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Mike Flaskey is a businessman who hails from the United States of America.
His net worth as of 2021 is still far from the media.
Mike is known to people as the CEO of Diamond Resorts. From the start, the merchant does a great job in everything he does.
Quick Facts: How Much Is Mike Flaskey Worth? 10 Facts On CEO Of Diamond Resorts International
Surname
Mike Bottley
birthday
Aug. 3, 1967
Age
53
gender
Masculine
Height
–
nationality
American
profession
businessman
Married single
Married
Wife
Suzanne
children
2 sons
@thevacationdr
@TheVacationDR
Mike is well known in the golf industry and his company sponsors many famous LPGA players. Because his company invests in many A-listed golfers, he is often seen posing with many famous golfers on his social media.
In this article, you will learn about his career, personal life, relationship and much more.
Cheers to our well deserved #DiamondLPGA champions, @thejessicakorda and @mardyfish! It’s been a roller coaster re for a year, but standing on the 18th green and celebrating world- golf and world- people was worth every second. pic.twitter.com/aerbTHaJTq
— Mike Flaskey (@TheVacationDR) January 25, 2021
10 Facts On Mike Flaskey
Mike Flaskey Net Worth in 2021 is still far from the media, as is his salary and annual income. However, the annual revenue of his company, Diamond Resorts, is $230.7 million.
Mike Flaskey has been married to his wife Susan for a long time and the couple have two sons together. We can find his wife on Twitter.
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Mike Flaskey, aka Michael Flaskey, was born on August 3, 1967 in Virginia Beach, Virginia, United States. His age is 53 years old.
Moving on to his family and parents, Mike Flaaskey has chosen to remain silent about these facts.
In addition, the businessman is also very popular on social media as he managed to gain 12.2k followers on his official Instagram name.
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From his Wikipedia, we learned that Mike Flaskey received his education from Limestone University, formerly Limestone College.
Mike was appointed CEO of Diamond Resorts in March 2017.
He has donated more than $4.1 million to charity at the Flora Hospital for Children.
Likewise, Flaskey began his career in the industry in 1992 when he joined Fairfield Resorts.
From 2003 to 2006 he held a senior leadership position at Starwood Vacation Ownership.
Who is the owner of Diamond Resorts?
What is Diamond Resorts worth?
…
Stephen Cloobeck Net Worth.
| Net Worth: | $100 Million |
|---|---|
| Profession: | Businessperson |
How many Diamond Resort owners are there?
Diamond’s 92 leisure resorts and nearly 400,000 owners uniquely complement HGV’s 62 upscale and luxury properties and over 325,000 owners, and the combination will create the premier vacation ownership company with the broadest offering in the industry.
Why did Stephen Cloobeck leave Diamond Resorts?
Cloobeck left Diamond International Resorts in 2016 to pursue other business ventures and remains a major Democratic donor and local philanthropist. Stephen J. Cloobeck earned a reputation as a successful businessman when he turned Diamond International Resorts into one of world’s top timeshare vacation companies.
Does Stephen Cloobeck still own Diamond Resorts?
Business activity
Cloobeck stepped down as chairman and chief executive officer of Diamond Resorts International when the company was purchased by Apollo Global Management, LLC in June 2016.
What is the biggest timeshare company?
Wyndham Destinations (NYSE:WYND), the world’s largest vacation club and exchange company, is on a mission to put the world on vacation.
Did HGV buy Diamond Resorts?
(Aug. 2, 2021) – Hilton Grand Vacations Inc. (NYSE:HGV) (“HGV” or the “Company”) announced today that it has completed the previously announced acquisition of Diamond Resorts International, Inc. (“Diamond”) from funds managed by affiliates of Apollo Global Management, Inc.
Stephen J. Cloobeck, Diamond Resorts International – Building a Resort Empire
[su_youtube url=”https://www.youtube.com/watch?v=i3Z91-tAwc4″]
Images related to the topicStephen J. Cloobeck, Diamond Resorts International – Building a Resort Empire
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Michael Flaskey Net Worth, Salary, Wiki, Married, Bio, Family, Career, Fact
Age, biography and wiki
Michael Flaskey was born on August 3, 1967 in Virginia Beach, Virginia, USA and is a businessman. Discover Michael Flaskey’s Biography, Age, Height, Physical Stats, Dating/Affairs, Family & Career Updates. Find out how rich he is this year and what he’s spending money on. Also, learn how he made most of his net worth at the age of 53?
Popular as N/A Occupation Businessman Age 53 years old Zodiac Sign Leo Born August 3, 1967 Birthday August 3 Place of Birth Virginia Beach, Virginia, United States Nationality United States
We encourage you to check the complete list of famous people born on August 3rd.
He is a member of the group of famous businessman at 53 years old.
Michael Flaskey Height, Weight and Measurements
At 53, Michael Flaskey is currently unavailable. We will update Michael Flaskey’s height, weight, body measurements, eye color, hair color, shoe and dress size as soon as possible.
Physical condition Height not available Weight not available Body measurements not available Eye color not available Hair color not available
Dating & Relationship Status
He is currently single. He’s not dating anyone. We don’t have much information about He’s previous relationship and previous engagements. According to our database, he has no children.
Family Parents not available Wife not available Siblings not available Children not available
Michael Flaskey Net Worth
His net worth has grown significantly in 2018-19. So how much is Michael Flaskey worth at the age of 53? Michael Flaskey’s source of income is primarily from being a successful businessman. He is from the United States. We estimated Michael Flaskey’s Net Worth, Money, Salary, Income and Net Worth.
Net worth in 2020 $1 million – $5 million Salary in 2019 Under review Net worth in 2019 Pending Salary in 2019 Under review House not available Cars not available Source of income Businessman
Michael Flaskey Social Network
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Stephen Cloobeck Net Worth
Stephen Cloobeck net worth: Stephen Cloobeck is the Chairman and CEO of Las Vegas conglomerate Diamond Resorts Holdings Inc which has a net worth of $100 million. Stephen Cloobeck’s Diamond Resorts Holdings owns and operates more than 200 timeshare specialty resorts around the world. Their resorts are located around the globe in 25 different countries.
More than 400,000 people use Diamond hotels for their holidays every year. Cloobeck has worked as an executive for a number of companies and bought Sunterra Corporation in April 2007. He then changed it to Diamond Resorts International, a multi-million dollar vacation ownership company with over 4,500 employees worldwide. In addition to being CEO of Diamond Resorts, he is also Chairman of the Board of Directors of the US Corporation for Travel Promotion and the Nevada Cancer Institute. He established the Brent Shapiro Foundation for Drug Awareness and presented a significant endowment to Brandeis University International Business School in 2012. He is very active politically and considered running for governor of Nevada in 2007 Themes of the first season of the reality series “Undercover Boss”.
DEF 14A
DEF14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNEX 14A
Schedule 14A information
Power of Attorney pursuant to Section 14(a) of
Stock Exchange Act 1934
(Change No. )
Submitted by the registrant x Submitted by a party other than the registrant ¨
Tick the appropriate box:
¨ Preliminary Letter of Authority ¨ Confidential, for use by the Commission only (as permitted in Rule 14a-6(e)(2)) x Final Letter of Authority ¨ Final Additional Materials ¨ Obtaining material under §240.14a-12
DIAMOND RESORTS INTERNATIONAL, INC.
(Name of the registrant as stated in its statutes)
(Name of person(s) submitting the Letter of Authority if not the Registrant)
Payment of Registration Fee (tick all that apply):
x No fee required. ¨ The fee is calculated in accordance with Exchange Act Rules 14a-6(i)(1) and 0-11 in the table below. 1) Security of each class of security to which the transaction applies: 2) Total number of securities to which the transaction applies: 3) Price per unit or other underlying value of the transaction calculated in accordance with Exchange Act Rule 0-11 (statement of Amount on which the filing fee is calculated and how it was calculated): 4) Suggested maximum total transaction value: 5) Total fee paid: ¨ Fee previously paid with input material. ¨ Check the box if a portion of the fee is offset under Exchange Act Rule 0-11(a)(2) and identify the filing for which the offset fee was previously paid. Identify the earlier filing by the Registration Statement number or form or attachment and the date of its filing. 1) Amount Paid Before: 2) Form, Schedule or Registration Statement No.: 3) Applicant: 4) Date of Filing:
10600 West Charleston Blvd
Las Vegas, Nevada 89135
(702) 684-8000
April 10, 2015
Dear shareholder,
On behalf of the Board of Directors of Diamond Resorts International, Inc., we cordially invite you to attend the 2015 Diamond Resorts International, Inc. Annual Meeting on May 19, 2015 at 2:00 p.m. , Las Vegas time, in the Podium Room at Polo Towers, 3745 S. Las Vegas Boulevard, Las Vegas, Nevada 89109.
The attached Notice of Annual General Meeting of Shareholders and Proxy Statement describe matters which we expect to be addressed at the annual meeting.
It is important that your views are represented whether or not you are able to attend the annual meeting. Please complete, sign and date the enclosed proxy card and return it promptly in the envelope provided, or vote by internet or telephone according to the instructions on the proxy card whether or not you wish to attend the Annual General Meeting. If you sign and return your proxy card without indicating your choices, you will be deemed to wish to have your shares voted in accordance with the recommendations of our Board of Directors contained in the proxy statement.
We appreciate your continued interest in Diamond Resorts International, Inc. and urge you to return your power of attorney card as soon as possible.
Sincerely, Stephen J. Cloobeck David F. Palmer Chairman Chief Executive Officer and President
Las Vegas, Nevada
April 10, 2015
10600 West Charleston Blvd
Las Vegas, Nevada 89135
(702) 684-8000
April 10, 2015
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
WILL TAKE PLACE ON MAY 19, 2015
To the shareholders of
Diamond Resorts International, Inc.:
The Annual General Meeting of Shareholders of Diamond Resorts International, Inc. (the “Company”) will be held on May 19, 2015 at 2:00 p.m. Las Vegas time at the Podium Room at Polo Towers, 3745 S. Las Vegas Boulevard, Las Vegas, Nevada 89109, for the following purposes, as more fully described in the attached Power of Attorney:
(1) Re-election of David F. Palmer, Zachary D. Warren and Richard M. Daley to the Board of Directors of the Company, each for a three-year term ending at the 2018 AGM;
(2) to approve Diamond Resorts International, Inc.’s 2015 Equity Incentive Compensation Plan;
(3) to approve the Diamond Resorts International, Inc. Bonus Compensation Plan;
(4) hold a consultative vote on the frequency of future board compensation consultative votes; and
(5) Ratification by the Board of Directors of the appointment of BDO USA, LLP, an independent registered public accounting firm, as the independent auditors of the Company’s financial statements for the year ended December 31, 2015.
