Use these links to rapidly review the document
Table of Contents
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
|
|
|
Filed by the Registrant
ý
|
Filed by a Party other than the Registrant
o
|
Check the appropriate box:
|
o
|
|
Preliminary Proxy Statement
|
o
|
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|
ý
|
|
Definitive Proxy Statement
|
o
|
|
Definitive Additional Materials
|
o
|
|
Soliciting Material under §240.14a-12
|
|
|
|
|
|
VICTORY CAPITAL HOLDINGS, INC.
|
(Name of Registrant as Specified In Its Charter)
|
|
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
|
Payment of Filing Fee (Check the appropriate box):
|
ý
|
|
No fee required.
|
o
|
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|
|
(1)
|
|
Title of each class of securities to which transaction applies:
|
|
|
(2)
|
|
Aggregate number of securities to which transaction applies:
|
|
|
(3)
|
|
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
|
|
|
(4)
|
|
Proposed maximum aggregate value of transaction:
|
|
|
(5)
|
|
Total fee paid:
|
o
|
|
Fee paid previously with preliminary materials.
|
o
|
|
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
|
|
|
(1)
|
|
Amount Previously Paid:
|
|
|
(2)
|
|
Form, Schedule or Registration Statement No.:
|
|
|
(3)
|
|
Filing Party:
|
|
|
(4)
|
|
Date Filed:
|
Table of Contents
March 22, 2019
Dear
Stockholder:
On
behalf of the Board of Directors of Victory Capital Holdings, Inc., we cordially invite you to attend the 2019 Annual Meeting of Stockholders, which will be held on
May 1, 2019, at 7:00 a.m., Eastern
Time. For your convenience, we are pleased to advise that the Annual Meeting will be a completely virtual meeting which will be conducted via live webcast. You will be able to attend the Annual
Meeting via the Internet, vote your shares electronically, and submit questions during the Annual Meeting by visiting:
www.virtualshareholdermeeting.com/VCTR2019.
The
matters to be considered by stockholders at the Annual Meeting are described in detail in the accompanying materials.
We
have decided to provide access to our proxy materials over the Internet under the Securities and Exchange Commission's "notice and access" rules. Information about how to access and
review our proxy statement and 2018 Annual Report on Form 10-K, is included in the Notice of Internet Availability of Proxy Materials that you received in the mail. The notice also explains how
you may submit your vote over the Internet. You will not receive printed copies of our proxy materials unless you request them.
Attached
to this letter are a Notice of Annual Meeting of Stockholders and Proxy Statement, which describe the business to be conducted at the meeting.
Whether
or not you plan to attend the Annual Meeting virtually, please submit your vote at your earliest convenience.
|
|
|
|
|
Sincerely,
|
|
|
|
|
|
David C. Brown
|
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
Table of Contents
NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the 2019 Annual Meeting of Stockholders of Victory Capital Holdings, Inc. will be held on May 1, 2019,
at 7:00 a.m., Eastern Time. You will be able to attend the Annual Meeting via the Internet, vote your shares electronically and submit your questions during the meeting by visiting:
www.virtualshareholdermeeting.com/VCTR2019.
You
will need the control number included in your Notice of Internet Availability of Proxy Materials or your proxy card (if you received a printed copy of the proxy materials) to enter
the meeting online to consider and vote upon:
-
1.
-
The
election of three Class I directors to serve until the 2022 annual meeting of stockholders.
-
2.
-
The
ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2019.
-
3.
-
Any
other business as may properly come before the Annual Meeting or any adjournments thereof.
Stockholders
who owned shares of our stock as of the close of business on March 5, 2019, are entitled to attend and vote at the Annual Meeting and any adjournments thereof.
We encourage you to read this proxy statement and submit your proxy or voting instructions as soon as possible. You may vote your shares by Internet or, if you
received printed proxy materials, by mailing the completed proxy card. Please refer to the section "How do I vote?" for detailed voting instructions.
|
|
|
|
|
By Order of the Board of Directors,
|
|
|
|
|
|
Nina Gupta
|
|
|
Corporate Secretary
|
Brooklyn,
Ohio
March 22, 2019
Important
Notice Regarding the Internet Availability of Proxy Materials for the Stockholder Meeting to be held on Wednesday, May 1, 2019, at 7:00 a.m., Eastern Time. Our
proxy statement and 2018 Annual Report on Form 10-K are available at www.proxyvote.com.
Table of Contents
Table of Contents
i
Table of Contents
Victory Capital Holdings, Inc.
4900 Tiedeman Road, 4th Floor
Brooklyn, Ohio 44144
PROXY STATEMENT
GENERAL INFORMATION
We are providing you this proxy statement in connection with the solicitation of proxies by our Board of Directors to be voted at the 2019
Annual Meeting of Stockholders (the "Annual Meeting") and at any adjournments thereof. The Annual Meeting will be held virtually via live webcast on Wednesday, May 1, 2019, at 7:00 a.m.,
Eastern Time. You will be able to attend the Annual
Meeting via the Internet, vote your shares electronically, and submit questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/VCTR2019.
We
provide our stockholders with access to proxy materials on the Internet instead of mailing a printed copy of the materials to each stockholder. A Notice of Internet Availability of
Proxy Materials has been mailed to our stockholders on or about March 22, 2019. As of that date, stockholders will have the ability to access the proxy materials on the website referred to in
the notice or request a printed set of proxy materials be sent by following the instructions on the notice.
