UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 6, 2011
Constant Contact, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 001- 33707 | 04-3285398 | ||
(State or Other Jurisdiction of | (Commission File Number) | (IRS Employer | ||
Incorporation) | Identification No.) |
1601 Trapelo Road Waltham, Massachusetts |
02451 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (781) 472-8100
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Constant Contact, Inc. (the Company) is filing this Current Report on Form 8-K to report
the following events, each of which occurred on December 6, 2011 and is described in more
detail below:
| The Compensation Committee (the Compensation Committee) of the Companys Board of Directors (the Board) approved the 2012 annual base salaries for the Companys executive officers, including the Companys named executive officers (as identified in the Companys Proxy Statement for the 2011 Annual Meeting of Stockholders); | ||
| The Compensation Committee adopted the Companys 2012 Executive Cash Incentive Bonus Plan (the 2012 Bonus Plan); and | ||
| The Compensation Committee approved the award of a discretionary cash bonus of $20,000 to Harpreet S. Grewal, the Companys Executive Vice President, Chief Financial Officer and Treasurer. |
Base Salaries of Named Executive Officers
On December 6, 2011, the Compensation Committee approved the 2012 annual base salaries for the
Companys executive officers, including the Companys named executive officers. The following table
sets forth the 2012 annual base salary for each of the Companys named executive officers:
Name | Title | Base Salary | ||||||
Gail F. Goodman | Chairman, President and Chief Executive Officer |
$ | 450,000 | |||||
Harpreet S. Grewal | Executive Vice President, Chief Financial Officer and Treasurer |
$ | 325,000 | |||||
Ellen M. Brezniak | Senior Vice President, Product Strategy |
$ | 270,000 | |||||
Christopher M. Litster | Vice President and General Manager, Event Marketing |
$ | 230,000 | |||||
Robert P. Nault | Vice President, General Counsel and Secretary |
$ | 270,000 | |||||
John J. Walsh, Jr | Senior Vice President, Engineering and Operations |
$ | 270,000 |
2012 Executive Cash Incentive Bonus Plan
On December 6, 2011, the Compensation Committee adopted the 2012 Bonus Plan for its executive
officers, including the Companys named executive officers. Amounts payable under the 2012 Bonus
Plan to the Companys executive officers are calculated as a percentage of the applicable executive
officers 2012 annual base salary described above.
The following table sets forth the target bonus percentage under the 2012 Bonus Plan, as a
percentage of 2012 annual base salary, for each of the Companys named executive officers:
Target Bonus | ||||
Name | Percentage | |||
Gail F. Goodman |
100 | % | ||
Harpreet S. Grewal |
67 | % | ||
Ellen M. Brezniak |
50 | % | ||
Christopher M. Litster |
40 | % | ||
Robert P. Nault |
40 | % | ||
John J. Walsh, Jr |
45 | % |
Under the 2012 Bonus Plan, the Companys executive officers are eligible to receive cash incentive
bonus payments based on the achievement of (i) quarterly corporate financial targets, (ii)
quarterly customer satisfaction targets (or other customer satisfaction- or customer success-based
targets approved by the Compensation Committee), (iii) quarterly individual performance goals
and/or (iv) in the case of the Companys business unit heads, annual
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financial and operating targets related to the executive officers operational area of
responsibility. The Compensation Committee determines which of the foregoing performance metrics
apply to each executive officer and the portion (if any) of such executive officers target cash
incentive bonus that is allocated to each such performance metric.
For the Companys named executive officers (other than Ms. Goodman and Mr. Litster), the 2012 Bonus
Plan provides for pro rata quarterly cash incentive bonus payments based on the achievement of (i)
quarterly corporate financial targets, (ii) quarterly customer satisfaction targets (or other
customer satisfaction- or customer success-based targets approved by the Compensation Committee)
and (iii) quarterly individual performance goals, with 55% of the target cash incentive bonus being
allocated to the quarterly corporate financial targets, 25% of the target cash incentive bonus
being allocated to the quarterly customer satisfaction (or other customer satisfaction- or customer
success-based) targets and 20% of the target cash incentive bonus being allocated to the quarterly
individual performance goals.