Your voice matters. All shareholders are urged to attend the meeting in person or by proxy. Whether or not you will be present at the meeting, so that we can ensure your vote is counted, please complete, sign and date the enclosed proxy card and return it promptly in the envelope provided, or vote according to the instructions on the power of attorney card via the Internet or telephone. Shareholders attending the meeting can vote in person even if they have previously returned proxy cards.
The Board of Directors has set the close of business on March 31, 2015 as the cut-off date for determining the shareholders entitled to convene and vote.
On behalf of the board,
Jared T Finkelstein
General Counsel and Corporate Secretary
Las Vegas, Nevada
April 10, 2015
10600 West Charleston Blvd
Las Vegas, Nevada 89135
(702) 684-8000
POWER OF ATTORNEY FORM
The attached proxy is being requested by the board of directors (the “Board of Directors”) of Diamond Resorts International, Inc., a Delaware corporation, for use at its annual general meeting (the “Annual Meeting”) at 2:00 p.m. Las Vegas time on the Polo Towers Suites, 3745 S. Las Vegas Boulevard, Las Vegas, Nevada 89109, and any interruptions or postponements thereof. For directions to the meeting location, please visit our website www.diamondresorts.com under the “Investor Relations – Annual Meeting Materials” section or call (702) 684-8000. This proxy statement and accompanying proxy form will be mailed to shareholders on or about April 10, 2015. As used in this proxy statement, the terms “the Company,” “we,” “us,” and “our” refer to Diamond Resorts International, Inc. and its subsidiaries.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL SHAREHOLDERS’ MEETING ON MAY 19, 2015
The company’s proxy statement for the AGM
will take place on May 19, 2015 at:
www.diamondresorts.com/2015proxy
ABOUT THE MEETING
What proposals can I vote on at the annual meeting and how does the board recommend my vote?
# Proposal of the Board of Directors Recommendation 1: Re-election of David F. Palmer, Zachary D. Warren and Richard M. Daley to the Company’s Board of Directors, each for a three-year term expiring at the 2018 Annual General Meeting of Shareholders FOR 2 Approval of the Equity 2015 Incentive Compensation Plan of Diamond Resorts International, Inc. FOR 3 Approve the Bonus Compensation Plan of Diamond Resorts International, Inc. FOR 4 Advisory vote on the frequency of future advisory votes on directors’ compensation FOR (1) 5 To Confirm the appointment of the independent registered public accounting firm BDO USA, LLP by the Directors as independent auditors of the financial statements of the Company for the year ended 31 December 2015 FOR
(1) The Board recommends that you vote on an advisory basis to hold an advisory vote on the compensation of the Company’s designated officers EVERY YEAR (Proposition 4).
1
Who is eligible to vote?
Only shareholders of record as of the close of business on March 31, 2015 (the “Record Date”) are entitled to receive notice of, and vote at, the Annual Meeting or its adjournment or adjournment. As of the record date of the annual meeting, we had 73,322,556 common shares outstanding and there were no other classes of shares outstanding that would be entitled to vote at the annual meeting. A record holder of outstanding shares of our common stock as of the Record Date is entitled to one vote per share held on any matter to be discussed. As a result, the total number of votes that holders of our common stock may cast in favor of the proposals to be voted on at the annual meeting is 73,322,556 votes.
Shares held as of the Record Date include shares held directly in your name as a registered shareholder as of the Record Date and those shares of which you are a beneficial owner as of the Record Date and which are held as nominee on your behalf through a broker, bank or other entity that acts as a registered shareholder of these shares.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
Registered Shareholders
If shares of our common stock are registered directly in your name with the transfer agent for our common stock, Continental Stock Transfer & Trust Company, you will be a shareholder of record in respect of those shares of our common stock.
beneficial owners
If shares of our common stock are held by a bank, brokerage firm or other nominee on your behalf, you will be considered the beneficial owner of those shares (sometimes referred to as “held under street name”). If you are a beneficial owner, your broker or other authorized representative who is considered a shareholder of record in those shares will provide you with these proxy documents requesting your voting instructions. As the beneficial owner, you have the right to direct your broker or other nominee how to reconcile your Shares using the voting methods that the broker or other nominee offers as options. For a discussion of the rules regarding voting for shares held by beneficial owners, please see the following question entitled “How do I vote if I am a beneficial owner of shares and my broker, bank or other institution holding my shares in the ‘street name’?”
How do I vote if I am a shareholder of record?
Registered shareholders can exercise their voting rights either by voting in person at the Annual General Meeting or by proxy in accordance with the instructions on the enclosed proxy card. In order for your vote to count, your voting card must be received or otherwise cast before the date of the annual meeting. Therefore, please vote as early as possible so that we can ensure that your vote is counted at the AGM. A shareholder should complete the enclosed proxy card and return it in a timely manner in the envelope provided, or vote by internet or telephone in accordance with the instructions on the enclosed proxy card. Signing and returning the proxy card does not affect the right to vote in person at the Annual General Meeting. Any proxy executed and returned will be given in accordance with the instructions set forth thereon, or if no instruction is specified, such proxy will be elected in accordance with the recommendations of the Board of Directors contained in this proxy statement and the proxy card.
Howard S. Lanznar and Jared T. Finkelstein, who are named as proxies on the proxy card attached to this proxy statement, have been selected by the Board of Directors for this function. Mr. Lanznar is the Company’s Executive Vice President and Chief Administrative Officer, and Mr. Finkelstein is the Company’s General Counsel and Secretary.
How do I vote if I am a beneficial owner of shares and my broker, bank or other entity holds my shares under “Street Name”?
If your shares are held under “street names,” your broker or other entity acting as a nominee will send you a request for instructions on how to vote for those shares. Many brokers, banks and other institutions act as nominees
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(but not all) participate in a program that offers internet voting options and may provide you with a notice of internet availability of proxy materials. To access our Proxy Materials online or to request a paper or email copy of our Proxy Materials, follow the instructions in the Notice of Web Availability of Proxy Materials. If you received these paper proxy materials, the materials included a voting instruction card so that you can instruct your broker or other proxy on how to vote your shares.
For a discussion of the rules regarding the voting of shares held by beneficial owners, please see the following question entitled “What are “broker non-voting rights”?”
Can I revoke my power of attorney?
Yes. You can revoke your proxy and change your vote before the general meeting by:
• Sending a written cancellation notice to our secretary, Jared T. Finkelstein, at the address specified in the AGM notice (this notice must be received by the close of business on May 18, 2015);
• Voting in person at the annual meeting (but attendance at the annual meeting alone does not revoke a proxy); or
• Submission of a new, duly signed and dated proxy with a later date (to be received prior to the start of the AGM).
Who counts the votes?
A representative of Continental Stock Transfer & Trust Company, the transfer agent for our common stock, serves as the election inspector, counting votes at the annual meeting.
Is my voice confidential?
Your vote will not be disclosed except (1) as necessary to allow the Election Inspector to tabulate and confirm the vote, and (2) as required by law.
What is the quorum requirement?
The meeting must have a quorum in order to be held. The presence of stockholders holding a majority of our outstanding common shares entitled to vote at the annual meeting, whether in person or by proxy, is required to constitute a quorum for the transacting of business. Accordingly, the presence of 36,661,279 voting shares of common stock constitute a quorum at the Annual General Meeting. If you submit a properly issued proxy card, you will be deemed to have a quorum even if you abstain.
What vote is required to approve each proposal?
Suggestion #1: Election of Directors. Assuming a quorum, each of the director-nominees, David F. Palmer, Zachary D. Warren and Richard M. Daley, to be elected, must receive a majority of the stock votes cast at the annual meeting. This means that the three candidates with the most “FOR” votes will be elected. In other words, since there are no other candidates for election as directors other than those named on the attached proxy card, and provided that each such person receives at least one vote, all of them will be re-elected to our Board. See “Have Shareholders Agreed to Vote for Any of the Proposals?” below.
Proposal #2: Approve a New Stock Incentive Compensation Plan. Approval of Diamond Resorts International, Inc.’s 2015 Equity Incentive Compensation Plan requires the approval of a majority of the votes of the shares present, represented in person or by proxy and entitled to vote.
3
Proposal #3: Approval of a New Bonus Compensation Plan. Approval of the Bonus Compensation Plan of Diamond Resorts International, Inc. requires the approval of a majority of the votes of the shares present present, present in person or by proxy, entitled to vote.
Proposal #4: Consultative Vote on Frequency of Future Consultative Votes on Executive Compensation. Shareholders may vote to hold the Company’s nominee director’s compensation vote annually, biennially or triennially, and may abstain. The Directors will consider the results of a vote on any such proposal in determining whether to hold the consultative vote on directors’ compensation annually, biennially or triennially.
Proposal No. 5: Ratify the appointment of an independent registered accounting firm. Confirming the appointment of BDO USA, LLP as the independent auditor of our financial statements for the year ended 31 , 2015.
Have shareholders already agreed to vote for any of the proposals?
We and stockholders who collectively held approximately 27.0 million shares of our common stock as of March 31, 2015, representing approximately 36.8% of our common stock outstanding as of that date, are parties to a stockholders agreement dated July 17, 2013, as amended (the “Shareholders’ Agreement”). Pursuant to the Shareholder Agreement, each shareholder party agreed to have the shares of our common stock held by that shareholder voted in person or by proxy at a meeting of our shareholders convened for this purpose for all persons nominated by the Board of Directors to be elected thereto. An irrevocable proxy has been granted to Stephen J. Cloobeck, our Chairman, and David F. Palmer, our President and Chief Executive Officer (and their designees) to vote on the shares of our common stock held by the parties to the stockholders’ agreement way described above.
What other issues might arise at the meeting?
As of the date of this proxy statement, the Board is not aware of any matters to be brought up at the annual meeting other than those set forth in this proxy statement. The proxies named on the proxy card shall be entitled, at their discretion, to vote on any other matter properly pending before the meeting or any adjournment or rescheduling thereof.
What if I check “abstain” on my proxy card for a proposal?
Abstentions recorded on a proxy card will be treated as shares present and voting for the purpose of determining whether a quorum exists and voting on Motion #2, Motion #3 and Motion #5. Accordingly, abstentions recorded on a proxy card with respect to Motion No. 2, Motion No. 3 or Motion No. 5 have the same effect as votes against that motion. There will be no abstentions on Motion #1, and abstentions will not affect the outcome of Motion #4.
What are “broker non-votes”?
