
|
2017
|
|
|
|
320,000
|
|
|
|
1,225,335
|
|
|
|
275,935
|
|
|
|
29,788
|
|
|
|
4,113
|
|
|
|
1,855,171
|
|
Chief Product Officer
|
|
|
2016
|
|
|
|
320,000
|
|
|
|
294,402
|
|
|
|
|
|
|
|
104,827
|
|
|
|
4,113
|
|
|
|
723,342
|
|
|
|
|
2015
|
|
|
|
320,000
|
|
|
|
290,880
|
|
|
|
265,315
|
|
|
|
40,000
|
|
|
|
4,113
|
|
|
|
920,328
|
|
Albert C. Cooke III,
|
|
|
2017
|
|
|
|
272,000
|
|
|
|
338,668
|
|
|
|
222,382
|
|
|
|
113,657
|
|
|
|
10,548
|
|
|
|
957,255
|
|
Vice President, Global Sales
|
|
|
2016
|
|
|
|
272,000
|
|
|
|
250,240
|
|
|
|
|
|
|
|
245,982
|
|
|
|
10,548
|
|
|
|
778,770
|
|
|
|
|
2015
|
|
|
|
272,000
|
|
|
|
247,248
|
|
|
|
225,518
|
|
|
|
157,635
|
|
|
|
10,548
|
|
|
|
912,949
|
|
(1)
|
These amounts represent:
|
|
(a)
|
For 2017, for Mr. Preuninger, the aggregate grant date fair value ($9.09 per share) of 97,103 RSUs and 136,537 PSUs made during the fiscal year ended December 31, 2017. Vesting of the PSUs will be determined
on the basis of an Adjusted EBITDA target for the Company for the fiscal year ending December 31, 2018. The PSUs will vest at 100% for achieving the target. Under and over performance shall achieve vesting of 0% at the threshold (80% of target)
and 500% if the cap (200% of target) is exceeded. If performance falls between the specified ranges, the Compensation Committee will determine the vesting percentage by decelerators and accelerators. If earned, the PSUs will cliff-vest following the
filing of our Annual Report on Form
10-K
for the year ending December 31, 2018.
|
For 2017, for Messers. Conway, Pieri and Cooke, the aggregate grant date fair value ($8.18 per share) of, respectively, 39,448, 39,448 and
31,792 RSUs and the aggregate grant date fair value ($8.18 per share) of, respectively, 10,909, 11,082 and 9,610 PSUs made during the fiscal year ended December 31, 2017. Vesting of the PSUs will be determined on the basis of an Adjusted EBITDA
target for the Company for the fiscal year ending December 31, 2018. The PSUs will vest at 100% for achieving the target. Under and over performance shall achieve vesting of 0% at the threshold (80% of target) and 500% if the cap (200% of
target) is exceeded. If performance falls between the specified ranges, the Compensation Committee will determine the vesting percentage by decelerators and accelerators. If earned, the PSUs will cliff-vest following the filing of our Annual Report
on Form
10-K
for the year ending December 31, 2018.
For 2017, for Mr. Conway and
Mr. Pieri, the aggregate grant date fair value ($8.12 per share) of 100,000 RSUs made to each during the fiscal year ended December 31, 2017.
|
(b)
|
For 2016, the aggregate grant date fair value ($3.74 per share) of RSUs made during the fiscal year ended December 31, 2016.
|
|
(c)
|
For 2015, the aggregate grant date fair value ($8.08 per share) of PSUs made during the fiscal year ended December 31, 2015. Achievement of the PSUs was to be determined on the basis of a target amount of revenue
of the Company for the fiscal year ending December 31, 2017, by reference to a stated revenue target that reflected a compound annual revenue growth rate for the three-year period ending on such date. The revenue threshold for the fiscal year
ending December 31, 2017 was not achieved and therefore the PSUs did not vest, were cancelled and are currently valued at $0.00.
|
29
EXECUTIVE COMPENSATION DISCUSSION
(2)
|
These amounts represent the aggregate grant date fair value of stock option awards made during each fiscal year, calculated in accordance with ASC 718. The vesting terms for the listed options are as follows: 25% at the
first year anniversary of the grant date and 6.25% at the end of each quarter thereafter.
|
(3)
|
These amounts represent Short-Term (Annual Cash) Incentive Program bonus payments relating to the stated fiscal year, and in the case of Mr. Cooke, also his sales commission plan. These amounts were earned based on
the recipients formulaic performance against specified criteria. The 2017 criteria included Revenue, Annual Subscription Value and Adjusted EBITDA (however, Adjusted EBITDA for 2017 was a
two-year
deferred metric not designed to be paid in 2017, but in PSUs based on 2018 Adjusted EBITDA performance, and are therefore included as a Stock Award in footnote 1(a), above). Mr. Cooke received incentive compensation based on these
same factors for 2017 resulting in an amount paid of $25,832, but 50% of his target award was based on the Companys sales incentive program resulting in an amount paid of $87,825, for a total of $113,657.
|
(4)
|
These amounts include premiums we paid for life insurance, long-term disability and accidental death and dismemberment insurance on these individuals. In addition, Mr. Cooke receives a standard car allowance.
|
(5)
|
The Committee and Mr. Preuninger discussed postponing Mr. Preuningers
would-be
2016 Long-Term (Equity) Incentive Program award in order to maximize the awards to
other employees due to the limited number of equity shares remaining in the Companys 2012 Plan for fiscal 2016. The Committee did award him, during the fiscal year ended December 31, 2017, 107,792 PSUs (included in the 136,537 PSU grant
referenced in footnote 1(a) above) to be considered in recognition of his
non-receipt
of a 2016 Long-Term (Equity) Incentive Program award.