When
we use the terms "Victory", the "Company", "we", "us" and "our" in this Proxy Statement, we mean Victory Capital Holdings, Inc., a Delaware corporation and, unless the
context otherwise requires, its consolidated subsidiaries. "You" refers to the holders of our common stock.
Matters to be voted on at the Annual Meeting
|
|
|
|
|
Proposal
|
|
Board
Recommendation
|
|
Vote Required
|
Election of Class I Directors
|
|
FOR each nominee
|
|
Plurality of the votes present in person or by proxy
|
Ratification of the Appointment of Ernst & Young LLP as our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2019
|
|
FOR
|
|
Majority of the votes present in person or by proxy
|
1
Table of Contents
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING
1. Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of materials?
We have decided to provide access to our proxy materials over the Internet under the Securities and Exchange Commission's "notice and access" rules. Information
about how to access and review our proxy materials is included in the Notice of Internet Availability of Proxy Materials that you received in the mail. The notice also explains how you may submit your
vote over the Internet. You will not
receive printed copies of our proxy materials unless you request them by following the instructions on the notice.
If
you own shares of stock in more than one accountfor example, in a joint account with your spouse and in your individual brokerage accountyou may receive more
than one notice. To vote all of your shares, please follow the instructions provided on each of the notices you received.
2. What information does the notice contain?
The notice provides information about:
-
-
The date, time and details of how the Annual Meeting will be conducted.
-
-
The proposals to be voted on at the Annual Meeting and the voting recommendation of our board of directors with regard to each item.
-
-
The website where our proxy materials can be viewed.
-
-
Instructions on how to request a paper or E-Mail copy of the proxy materials.
-
-
Instructions on how to vote by Internet or by mail or at the Annual Meeting.
3. What proposals will be voted on at the Annual Meeting?
There are two proposals to be considered and voted on at the Annual Meeting:
-
-
The election of three Class I directors to serve until the 2022 annual meeting of stockholders.
-
-
The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year
ending December 31, 2019.
We
will also consider any other business that properly comes before the Annual Meeting.
4. What securities can be voted at the Annual Meeting?
The securities that can be voted in connection with the Annual Meeting consist of our Class A and Class B common stock. Each share of Class A
common stock entitles its holder to one vote and each share of Class B common stock entitles its holder to ten votes. The holders of our common stock will vote together as a single class on all
matters presented to the stockholders for their vote or approval.
5. Who is entitled to vote at the Annual Meeting?
Holders of our Class A common stock (each of which entitles its holder to one vote per share), Class B common stock (each of which entitles its
holder to ten votes per share) and unvested Class B restricted stock (each of which entitles its holder to ten votes per share) but are subject to future vesting based on time or performance
criteria at the close of business on March 5, 2019, are entitled to vote in connection with the Annual Meeting.
2
Table of Contents
On
March 5, 2019, we had the following numbers of shares outstanding entitled to vote:
|
|
|
|
|
Class A common stock
|
|
|
14,565,975
|
|
Class B common stock and unvested restricted stock
|
|
|
55,541,207
|
|
Total shares of common stock
|
|
|
70,107,182
|
|
Pursuant
to our Employee Shareholders' Agreement, a three-member Employee Shareholders Committee, currently composed of David C. Brown (Chief Executive Officer and Chairman of the
Board), Michael D. Policarpo, (President, Chief Financial Officer and Chief Administrative Officer) and Kelly S. Cliff (President, Investment Franchises), has an irrevocable proxy from a substantial
majority of our employees to vote the shares of Class B common stock and Class A common stock those employees have acquired from us, and any shares they may acquire from us in the
future. As of the record date, there were 8,195,115 shares of Class B common stock and unvested restricted stock and 1,139,297 shares of Class A common stock held by such employees and
subject to the Employee Shareholders' Agreement, representing in the aggregate approximately 15% of the total voting power of the outstanding common stock (including unvested restricted shares). For
administrative ease, we have adopted the following methodology to approximate the number of Class A shares held by those employees and subject to the Employee Shareholders' Agreement as of the
record date. We generally compare (x) the cumulative number of Class B shares that have been converted to Class A shares and are held by those employees (the "Employee-Converted
Class A Shares") to (y) the number of Class A shares held by these employees in brokerage accounts to determine the number of those Employee-Converted Class A Shares that
have been sold by those employees (the "Employee-Sold Class A Shares"). We then subtract the Employee-Sold Class A Shares from the cumulative Employee-Converted Class A Shares to
calculate the number of Employee-Converted Class A Shares held by those employees and subject to the Employee Shareholders' Agreement. Although the Employee Shareholders Committee has an
irrevocable proxy from those employees to vote those shares of Class A Common Stock, the Employee Shareholders Committee has opted not to exercise that proxy with respect to those shares for
this year's Annual Meeting. This decision does not prevent the Employee Shareholders Committee from exercising its proxy with respect to those shares in the future. For more information on our
Employee Shareholders' Agreement and Employee Shareholders
Committee, see "Relationships and Related Party TransactionsEmployee Shareholders' Agreement".
6. How does the board of directors recommend I vote?
Our board of directors recommends that you vote:
-
-
"FOR" each of the Class I nominees to the board of directors.
-
-
"FOR" the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the
fiscal year ending December 31, 2019.
7. How do I hold my stock?
Most of our Class A stockholders hold their shares as a beneficial owner through a broker or other nominee rather than directly in their own name on the
records of our transfer agent. There are distinctions between shares held of record and those owned beneficially, which are highlighted below.