Under the rules of the New York Stock Exchange (“NYSE”), member brokers who hold stocks in the street name for their clients who are the beneficial owners of those stocks are authorized to vote on certain “routine” items only in the event they do not have any Receive instructions from beneficial owners. If a proposal is not a “routine” matter and a member broker has not received voting instructions from the beneficial owner of the shares with respect to that proposal, NYSE rules require the brokerage firm not to vote on the shares on that proposal because it has not, in its sole discretion, have the authority to vote on those shares in this matter. A “broker non-vote” is transmitted when a broker returns a proxy card indicating that it will not vote on a certain number of shares on a particular matter because it has not received voting instructions on the matter
4
such shares from the beneficial owner and has no discretionary authority to vote on such shares on such matters. “Broker Dissents” shall not be entitled to vote at the Annual Meeting in respect of the matters to which they relate; However, “broker non-votes” will be included for the purpose of determining whether the annual meeting has a quorum.
Each of Suggestion #1, Suggestion #2, Suggestion #3, and Suggestion #4 are considered “non-routine” matters. As a result, brokers who do not receive instructions in relation to Proposal #1, Proposal #2, Proposal #3 or Proposal #4 from their clients are not eligible to vote on that Proposal; such “broker non-votes” shall not affect voting on such proposals. Proposal #5 is considered a “routine” matter and accordingly brokers and other nominees have discretionary power to vote on this proposal.
The Board strongly encourages you to vote for your shares and exercise your right to vote as a shareholder on any of the proposals.
Who can attend the AGM?
All shareholders of record as of March 31, 2015 or their duly appointed proxies may attend. Beginning May 9, 2015 and continuing through May 9, 2015, an alphabetical list of shareholders entitled to vote at the AGM, with address and number of shares registered in the name of each shareholder, will be available at the AGM at our main offices located at 10600 West Charleston Boulevard, Las Vegas, Nevada 89135. Please note that if you hold shares under “street names” (i.e., through a broker or other nominee), you will need a valid photo ID and proof of your beneficial interest in our common stock as of deadline, such as B. Bring a copy of a broker’s declaration with you.
How are the voting results published?
We will publicize voting results by filing a current report on Form 8-K with the SEC within four business days of the annual meeting. If, by the date of filing this current report on Form 8-K, the AGM election inspector has not certified the voting results as final, we will indicate in the filing that the results are preliminary and will post the final results in a subsequent current report on Form 8-K, which we will file within four business days of the final voting results being announced.
Our Annual Report to Shareholders for the year ended December 31, 2014, which includes financial and other information about the Company, is being made available to shareholders concurrently with this proxy statement.
5
MANAGEMENT OF THE COMPANY
Is the company a party to agreements affecting the conduct of the company?
In connection with our initial public offering in July 2013, we and certain shareholders who collectively owned approximately 27.2% of our outstanding common stock as of March 31, 2015, entered into a director designation agreement dated July 17, 2013 (the “Director Design Agreement”). Pursuant to the Director Appointment Agreement, the Board, subject to its fiduciary duties, agreed to take the following actions:
• to nominate our Chief Executive Officer (currently David F. Palmer) for election to the Board of Directors;
• so long as CDP and its affiliates collectively beneficially own at least 10% of our outstanding common stock, to nominate a number of CDP officers for election to the Board of Directors equal to the percentage of our common stock owned by CDP and its affiliates beneficially owned multiplied by the number of board members, rounded up to the nearest whole number (up to a maximum of two); provided, however, that in the event that our current Board of Directors determines in good faith, after consultation with outside counsel, that the appointment of such a proxy would constitute a breach of its fiduciary duty to our shareholders, then CDP must appoint an alternate person (who is also subject to the same determination by the Board); and
• while DRP Holdco, LLC, an investment vehicle managed by a subsidiary of Guggenheim Partners, LLC, with members who are clients of a subsidiary of Guggenheim Partners, LLC and one of our largest shareholders (the “Guggenheim Investor”), and its affiliates collectively beneficially own at least 10% of our common stock to nominate a number of officers of Guggenheim Investor for election to the Board of Directors equal to the percentage of our common stock beneficially owned by Guggenheim Investor and its affiliates multiplied by the number of board members, rounded up to the nearest whole number (up to a maximum of two); provided, however, that in the event that our current Board of Directors determines in good faith, after consultation with outside counsel, that the appointment of such a proxy would constitute a breach of its fiduciary duties to our shareholders, the Guggenheim Investor must appoint another person ( which is also subject to the same determination by the Board).
CDP’s current officers are Mr. Cloobeck and Lowell D. Kraff, and Guggenheim Investor’s current officers are Zachary D. Warren and B. Scott Minerd.
In addition, as discussed above under the question “Have shareholders already consented to vote for any of the Proposals?”, we and shareholders who held approximately 36.8% of our outstanding common shares as of March 31, 2015 are parties to the shareholders’ agreement, pursuant to the each shareholder party agrees to cause the shares of our common stock held by such shareholder to be elected to the nominees of the Board of Directors pursuant to the Director Appointment Agreement described above and to any other persons nominated by the Board of Directors for choice to.
Additionally, on January 6, 2015, we entered into a master agreement with Stephen J. Cloobeck, our CEO, Hospitality Management and Consulting Service L.L.C. (“HM&C”), JHJM Nevada I, LLC (“JHJM”) and other companies controlled by Mr. Cloobeck or his immediate family members, pursuant to which at least until December 31, 2017, so long as Mr. Cloobeck is in office as a member of our Board of Directors, he will continue to act as Chairman of the Board. See “Certain Relationships and Related Party Transactions – Master Agreement and HM&C Acquisition” below.
What are the consequences of the termination of the status as a “controlled company”?
Under NYSE rules, a company in which more than 50% of the voting rights are owned by an individual, group or other company is a “controlled company” and may choose not to comply with certain standards of corporate governance. We were formerly a “controlled entity” under NYSE rules but relinquished it on August 11, 2014. As a result of this loss of “controlled company” status, we must do so
6
until August 11, 2015 (the first anniversary of our loss of “controlled company” status), a majority of independent directors on our Board of Directors. As disclosed below under “Proposal No. 1 for Election of Directors – Director Elect”, the Board has elected Jeffrey W. Jones as a Director, effective immediately following the Annual Meeting. The Board has determined that Mr. Jones will be an “independent director” as defined in the NYSE Market Rules; accordingly, upon the effective date of Mr. Jones’ appointment to the board, half of the board members will be “independent directors” as defined by NYSE rules. The Board will take such steps as it deems necessary to ensure that we comply with this NYSE director’s independence requirement in a timely manner. As of August 11, 2014, we have already complied (and will continue to do so) with all other corporate governance requirements applicable to entities that are not considered “controlled entities” under the NYSE regulations.
What are the consequences of not being an “emerging growth company”?
We used to be an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012 (commonly referred to as the JOBS Act), but as of 2015 we are no longer. Infolge unseres Verlustes als „aufstrebendes Wachstumsunternehmen“ sind wir nicht mehr berechtigt, bestimmte Ausnahmen von verschiedenen Meldepflichten in Anspruch zu nehmen, die für börsennotierte Unternehmen gelten, die keine „aufstrebenden Wachstumsunternehmen“ sind. Insbesondere nach unserem Verlust des Status eines „aufstrebenden Wachstumsunternehmens“ sind wir verpflichtet, (i) die Anforderungen an die Bestätigung durch den Wirtschaftsprüfer gemäß Abschnitt 404(b) des Sarbanes-Oxley Act zu erfüllen, (ii) die vollständige Offenlegung der Vergütung der Führungskräfte in unsere Vollmachtserklärung aufzunehmen (siehe „Führungskräfte Compensation“ unten), (iii) die Zustimmung der Aktionäre zu bestimmten Golden Parachute-Zahlungen einholen und (iv) unsere erste Konsultativabstimmung über die Häufigkeit künftiger Konsultativabstimmungen über die Vergütung der Führungskräfte des Unternehmens abhalten (siehe Vorschlag Nr. 4 unten). Unser Verlust des Status eines „aufstrebenden Wachstumsunternehmens“ löst die Anforderung aus, solche beratenden Abstimmungen über die Vergütung der Führungskräfte des Unternehmens abzuhalten. Aufgrund geltender Übergangserleichterungen, die wir in Anspruch nehmen, wird unsere erste beratende Abstimmung über die Vergütung der Führungskräfte des Unternehmens jedoch erst auf unserer Jahreshauptversammlung 2016 erforderlich sein. Der nachstehende Vorschlag Nr. 4 fordert die Aktionäre auf, über die Häufigkeit der Durchführung solcher beratenden Abstimmungen abzustimmen.
Welche Grundsätze hat der Verwaltungsrat in Bezug auf Corporate Governance aufgestellt?
Der Vorstand hat die von der Securities Exchange Commission (die „SEC“) verabschiedeten Corporate-Governance-Regeln und die NYSE sowie andere Corporate-Governance-Empfehlungen sorgfältig geprüft und die nachstehend beschriebenen Corporate-Governance-Dokumente verabschiedet.
• Corporate-Governance-Richtlinien. Unsere Corporate-Governance-Richtlinien behandeln unter anderem die Zusammensetzung, die Qualifikationen und Verantwortlichkeiten des Vorstands, die Unabhängigkeit der Direktoren, Richtlinien zum Aktienbesitz, die Vergütung der Direktoren und die Kommunikation zwischen Aktionären und unseren Direktoren.
• Satzungen der Vorstandsausschüsse. Der Vorstand hat Satzungen für seinen Prüfungsausschuss, seinen Vergütungsausschuss und seinen Nominierungs- und Corporate-Governance-Ausschuss verabschiedet. Siehe „Was sind die Ausschüsse des Verwaltungsrats und was sind ihre Aufgaben?“ unten.
• Ethikkodex. Unser Ethikkodex für leitende und leitende Finanzbeamte artikuliert Standards der Geschäfts- und Berufsethik, die für unseren Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer und alle anderen leitenden Finanzbeamten unseres Unternehmens gelten. Dieser Kodex fungiert als unser „Ethikkodex für Senior Financial Officers“ gemäß Abschnitt 406 des Sarbanes-Oxley Act von 2002 und als unser „Ethikkodex“ im Sinne von Punkt 406 der Verordnung S-K.
Unsere Corporate-Governance-Richtlinien, die Satzungen der Vorstandsausschüsse und unser Ethikkodex sind im vollständigen Text auf unserer Website unter www.diamondresorts.com im Abschnitt „Investor Relations – Corporate Governance“ verfügbar. Auf unserer Website finden Sie auch Informationen, wie Sie uns kontaktieren können, und andere interessante Informationen für Anleger.
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Wie setzt sich der Vorstand zusammen?