|
Outstanding Equity Award Table (at Fiscal Year End)
The following table provides
information regarding outstanding equity awards held by each of our named executive officers as of December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPTION AWARDS
1
|
|
|
STOCK AWARDS
|
|
Name and Principal Position
|
|
Grant Date
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
|
Option
Exercise
Price ($)
|
|
|
Option
Expiration
Date
|
|
|
Number of
Shares
or Units of
Stock
That Have
Not Vested
(#)
|
|
|
Market Value of
Shares or Units
of Stock That
Have Not
Vested ($)
|
|
James W. Preuninger,
|
|
|
6/25/2013
|
|
|
|
133,600
|
|
|
|
0
|
|
|
|
6.14
|
|
|
|
6/25/2023
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
8/5/2014
|
|
|
|
266,448
|
|
|
|
61,489
|
|
|
|
13.00
|
|
|
|
8/5/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
2/19/2015
|
|
|
|
142,656
|
|
|
|
64,844
|
|
|
|
8.08
|
|
|
|
2/19/2025
|
|
|
|
93,375
|
2
|
|
|
0
|
|
|
|
|
2/10/2016
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/14/2017
|
|
|
|
0
|
|
|
|
232,038
|
|
|
|
9.09
|
|
|
|
7/14/2027
|
|
|
|
97,013
|
3
|
|
|
712,075
|
|
|
|
|
7/14/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
136,537
|
4
|
|
|
1,241,121
|
|
Thomas Conway,
|
|
|
2/11/2010
|
|
|
|
33,400
|
|
|
|
0
|
|
|
|
2.31
|
|
|
|
2/11/2020
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer
|
|
|
9/30/2011
|
|
|
|
26,720
|
|
|
|
0
|
|
|
|
2.31
|
|
|
|
9/30/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
6/25/2013
|
|
|
|
36,740
|
|
|
|
0
|
|
|
|
5.57
|
|
|
|
6/25/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
8/5/2014
|
|
|
|
170,028
|
|
|
|
39,238
|
|
|
|
13.00
|
|
|
|
8/5/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
2/19/2015
|
|
|
|
54,140
|
|
|
|
26,610
|
|
|
|
8.08
|
|
|
|
2/19/2025
|
|
|
|
35,438
|
2
|
|
|
0
|
|
|
|
|
2/10/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,587
|
3
|
|
|
319,929
|
|
|
|
|
6/12/2017
|
|
|
|
0
|
|
|
|
94,353
|
|
|
|
8.18
|
|
|
|
6/12/2027
|
|
|
|
39,448
|
3
|
|
|
289,548
|
|
|
|
|
6/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,909
|
4
|
|
|
89,236
|
|
|
|
|
10/6/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
3
|
|
|
734,000
|
|
Nathan Pieri,
|
|
|
7/16/2014
|
|
|
|
219,375
|
|
|
|
50,625
|
|
|
|
15.36
|
|
|
|
7/16/2024
|
|
|
|
|
|
|
|
|
|
Chief Product Officer
|
|
|
2/19/2015
|
|
|
|
55,000
|
|
|
|
25,000
|
|
|
|
8.08
|
|
|
|
2/19/2025
|
|
|
|
36,000
|
2
|
|
|
0
|
|
|
|
|
2/10/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,279
|
3
|
|
|
325,008
|
|
|
|
|
6/12/2017
|
|
|
|
0
|
|
|
|
94,353
|
|
|
|
8.18
|
|
|
|
6/12/2027
|
|
|
|
39,448
|
3
|
|
|
289,548
|
|
|
|
|
6/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,082
|
4
|
|
|
90,651
|
|
|
|
|
10/6/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
3
|
|
|
734,000
|
|
30
EXECUTIVE COMPENSATION DISCUSSION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Albert C. Cooke III,
|
|
|
2/11/2010
|
|
|
|
25,000
|
|
|
|
0
|
|
|
|
2.31
|
|
|
|
2/11/2020
|
|
|
|
|
|
|
|
|
|
Vice President, Global Sales
|
|
|
9/30/2011
|
|
|
|
26,720
|
|
|
|
0
|
|
|
|
2.31
|
|
|
|
9/30/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
6/25/2013
|
|
|
|
23,380
|
|
|
|
0
|
|
|
|
5.57
|
|
|
|
6/25/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
8/5/2014
|
|
|
|
146,817
|
|
|
|
33,882
|
|
|
|
13.00
|
|
|
|
8/5/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
2/19/2015
|
|
|
|
46,750
|
|
|
|
21,250
|
|
|
|
8.08
|
|
|
|
2/19/2025
|
|
|
|
30,600
|
2
|
|
|
0
|
|
|
|
|
2/10/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,637
|
3
|
|
|
276,256
|
|
|
|
|
6/12/2017
|
|
|
|
0
|
|
|
|
76,041
|
|
|
|
8.18
|
|
|
|
6/12/2027
|
|
|
|
31,792
|
3
|
|
|
233,353
|
|
|
|
|
6/12/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,610
|
4
|
|
|
78,610
|
|
(1)
|
These stock options vest over four years as follows: 25% at the first year anniversary of the grant date and 6.25% at the end of each quarter thereafter.
|
(2)
|
These stock awards are for PSUs valued at December 31, 2017. Achievement of these PSUs was determined on the basis of a target amount of revenue of the Company for the fiscal year ending December 31, 2017, by
reference to a stated revenue target that reflected a compound annual revenue growth rate for the three-year period ending on such date. The revenue threshold for the fiscal year ending December 31, 2017 was not achieved and therefore the PSUs
did not vest, were cancelled and are currently valued at $0.00.
|
(3)
|
The stock awards that were granted on 2/10/2016 are for RSUs that vest over four years as follows: 25% at the first year anniversary of the grant date and 6.25% at the end of each quarter thereafter and are valued at
December 31, 2017. The stock awards that were granted on 6/12/2017, 7/14/2017 and 10/6/2017 are for RSUs that vest over four years as follows: 25% on each of the first, second, third and fourth anniversaries of the grant date and are valued at
December 31, 2017.