-
-
Stockholder of Record
If you hold stock that is registered directly in your name on
the records of our transfer agent, American Stock Transfer & Trust Company, LLC ("AST"), you are a stockholder of record. As a stockholder of record, you will receive notice from our
mailing distributor.
3
Table of Contents
-
-
Beneficial Owner
If you hold stock in an account through a broker, bank or similar
institution, you are considered a beneficial owner of shares held in street name. As such, the notice will be sent to you by the bank, broker or other institution through which you hold your shares.
8. How do I vote?
If you are a stockholder of record, you may vote in one of four ways:
-
-
By Internet.
Go to
www.proxyvote.com and follow the instructions for Internet voting. You will need the control number located on your notice or proxy card, as applicable. Internet voting is available 24 hours a
day. If you choose to vote by Internet, you do not need to return a proxy card. To be valid, your vote by Internet must be received by 11:59 p.m., Eastern Time, on April 30, 2019.
-
-
By Mail.
If you request printed
copies of the proxy materials, you will receive a proxy card. You may then vote by signing, dating and mailing the proxy card in the envelope provided. To be valid, your vote by mail must be received
by 11:59 p.m., Eastern Time, on April 30, 2019.
-
-
By Phone.
Use any touch-tone
telephone and dial 1-800-690-6903 to transmit your voting instructions. Vote by 11:59 p.m., Eastern Time on April 30, 2019 for shares held directly and by 11:59 p.m., Eastern Time
on April 25, 2019 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
-
-
During the Virtual Meeting.
Go to
www.virtualshareholdermeeting.com/VCTR2019 during the virtual meeting on Wednesday May 1, 2019 via webcast at 7:00 a.m. Eastern Time.
If
you are the beneficial owner of shares held in street name, you will receive voting instructions from the institution holding your shares. The availability of telephone or Internet
voting will depend upon that particular institution's voting processes. You may also vote during the Annual Meeting webcast after obtaining a legal proxy from the institution holding your shares.
Please contact your broker for more information.
9. How many votes must be present to transact business at the Annual Meeting?
To conduct the Annual Meeting, a majority of the voting power of the common stock issued and outstanding as of the record date must be present during the webcast
or by proxy. This is called a quorum.
10. If I submit a proxy by Internet or mail, how will my shares be voted?
If you properly submit your proxy by Internet or mail and do not subsequently revoke your proxy, your shares will be voted in accordance with your instructions.
If
you sign, date and return a proxy card but do not give voting instructions, your shares will be voted as recommended by our board of directors.
11. If I am the beneficial owner of shares held in street name and do not provide voting instructions, can my broker still vote my shares?
Under the rules of the New York Stock Exchange if you hold shares in street name and do not provide specific voting instructions, your broker may generally vote
your shares with respect to certain routine matters.
The
ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm is a routine matter and so your broker may vote your shares on
that proposal.
4
Table of Contents
However,
your broker may not vote your shares in connection with the election of the Class I directors without receiving voting instructions from you.
When
your broker submits its proxy, but does not vote on a matter, a broker non-vote occurs with respect to that matter.
12. What vote is required to approve each proposal and how are votes counted?
With respect to the election of directors, a plurality of the votes cast by the holders of the shares of Class A common stock and Class B common
stock (voting together as a single class) present during the webcast or represented by proxy at the meeting is required for the election of each of the three nominees. This means that the three
nominees receiving the highest number of votes will be elected regardless of whether the number of votes received by any such nominee constitutes a majority of the number of votes cast. Broker
non-votes will not be counted as shares entitled to vote with respect to the election of directors and so they will have no effect on the voting results.
The
ratification of the appointment of Ernst & Young LLP requires the affirmative vote of the holders of a majority of the voting power of the shares of our Class A
common stock and Class B common stock (voting together as a single class) present during the webcast or represented by proxy and entitled to vote. Abstentions will be counted as shares entitled
to vote and therefore will have the effect of negative votes with respect to the proposal.
Crestview
Partners II GP, L.P. ("Crestview GP") has sufficient voting power to control the outcome of voting for both proposals and intends to vote in favor of each
proposal.
13. How can I attend and vote my shares during the Annual Meeting
We will be hosting a completely virtual Annual Meeting which will be conducted live via webcast. Any stockholder can attend the annual Meeting via the Internet at
www.virtualshareholdermeeting.com/VCTR2019. If you were a stockholder as of the Record Date, or you hold a valid proxy for the Annual Meeting, you can vote at the Annual Meeting. A summary of the
information you need to attend the Annual Meeting online is provided below:
-
-
Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at
www.virtualshareholdermeeting.com/VCTR2019
-
-
Webcast starts at 7 a.m., Eastern Time
-
-
Stockholders may vote and submit questions while attending the Annual Meeting via the Internet
14. How can I change my vote or revoke a proxy?
If you are a stockholder of record you may change your vote or revoke a proxy at any time prior to the Annual Meeting by submitting a written notice of revocation
or a proxy bearing a later date to the Company's Corporate Secretary no later than the deadline specified on the notice or proxy card, or by voting via the Internet during the Annual Meeting.
If
you are the beneficial owner of shares held in street name you may change your vote or revoke a proxy in accordance with the instructions provided by the institution through which you
hold your shares.
15. Where and when will the voting results be available?
We will file the official voting results on a Form 8-K within four business days of the Annual Meeting. If the final results are not available at that
time, we will provide preliminary voting results in
5
Table of Contents
the
Form 8-K and will provide the final results in an amendment to the Form 8-K when they become available.