Gemäß unserer geänderten und neu gefassten Gründungsurkunde und unserer geänderten und neu gefassten Satzung ist unser Board of Directors in drei Klassen mit gestaffelten Amtszeiten von drei Jahren unterteilt, wobei die Amtszeit der Directors einer Klasse bei jeder Jahresversammlung unserer Aktionäre abläuft. Die Klassen setzen sich derzeit wie folgt zusammen:
• David J. Berkman, B. Scott Minerd und Hope S. Taitz sind Direktoren der Klasse I, deren Amtszeit bei der Jahreshauptversammlung 2017 ausläuft;
• David F. Palmer, Zachary D. Warren und Richard M. Daley sind Verwaltungsratsmitglieder der Klasse II, deren ursprüngliche Amtszeit bei der Jahresversammlung ausläuft; and
• Stephen J. Cloobeck, Lowell D. Kraff und Robert Wolf sind Verwaltungsratsmitglieder der Klasse III, deren ursprüngliche Amtszeit auf der Jahreshauptversammlung 2016 ausläuft.
Der Vorstand hat David F. Palmer, Zachary D. Warren und Richard M. Daley zur Wiederwahl in den Vorstand bei der Jahresversammlung nominiert und empfiehlt Ihnen, die Herren Palmer, Warren und Daley jeweils neu zu wählen three-year term (and until a successor to such director shall be elected and qualified, or until the earlier resignation or removal of such director) at the Annual Meeting. Additionally, the Board has elected Jeffrey W. Jones to serve on the Board, effective immediately following the Annual Meeting. In connection with Mr. Joness election to the Board, the Board increased the size of the Board from nine to 10 directors, effective immediately following the Annual Meeting, and Mr. Jones will fill the vacancy on the Board resulting from that expansion. Mr. Jones will serve as a Class I director, with a term expiring at the 2017 annual meeting of the Companys stockholders (and until his successor shall be elected and qualified, or until his resignation or removal).
Which directors are independent and how does the Board make that determination?
We are subject to the listing requirements of the NYSE and, as a result, our board of directors would typically be required to be composed of a majority of independent directors, as defined by the marketplace rules of the NYSE. Until August 11, 2014, we qualified as a controlled company, and were not required to have a majority of independent directors. As a result of the loss of controlled company status, we are required to have a majority independent board by August 11, 2015 (the first anniversary of our loss of controlled company status). Our board of directors has determined that each of David J. Berkman, Richard M. Daley, Hope S. Taitz and Robert Wolf is a non-employee director who meets the applicable independence requirements for directors of the NYSE, and has determined that each of Stephen J. Cloobeck, David F. Palmer, Lowell D. Kraff, Zachary D. Warren and B. Scott Minerd does not meet such standards. In addition, the Board has determined that Jeffrey W. Jones, who will become a member of the Board effective immediately following the Annual Meeting, will be a non-employee director who meets the applicable independence requirements for directors of the NYSE.
Discussed below is the composition of each of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, including as to the independence of each of the members of those committees.
In addition to the NYSE independence requirements, we also apply the independence guidelines set forth in our Corporate Governance Guidelines, which are available on our website at www.diamondresorts.com in the Investor Relations Corporate Governance section and are substantially similar to the NYSE director independence requirements.
Do independent directors meet separately in regularly scheduled executive sessions?
Yes. The independent directors meet without the presence of any director who is not independent, for regularly scheduled sessions and at various other times throughout the year if deemed necessary.
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How can I communicate with directors?
As set forth in our Corporate Governance Guidelines, stockholders or other interested parties may communicate with the Board, or any individual member or members of the Board, by sending a letter to Diamond Resorts International, Inc. Board of Directors, c/o Jared T. Finkelstein, Secretary, 10600 West Charleston Boulevard, Las Vegas, Nevada 89135. The Secretary will receive the correspondence and forward it to the Board or specified Board member or members to whom the communication is addressed.
How often did the Board meet in 2014?
During 2014, the Board met nine times. Other than Mr. Minerd, each director who served on the Board during 2014 attended at least 75% of the aggregate of (1) the total number of meetings held by the Board during the period in which such individual was a director, and (2) the total number of meetings held by all committees of the Board on which such director served during the period in which such individual served on such committees.
What is the Companys policy regarding Board members attendance at the Annual Meeting?
The Corporate Governance Guidelines provide that directors are expected to attend the Annual Meeting. The full text of the Corporate Governance Guidelines is available on our website at www.diamondresorts.com in the Investor Relations Corporate Governance section.
What is the Boards leadership structure, and why does the Board believe it is the best structure for the Company at this time?
While the Board does not have a formal policy requiring the separation of the positions of Chairman of the Board and Chief Executive Officer, currently the roles of the Chairman of the Board and the Chief Executive Officer are separated.
Our Chairman of the Board presides at all meetings of stockholders and all meetings of the Board, approves the agendas for all Board meetings, approves information sent to the Board as a whole and, if requested by significant stockholders of the Company, is available for consultation and direct communication with such stockholders (subject to compliance with applicable Company policies). Our Chief Executive Officer manages and directs the day-to-day operations of the Company, and is responsible for leading strategic business decisions. He also serves as a member of the Board and is the primary liaison between the Board and our management.
The Board believes that separation of the roles of Chairman of the Board and Chief Executive Officer is the best governance model for the Company at this time, because it allows our Chief Executive Officer to focus on his duties while benefitting from the Chairmans significant experience with our company and in the vacation ownership industry. Under our Corporate Governance Guidelines, however, the Board has the discretion to, and may in the future, determine that under certain circumstances it may be appropriate for the Chief Executive Officer to also serve as the Chairman of the Board.
Additionally, pursuant to amendments to the Corporate Governance Guidelines recently approved by the Board, if, as is currently the case, the office of Chairman of the Board is held by the Chief Executive Officer or another person who is not an independent director, the independent directors will designate one independent director to serve as the Lead Director. The Lead Director will preside at meetings of the Board at which the Chairman of the Board and Vice Chairman of the Board are not present and at executive sessions of the independent directors, serve as liaison between the Chairman of the Board and the independent directors, approve information sent to the Board and approve meeting agendas and schedules for the Board. The Lead Director will also have the authority to call meetings of the independent directors and, if requested by our significant stockholders, be available for consultation and direct communication with such stockholders (subject to compliance with applicable Company policies). The independent directors will first designate a Lead Director in conjunction with the first meeting of the Board held after the Annual Meeting.
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What is the Boards role in risk oversight?
From time to time, we are exposed to risks, including strategic, operational, financial, legal, regulatory and compliance risks. The Board as a whole, as well as the committees thereof, is responsible for overseeing our risk management process and evaluating whether this process, as designed, is adequate to effectively manage the risks that we face. Our management is responsible for developing and implementing the Companys plans and processes for risk management and is responsible for preparing and delivering reports directly to the Audit Committee and the Board with respect to risk management.
Throughout the year, the Board and the committees to which it has delegated responsibility conduct risk assessments and discuss identified risk and how to eliminate or mitigate such risks, within such areas as operational, financial performance, financial reporting, legal, regulatory and strategic planning. The Board reviews with management its plans and processes for managing risk. In addition, while our Board is ultimately responsible for overseeing our risk management, the committees of our Board assist the Board in fulfilling this responsibility by evaluating and assessing risks within their respective areas of responsibility and advising the Board of any significant risks. For example, the Audit Committee focuses on assessing and mitigating financial risks, including risks related to internal control over financial reporting and disclosure controls and procedures. The Compensation Committee considers risks relating to the Companys compensation programs and policies, and evaluates whether our compensation programs are designed so employees are incentivized to make decisions that lead to long-term value for our stockholders, without encouraging excessive risk-taking. The Nominating and Corporate Governance Committee evaluates whether proper corporate governance standards are maintained and whether the Board is comprised of qualified directors.
What are the committees of the Board and what are their functions?
The Board has established three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each of these committees consists of only non-employee directors. The current members of the committees are identified in the table below.
Name Audit
Committee Compensation
Committee Nominating and
corporate governance
Committee David J. Berkman X (1) X X Richard M. Daley X Hope S. Taitz X X (1) X (1) Robert Wolf X X X
X Committee Member
(1) Committee Chair
Audit Committee
The current members of our Audit Committee are David J. Berkman, Hope S. Taitz and Robert Wolf, each of whom is financially literate as required by the rules of the NYSE. Each of Mr. Berkman and Ms. Taitz also qualifies as an audit committee financial expert as defined in SEC rules under the Sarbanes-Oxley Act of 2002. Our Board has determined that each of Messrs. Berkman and Wolf and Ms. Taitz meets the independence requirements for audit committee members of the NYSE. The Audit Committee exercises oversight responsibility regarding the quality and integrity of our accounting and financial reporting processes and the auditing of our financial statements. In fulfilling this responsibility, the Audit Committee, among other things, selects the independent auditors, pre-approves any audit or non-audit services to be provided by the independent auditors, reviews the results and scope of the annual audit performed by the auditors and assesses processes related to risks and the control environment. The Audit Committee reports to the full Board regarding all of the foregoing. The Audit Committee operates pursuant to a written charter that is posted on our website at www.diamondresorts.com in the Investor Relations Corporate Governance section. The Audit Committee held 11 meetings in 2014. See Audit Committee Matters.
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Compensation Committee
The current members of our Compensation Committee are David J. Berkman, Richard M. Daley, Robert Wolf and Hope S. Taitz, each of whom meets the independence requirements of the NYSE and the charter for our Compensation Committee. Pursuant to its recently amended and restated charter, the Compensation Committee has the primary responsibility for a range of issues regarding compensation, including: (1) reviewing and approving the corporate goals and objectives relating to the compensation and benefits for the Companys Chief Executive Officer and other executive officers; (2) coordinating an annual review of the performance of our Chief Executive Officer and our other executive officers relative to the established corporate goals and objectives, and determining and approving compensation paid to our Chief Executive Officer and our other executive officers based upon such evaluation; (3) overseeing the administration of, and making awards under, the Companys equity compensation plans; provided, that the committee may delegate its responsibilities relating to awards under the Companys equity compensation plans to such persons as permitted by applicable law, the terms of the applicable plan and the provisions of the Companys Equity Award Approval Policy; and (4) recommending to the Board the compensation to be paid to non-employee directors. The Compensation Committee reports to the full Board regarding the foregoing matters. The Compensation Committee operates pursuant to a written charter, as amended, that is posted on our website at www.diamondresorts.com in the Investor Relations Corporate Governance section. The Compensation Committee held seven meetings in 2014. For more information on the Compensation Committees scope of authority and responsibilities with regards to executive compensation, including as to its more limited responsibilities prior to 2015, see Executive Compensation Role of the Compensation Committee in the Compensation Process below.