|
(4)
|
The stock awards that were granted on 6/12/2017 and 7/14/2017 are for PSUs valued at December 31, 2017. Vesting of these PSUs will be determined on the basis of an Adjusted EBITDA target for the Company for the
fiscal year ending December 31, 2018. Vesting of the PSUs will be 100% for achieving the target. Under and over performance shall achieve vesting of 0% at the threshold (80% of target) and 500% if the cap (200% of target) is exceeded. If
performance falls between the specified ranges, the Compensation Committee will determine the vesting percentage by decelerators and accelerators. If earned, the PSUs will cliff-vest following the filing of our Annual Report on Form
10-K
for the year ending December 31, 2018.
|
(5)
|
The Committee and Mr. Preuninger discussed postponing any
would-be
2016 equity award from the 2016 Long Term (Equity) Incentive Program in order to maximize the awards to
other employees due to the limited number of equity shares remaining in the Companys 2012 Plan. No equity award was made in 2016.
|
|
DIRECTOR COMPENSATION DISCUSSION
|
Director Compensation Discussion
Our Board has adopted a
Non-Employee
Directors Compensation Policy for our
non-employee
directors, providing for a mix of cash and equity compensation, that applies much of the philosophy set forth in the Executive Compensation Discussion to
non-employee
director compensation.
Each
non-employee
director receives an annual cash retainer of $60,000. The Chairman of the Board receives a supplemental annual cash retainer in an amount $25,000. Effective for fiscal 2017, each
non-employee
director that
serves in a chairperson role of a committee will receive a supplemental annual cash retainer in an amount equal to the corresponding role: (i) Chair of the Audit Committee$15,000; (ii) Chair of the Compensation Committee$15,000; and
(iii) Chair of the Nominating and Corporate Governance Committee$7,500. The annual and supplemental cash retainers are payable in monthly installments on the first business day of each calendar month if the director remains in continuous
service through such date. We also reimburse our
non-employee
directors for reasonable travel and other expenses incurred in connection with attending Board and committee meetings.
In addition, each year on the date of the Annual Meeting of Stockholders (or the next trading day after a blackout period), each
non-employee
director receives an annual award of restricted stock units (RSUs) for the number of shares of our common stock that have a market value of $90,000 based on the closing price of the common
stock on the last business day preceding the grant date. The Chairman of the Board receives an additional annual RSU grant for the number of shares based on his increased annual cash retainer. Additionally, a new
non-employee
director receives
31
DIRECTOR COMPENSATION DISCUSSION
an inaugural award of RSUs for the number of shares of the Companys common stock that has a market value of $180,000 based on the closing price on the last business day preceding the date
such RSUs are granted. In August 2017, our Board collectively received a total of 57,022 RSUs as their annual award, as follows: Ms. Craven and Messrs. Harvey, Howard and Malone each received 10,804 RSUs and Mr. Williams received 13,806
RSUs. James Preuninger, our Chief Executive Officer, receives no separate compensation for his services as a director. Our 2012 Plan places a calendar-year limitation of $400,000 on the fair market value (at the time of grant) of each equity award
granted to our
non-employee
directors.
The annual RSU grants vest on the earlier of (i) the
first anniversary of the date of grant, (ii) the date of the
non-employee
directors death, or (iii) upon a Change in Control (as defined in the award agreements), provided that the
director remains in continuous service until the vesting date. The shares underlying vested RSUs will be issued to the
non-employee
directors in settlement of the award on the earlier of Separation from
Service (as defined in the 2012 Plan) or upon consummation of a Change in Control. If a
non-employee
directors RSUs are not vested on or before the directors Separation from Service, with limited
exception, the directors
non-vested
RSUs will be immediately forfeited without consideration. For grants during fiscal 2018, the Board adopted a RSU Deferral Election Form, allowing a director to elect
to receive vested RSUs on the vesting date or the Separation of Service date, or a date in between. Deferral elections for fiscal 2018 had to be documented with the Company prior to December 31, 2017.
To insure an appropriate level and mix of
non-employee
director compensation, in conjunction with
Pearl Meyer, the Committee reviews total compensation against the peer group. While the Committee does not target specifically its peer group in determining the compensation level and mix, the Committee does consider the range of annual cash
retainer and long-term incentive levels that the peer group provides to their
non-employee
directors and generally intends to fall within the 35th to 65th percentile of the range.
The compensation program for our
non-employee
directors is intended to be competitive and fair so that
we can attract the best talent to our Board of Directors and recognize the time and effort required of a director given the size and complexity of our operations. We believe the equity grants help to align the directors
interests with all of our stockholders interests and to motivate our directors to focus on our long-term growth and success. To further this notion, we have adopted Stock Ownership Guidelines so that
non-employee
directors achieve and maintain a minimum ownership position of our common stock having a value that is at least equal to two (2x) times their total annual compensation.
Director Compen
sation Table
The following table provides
information concerning the compensation earned by each person, other than Mr. Preuninger, who served as a member of our Board of Directors during the year ended December 31, 2017. See Executive Compensation for a discussion of the
compensation received by Mr. Preuninger.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
Fees earned or
paid in cash
($)
1
|
|
|
Stock Awards
($)
2
|
|
|
Option Awards
($)
3
|
|
|
Total ($)
|
|
Pamela F. Craven
|
|
|
71,250
|
|
|
|
90,000
|
|
|
|
|
|
|
|
161,250
|
|
Ralph Faison
4
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
Kenneth Harvey
|
|
|
65,625
|
|
|
|
90,000
|
|
|
|
|
|
|
|
155,625
|
|
Rudy Howard
|
|
|
71,250
|
|
|
|
90,000
|
|
|
|
|
|
|
|
161,250
|
|
John Malone
|
|
|
60,000
|
|
|
|
90,000
|
|
|
|
|
|
|
|
150,000
|
|
Barry Williams
|
|
|
85,000
|
|
|
|
115,000
|
|
|
|
|
|
|
|
200,000
|
|
(1)
|
Represents amount earned or paid during fiscal year 2017.