16. How can I view a list of record stockholders?
A list of the stockholders of record entitled to vote at the Annual Meeting will be available for inspection upon request of any stockholder for a purpose germane
to the meeting during ordinary business hours at our principal executive offices located at 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144, during the ten days prior to the Annual Meeting.
To make arrangements to view the list prior to the Annual Meeting, stockholders should contact our Investor Relations department at (216) 898-2412 or ir.vcm.com.
17. Who pays for the expenses of this proxy solicitation?
We will pay all expenses incurred in connection with the solicitation of proxies.
6
Table of Contents
PROPOSAL 1: ELECTION OF CLASS I DIRECTORS
General
Victory's board of directors currently consists of nine members who are divided into three classes with three members each: Class I,
Class II and Class III. Class I directors initially are serving for a term expiring at the Annual Meeting. Class II directors initially are serving for a term expiring at
the 2020 annual meeting and Class III directors initially are serving for a term expiring at the 2021 annual meeting. At each succeeding annual meeting of the stockholders, successors to the
class of directors whose term expires at that annual meeting will be elected for a three-year term. Our
bylaws permit our board of directors to establish by resolution the authorized number of directors, and nine directors are currently authorized. Any increase or decrease in the number of directors
will be distributed among the three classes so that, as nearly as possible, each class will consist of an equal number of directors.
Nominees for Class I Directors
Three candidates have been nominated for election as Class I directors at the 2019 Annual Meeting for a three-year term expiring in 2022.
Upon the recommendation of the Nominating and Corporate Governance Committee, the board of directors has nominated
Alex Binderow
,
Lawrence Davanzo
and
Karin Hirtler-Garvey
for re-election as Class I directors. Biographical
information about each of the nominees is contained in the following section. A discussion of the qualifications, attributes and skills of each nominee that led our board of directors and the
Nominating and Corporate Governance Committee to the conclusion that he or she should continue to serve as a director follows each of the director and nominee biographies.
If
you are a stockholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with respect to the voting of directors, your
shares will be voted FOR the re-election of Messrs. Binderow and Davanzo and Ms. Hirtler-Garvey. Each of Messrs. Binderow and Davanzo and Ms. Hirtler-Garvey has accepted
such nomination; however, in the event that a nominee is unable or declines to serve as a director at the time of the 2019 Annual Meeting, the proxies will be voted for any nominee who shall be
designated by the board of directors to fill such vacancy. If you wish to give specific instructions with respect to the voting of directors, you may do so by indicating your instructions on your
proxy card or when you vote by telephone or over the Internet. If you are a beneficial owner holding your shares in street name and you do not give voting instructions to your broker, bank or other
intermediary, that organization will leave your shares unvoted on this matter.
THE BOARD RECOMMENDS A VOTE
FOR
THE ELECTION OF A
LEX BINDEROW, LAWRENCE DAVANZO AND KARIN HIRTLER-GARVEY.
Information Regarding the Class I Director Nominees and the Other Members of the Board of
Directors
The names of the proposed director nominees and the remaining members of our board of directors, their respective ages, their positions with
Victory and other biographical information as of March 22, 2019, are set forth below. To our knowledge, there are no family relationships among any of our directors or executive officers.
7
Table of Contents
Class I Director Nominees
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
Alex Binderow
|
|
|
37
|
|
Director
|
Lawrence Davanzo
|
|
|
66
|
|
Director
|
Karin Hirtler-Garvey
|
|
|
62
|
|
Director
|
Other Members of the Board of Directors
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
David C. Brown
|
|
|
46
|
|
Chief Executive Officer and Chairman
|
Milton R. Berlinski
|
|
|
62
|
|
Director
|
Richard M. DeMartini
|
|
|
66
|
|
Director
|
James B. Hawkes
|
|
|
77
|
|
Director
|
Robert J. Hurst
|
|
|
73
|
|
Director
|
Alan H. Rappaport
|
|
|
66
|
|
Director
|
Additional Information Regarding the Class I Director Nominees
Alex Binderow
joined our board of directors at the time of our acquisition from KeyCorp in
August 2013. Mr. Binderow joined Crestview Partners, or Crestview, in 2005. At Crestview, Mr. Binderow is a partner and a leader on the financial services team, specializing in asset and
wealth management investments. Prior to joining Crestview, he worked at Bear, Stearns & Co. in the company's acquisition finance group on a range of assignments, which included leveraged
buyouts, strategic refinancings and M&A financings across various industries. Mr. Binderow is currently a director of certain Crestview portfolio companies and previously served on the board of
directors of Munder Capital Management, or Munder, a registered investment company, until our acquisition of Munder in 2014. Mr. Binderow received his Bachelor of Business Administration, with
high distinction, from Emory University's Goizueta Business School with majors in finance and organization and management. Mr. Binderow's qualifications to serve on our board of directors
include his in-depth knowledge and experience in mergers and acquisitions, investing, leveraged finance, capital markets and asset management.
Lawrence Davanzo
joined our board of directors in October 2014. Mr. Davanzo most recently served as President of Wilshire
Associates Incorporated, overseeing the asset management areas of the firm, and
as Vice Chairman of the board of directors of Wilshire and on its executive committee until his retirement in 2012. He first joined Wilshire in 1978 and rejoined in October 2004. During his tenure at
Wilshire, he founded Wilshire's Pension Consulting business and built the firm's Funds Management Group. With over $70 billion in assets under management, or AUM, for financial intermediaries,
Funds Management became the firm's primary source of revenue growth. He also served as President of the firm's mutual fund complexes. During Mr. Davanzo's career, he also founded Asset Strategy
Consulting and served as its managing director from February 1991 to February 2000. Mr. Davanzo earned a Bachelor of Business Administration (B.B.A.) and a Masters of Science degree in Finance
(M.S.). at the University of Wisconsin-Madison. Mr. Davanzo's qualifications to serve on our board of directors include the knowledge and experience gained in the combination of more than
40 years of asset management experience through his extensive career at Wilshire Associates and also managing and running his own investment consulting firm. This allows him to bring to the
board of directors a deep understanding of issues associated with operating a business and the importance of client service and customer satisfaction unique to the asset management business.