For Ms. Goodman, the 2012 Bonus Plan provides for pro rata quarterly cash incentive bonus payments
based on the achievement of quarterly corporate financial targets and quarterly customer
satisfaction (or other customer satisfaction- or customer success-based) targets, with 75% of the
target cash incentive bonus being allocated to the quarterly corporate financial targets and 25% of
the target cash incentive bonus being allocated to the quarterly customer satisfaction (or other
customer satisfaction- or customer success-based) targets. Under the 2012 Bonus Plan, Ms. Goodmans
bonus award will not depend on the achievement of individual performance goals.
For Mr. Litster, the 2012 Bonus Plan provides for pro rata quarterly cash incentive bonus payments
based on the achievement of quarterly corporate financial targets and the achievement of quarterly
individual performance goals and an annual bonus based on the achievement of annual financial and
operating targets related to his operational area of responsibility (the event marketing business
unit), with 35% of the target cash incentive bonus being allocated to the quarterly corporate
financial targets, 25% of the target cash incentive bonus being allocated to the quarterly
individual performance goals and 40% of the target cash incentive bonus being allocated to the
annual financial and operating targets related to the Companys event marketing business unit.
Quarterly Corporate Financial and Customer Satisfaction (or Other Customer Satisfaction- or
Customer Success-Based) Targets
The quarterly corporate financial targets and, where applicable, customer satisfaction targets
under the 2012 Bonus Plan are based on the following corporate metrics: (i) quarterly revenue
growth (QRG), (ii) adjusted earnings before interest, taxes, depreciation and amortization as a
percentage of revenue (Adjusted EBITDA Margin), and (iii) customer satisfaction survey results or
other customer satisfaction- or customer success-based metrics (Customer Satisfaction) as may be
approved from time to time by the Compensation Committee.
The quarterly QRG and Adjusted EBITDA Margin targets are established by the Board as part of the
budgeting process and subsequently approved by the Compensation Committee. As of the filing of this
Current Report on Form 8-K, the Compensation Committee has not yet approved the quarterly QRG,
Adjusted EBITDA Margin or Customer Satisfaction targets for the 2012 Bonus Plan.
The Compensation Committee determines the portion of each executive officers target cash incentive
bonus that is allocated to each of the QRG metric, the Adjusted EBITDA Margin metric and the
Customer Satisfaction metric. For the Companys named executive officers (other than Ms. Goodman
and Mr. Litster), 40% of the target cash incentive bonus is allocated to the QRG metric, 15% of the
target cash incentive bonus is allocated to the Adjusted EBITDA Margin metric and 25% of the target
cash incentive bonus is allocated to the Customer Satisfaction metric. For Ms. Goodman, 60% of the
target cash incentive bonus is allocated to the QRG metric, 15% of the target cash incentive bonus
is allocated to the Adjusted EBITDA Margin metric and 25% of the target cash incentive bonus is
allocated to the Customer Satisfaction metric. For Mr. Litster, 25% of the target cash incentive
bonus is allocated to the QRG metric and 10% of the target cash incentive bonus is allocated to the
Adjusted EBITDA Margin metric.
Bonus payments related to the QRG metric will be based on the following levels of achievement, as a
percentage of the quarterly target QRG:
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Less | 140% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Achievement | than | and | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Level | 80% | 80% | 85% | 90% | 95% | 100% | 105% | 110% | 115% | 120% | 125% | 130% | 135% | Greater | ||||||||||||||||||||||||||||||||||||||||||
Payout Percentage |
0 | % | 50 | % | 63 | % | 75 | % | 88 | % | 100 | % | 125 | % | 150 | % | 175 | % | 200 | % | 225 | % | 250 | % | 275 | % | 300 | % |
Bonus payments for achievement between the levels described in the table above will be made on
a pro rata basis.
Bonus payments will be made to any executive officer based on the quarterly Adjusted EBITDA Margin metric
if the quarterly Adjusted EBITDA Margin achieved by the Company is at least equal to one percentage
point below the quarterly target Adjusted EBITDA Margin, in which event the executive will be
eligible to receive 95% of the bonus allocated to the Adjusted EBITDA Margin metric. No payment
will be made if the quarterly achievement level is more than one percentage point below the
quarterly target Adjusted EBITDA Margin. In the event that the quarterly Adjusted EBITDA Margin
achieved by the Company is one percentage point or more above the quarterly target Adjusted EBITDA
Margin, the executive will be eligible to receive 105% of the bonus allocated to the Adjusted
EBITDA Margin metric. Bonus payments for achievement between the two Adjusted EBITDA Margin
thresholds will be made on a pro rata basis.