|
(2)
|
These awards consist of restricted stock unit (RSU) grants that vest in their entirety on the first anniversary of the grant date but are not settled until a directors separation of service. These amounts reflect
the fair value of the RSU award, based on the value of our common stock at the close of market on the date immediately preceding the date of grant. As of December 31, 2017, the following
non-employee
directors of our Board held the following number of vested RSUs, Ms. Craven and Messrs. Harvey, Howard and Malone each held 49,174 RSUs and Mr. Williams held 64,104 RSUs. On August 7, 2018, Ms. Craven and Messrs. Harvey, Howard
and Malone will each have an additional 10,804 RSUs vest and Mr. Williams will have an additional held 13,806 RSUs vest.
|
32
DIRECTOR COMPENSATION DISCUSSION
(3)
|
There were no stock option awards to the individuals listed in the table during fiscal year 2017. As of December 31, 2017, the only
non-employee
directors holding options to
purchase shares of our common stock were Mr. Howard and Mr. Harvey who each hold 80,160 vested options.
|
(4)
|
Mr. Faison joined the Board effective December 1, 2017
|
OWNERSHIP OF EQUITY
SECURITIES OF THE COMPANY
Ownership
of Equity Securities of the Company
Security Ownership of Directors and Executive Officers
The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 9, 2018 by
(i) each current director and nominee, (ii) our executive officers named in the Summary Compensation Table, and (iii) all of our current directors and executive officers as a group. There were 27,321,849 shares of our common stock
outstanding as of March 9, 2018.
Unless otherwise indicated, the address of each person named in the table below is Amber Road,
Inc., One Meadowlands Plaza, East Rutherford, New Jersey 07073, and each beneficial owner named in the table has sole voting and sole investment power with respect to all shares beneficially owned. The amounts and percentage of common stock
beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a beneficial owner of a security if that
person has or shares voting power, which includes the power to vote or to direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person
is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person
may be deemed to be a beneficial owner of securities as to which such person has no economic interest. We are not aware of any arrangements that could at a subsequent date result in a change in control. The table does not include PSUs that were
awarded during 2017, which generally vest only upon the achievement of performance criteria.
|
|
|
|
|
|
|
|
|
Named Executive Officers and Directors:
|
|
# Shares
Beneficially
Owned
1
|
|
|
Percent
of Total
|
|
Thomas Conway
2
|
|
|
356,951
|
|
|
|
1.3
|
|
Pamela Craven
3
|
|
|
57,174
|
*
|
|
|
|
|
Albert C. Cooke III
4
|
|
|
307,687
|
|
|
|
1.1
|
|
Kenneth Harvey
5
|
|
|
303,580
|
|
|
|
1.1
|
|
Rudy Howard
6
|
|
|
129,334
|
*
|
|
|
|
|
John Malone
7
|
|
|
57,174
|
*
|
|
|
|
|
Nathan Pieri
8
|
|
|
343,951
|
|
|
|
1.3
|
|
James Preuninger
9
|
|
|
2,495,760
|
|
|
|
9.1
|
|
Barry Williams
10
|
|
|
64,104
|
*
|
|
|
|
|
Ralph Faison
11
|
|
|
6,500
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (10 persons)
|
|
|
4,122,215
|
|
|
|
15.1
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes shares which the individuals shown have the right to acquire (a) upon vesting of restricted stock units (RSUs) where the shares could be issuable as of March 9, 2018 or within 60 days thereafter, and
(b) upon exercise of stock options that are vested as of March 9, 2018 or within 60 days thereafter. Such shares are deemed to be outstanding in calculating the percentage ownership of such individual (and the group), but are not deemed to
be outstanding as to any other person.
|
(2)
|
Mr. Conway is our Chief Financial Officer. Includes 4,843 shares of common stock and options to purchase 352,108 shares of common stock that have vested or will vest within 60 days of the date of this table.
|
(3)
|
Ms. Craven is one of our directors. Includes 8,000 shares of common stock and 49,174 vested RSUs for which receipt could be settled within 60 days of the date of this table.
|
33
OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY
(4)
|
Mr. Cooke is our SVP, Managing Director of EMEA. Includes 12,182 shares of common stock and options to purchase 295,505 shares of common stock that have vested or will vest within 60 days of the date of this table.
|
(5)
|
Mr. Harvey is one of our directors. Includes 174,246 shares of common stock, options to purchase 80,160 shares of common stock that have vested or will vest within 60 days of the date of this table, and 49,174
vested RSUs for which receipt could be settled within 60 days of the date of this table.
|
(6)
|
Mr. Howard is one of our directors. Includes stock options to purchase 80,160 shares of common stock that have vested or will vest within 60 days of the date of this table and 49,174 vested RSUs for which receipt
could be settled within 60 days of the date of this table.
|
(7)
|
Mr. Malone is one of our directors. Includes 8,000 shares of common stock and 49,174 vested RSUs for which receipt could be settled within 60 days of the date of this table.
|
(8)
|
Mr. Pieri is our Chief Product Officer. Includes 30,826 shares of common stock and stock options to purchase 313,125 shares of common stock that have vested or will vest within 60 days of the date of this table.
|
(9)
|
Mr. James Preuninger is our Chief Executive Officer and a director. Consists of 1,899,095 shares of common stock (inclusive of 249,545 shares of common stock held of record by The James Preuninger 2013 Five Year
GRAT) and stock options to purchase 596,665 shares of common stock that have vested or will vest within 60 days of the date of this table.
|
(10)
|
Mr. Williams is one of our directors. Includes 64,104 vested RSUs for which receipt could be settled within 60 days of the date of this table.
|
(11)
|
Mr. Faison is one of our directors as of December 1, 2017. Includes 6,500 shares of common stock.
|
Security Ownership of Certain B
eneficial Owners
The following table shows the number of shares of our common stock owned by each person or entity known to the Company to be the beneficial
owners of more than 5% of our common stock as of March 9, 2018, based on a review of publicly available statements of beneficial ownership filed with the SEC on Schedules 13D and 13G and Forms 4 through the date of this Proxy Statement. There
were 27,321,849 shares of our common stock outstanding as of March 9, 2018.
|
|
|
|
|
|
|
|
|
Name and Address of Beneficial
Owner
|
|
Common Stock
Beneficially Owned
|
|
|
Number of
Shares
|
|
|
Percent
of Total
1
|
|
Neil Gagnon and Gagnon Securities LLC
2
1370 Avenue of the Americas, Suite 2400, New York, NY 10019
|
|
|
2,573,946
|
|
|
|
9.4
|
%
|
Royce & Associates, LP
3
745 Fifth Avenue, New York, NY 10151
|
|
|
1,834,471
|
|
|
|
6.7
|
%
|
Granahan Investment Management, Inc.4
404 Wyman Street, Suite 460, Waltham, MA 02451
|
|
|
1,652,152
|
|
|
|
6.0
|
%
|
Altai Capital Management L.P., et al.