Karin Hirtler-Garvey
joined our board of directors in October 2014. Ms. Hirtler-Garvey has over nine years of experience as a board
director in diversified industries and over 25 years of leadership experience in the financial services industry, preceded by eight years in public accounting as a CPA
8
Table of Contents
licensed
in New Jersey. Ms. Hirtler-Garvey is currently a director at Medley Capital Corporation, where she serves as the Compensation Committee Chair and a member of the Audit Committee and
the Nominating and Governance Committee, USAA Federal Savings Bank, where she serves as the Compensation Committee Chair and a member of the Audit Committee, Risk Committee and Member &
Technology Committee and Western World Insurance Company, where she serves as the Audit Committee Chair. Ms. Hirtler-Garvey also serves on a private company board. Previously,
Ms. Hirtler-Garvey served as a director and Audit Committee Chair at Residential Capital LLC, a director and a member of the Audit Committee and Risk Committee for Validus
Holdings, Ltd and a director at Aeropostale, Inc., where during her tenure she served in various roles including as Chairman of the board of directors, the Lead Independent Director,
Audit Committee Chair and a member of the Nominating and Governance Committee. Ms. Hirtler-Garvey was previously Chief Risk Officer at Ally Financial (formerly GMAC) and held a broad range of
leadership positions at Bank of America and its predecessor NationsBank and a broad range of mid-level assignments at J.P. Morgan in both the finance and risk groups. Prior to this, she worked for
eight years at Ernst & Young LLP with a focus on banking, insurance, garment industry and technology clients. Ms. Hirtler-Garvey earned a Bachelor of Science from Fairleigh
Dickinson University and is a Certified Public Accountant. Ms. Hirtler-Garvey brings executive experience from large national and international, diversified financial services companies
providing traditional banking, real estate, insurance and asset management services and through her service on other public company boards. Ms. Hirtler-Garvey provides our board of directors
with unique insight and perspective to its oversight of our global operations, corporate governance and risk management. She qualifies as an audit committee financial expert under the rules and
regulations of the SEC.
Additional Information Regarding the Other Members of the Board of Directors
David C. Brown
has served as our Chief Executive Officer since our acquisition from KeyCorp in
August 2013 and Chairman of our board of directors since April 2014. He joined our board of directors upon its formation. Mr. Brown serves as Chairman and Chief Executive Officer of Victory
Capital Management Inc., our wholly owned registered investment adviser (which we call VCM), responsible for the development, execution and oversight of firm strategy. He is also Chairman of
the VCM investment committee and a trustee for our proprietary mutual funds, the Victory Funds. Mr. Brown joined the firm in 2004 and has held multiple senior level positions including
President and Chief Operating Officer prior to his current role. Before joining Victory, Mr. Brown spent five years at Gartmore Global Investments, Inc. in a number of senior management
positions including Chief Financial Officer and Chief Operating Officer of Gartmore Emerging Managers, LLC. Prior to joining Gartmore, he worked for Ernst & Young LLP as a manager
in the Assurance & Advisory Business Services unit focusing on investment management businesses. Mr. Brown also currently serves as a director of Cerebellum Capital. He previously was a
member of the Bluecoats, Inc. of Cuyahoga County, OH, and previously served on the Summa Health Systems of Ohio Investment Committee and on the board of directors for JumpStart of Ohio.
Mr. Brown holds a Bachelor of Arts degree in political science with an emphasis on accounting from Ursinus College and a Master of Business Administration from Case Western Reserve University.
Mr. Brown's extensive business, finance and leadership skills gained and developed through years of experience in the financial services industry, including tenure overseeing our strategic
direction as Chief Executive Officer, brings valuable industry-specific knowledge and insights to our board of directors. Mr. Brown has also overseen several transactions in the asset
management sector during his tenure with us. He has significant expertise in identifying, structuring and executing strategic acquisitions, as well as in managing boutique firms post-acquisition.
These skills, combined with Mr. Brown's extensive knowledge of our business and our industry, enable him to provide valuable insights to our board of directors on our strategic direction.
Milton R. Berlinski
joined our board of directors at the time of our acquisition from KeyCorp in August 2013. Mr. Berlinski
co-founded Reverence Capital Partners, or Reverence Capital, in June 2013
9
Table of Contents
after
concluding a 26-year career at Goldman, Sachs & Co., or Goldman Sachs, as a Partner and Managing Director. He joined Goldman Sachs in 1986 as Vice President of the investment
banking division and as one of the founders of Goldman Sachs' Financial Institutions business. He became a Partner and Managing Director in 1996, responsible for Advisory, Principal Investing and
Merchant Banking for financial institutions. In 1999, he was named head of the firm's Strategy and Corporate Development Group, and in 2001 he assumed additional responsibility as head of Firm Wide
Strategy. Mr. Berlinski also served as a member of the Operating Committee and Compensation Committee. Mr. Berlinski also served as Global Head of the Financial Sponsors Group from 2005
until 2012 and was a founding member of the Financial Institutions Group. Mr. Berlinski is a founding partner of the
Aruba Growth Fund, a private equity fund funded by and invested in local companies and institutions in Aruba. Mr. Berlinski received a Master of Business Administration in finance from The
Wharton School of Finance at the University of Pennsylvania and a Bachelor of Arts in engineering from California State University. Mr. Berlinski's qualifications to serve on our board of
directors include his extensive background in the investment management industry, business development, corporate strategy and international finance, as well as his substantial board experience (both
public and private). In addition, he brings experience relating to operations and compensation matters having served as a member of Goldman Sachs Operating and Compensation Committees for several
years. In addition, Mr. Berlinski serves on the board of directors of Kabbage Inc., Russell Investments Ltd., Diamond Resorts International Inc., and Venerable
Holdings, Inc.