Nominating and Corporate Governance Committee
The current members of our Nominating and Corporate Governance Committee are David J. Berkman, Hope S. Taitz and Robert Wolf, each of whom meets the applicable independence requirements of the NYSE and the charter for our Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee has the primary responsibility for a range of issues, including: (1) identifying individuals qualified to become members of the Board, consistent with criteria approved by the Board; (2) recommending to the Board the nominees for election to the Board at each annual meeting of stockholders (subject to the provisions of the Director Designation Agreement) and filling vacancies on the Board; (3) reviewing nominees for Board membership submitted by stockholders of the Company; (4) advising the Board with respect to Board composition, procedures and committees; (5) recommending directors to serve on each Board committee; (6) overseeing the annual evaluation of the Companys management and the annual self-evaluation of the Board and the committees of the Board; and (7) reviewing and recommending any necessary updates or modifications to the corporate governance-related policies of the Company, and otherwise taking a leadership role in shaping the corporate governance of the Company. The Nominating and Corporate Governance Committee reports to the full Board regarding the foregoing matters. The Nominating and Corporate Governance Committee operates pursuant to a written charter that is posted on our website at www.diamondresorts.com in the Investor Relations Corporate Governance section. The Nominating and Corporate Governance Committee was established in June 2014 and held two meetings during the year.
How are nominees for the Board selected?
As described under the question titled Is the Company party to any agreements affecting the governance of the Company? above, pursuant to the Director Designation Agreement, subject to its fiduciary duties, the Board agreed to nominate (i) our Chief Executive Officer (currently David F. Palmer), (ii) two individuals designated by CDP (currently Stephen J. Cloobeck and Lowell D. Kraff) and (iii) two individuals nominated by the Guggenheim Investor (currently Zachary D. Warren and B. Scott Minerd). Apart from such nominees, the Nominating and Corporate Governance Committee evaluates and recommends to the Board nominees for election to the Board at each annual meeting of the stockholders, including nominees for re-election. The Nominating and Corporate Governance Committee considers many factors when evaluating candidates for election to the Board, including that the proper skills, experiences and competencies are represented on the Board
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and its committees and that the composition of the Board and each such committee satisfies applicable legal requirements. Among other criteria, the Nominating and Corporate Governance Committee considers a candidates independence, ability to exercise business judgment, applicable industry knowledge and experience, other relevant business or professional experience and the ability to offer our management meaningful advice and guidance based on that experience, stockholder relationships and the core competencies or technical expertise necessary for our committees. Additionally, while we do not have a formal policy mandating the consideration of diversity in identifying or evaluating director nominees, directors or the Board as a whole, under our Corporate Governance Guidelines, the Nominating and Corporate Governance Committee considers factors such as diversity when evaluating directors, director candidates and the overall composition of the Board, with diversity being broadly understood by the Board to mean a variety of opinions, perspectives, personal and professional experiences and backgrounds, including gender, race and ethnicity differences, as well as other differentiating characteristics. The director qualification standards that the Nominating and Corporate Governance Committee uses when considering candidates are included in the Corporate Governance Guidelines available on our website at www.diamondresorts.com in the Investor Relations Corporate Governance section. The Nominating and Corporate Governance Committee considers the entirety of each candidates credentials and does not have any specific minimum qualifications that must be met by a nominee. However, we do believe that all members of the Board should have the highest personal and professional ethics, a commitment to representing the long-term interests of the stockholders and sufficient time to devote to Board matters.
The Nominating and Corporate Governance Committee considers candidates for the Board from any reasonable source, including stockholder recommendations and recommendations from current directors and executive officers. The Nominating and Corporate Governance Committee does not evaluate candidates differently based on who has proposed the candidate. After considering candidates and assessing any material relationships with the Company or third parties that might adversely impact independence and objectivity, as well as such other criteria as the Nominating and Corporate Governance Committee determines to be relevant at the time, the Nominating and Corporate Governance Committee determines which candidates to recommend to the Board for nomination.
How can a stockholder recommend a candidate for nomination as a director of Diamond Resorts International, Inc.?
Stockholders who wish to nominate a qualified director candidate should write to us at our principal executive offices. The procedures to submit stockholder proposals and candidates for nomination to the Board for the 2015 annual meeting of stockholders are described under the section entitled Miscellaneous and Other Matters Deadlines for Submission of Proxy Proposals of Stockholders and Stockholder Nominations of Directors.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board currently consists of nine directors. Article Fifth of our Certificate of Incorporation provides that the business and affairs of the Company shall be managed by, or under the direction of, a board of directors consisting of no less than three and no more than 13 directors. The directors are divided into three classes, Class I, Class II and Class III, with each class having three directors. The initial term of office of the Class I directors expired at the 2014 annual meeting of stockholders, and at such meeting each of the Class I directors was elected for a three-year term that will expire at the 2017 annual meeting of stockholders. The initial term of office of the Class II and Class III directors will expire at the Annual Meeting and the annual meeting of stockholders in 2016, respectively, and at each such annual meeting, successors to the class of directors whose term expires at that annual meeting will be elected for a three-year term. At the Annual Meeting, each of David F. Palmer, Zachary D. Warren and Richard M. Daley is to be elected for a term of three years expiring at the 2018 annual meeting of stockholders and until his or her successor is elected and qualified (or until his or her earlier resignation or removal).
On March 27, 2015, at a meeting of the Board, the Board elected Jeffrey W. Jones to serve as a member of the Board, effective immediately following the Annual Meeting. In connection with Mr. Joness election to the Board, the Board increased the size of the Board from nine to 10 directors, effective immediately following the Annual Meeting, and Mr. Jones will fill the vacancy on the Board resulting from that expansion. Mr. Jones will serve as a Class I director, with a term expiring at the 2017 annual meeting of the Companys stockholders.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR OF THE ELECTION OF EACH OF THE NOMINEES NAMED IN THIS PROXY STATEMENT TO SERVE AS OUR DIRECTORS FOR A THREE-YEAR TERM. See Nominees below.
The directors whose terms of office expire in 2016 and 2017 will continue to serve after the Annual Meeting until such time as their respective terms of office expire and their successors are duly elected and qualified (or until their earlier resignation or removal). See Other Continuing Directors and Director Elect below.
If at the time of the Annual Meeting a nominee should be unable or declines to serve, the person named in the proxy will vote for such substitute nominee as the Board recommends, or vote to allow the vacancy created thereby to remain open until filled by the Board, as the Board recommends. The Board has no reason to believe that any nominee for election at the Annual Meeting will be unable or will decline to serve as a director if elected.
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The following table lists the nominees for election to the Board, the other current members of the Board and Mr. Jones (who will become a member of the Board, effective immediately following the Annual Meeting), their ages, their positions with us, the year each was first elected as a director, the expiration of their current terms and the years of the annual meetings for which their terms are to expire following the Annual Meeting.
Name Age Position with Company Served
how
director
Since Term
Expires
Prior to
Annual
Meeting Term
Expires
To
Annual
Meeting Class of
Director Nominees: David F. Palmer (1) 53 Chief Executive Officer;
President and Director 2007(2) 2015 2018 II Richard M. Daley (1) 72 Director 2013 2015 2018 II Zachary D. Warren (1) 41 Director 2010(2) 2015 2018 II Other Continuing Directors: Stephen J. Cloobeck 53 Chairman of the
Board, Director 2007(2) 2016 2016 III Lowell D. Kraff 54 Vice Chairman of the
Board, Director 2007(2) 2016 2016 III David J. Berkman 53 Director 2013 2017 2017 I B. Scott Minerd 56 Director 2010(2) 2017 2017 I Hope S. Taitz 50 Director 2013 2017 2017 I Robert Wolf 53 Director 2013 2016 2016 III Director Elect: Jeffrey W. Jones 53 Director 2015(3) 2017 2017 I
(1) Nominated for re-election to the Board at the Annual Meeting for a three-year term expiring in 2018.
(2) Includes service as a member of the board of directors of Diamond Resorts Parent, LLC, the predecessor to the Company (Diamond LLC) through which we operated our business until the consummation of our initial public offering in July 2013.
(3) Mr. Jones will become a member of the Board, effective immediately following the Annual Meeting, filling the vacancy on the Board resulting from the Boards increase in the size of the Board from nine directors to 10 directors, also effective immediately following the Annual Meeting.
Below are the biographies for our director nominees, including information concerning their specific experiences, qualifications, attributes and skills that led the Board to conclude that the nominee should continue to serve on the Board:
Nominees
David F. Palmer served as President of Diamond LLC from September 2010 until the merger of Diamond LLC with and into the Company in July 2013. Mr. Palmer was appointed Chief Executive Officer of Diamond LLC effective as of January 1, 2013, and served as a member of the board of managers of Diamond LLC from April 2007 until the merger of Diamond LLC with and into the Company in July 2013. Mr. Palmer has served as our President and Chief Executive Officer, and as a member of the Board, since the inception of the Company in January 2013. Mr. Palmer served as an Executive Vice President of Diamond LLC from April 2007 through his appointment as President in September 2010, and as Chief Financial Officer of Diamond LLC from April 2007 through December 2012. Mr. Palmer has over 25 years of experience as a private equity/financial professional. Mr. Palmer served as a managing director of Trivergance, LLC, which he co-founded with Mr. Kraff, from its formation in June 2006 to July 2010. From September 2002 to December 2006, he served as a member of Onyx Capital Ventures, LLC, a private equity firm and minority business enterprise that specialized in investing in middle-market minority business enterprises. From 1996 to 2002, he was a principal of Vision Capital Partners,
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LLC, together with Mr. Kraff, and was a founder of Velocity Capital, LLC. Both merchant banking partnerships focused on early stage venture capital and private equity investments. From 1989 to 1999, Mr. Palmer served as vice president of corporate development for Farley Industries, Inc., a diversified holding company with interests in the automotive, industrial and apparel industries. From 2003 to 2006, Mr. Palmer served as Chairman of the Board of Directors of CiDRA Corporation, an industrial and optical services provider to the oilsands, minerals processing and pulp and paper industries. Mr. Palmer received an A.B. in Physical Chemistry from Hamilton College and an M.B.A. from the J.L. Kellogg Graduate School of Management at Northwestern University.
The Board believes that Mr. Palmer should continue to serve as a director because of his significant executive experience, his financial and investment expertise and his extensive knowledge of our business and operations, which he has acquired through his service as our Chief Executive Officer and former Chief Financial Officer.