5
520 Newport Center Dr., 12
th
Floor, Newport Beach, CA
92660
|
|
|
1,569,653
|
|
|
|
5.7
|
%
|
Oaktop Capital Management II, L.P.
6
One Main Street, Suite 202, Chatham, NJ 07928
|
|
|
1,384,691
|
|
|
|
5.1
|
%
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
9,014,913
|
|
|
|
33.0
|
%
|
|
|
|
|
|
|
|
|
|
(1)
|
The Percent of Total reported in this column has been calculated based upon the numbers of shares of common stock outstanding as of March 9, 2018 and may differ from the Percent of Class
reported in statements of beneficial ownership filed with the SEC.
|
(2)
|
The beneficial ownership shown was provided by Neil Gagnon and Gagnon Securities LLC pursuant to a Schedule 13G/A filed with the SEC on February 14, 2018.
|
(3)
|
The beneficial ownership shown was provided by Royce & Associates, LP pursuant to a Schedule 13G filed with the SEC on January 17, 2018.
|
(4)
|
The beneficial ownership shown was provided by Granahan Investment Management, Inc. pursuant to a Schedule 13G filed with the SEC on February 12, 2018.
|
34
OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY
(5)
|
The beneficial ownership shown was provided by Altai Capital Management L.P., et al., pursuant to a Schedule 13D filed with the SEC on March 12, 2018. According to such filing 1,569,653 shares were acquired on or
before March 9, 2018 and 22,894 shares were acquired subsequent to March 9, 2018.
|
(6)
|
The beneficial ownership shown was provided by Oaktop Capital Management II, L.P. pursuant to a Schedule 13G filed with the SEC on February 14, 2018.
|
Equity Compensation Plan Information
The following table provides
information as of December 31, 2017 about our common stock that may be issued under our existing equity compensation plans. All of the indicated securities are authorized under our 2012 Omnibus Incentive Compensation Plan and our 2002 Stock
Option Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Compensation Plans
|
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
|
|
|
Weighted-average exercise
price of outstanding
options, warrants and
rights
|
|
|
Number of securities
remaining available for
future issuance under equity
compensation plans
|
|
Equity compensation plans approved by stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
4,632,654
|
1
|
|
$
|
9.79
|
|
|
|
|
|
Restricted Stock Units (RSUs)
|
|
|
812,262
|
|
|
|
N/A
|
|
|
|
|
|
Performance Stock Units (PSUs)
|
|
|
466,499
|
2
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal:
|
|
|
5,911,415
|
|
|
|
N/A
|
|
|
|
3,141,931
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans not approved by stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
5,911,415
|
|
|
$
|
9.79
|
|
|
|
3,141,931
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
As of December 31, 2017, the aggregate weighted-average remaining contractual life of our outstanding stock options was 6.4 years with an aggregated weighted-average exercise price of $9.79.
|
(2)
|
Represents the number of PSU underlying shares that could be earned assuming target achievement of the applicable performance conditions.
|
(3)
|
Inclusive of the additional shares approved by the stockholders at the 2017 Annual Meeting.
|
(4)
|
For grants after March 10, 2017, full value awards (equity awards other than stock options and stock appreciation rights) reduce the remaining available total by a ratio of 1.67 shares for every one share issued in
connection with such an award.
|
|
PROPOSAL 2 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
|
Proposa
l 2 -
Ratification of Independent Registered Public Accountants
The Audit Committee of the Board of
Directors has selected KPMG LLP, or KPMG, as our independent registered public accountants for the fiscal year ending December 31, 2018, and the Board has directed that management submit this selection for ratification by the stockholders at
our 2018 Annual Meeting. KPMG has served as our independent registered public accounting firm and has audited our financial statements, prior to us becoming public, since 2003. The Audit Committee periodically considers whether there should be a
rotation of our independent registered public accountants. The members of the Audit Committee believe that the continued retention of KPMG as our independent registered public accountants is in the best interests of the Company.
Stockholder ratification of the selection of KPMG as our independent registered public accountants is not required. The Board is submitting the
selection of KPMG to the stockholders for ratification because we believe it is a matter of good corporate governance practice. If our stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain KPMG, but
still may retain them. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines
that such a change would be in our best interests and that of our stockholders.
35
PROPOSAL 2 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Representatives of KPMG are expected to attend the Annual Meeting, will have an opportunity
to make a statement if they so desire and will be available to respond to appropriate questions from stockholders. Fees for professional services provided by our independent auditors in each of the last two fiscal years, in each of the following
categories, are as follows:
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
Audit fees
|
|
$
|
523,757
|
|
|
$
|
594,126
|
|
Audit-related fees
|
|
|
15,000
|
|
|
|
|
|
Tax fees
|
|
|
385,777
|
|
|
|
368,922
|
|
All other fees
|
|
|
306,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,230,885
|
|
|
$
|
963,048
|
|
|
|
|
|
|
|
|
|
|
Audit and audit-related fees consist of fees incurred for the audit of our annual consolidated financial
statements, review of our quarterly consolidated financial statements, and services that are normally provided by KPMG in connection with statutory and regulatory filings or engagements. Tax fees include tax return compliance, tax due diligence,
transfer pricing, post-acquisition tax structuring, global mobility services and tax consultations. Other fees include fees for advising the Company on the adoption of the new revenue recognition standard, ASC 606.