Richard M. DeMartini
joined our board of directors at the time of our acquisition from KeyCorp in August 2013. Mr. DeMartini joined
Crestview as a partner in 2005. He leads Crestview's financial services strategy. Prior to Crestview, Mr. DeMartini served as President of the Bank of America Asset Management Group from March
2001 until December 2004. At Bank of America, Mr. DeMartini was responsible for all wealth and asset management activities and oversaw approximately $400 billion in AUM. He was also a
member of Bank of America's operating committee. Prior to working at Bank of America, Mr. DeMartini served as Chairman and Chief Executive Officer of the international private client group at
Morgan Stanley Dean Witter. His 26-year career at Morgan Stanley included roles as President of individual asset management, Co-President of Dean Witter & Company, Inc. and Chairman of
Discover Card. He was also a member of the Morgan Stanley management committee. He also currently serves as a director of Fidelis Insurance holdings, PMC Consolidated Holdings, Partners Capital and as
a trustee and President of the Whitney Museum of American Art. Mr. DeMartini has served as Chairman of the board of directors of the NASDAQ Stock Market, Vice Chairman of the board of directors
of the National Association of Securities Dealers, Inc. and a director of Capital Bank Financial Corp. Mr. DeMartini received a Bachelor of Arts from San Diego State University.
Mr. DeMartini's qualifications to serve on our board of directors include his in-depth knowledge and operating experience in financial services, particularly in the asset and wealth management
sectors, having held senior executive positions at major institutions. In addition, Mr. DeMartini has significant experience as a director on the boards of public and private companies. He
provides the board of directors with a valuable perspective on global investment management and capital markets and has extensive experience in assessing value, strategy and risks related to potential
acquisitions.
James B. Hawkes
joined our board of directors at the time of our acquisition from KeyCorp in August 2013. Mr. Hawkes also serves as
Chairman Emeritus of Eaton Vance. In his 37-year career at Eaton Vance, Mr. Hawkes served in numerous senior executive roles, including Chairman, President and Chief Executive Officer, Chief
Investment Officer and Director of Investment Research. Mr. Hawkes also serves on the board of managers of Central Park Group, an alternative investment advisory firm, and on other private
company boards. He is a trustee of the Peabody Essex Museum and Winterthur Museum and is a Life Trustee of the USS Constitution Museum. Mr. Hawkes earned a Master of Business Administration
from Harvard Business School and a Bachelor of Science in aerospace engineering from the University of Oklahoma. After graduation from the University of Oklahoma Mr. Hawkes served in the U.S.
Navy aboard submarines as a nuclear-trained officer. He also
10
Table of Contents
earned
the Chartered Financial Analyst designation. Mr. Hawkes' qualifications to serve on our board of directors include his extensive business, finance, investment and leadership skills
gained and developed through years of experience in the numerous senior executive roles held during his 37-year career at Eaton Vance. In particular, as former Chief Executive Officer of Eaton Vance,
Mr. Hawkes has substantial experience managing and leading a firm in the financial services industry. These skills, combined with Mr. Hawkes' extensive knowledge of our business and our
industry, enable him to provide valuable insights to our board of directors on our strategic direction.
Robert J. Hurst
joined our board of directors in October 2016. Mr. Hurst joined Crestview in 2005 and is Vice Chairman of Crestview
and a member of its investment committee. He retired as Vice Chairman of Goldman Sachs in June 2004. At Goldman Sachs, Mr. Hurst spent 30 years in a variety of leadership positions,
including head of the investment banking division from 1990 to 1999. Following Goldman Sachs' initial public offering, Mr. Hurst became Vice Chairman and a member of the board of directors and
focused on firm-wide matters in addition to having client responsibilities. He is currently a director of VF Corporation and has served on the board of directors of six other public companies. He has
been active in the nonprofit sector and currently serves as Chairman of the board of directors of the Aspen Music Festival and School, Chairman of the National Cybersecurity Center, former Chairman of
the board of directors and currently Chairman of the executive committee of the Whitney Museum of American Art, a trustee and member of the executive committee of The Aspen Institute, Chairman
emeritus of the Jewish Museum and a former member of the board of overseers of The Wharton School. He is a member of the Council on Foreign Relations. Mr. Hurst was also founding Chief
Executive Officer of the
9
/
11
United Services Group, the coordinating arm for 13 social service agencies involved in relief activities, including the Red Cross. Mr. Hurst
received a Master of Business Administration from The Wharton School at the University of Pennsylvania and a Bachelor of Arts from Clark University. He also did additional graduate work as a Public
Finance Fellow at the University of Pennsylvania. Mr. Hurst's qualifications to serve on our board of directors include his 30 years of operating and leadership experience at Goldman
Sachs and as a partner in a private equity firm. Through his involvement with Crestview, he has provided leadership to both public and private companies. Mr. Hurst brings to our board of
directors extensive experience in the financial services industry, finance and business development.