Richard M. Daley has served as a member of the Board since the consummation of our initial public offering in July 2013. Mr. Daley has spent his career in public service. From his initial election in 1989 through his decision to retire from government in May 2011, he served as Mayor of Chicago, one of the worlds largest cities, managing all aspects of a complex governmental organization, including a multi-billion dollar budget and over 30 departments with over 35,000 employees. Mr. Daley is currently the executive chairman of Tur Partners LLC, an investment and advisory firm focusing on sustainable solutions within the urban environment, a position he has held since May 2011. He has also been Of Counsel at Katten Muchin Rosenman LLP since June 2011. Additionally, in October 2011, he was appointed a senior advisor to JPMorgan Chase & Co., where he chairs the Global Cities Initiative, a joint project of JPMorgan Chase & Co. and the Brookings Institution to help cities identify and leverage their greatest economic development resources. Mr. Daley also has been a distinguished senior fellow at the University of Chicago Harris School of Public Policy since May 2011, and has served as a member of the International Advisory Board for the Russian Direct Investment Fund since September 2011. Since his retirement as Mayor of Chicago, he has continued a focus on developing international relationships, particularly in China through efforts such as the Chicago-China Friendship Initiative Campaign. Mr. Daley also serves as a member of the board of directors of The Coca-Cola Company, a multinational beverage corporation listed on the NYSE, and until September 2014, Mr. Daley served as a member of the board of directors of Ind Cor Properties, a Chicago based real estate investment trust. Mr. Daley received a J.D. from the DePaul University College of Law in 1968. Mr. Daley is a member of the Compensation Committee.
The Board believes that Mr. Daley should continue to serve as a director because of his expertise and experience managing the diverse operations (and associated risks) of a large, complex organization, which he acquired through his service as the mayor of Chicago. The Board also believes that Mr. Daleys international experience, including his experience developing relationships in China, will be valuable to us as we expand our business into new geographic markets.
Zachary D. Warren served as a member of the board of managers of Diamond LLC from June 2010 until the merger of Diamond LLC with and into the Company in July 2013, and has served on our Board since the inception of the Company in January 2013. In April 2004, Mr. Warren joined Guggenheim Partners, LLC, where he has participated in numerous financings and currently serves as a senior managing director. Mr. Warren has over 15 years of experience in the equity and corporate debt markets, with a focus on making direct debt investments in middle-market companies. Mr. Warren received a B.A. in Economics from the College of William and Mary and an M.B.A. from the Anderson School at UCLA.
The Board believes that Mr. Warren should continue to serve as a director because of his financial and investment expertise, experience in the equity and corporate debt markets and his extensive knowledge of our business and operations, which he has acquired through his service as a member of the board of managers of Diamond LLC. As a senior managing director of one of the worlds most prominent financial services firms, Mr. Warren also contributes general expertise in investment evaluation and management, enhancement of balance sheet and financial strength, entrepreneurialism, management of credit and credit agreements and management of banking and investment banking relationships.
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Other Continuing Directors
Stephen J. Cloobeck served as Chairman of the board of managers of Diamond LLC from April 2007 until the merger of Diamond LLC with and into the Company in July 2013, and has served as our Chairman of the Board since the inception of the Company in January 2013. Until January 2015, Mr. Cloobeck provided strategic oversight and direction for our hospitality services, including services provided to our managed resorts. From April 2007 through December 2012, Mr. Cloobeck also served as Chief Executive Officer of Diamond LLC. Mr. Cloobeck has over 30 years of experience in the vacation ownership industry, and the development, construction, management, operations, marketing and sales of real estate properties, including vacation ownership resorts, hotels, retail shopping centers, office and apartment buildings. Mr. Cloobeck coordinated the development of the Polo Towers Resort and spearheaded the design of Marriotts Grand Chateau vacation ownership resort, through Diamond Resorts, LLC, a group of affiliated companies, that was founded in 1999. Mr. Cloobeck is a member of the American Resort Development Association (ARDA) and is active in a wide range of community affairs on the local, state and national levels. In September 2010, Mr. Cloobeck was appointed by the United States Secretary of Commerce, Gary Locke, as a director to the Corporation for Travel Promotion for the United States and was elected chairman of the board in October 2010. Mr. Cloobeck was also a member of the board of directors for the Nevada Cancer Institute from 2003 to 2010, serving as chairman of the board for the last year that he was on the board. In addition, Mr. Cloobeck has worked with many charities and civic organizations, including the Prostate Cancer Foundation, Kids Charities.org, the Police Athletic League, Boy Scouts of America, Inner City Games, the Alzheimers Association, the Andre Agassi Charitable Foundation, and Autism Speaks, and is a founder of the Brent Shapiro Foundation for Drug Awareness. Mr. Cloobeck received a B.A. in Psychobiology from Brandeis University.
The Board believes that Mr. Cloobeck, as our founder and the former Chief Executive Officer of Diamond LLC, should continue to serve as a director because of Mr. Cloobecks unique understanding of the opportunities and challenges that we face and his in-depth knowledge about our business, including our customers, operations, key business drivers and long-term growth strategies, derived from his 30 years of experience in the vacation ownership industry and his service as our founder and former Chief Executive Officer.
Lowell D. Kraff served as a member of the board of managers of Diamond LLC from April 2007 until the merger of Diamond LLC with and into the Company in July 2013, and has served on the Board since the inception of the Company in January 2013. He was appointed Vice Chairman of the Board on March 21, 2013. As the Vice Chairman of the Board, Mr. Kraff provides key advice regarding the strategic direction of the Company, and takes an active role in our consideration and pursuit of various strategic opportunities. Mr. Kraff has spent his career in the private equity, merchant banking and investment banking fields. He has been a principal equity investor for over 20 years, participating in leveraged buyouts, growth equity and early stage venture capital transactions. Mr. Kraff co-founded Trivergance, LLC with Mr. Palmer in June 2006, and has served as a managing member since its formation. From July 2001 to June 2006, Mr. Kraff was a founding principal of Connecting Capital & Partners, LLC, a merchant banking company organized to make principal investments in alternative assets and provide limited strategic investment banking advice. From June 1996 to July 2001, Mr. Kraff also served as a founding principal of Vision Capital Partners, LLC, together with Mr. Palmer. At Vision Capital, Mr. Kraff and his partners, including Mr. Palmer, sourced proprietary deals and invested in several early stage and growth capital opportunities. He currently is a member of the board of directors of Tranzact, a company focused on ways to sell insurance direct to consumers in scale, and on the board of directors of a sister company, Oursurance, which is a venture with Walmart to help them sell auto and health insurance to their customers. Mr. Kraff received a B.S. from The Wharton School, University of Pennsylvania and an M.B.A. from the University of Chicago.
The Board believes that Mr. Kraff should continue to serve as a director because of his financial and investment expertise and his extensive knowledge of our business and operations, which he acquired through his service as a member of the board of managers of Diamond LLC. His experience in the private equity and investment banking industry adds investment management and analysis experience, which is useful to our Board when reviewing potential acquisitions, joint ventures and other strategic transactions.
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David J. Berkman has served as a member of the Board since the consummation of our initial public offering in July 2013. Since 2000, Mr. Berkman, has served as the managing partner of Associated Partners, LP, a private equity firm engaged in the telecommunications, media and internet market segments. He has also served as member of the board of directors of Entercom Communications Corp., a publicly held radio broadcasting company, since its initial public offering in 1999, and is currently the chairman of its compensation committee and a member of both the audit and nominating and governance committees. Mr. Berkman has also served as a member of the board of directors of Actua Corporation (formerly ICG, Corp.), a multi-vertical cloud company, since 2001, and is currently the chairman of its compensation committee and a member of its nominating and governance committee. Additionally, Mr. Berkman has been a member of the board of managers of Franklin Square Holdings, LP, a holding company which owns the manager of funds involved in the credit and energy markets, since 2011. He is also an advisory board member, and was the initial anchor investor, of First Round Capital, an early stage venture capital fund. Civically, Mr. Berkman served on the Board of Overseers for the University of Pennsylvania School of Engineering and Applied Science, and through December 31, 2014, served as a member of the Board of Trustees of the Franklin Institute. Mr. Berkman received a B.S. in Economics from the Wharton School of the University of Pennsylvania with a concentration in Finance and Entrepreneurial Management. Mr. Berkman is the Chair of the Audit Committee, a member of both the Nominating and Corporate Governance Committee and Compensation Committee and qualifies as an audit committee financial expert as defined in SEC rules under the Sarbanes Oxley Act of 2002.
The Board believes that Mr. Berkman should continue to serve as a director because of his deep experience in private equity markets and his significant experience with mergers and acquisitions, corporate finance, financial reporting and accounting and controls, which he has acquired from nearly 20 years holding executive and management positions with investment and private equity firms. In addition, our Board believes that Mr. Berkmans nearly 15 years of experience serving as a director on various other boards and committees will enable him to offer valuable expertise in matters relating to our corporate governance and board responsibilities.
B. Scott Minerd served as a member of the board of managers of Diamond LLC from August 2010 until the merger of Diamond LLC with and into the Company in July 2013, and has served on the Board since the inception of the Company in January 2013. Mr. Minerd joined Guggenheim Partners in 1998. In his current role as Global Chief Investment Officer of Guggenheim Partners Investment Management, LLC, Mr. Minerd guides Guggenheims investment strategies and oversees client accounts across a broad range of fixed-income and equity securities. Mr. Minerd is also a founding managing partner of Guggenheim Partners, LLC. Previously, Mr. Minerd was a Managing Director of Credit Suisse First Boston in charge of trading and risk management for the Fixed Income Credit Trading Group. In this position, he was responsible for the corporate bond, preferred stock, money markets, U.S. government agency and sovereign debt, derivatives securities, structured debt and interest rate swaps trading business units. Prior to that, Mr. Minerd served as Morgan Stanleys London-based European Capital Markets Products Trading and Risk Manager responsible for Eurobonds, Euro-MTNs, domestic European bonds, FRNs, derivative securities and money market products in 12 European currencies and Asian markets. Mr. Minerd has also held capital markets positions with Merrill Lynch and Continental Bank and was a Certified Public Accountant for Price Waterhouse. Mr. Minerd is a member of the Federal Reserve Bank of New Yorks Investment Advisory Committee on Financial Markets, helping advise the Federal Reserve Bank of New Yorks President and senior management about the current financial markets and ways the public and private sectors can better understand and mitigate systematic risks. Mr. Minerd is also currently working with the Organization for Economic Cooperation and Development (OECD), advising on research and analysis of private sector infrastructure investment, and is a contributing member of the World Economic Forum (WEF). Mr. Minerd holds a B.S. degree in Economics from The Wharton School, University of Pennsylvania, and has completed graduate work at the University of Chicago Graduate School of Business and The Wharton School, University of Pennsylvania.
The Board believes that Mr. Minerd should continue to serve as a director because of his financial and investment expertise, experience in capital markets and his extensive knowledge of our business and operations, which he acquired through his service as a member of the board of managers of Diamond LLC and as a member
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of the Board. As a managing partner of one of the worlds most prominent financial services firms, Mr. Minerd also contributes general expertise in investment evaluation and management, enhancement of balance sheet and financial strength, entrepreneurialism, management of credit and credit agreements and management of banking and investment banking relationships.