All audit and
non-audit
services provided by our independent registered public accounting firm must be
pre-approved
by the Audit Committee. Unless the specific service has been previously
pre-approved
with respect to that year, the Audit Committee must approve the
permitted service before the independent registered public accounting firm is engaged to perform it. The Audit Committee uses the following procedures in
pre-approving
all audit and
non-audit
services provided by our independent registered public accounting firm. At or before the first meeting of the Audit Committee each year, the Audit Committee is presented with a detailed listing of the
individual audit and
non-audit
services and fees (separately describing audit-related services, tax services and other services) expected to be provided by our independent registered public accounting firm
during the year. Quarterly, the Audit Committee is presented with an update of any new audit and
non-audit
services to be provided. The Audit Committee reviews the quarterly update and approves the services
outlined therein if such services are acceptable to the Audit Committee.
Non-audit
services that
constitute less than 5% of the revenues paid by the Company to the independent registered public accounting firm may be approved by the Audit Committee (or one or more members authorized by the Audit Committee) after the services are commenced but
before the completion of the audit, provided that such services were not recognized by the Company at the time of the engagement to be
non-audit
services and such services are promptly brought to the attention
of the Audit Committee. The Audit Committee may delegate to one or more of its members the authority to
pre-approve
permissible
non-audit
services so long as this
pre-approval
is presented to the full Audit Committee at scheduled meetings. The Audit Committee has delegated
pre-approval
authority of up $100,000 in between scheduled Audit
Committee meetings to the Chairperson of the Audit Committee, and the Chairperson is required to report any such
pre-approval
decisions to the Audit Committee at its next scheduled meeting. In addition, the
Audit Committee has granted Thomas Conway, the Companys Chief Financial Officer, authority to approve
non-audit
services of up to $100,000 in between scheduled Audit Committee meetings upon notice in
each instance to the Chairperson of the Audit Committee, subject to confirmation of the approval of such services by the Audit Committee at the next scheduled meeting. All KPMG services and fees in 2017 were approved in advance by the Audit
Committee.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE
FOR
RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS
PROXIES WILL BE VOTED
FOR
RATIFICATION UNLESS OTHERWISE SPECIFIED
36
AUDIT COMMITTEE REPORT
Audit Committe
e Report
The Audit Committee of the Board of Directors (Committee), is composed of three independent directors, Rudy Howard (Chair), Pamela
Craven and John Malone), and operates under a written charter adopted by the Board of Directors. Among its functions, the Committee selects the independent auditors. Management has the primary responsibility for the financial statements and the
reporting process, including the systems of internal controls, and the independent auditors are responsible for auditing those financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The
Committees responsibility is to oversee the financial reporting process on behalf of the Board of Directors and to report the result of their activities to the Board of Directors.
In this context, the Committee has met and held discussions with management and the independent auditors. Management represented to the
Committee that its financial statements were prepared in accordance with accounting principles generally accepted in the United States, and the Committee has reviewed and discussed the financial statements with management and the independent
auditors. The Committee discussed with the independent auditors matters required to be discussed by Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 16, Communications with Audit Committees. The independent
auditors also provided to the Committee the written disclosures and the letter required by applicable requirements of the PCAOB, and the Committee discussed with the independent auditors their independence and considered the compatibility of
non-audit
services with the auditors independence.
Based upon the Committees discussion with
management and the independent auditors and the Committees review of the representation of management and the report of the independent auditors to the Committee, and relying thereon, the Committee recommended that the Board of Directors
include the audited financial statements in the Companys Annual Report on Form
10-K
for the year ended December 31, 2017, filed with the Securities and Exchange Commission.
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Audit Committee of the Board of Directors,
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Rudy Howard (Chair)
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Pamela Craven
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John Malone
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MANAGEMENT
Management
The names of our current executive
officers and other executive management, their ages, their positions and other biographical information are set forth below:
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Executive Officers
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Age
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Position
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James Preuninger
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58
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Chief Executive Officer and Director
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Thomas Conway
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50
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Chief Financial Officer
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Nathan Pieri
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52
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Chief Product Officer
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Albert C. Cooke III
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58
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SVP, Managing Director EMEA
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Executive Management (including Executive
Officers)
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Age
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Position
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Ty Y. Bordner
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53
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SVP, Marketing and Business Development
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Kae-por
F. Chang
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57
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Managing Director, Amber Road China
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Claude Correll
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46
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Vice President, Global Engineering
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Glenn T. Gorman
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58
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Chief Information Officer
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Brad Holmstrom
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53
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General Counsel and Corporate Secretary
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William R. Jackowski
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51
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Vice President, Professional Services
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Stephanie J. Miles
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49
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Vice President, Commercial Services
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James W. Preuninger
is a
co-founder
of our Company and has
served as Chief Executive Officer and a member of our Board of Directors since 2002. Biographical information concerning Mr. Preuninger is set forth above under Election of Directors.
37
MANAGEMENT
Thomas E. Conway
is our Chief Financial Officer, a position he has held since 2007. He
previously served as Assistant Corporate Controller and Director of North American Accounting Operations at Cognizant Technology Solutions, an information technology company. Prior to joining Cognizant, Mr. Conway worked for seven years at JDS
Uniphase, a fiber optic component and systems provider, where he served as Controller and Director of Finance, and nine years at KPMG LLP, where he was Senior Manager in the Communication and Entertainment audit and consulting practice.
Mr. Conway is a certified public accountant and a member of the American Institute of Certified Public Accountants and the New Jersey Society of Certified Public Accountants.
Nathan Pieri
is our Chief Product Officer. He returned to us in 2014 after two years as Senior Vice President of Portfolio Product
Management & Software Delivery for Triple Point Technology, a provider of commodity trading and risk management solutions. For a
ten-year
period, Nathan worked as our Senior Vice President, Marketing
and Product Management and was responsible for product strategy and global marketing. Prior to his first appointment with us, he held senior marketing and product management roles at other enterprise software companies such as Celarix and Baan
(Infor). Earlier in his career, Mr. Pieri was a strategy and supply chain management consultant at Coopers & Lybrand and held various operating roles at General Electric, where he started his career in the manufacturing management
program.