Bonus payments to be made to any executive officer based on the quarterly Customer Satisfaction metric will
be paid at 100% of the target payment if the quarterly Customer Satisfaction target is achieved.
For achievement levels below the quarterly Customer Satisfaction target, the bonus payment will be
reduced by 25% for every percentage point of under-achievement below the target up to a maximum of
three percentage points below the target. No payment will be made if the quarterly achievement
level is more than three percentage points below the quarterly Customer Satisfaction target. For
achievement levels above the quarterly Customer Satisfaction target, the bonus payment will be
increased by 25% for every percentage point above the target up to a maximum of four percentage
points above the target.
Quarterly Individual Performance Goals
If a portion of an executive officers target cash incentive bonus is allocated to the achievement
of quarterly individual performance goals, the quarterly individual performance goals for the
executive officer will be established by Ms. Goodman and will be tied to the particular area of
expertise of the executive and his or her performance in attaining those objectives relative to
external forces, internal resources utilized and overall individual effort. Under the 2012 Bonus
Plan, Ms. Goodman will establish the quarterly individual performance goals for each such executive
officer using the foregoing criteria at the beginning of each quarter of 2012. As of the filing of
this Current Report on Form 8-K, Ms. Goodman has not established the quarterly individual
performance goals for the named executive officers for 2012.
Operational Financial and Operating Targets
For the Companys executive officers who are business unit heads, the 2012 Bonus Plan provides that
a portion of each such executive officers target cash incentive bonus will be allocated to one or
more annual financial and operating targets related to the executive officers operational area of
responsibility, with the Compensation Committee determining the portion of each such executive
officers target cash incentive bonus that is allocated to each such annual financial and operating
target.
For Mr. Litster, who heads the Companys event marketing business unit, the annual financial and
operating targets under the 2012 Bonus Plan are related to the Companys event marketing business
unit and are based on two metrics: (i) annual revenue of the Companys event marketing business
unit (EVM BU Revenue) and (ii) year-end customer count of the Companys event marketing product
(EVM Customer Count), with 25% of the target cash incentive bonus being allocated to the EVM BU
Revenue metric and 15% of the target cash incentive bonus being allocated to the EVM Customer Count
metric.
The annual EVM BU Revenue and EVM Customer Count targets are established by the Board as part of
the budgeting process and approved by the Compensation Committee. As of the filing of this Current
Report on Form 8-K,
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the Compensation Committee has not yet approved the annual EVM BU Revenue or
EVM Customer Count targets for the 2012 Bonus Plan.
Discretionary Cash Bonus
On December 6, 2011, the Compensation Committee approved the award of a discretionary cash bonus of
$20,000 to Mr. Grewal for his extraordinary performance in 2011.
Item 8.01. Other Events.
From November 22, 2011 to December 2, 2011, while it was permissible under the applicable
securities laws for officers and directors of the Company to purchase and sell securities of the
Company, the following officers entered into binding trading plans (the 10b5-1 Plans):
Maximum number | ||||||||||
of shares of | ||||||||||
common stock that | Time period during | |||||||||
may be sold under | which sales may occur | |||||||||
Name | Title | the 10b5-1 Plans | under the 10b5-1 Plans | |||||||
Robert P. Nault | Vice President and General Counsel |
12,000 | 3/5/2012 6/30/2012 | |||||||
Robert D. Nicoson | Vice President and Chief Human
Resources Officer |
20,000 | 2/20/2012 11/16/2012 |
Pursuant to the 10b5-1 Plans, certain shares of the Companys common stock held by such
individuals will be sold on a periodic basis without further direction from the individual in
accordance with the terms and conditions set forth in the applicable 10b5-1 Plan, which in all
cases include minimum sale price thresholds. Under the Companys insider trading policy, trades
will not occur under the 10b5-1 Plans until at least 90 days after the execution date of the
applicable 10b5-1 Plan. Each of the 10b5-1 Plans is designed to comply with Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended, and the Companys insider trading policy. Transactions
made pursuant to the 10b5-1 Plans will be disclosed publicly through Form 144 and Form 4 filings
with the Securities and Exchange Commission. Except as may be required by law, the Company does not
undertake to report on specific Rule 10b5-1 plans of the Companys officers or directors, nor to
report modifications or terminations of such plans.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
CONSTANT CONTACT, INC. |
||||
Date: December 6, 2011 | By: | /s/ Robert P. Nault | ||
Robert P. Nault | ||||
Vice President and General Counsel | ||||
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