Hope S. Taitz has served as a member of the Board since her appointment to the Board in August 2013. After graduating from the University of Pennsylvania, majoring in economics with a concentration in marketing, Ms. Taitz began her investment banking career, first as a mergers and acquisitions analyst and then as an associate at Drexel Burnham Lambert from 1986 to 1990. Ms. Taitz continued as a Vice President at The Argosy Group (now part of the Canadian Imperial Bank of Commerce) from 1990 to 1992 and as a Managing Director at Crystal Asset Management from 1992 to 1995. From 1995 to 2004, Ms. Taitz was managing partner of Catalyst Partners, L.P., a money management firm focused on special situations in both debt and equity in sectors including retail, consumer and specialty finance. Ms. Taitz currently acts as a consultant in the retail/consumer industries and serves as a director at MidCap FinCo Holdings Limited, MidCap FinCo Limited and MCFeeder Limited, Apollo Residential Mortgage, Inc., Athene USA Corporation, Athene Annuity and Life Company, Athene Life Insurance Company of New York, Athene Annuity and Life Assurance Company of New York, Athene Annuity & Life Assurance Company, Athene Life Re Ltd. and Athene Holding Ltd. Ms. Taitz also serves as an external director and is a member of the audit committee for Lumenis Ltd. In addition, Ms. Taitz is a founding executive member of Pencils of Promise as well as the Youth Renewal Fund. Ms. Taitz is a member of the Audit Committee, the Chair of both the Compensation Committee and the Nominating and Corporate Governance Committee and qualifies as an audit committee financial expert as defined in SEC rules under the Sarbanes Oxley Act of 2002.
The Board believes that Ms. Taitz should continue to serve as a director because her business and marketing experience and her extensive investment and analytical expertise, which she has acquired through her years of experience in the investment banking industry, provides the Board with valuable insight when reviewing potential acquisitions, joint ventures and other strategic transactions and in making other strategic and operational decisions. In addition, Ms. Taitzs other experience as a public company director provides the Board with perspective into corporate governance best practices.
Robert Wolf has served as a member of the Board since the consummation of our initial public offering in July 2013. Mr. Wolf is the founder and Chief Executive Officer of 32 Advisors, LLC, a New York-based, global consulting firm providing senior executives with strategic intelligence and actionable guidance on a broad spectrum of issues affecting immediate and long-term growth and success. Mr. Wolf spent 18 years at UBS, a global financial services firm, prior to leaving UBS and forming 32 Advisors, LLC in August 2012. He held several senior positions at UBS, including Global Head of Fixed Income, Chairman and CEO of UBS Americas, and President and Chief Operating Officer of UBS Investment Bank. He joined UBS in 1994 after spending approximately 10 years at Salomon Brothers in Fixed Income Sales and Trading. Mr. Wolf was a member of President Obamas Council on Jobs and Competitiveness from 2011 through 2013 and a member of the Presidents Economic Recovery Advisory Board from 2009 through 2011 and was on the Homeland Security Advisory Councils Border Infrastructure Task Force in 2012. In June 2013, President Obama appointed Mr. Wolf to the Presidents Export Council. He is also a member of the Council on Foreign Relations and is a graduate member of the Committee Encouraging Corporate Philanthropy, and serves on the Undergraduate Executive Board of the Wharton School, the Athletics Board of Overseers at the University of Pennsylvania and the advisory committee of Wisekey, a global digital technology company. In addition, he serves on the boards of a number of non-profit institutions, including the Robert F. Kennedy Center for Social Justice & Human Rights (as vice chairman), the Partnership for NYC and the Leadership Council for the Multiple Myeloma Research Foundation. Mr. Wolf graduated from the Wharton School of the University of Pennsylvania with a B.S. in Economics in 1984. Mr. Wolf is a member of each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee.
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The Board believes that Mr. Wolf should continue to serve as a director because of his experience in the financial services and investment banking industries, as well as his experience offering economic advice and guidance to the President of the United States and other individuals and entities.
Director Elect
Jeffrey W. Jones will become a member of the Board, effective immediately following the Annual Meeting, filling the vacancy on the Board resulting from the Boards increase in the size of the Board from nine directors to 10 directors, also effective immediately following the Annual Meeting. From 2003 to 2012, Mr. Jones served as the Chief Financial Officer for Vail Resorts, Inc., a publicly held resort management company, and also served as a member of the board of directors of Vail Resorts, Inc. from 2008 through 2012. In addition, later in his tenure at Vail Resorts, Inc., Mr. Jones served as President Lodging, Retail and Real Estate. Mr. Jones is currently a member of the board of directors and chairs the audit committee for Noodles & Company, a publicly held fast-casual restaurant chain with over 430 locations system wide. Mr. Jones also serves on the board of directors and chairs the audit and finance committee of Hershey Entertainment and Resorts, a privately held entertainment and hospitality company. In addition, Mr. Jones is a member of the board of directors of Summit Hotel Properties, a publicly held real estate investment trust, where he is chairman of the audit committee and a member of the nominating and corporate governance committee and the compensation committee. He is also a member of the US Bank Advisory Board and is a member of the board of the Leeds School of Business, University of Colorado Boulder. Prior to joining Vail Resorts, Inc., Mr. Jones held chief financial officer positions with Clark Retail Enterprises and Lids Corporation. Mr. Jones received a BA in Accounting and American Studies from Mercyhurst College and is a member of the American Institute of Certified Public Accountants (AICPA).
The Board believes Mr. Jones should serve as a director because of his significant management, financial and hospitality industry experience and expertise, which he has acquired through his 15 years as a chief financial officer, including 10 years as chief financial officer and four years as a director, as well as president of lodging, retail and real estate, of a publicly held resort management company. In addition, Mr. Joness other experience as a public company director and audit committee member and chair provides the Board with perspective into corporate governance best practices.
Arrangements or Understandings Regarding Service as a Director
Pursuant to the Director Designation Agreement, subject to its fiduciary duties, the Board agreed to nominate (i) our Chief Executive Officer (currently David F. Palmer), (ii) two individuals designated by CDP (currently Stephen J. Cloobeck and Lowell D. Kraff) and (iii) two individuals nominated by the Guggenheim Investor (currently Zachary D. Warren and B. Scott Minerd) for service on the Board. In addition, pursuant to the Master Agreement, at least through December 31, 2017, so long as Stephen J. Cloobeck is serving as a member of the Board, he has the right to serve as Chairman of the Board. In addition, we and stockholders that, as of March 31, 2015 held approximately 36.8% of our outstanding common stock, are parties to the Stockholders Agreement, pursuant to which each stockholder party thereto agreed to cause the shares of our common stock held by such stockholder to be voted for the nominees of the Board designated pursuant to the Director Designation Agreement described above and for all other persons nominated by the Board for election thereto.
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PROPOSAL NO. 2
APPROVAL OF THE DIAMOND RESORTS INTERNATIONAL, INC. 2015
EQUITY INCENTIVE COMPENSATION PLAN
We are requesting that our stockholders vote in favor of adopting our 2015 Equity Incentive Compensation Plan (the Equity Plan). On March 27, 2015, our Board adopted the Equity Plan, subject to approval by our stockholders. If our stockholders approve the Equity Plan, it will become effective as of the date upon which the Equity Plan was approved by our Board. The description of certain key features of the Equity Plan is subject to the specific provisions in the full text of the Equity Plan, which is attached as Appendix A to this Proxy Statement. Subject to approval of the Equity Plan by our stockholders, we will cease making equity-based awards under our 2013 Incentive Compensation Plan (the 2013 Incentive Plan), although awards previously issued under the 2013 Incentive Plan will remain outstanding in accordance with their terms. The 2013 Incentive Plan is the only equity compensation plan under which equity-based compensation may currently be awarded to our officers, employees, consultants, advisors and non-employee directors.
Stockholder approval of the Equity Plan is important to us for many reasons. Among other things, stockholder approval of the Equity Plan is necessary (1) to meet the requirements of the NYSE, (2) for us to be able to grant performance-based awards that qualify for the exception to the deductibility limit set forth in Section 162(m) (Section 162(m)) of the Internal Revenue Code of 1986, as amended (the Code), and (3) to qualify certain stock options granted under the Equity Plan as incentive stock options. See the discussion below regarding incentive stock options and Section 162(m). If our stockholders do not approve the Equity Plan, we will continue to be able to grant awards under the 2013 Incentive Plan. However, we would be limited in our ability to make equity and other awards that we believe are necessary to effectively attract, retain and incentivize officers and other employees and non-employee directors, as we consider essential for our future success.
Although our future burn rate under the Equity Plan will depend upon and be influenced by a number of factors, such as the number of plan participants, the price per share of our common stock and the methodology used to establish the equity award mix, the shares of common stock reserved for issuance under the Equity Plan will enable us to continue to utilize stock-based awards as a significant component of our compensation program and help meet our objectives to attract, retain and incentivize talented personnel. The calculation of the Available Shares (as defined below) took into account, among other things, our stock price and volatility, our share burn rate and overhang and how they compare with our industry peers, the existing terms of our outstanding awards and our proposed fungible share rate of 1.67 for full-share awards under the Equity Plan. The results of this analysis were presented to the Compensation Committee and the full Board for their consideration.
Purposes and Eligibility
The Equity Plan is intended to assist us in attracting and retaining exceptionally qualified officers, employees, consultants, advisors and directors upon whom, in large measure, our sustained progress, growth and profitability depend, to motivate such individuals to achieve our long-term goals and to more closely align their interests with those of our stockholders by providing them with a proprietary interest in our growth and performance. Our officers, employees, non-employee directors, consultants and advisors (other than consultants and advisors providing services to us in connection with capital-raising securities offerings or the promotion or maintenance of a market for our securities) are eligible to participate in the Equity Plan. As of March 31, 2015, we had eight non-employee directors, seven executive officers and approximately 7,100 employees eligible to participate in the Equity Plan.
Highlights of Key Corporate Governance Practices and Provisions under the Equity Plan
We believe that the Equity Plan will promote the interests of our stockholders and is consistent with principles of good corporate governance. The Equity Plan includes the following practices and provisions.
Administered by an independent committee . The Equity Plan will be administered by our Compensation Committee, which is composed entirely of independent directors who meet the
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independence requirements of the NYSE and the charter for our Compensation Committee, qualify as non-employee directors for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act), and qualify as outside directors for purposes of Section 162(m).
Granting of Performance Awards . Under the Equity Plan, the Board may grant performance-based awards intended to qualify as exempt performance-based compensation under Section 162(m), as well as other performance-based awards.
Awards require a minimum vesting period . At the time of grant, stock options, stock appreciation rights or any other award based on shares of our common stock that are awarded under the Equity Plan require one-year vesting (other than awards to individuals who are not our employees or officers).
No broad discretion to accelerate vesting . Except with respect to a small portion of the shares available under the Equity Plan, the Committee does not have the discretion to accelerate equity vesting absent a change in control, death or disability.