Albert C. Cooke III
is our Sr. Vice President of Managing Director EMEA (Europe, Middle East and Asia). Prior to that he
was Vice President, Global Sales, a position he held since 2005. He is responsible for sales, marketing, implementation and market channels of our solutions to customers in the EMEA. Prior to joining us, Mr. Cooke was Vice President of Products
and Solutions for Industri-Matematik International Corp. (IMI), a leading provider of order management software. Prior to IMI, Mr. Cooke held senior sales roles at Adexa, Optum, and Russ Berrie & Company.
Ty Y. Bordner
is our Sr. Vice President of Marketing and Business Development. Prior to that he was Vice President, Solutions
Consulting since 2006. He is responsible for marketing, product strategy and direction of Amber Road. Prior to joining us in 2006, Mr. Bordner spent 10 years with JPMorgan Chase Vastera, a global trade management software and managed services
provider, in various leadership roles, including oversight for Engineering, Solutions Consulting and Product Management. During his tenure he helped manage the company through multiple growth stages from startup, through initial public offering, to
achieving annual revenues in excess of $80 million. Prior to joining JPMorgan Chase Vastera, Mr. Bordner worked for GXS (formerly GE Information Services).
Kae-por
Chang
has served as the Managing Director, Amber Road China since 2013. From 2007 until
September 2013, Mr. Chang was the founder and CEO of EasyCargo, which we acquired in 2013. Mr. Chang has over 20 years of senior management experience in global supply chain management, logistics, distribution, IT, and regulatory
compliance, as an executive of both public and private companies. He was also an Ernst & Young LLP consultant prior to founding EasyCargo.
Claude Correll
has been our Vice President, Global Engineering since 2016 and has served in various engineering roles with us since
2007. Mr. Correll is responsible for building and delivering Amber Roads portfolio of GTM solutions. Prior to joining Amber Road, Mr. Correll was with JPMorgan Chase Vastera as Principal Software Architect. Mr. Correll received
a Bachelors degree in Computer Science from the University of Maryland, College Park.
Glenn T. Gorman
serves as our Chief
Information Officer, a position he has held since 2002. Mr. Gorman is responsible for setting our technology policy and managing the hosting operations, information technology and quality assurance departments. Prior to joining us,
Mr. Gorman held various positions including that of Systems Engineer and Operational Specialist for IBM Corporation from 1984 until 1986, where he served as a liaison between field support and IBMs development laboratories.
Brad Holmstrom
has served as our General Counsel and Corporate Secretary since 2015. He has over 25 years of legal experience, most
recently as General Counsel and Corporate Secretary for MDU Communications International, Inc., a publicly-traded communications company. Prior to his
in-house
experience, he was partner with Shughart
Thomson & Kilroy, which subsequently merged to create the national law firm of Polsinelli PC.
William R. Jackowski
is our
Vice President, Professional Services, a position he has held since 2006. In this position, Mr. Jackowski manages a team of experienced consultants specializing in the implementation of our solutions. Prior to joining us, Mr. Jackowski
served as Vice President of Global Professional Services for JPMorgan Chase Vastera, where he oversaw strategic software accounts and helped grow that companys professional services organization across North America, Europe and South America.
Previously, Mr. Jackowski held several management and consulting positions with large consulting organizations such as American Management Systems (AMS) and PeopleSoft.
38
MANAGEMENT
Stephanie J. Miles
is our Sr. Vice President, Commercial Services, a position she has
held since 2005. Ms. Miles leads our support team for the delivery, implementation and ongoing support services relating to our GTM solutions. Until February 2013, her position also encompassed leadership of our professional services team.
Prior to joining us, Ms. Miles held various leadership positions with the supply chain visibility company BridgePoint, a subsidiary of CSX Corporation, for seven years. While at BridgePoint, she held the positions of Senior Vice President and
General Manager, and also served as a board member.
ANNUAL REPORT AND FORM 10-K
Annual Report and Form 10-K
The Companys Annual Report for
fiscal 2017, which contains the consolidated financial statements of the Company for the year ended December 31, 2017, accompanies this Proxy Statement, but is not a part of the Companys soliciting materials.
Stockholders may obtain, without charge, a copy of the Companys Annual Report on Form
10-K
for
the year ended December 31, 2017, filed with the Securities and Exchange Commission, including the financial statements and schedules thereto, without the accompanying exhibits, by writing to: Corporate Secretary, Amber Road, Inc., One
Meadowlands Plaza, East Rutherford, New Jersey 07073. The Companys Annual Report on Form
10-K
is also available online at the Companys website at
www.investor.amberroad.com/sec-filings.
A list of exhibits is included in the Form
10-K
and exhibits are available from the Company upon the payment to the
Company of the cost of furnishing them.
OTHER MATTERS
Other Matters
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities
Exchange Act of 1934, as amended, or Exchange Act, requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities (collectively, Reporting Persons), to file reports of
ownership and changes in ownership with the Securities and Exchange Commission, or SEC. Copies of the Section 16 reports are also required to be supplied to the Company
.
Based solely on our review of the reports filed by Reporting
Persons and written representations from certain Reporting Persons that no other reports were required for those persons, during the year ended December 31, 2017, the Reporting Persons met all applicable Section 16(a) filing requirements.
Stockholder Proposals and Director Nominations
Stockholders are entitled to submit
proposals on matters appropriate for stockholder action, consistent with SEC regulations. In order for stockholder proposals for the 2019 Annual Meeting of Stockholders to be eligible for inclusion in our Proxy Statement, they must be received by
our Corporate Secretary at our principal executive offices not later than December 1, 2018.
Any director nomination or proposal that
a stockholder wishes to present at the 2019 Annual Meeting of Stockholders, other than through inclusion in our Proxy Statement, must follow the procedures described in our Amended and Restated Bylaws. Under these procedures, stockholders must
submit the proposed nominee or proposal by giving written notice to our Corporate Secretary at our principal executive offices no earlier than January 5, 2019 and no later than February 2, 2019. These timing requirements differ if this
years annual meeting were to be adjourned or otherwise postponed or if the date of next years annual meeting is not within 30 days before or after the anniversary date of this years meeting. If any of these events occur, we will
furnish the new dates for submission of
39
OTHER MATTERS
proposed nominees or other items of business by public disclosure including filing with the SEC of a current report on Form
8-K.