Alan H. Rappaport
joined our board of directors at the time of our acquisition from KeyCorp in August 2013. Mr. Rappaport was
formerly the Chairman and President of Bank of America's Private Bank as well as managing director of Chase Investment Advisors and a member of the management committee of Chase Global Private Bank.
Prior to Bank of America, Mr. Rappaport served as a Managing Director of the Chase Global Private Bank and a Partner of the Beacon Group. Mr. Rappaport also spent 17 years with
CIBC Oppenheimer, where he was the senior executive responsible for the Asset Management Division. Mr. Rappaport serves as an adjunct professor of finance at New York University's Stern School
of Business and a lecturer at Stanford University's Graduate School of Business. Previously, Mr. Rappaport had served as Chairman of the Board of Trustees of GuideStar, trustee of NYU Langone
Medical Center, trustee of the American Museum of Natural History and national co-chair of the Duke University Parents Committee. He is currently a member of the Council on Foreign Relations, and
serves on the boards of directors of PIMCO multifund complex and Allianz multifund complex. Mr. Rappaport earned a Master of Business Administration from Stanford University and a Bachelor of
Arts from Harvard University. Mr. Rappaport's qualifications to serve on
our board of directors include the knowledge, leadership and experience gained in over 40 years of working in the investment management business of a large global, complex asset management
organization, including serving as Chairman and President of Bank of America's Private Bank. Mr. Rappaport's leadership and experience in academia provide our board of directors with a unique
perspective and in-depth understanding of issues concerning international finance, economics and public policy.
11
Table of Contents
Background and Experience of Directors
When considering whether directors and nominees have the experience, qualifications, attributes or skills, taken as a whole, to enable our board
of directors to satisfy its oversight responsibilities effectively in light of our business and structure, the board of directors focused primarily on each person's background and experience as
reflected in the information discussed in each of the directors' individual biographies set forth above. While we do not have a formal policy on diversity, we also consider diversity of experience as
one of the factors. We believe our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business.
Director Independence
Our board of directors has evaluated the independence of its members based upon the rules of NASDAQ. Applying these standards, our board of
directors has affirmatively determined that each of the directors, other than Mr. Brown, is an independent director.
Board Leadership Structure
Our board of directors includes our Chief Executive Officer, who also serves as Chairman of the board of directors. Our board of directors
understands that there is no single, generally accepted approach to providing board leadership and that given the dynamic and competitive environment in which we operate, the right board leadership
structure may vary as circumstances warrant. To this end, our board of directors has no policy mandating the combination or separation of the roles of Chairman of the board of directors and Chief
Executive Officer. We do not have a lead independent director. The board of directors will discuss and consider the matter from time to time as circumstances change and, subject to our amended and
restated bylaws, will have the flexibility to modify our board structure as it deems appropriate.
Director Nomination Rights Under the Shareholders' Agreement
Under the Shareholders' Agreement to which the Company is a party, for so long as Crestview Victory, L.P. ("Crestview Victory"),
continues to own 20% of the aggregate outstanding shares of our common stock, we have the obligation to nominate three Crestview Victory designees to the board of directors, for so long as Crestview
Victory continues to own at least 10% but less than 20% of the aggregate outstanding shares of our common stock, we have the obligation to nominate two Crestview Victory nominees, and for so long as
Crestview Victory continues to own at least 5% but less than 10% of the aggregate outstanding shares of our common stock, we have the obligation to nominate one Crestview Victory nominee (plus one
individual with board observer rights who is permitted to attend board and committee meetings). For so long as Reverence Capital Partners ("Reverence Capital") continues to own at least 10% of the
aggregate outstanding shares of our common stock, we have the obligation to nominate two Reverence Capital designees, and for so long as Reverence Capital continues to own at least 5% but less than
10% of the aggregate outstanding shares of our common stock, we have the obligation to nominate one Reverence Capital designee. As long as it is entitled to designate at least one director to the
board of directors, each of Crestview Victory and Reverence Capital are entitled to have a designee serve on each board committee, subject to applicable law and stock exchange requirements. Each of
the stockholders party to the Shareholders' Agreement (including the Employee Shareholders Committee) have also agreed to vote, or cause to be voted, all of its outstanding shares to ensure the above
composition of our board of directors.
Committees of the Board; Board Meetings
The board of directors conducts its business through meetings of the board and its committees. The board of directors has three standing
committees: an Audit Committee, a Compensation
12
Table of Contents
Committee
and a Nominating and Corporate Governance Committee. The current members and chairpersons of the committees are:
|
|
|
|
|
|
|
Director
|
|
Audit
Committee
|
|
Compensation
Committee
|
|
Nominating and Corporate
Governance Committee
|
Alex Binderow*
|
|
|
|
X
|
|
|
Lawrence Davanzo*
|
|
X
|
|
|
|
|
Karin Hirtler-Garvey*
|
|
Chairperson
|
|
|
|
|
Milton R. Berlinski*
|
|
|
|
X
|
|
X
|
Richard M. DeMartini*
|
|
|
|
|
|
Chairperson
|
James B. Hawkes*
|
|
|
|
X
|
|
X
|
Alan H. Rappaport*
|
|
X
|
|
Chairperson
|
|
|
During
2018, our board of directors held 11 meetings, the Audit Committee held 13 meetings, the Compensation Committee held 5 meetings and the Nominating and Corporate Governance
Committee held 1 meeting. As a matter of policy, it is expected that all directors should make every effort to attend meetings of the board of directors and meetings of the committees of which they
are members. During 2018, each director attended at least 75% of the aggregate number of meetings of the board of directors and meetings of the committees of which he or she is a member.