Double trigger vesting on change in control . If awards granted under the Equity Plan are assumed by a successor in connection with a change in control of our Company, they will not automatically vest and pay out solely as a result of the change in control.
Awards are subject to clawback . All awards under the Equity Plan are subject to recoupment or clawback under certain circumstances pursuant to our recently adopted clawback policy. See Executive Compensation Clawback Policy below.
No liberal share counting . The Equity Plan prohibits the reuse of shares withheld or delivered to satisfy the exercise price of stock options or to satisfy tax withholding requirements of any award.
Cap on awards to non-employee directors . The value of shares awarded to a single non-employee director during a calendar year will not exceed $1,000,000.
No discounted stock options or stock appreciation rights . All stock options and stock appreciation rights awarded under the Equity Plan must have an exercise or strike price that is not less than the fair market value of the underlying common stock on the date of grant.
No repricing of stock options or stock appreciation rights . The Equity Plan prohibits any repricing of stock options or stock appreciation rights without stockholder approval.
No tax gross-ups . The Equity Plan does not include any tax gross-up provisions.
No reloads . The Equity Plan does not provide for reloads.
Shares Authorized for Issuance
The number of shares of our common stock that may be delivered under the Equity Plan will not exceed 8,500,000 (the Available Shares), which number includes approximately 1,500,000 shares that would otherwise remain available for future awards under the 2013 Incentive Plan. Accordingly, we are asking for an increase in approximately 7,000,000 shares over the number of shares we currently have available for new equity awards. The number of Available Shares may be adjusted by the Board if, upon a potential corporate transaction (such as a merger or spin-off), the Board deems it equitable in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made under the Equity Plan. The pool of Available Shares is intended to be fungible. As a result, the number of Available Shares under the Equity Plan will be reduced by (1) the number of shares underlying each outstanding option and (2) the number equal to the greater of (i) each share available to be delivered upon the exercise of a stock appreciate right (a SAR) and (ii) the number of shares underlying the SAR. In addition, the number of Available Shares will be reduced by 1.67 shares for each share delivered pursuant to or otherwise underlying, an award other than an option or SAR (or other substitute award, as described below). If any Available Shares granted pursuant to the Equity Plan are forfeited or otherwise terminated without the delivery of the shares, to the extent of any forfeiture and in the amount that the shares reduced the Available Shares upon the granting of the shares, those shares will again be treated as Available
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Shares under the Equity Plan. The Equity Plan provides that shares withheld to pay the option price of an option, shares not issued in connection with a stock-settled SAR, shares purchased on the open market with option proceeds and shares used to satisfy tax withholding obligations will not be available for future awards under the Equity Plan. Shares of common stock that are issued under the Equity Plan are not affected by the cash payment of dividends (or dividend equivalents) in connection with any outstanding awards or any shares required to satisfy substitute awards.
Historical Share Usage
While the use of equity is an important part of our compensation program, we are mindful of our responsibility to our shareholders to exercise judgment in the granting of equity awards.
Overhang and Duration . As of March 31, 2015, we had 9,324,435 shares of common stock subject to outstanding equity awards or available for future equity awards under the 2013 Incentive Plan, which represented approximately 11% of the fully-diluted common shares then outstanding (or, the overhang percentage). The approximately 7,000,000 new shares proposed to be available under the Equity Plan would increase the overhang percentage by an additional 7% to approximately 18%. Based on current practices and share price, it is expected that the requested share reserve would allow us to continue our current equity grant practices for approximately four years.
The following table summarizes the actual shares outstanding and shares remaining for issuance under the 2013 Incentive Plan as of March 31, 2015. The table includes information regarding all of our outstanding equity awards and shares available for future awards under the 2013 Incentive Plan and the related award agreements as of March 31, 2015 (without giving effect to this Proposal 2).
Outstanding Weighted Average
Term (in years) Weighted Average
Exercise Price Stock options outstanding as of March 31, 2015 7,753,115 8.40 $15.01 Full-value awards outstanding as of March 31, 2015 44,910 1.75 N/A Shares remaining available for future grant as of March 31, 2015 ~1,500,000 N/A N/A Proposed increase in shares available for future grants ~7,000,000 N/A N/A Total proposed shares available for future awards 8,500,000 N/A N/A
Administration and Types of Awards
The Equity Plan will be administered by the Compensation Committee (referred to in this proposal as the Committee). The Committee has broad discretion under the Equity Plan to select the eligible persons to whom awards will be granted, as well as the type, size and terms and conditions of each award, including the exercise price of stock options, the number of shares subject to awards and the expiration dates of, and the vesting schedules or other restrictions applicable to, awards. So long as it complies with the written terms of the Equity Plan (including limitations on acceleration of vesting of awards), the Committee has broad authority to amend outstanding awards (subject to participant consent in the case of a materially adverse effect on the participant), create programs under the Equity Plan for awards to individuals located outside the United States, and otherwise take any other action deemed necessary or appropriate for administration of the Equity Plan. The Equity Plan provides that the Committee may accelerate the vesting of share-based awards thereunder in the case of death, disability or a change in control (subject to the applicable provision of the Equity Plan in the case of a change in control). In addition, the Equity Plan permits the Committee to accelerate the vesting of share based awards representing less than 5% of the aggregate shares of the Available Shares under the Equity Plan in circumstances other than death, disability or a change in control.
The Equity Plan permits the Committee to delegate its authority to grant awards under the Equity Plan to any sub-committee of the Committee or to our Chief Executive Officer (subject, in the case of delegation to the
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Chief Executive Officer, to the approval of the head of our Human Resources Department), subject to our Equity Award Approval Policy. This delegation is only available for awards made to anyone other than executive officers, those who are (or are expected to be) covered employees for purposes of Code Section 162(m) (see discussion below), and those who are subject to reporting requirements under Section 16 of the Exchange Act.
The Equity Plan allows us to grant the following types of awards:
stock options (non-qualified and incentive stock options) SARs restricted stock restricted stock units
deferred stock performance units dividend equivalents substitute awards
Stock Options . Stock options may be granted by the Committee and may be either non-qualified stock options or incentive stock options. Stock options are subject to the terms and conditions, including vesting conditions, set by the Committee (and incentive stock options are subject to further statutory restrictions that are set forth in the Equity Plan). The Equity Plan provides that no portion of any stock option may become vested less than one year after the grant date, subject to limited specified exceptions. Additionally, unless otherwise specified in an applicable award agreement (but subject to the one-year minimum vesting period), the Equity Plan provides that all stock options will vest with respect to (1) one-third of the shares purchasable under the option on the first anniversary of the grant date, (2) an additional one-third of shares purchasable under the option on the second anniversary of the grant date and (3) the remaining shares purchasable under the option vest on the third anniversary of the grant date. The exercise price for all stock options granted under the Equity Plan will be determined by the Committee, except that no stock options can be granted with an exercise price that is less than 100% of the fair market value of the underlying common stock on the grant date. Further, stockholders who own greater than 10% of our voting stock will not be granted incentive stock options that have an exercise price less than 110% of the fair market value of the underlying common stock on the date of grant.
The term of all stock options granted under the Equity Plan will be 10 years unless the Committee otherwise specifies a shorter period in an award agreement with a specific participant (five years for incentive stock options granted to stockholders who own greater than 10% of our voting stock). No incentive stock option may be granted to an optionee which, when combined with all other incentive stock options becoming exercisable in any calendar year that are held by that optionee, would have an aggregate fair market value in excess of $100,000. If an optionee is awarded incentive stock options in excess of $100,000 during the same year, the excess will be treated as non-qualified stock options.
Each stock option gives the holder the right to receive a number of shares of common stock upon exercise of the stock option and payment of the exercise price. The exercise price may be paid in cash (including cash obtained through a broker selling the shares acquired on exercise), by personal check, money order, cashiers check, wire transfer or, if approved by the Committee, shares of common stock or shares of restricted stock or by brokers assisted cashless exercise (provided that, if any portion of the exercise price is paid with restricted stock, the Committee may, in its discretion, specify that all or a number of shares acquired on the exercise of the option will be subject to the same restrictions as the tendered restricted shares). The Committee may also allow for net issue exercise of stock options.
The Equity Plan prohibits the repricing of stock options unless stockholder approval is obtained. For this purpose, repricing means (a) lowering the exercise price of a stock option (or the strike price of a SAR) after it is granted; (b) any other action that is treated as a repricing under generally accepted accounting principles; and (c) cancelling a stock option (or a SAR) at a time when its exercise price exceeds the fair market value of the underlying shares of common stock, in exchange for another stock option or SAR, restricted stock, other equity,
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cash or other property. Repricing does not occur if any of the foregoing are completed in connection with an adjustment of a stock option following a corporate transaction (such as a merger or spin-off). The Equity Plan provides that dividend equivalents will not be payable with respect to stock options.
Stock Appreciation Rights or SARs . All SARs may be granted on a stand-alone basis (i.e., not in conjunction with stock options granted under the Equity Plan) or on a tandem basis. SARs are subject to the terms and conditions, including vesting conditions, set by the Committee. A SAR granted under the Equity Plan entitles its holder to receive, at the time of exercise, an amount per share equal to the excess of the fair market value (at the date of exercise) of common stock over a specified price, known as the strike price, fixed by the Committee, which will not be less than 100% of the fair market value of the common stock on the grant date of the SAR. Payment may be made in cash, shares of common stock, or other property, in any combination as determined by the Committee. The Equity Plan provides that no portion of any SAR granted thereunder may become vested less than one year after the grant date, subject to limited specified exceptions. Additionally, unless otherwise specified in an applicable award agreement (but subject to the one-year minimum vesting period), the Equity Plan provides that all SARs will vest with respect to one-third of the shares to which the SARs pertain on the first anniversary of the grant date, (2) an additional one-third of shares to which the SARs pertain on the second anniversary of the grant date and (3) the remaining shares to which the SARs pertain vest on the third anniversary of the grant date. The Equity Plan prohibits the repricing of SARs (as described in the Stock Options section above). The Equity Plan provides that dividend equivalents will not be payable with respect to SARs.
Restricted Stock and Restricted Stock Units . Restricted stock is common stock that is forfeitable until the restrictions lapse. Restricted stock units are rights granted as an award to receive shares of common stock, conditioned upon the satisfaction of certain restrictions set by the Committee. The Committee will determine the restrictions for each award and the purchase price, if any, in the case of restricted stock. Restrictions on the restricted stock and restricted stock units may be based upon the passage of time, the satisfaction of performance criteria and/or the occurrence of one or more events or conditions, and will lapse separately or in combination upon the conditions and the time or times, in installments or otherwise, as the Committee may specify. Participants may have voting and dividend rights in respect of restricted stock, while participants do not have voting rights in restricted stock units, but restricted stock units may be credited with dividend equivalents to the extent dividends are paid or distributions are made p
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