The stockholder must have
been a stockholder of record at the time of the giving of the notice and entitled to vote at the meeting. The stockholders notice must set forth the following:
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As to any proposed nominee for directorship, (1) the name, age, business address and residence address of the nominee, (2) the principal occupation or employment of the nominee, (3) the number of shares
of common stock owned of record and beneficially by the nominee, (4) the date or dates on which the shares were acquired and the investment intent of the acquisition, and (5) such other information relating to the nominee that is required
to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, under the proxy rules, including (without limitation) such nominees written consent to being named in the proxy statement
as a nominee and to serve as a director if elected. The Company may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of the proposed nominee to serve as an independent director
of the Company or that could be material to a reasonable stockholders understanding of the independence, or lack thereof, of the proposed nominee.
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As to any other business proposed to be brought before the meeting, a brief description of the business, the reasons for conducting such business at the meeting and any material interest in such business of the
stockholder and the beneficial owner, if any, on whose behalf the proposal is made.
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As to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (1) the name and address of such stockholder and of such beneficial owner, as they
appear on our books, and (2) the class and number of shares owned beneficially and of record by such stockholder and such beneficial owner.
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Householding of Proxy Materials
The SEC has adopted rules that permit
companies and intermediaries (such as brokers and banks) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement
addressed to those stockholders. This process, which is commonly referred to as householding, is also permissible under the General Corporation Law of the State of Delaware and potentially means extra convenience for stockholders and
cost savings for companies.
This year, a number of banks and brokers with account holders who are our stockholders will be householding
our proxy materials. A single Notice of Annual Meeting of Stockholders or Proxy Statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you
have received notice from your broker or bank that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to
participate in householding and would prefer to receive a separate Proxy Statement and Annual Report, please notify your broker or bank. Stockholders who currently receive multiple copies of the Proxy Statement at their address and would like to
request householding of their communications should contact their broker or bank.
No Incorporation by Reference
To the extent that this Proxy Statement is incorporated by reference into any other filing by us under the Securities Act of 1933 or the
Exchange Act, the sections of this Proxy Statement entitled Audit Committee Report or Compensation Committee Report to the extent permitted by the rules of the SEC will not be deemed incorporated, unless specifically
provided otherwise in such filing.
In addition, references to our website are not intended to function as a hyperlink and the information
contained on our website is not intended to be part of this Proxy Statement. Information on our website, other than our Proxy Statement, Notice of Annual Meeting of Stockholders and form of proxy, is not part of the proxy soliciting material
and is not incorporated herein by reference.
40
OTHER MATTERS
Disclaimer
This Proxy Statement may contain
statements regarding future individual and Company performance targets and Company performance goals. These targets and Company performance goals are disclosed in the limited context of our compensation programs and should not be understood to be
statements of managements expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.
Other Matters
The Board knows of no matters other
than those listed in this Proxy Statement that are likely to be brought before the Annual Meeting. However, if any other matter properly comes before the Annual Meeting, the persons named on the enclosed proxy card will vote the proxy in accordance
with their best judgment on such matter.
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By Order of the Board of Directors
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Bradley D. Holmstrom
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General Counsel & Corporate Secretary
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East Rutherford, New Jersey
March 26, 2018
41
Fitch Proof - 92198-Amber Road Proxy Card Rev 01 - Front YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY. Vote by Internet - QUICK EASY
IMMEDIATE - 24 Hours a Day, 7 Days a Week or by Mail AMBER ROAD, INC. Your Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. Votes submitted electronically over
the Internet must be received by 11:59 p.m., Eastern Time, on April 30, 2018. INTERNET/MOBILE www.cstproxyvote.com Use the Internet to vote your proxy. Have your proxy card available when you access the above website. Follow the prompts to
vote your shares. MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope provided. PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE VOTING ELECTRONICALLY . FOLD HERE DO NOT SEPARATE INSERT IN ENVELOPE
PROVIDED PROXY Please mark your votes like this THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS INDICATED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR ALL THE NOMINEES IN PROPOSAL 1 AND FOR PROPOSAL 2, AND IN THE
PROXIES DISCRETION ON ANY OTHER MATTERS COMING BEFORE THE MEETING. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR Election of Directors James Preuninger Ralph Faison FOR
WITHHOLD FOR AGAINST ABSTAIN 2. Ratification of independent registered public accounting firm. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES IN PROPOSAL 1 AND FOR PROPOSAL 2. CONTROL NUMBER Signature
Signature, if held jointly Date , 2018 Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give
title as such.
Fitch Proof - 92198-Amber Road Proxy Card Rev 01 - Back Important Notice Regarding the Availability of Proxy Materials for the Annual
Meeting of Stockholders to be held May 1, 2018 The Proxy Statement and our Annual Report to Stockholders for the year ended December 31, 2017 are available at http://www.cstproxy.com/amberroad/2018 FOLD HERE DO NOT SEPARATE INSERT IN
ENVELOPE PROVIDED PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AMBER ROAD, INC. The undersigned appoints James W. Preuninger and Thomas E. Conway, and each of them, as proxies, each with the power to appoint his substitute, and
authorizes each of them to represent and to vote, as designated on the reverse hereof, all of the shares of common stock of Amber Road, Inc. held of record by the undersigned at the close of business on March 9, 2018 at the Annual Meeting of
Stockholders of Amber Road, Inc. to be held on May 1, 2018, or at any adjournment thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS INDICATED. IF NO CONTRARY INDICATION IS MADE, THE PROXY WILL BE VOTED FOR ALL THE NOMINEES IN
PROPOSAL 1, FOR PROPOSAL 2, AND IN ACCORDANCE WITH THE JUDGMENT OF THE PERSONS NAMED AS PROXY HEREIN ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
(Continued, and to be marked, dated and signed, on the other side)
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