Our
Corporate Governance Guidelines provide that directors are encouraged to attend our annual stockholder meetings.
Crestview GP
controls Class B common stock representing approximately 65% of the total voting power of our outstanding common stock. As a result, we are a "controlled
company" under the corporate governance listing standards of the NASDAQ Stock Market LLC, or NASDAQ. As a controlled company, we are exempt from the obligation to comply with certain corporate
governance requirements, including the requirements:
-
-
that a majority of our board of directors consists of independent directors, as defined under the rules of NASDAQ;
-
-
that we have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter
addressing the committee's purpose and responsibilities; and
-
-
that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's
purpose and responsibilities.
We
do not intend to take advantage of these exemptions once Crestview GP no longer controls a majority of our voting power. These exemptions do not modify the independence
requirements for our audit committee.
Audit Committee
We have an Audit Committee that is responsible for, among other things:
-
-
assisting the board of directors in reviewing: our financial reporting and other internal control processes;
-
-
our financial statements; the independent auditors' qualifications, and independence;
-
-
our compliance with legal and regulatory requirements and our Code of Business Conduct and Ethics.
13
Table of Contents
The
Audit Committee consists of Karin Hirtler-Garvey (Chair), Lawrence Davanzo and Alan H. Rappaport. Our board of directors has affirmatively determined that each of Karin
Hirtler-Garvey, Lawrence Davanzo and Alan H. Rappaport meet the definition of "independent director" for purposes of serving on an audit committee under Rule 10A-3 and the NASDAQ rules. Karin
Hirtler-Garvey has been identified as an "audit committee financial expert" as that term is defined in the rules and regulations of the SEC. The Audit Committee has adopted a written charter that,
among other things, specifies the scope of its rights and responsibilities and satisfies the applicable standards of the SEC
and NASDAQ. The charter of the Audit Committee is available under the Investor Relations link on our website at
www.vcm.com
. We will provide a printed
copy of the charter of the Audit Committee to stockholders upon request.
Nominating and Corporate Governance Committee
We have a Nominating and Corporate Governance Committee that is responsible for, among other things:
-
-
reviewing board structure, composition and practices, and making recommendations on these matters to our board of directors;
-
-
reviewing, soliciting and making recommendations to our board of directors and stockholders with respect to candidates for election to the
board of directors;
-
-
overseeing our board of directors' performance and self-evaluation process;
-
-
reviewing the compensation payable to board and committee members and providing recommendations to our board of directors in regard thereto;
and
-
-
developing and reviewing a set of corporate governance principles.
The
Nominating and Corporate Governance Committee consists of Richard M. DeMartini (Chair), James B. Hawkes and Milton R. Berlinski. The Nominating and Corporate Governance Committee has
adopted a written charter that, among other things, specifies the scope of its rights and responsibilities and satisfies the applicable standards of the SEC and NASDAQ. The charter of the Nominating
and Corporate Governance Committee is available under the Investor Relations link on our website at
www.vcm.com
. We will provide a printed copy of the
charter of the Nominating and Corporate Governance Committee to stockholders upon request.
Compensation Committee
We have a Compensation Committee that is responsible for, among other things:
-
-
determining the compensation of our executive officers;
-
-
reviewing our executive compensation policies and plans; and
-
-
administering and implementing our equity compensation plans.
The
Compensation Committee consists of Alan H. Rappaport (Chair), James B. Hawkes, Alex Binderow and Milton R. Berlinski. The Compensation Committee has adopted a written charter that,
among other things, specifies the scope of its rights and responsibilities and satisfies the applicable standards of the SEC and NASDAQ. The charter of the Compensation Committee is available under
the Investor Relations link on our website at
www.vcm.com
. We will provide a printed copy of the charter of the Compensation Committee to stockholders
upon request.
As
a controlled company, we may rely upon the exemption from the requirement that we have a compensation committee composed entirely of independent directors with a written charter
addressing the committee's purpose and responsibilities.
14
Table of Contents
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee is, or has at any time during the past year been, one of our officers or employees. None of
our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving
on our board of directors or Compensation Committee.
Director Compensation
During 2018, Alan Rappaport, Larry Davanzo, James Hawkes, and Karin Hirtler-Garvey each received $125,000, payable in quarterly installments, as
annual compensation for service on our board of directors. In 2018, Alan Rappaport, Larry Davanzo, James Hawkes, and Karin Hirtler-Garvey, had the opportunity to elect to receive all or a portion of
their director fees in fully-vested shares of the Company's Class B common stock. The other members of our board of directors, including directors who are also employed as our executive
officers, received no director compensation in 2018.
We
also reimburse our directors for reasonable and necessary out-of-pocket expenses incurred in attending board and committee meetings or performing other services for us in their
capacities as directors.
Except
as described above, we currently have no other formal arrangements under which our directors receive compensation for service to the board of directors or its committees.
The
following table sets forth information concerning director compensation paid during the year ended December 31, 2018.
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned
or Paid
in Cash
($)(1)
|
|
Total
($)
|
|
Milton R. Berlinski
|
|
|
|
|
|
|
|
Alex Binderow
|
|
|
|
|
|
|
|
Lawrence Davanzo
|
|
|
125,000
|
|
|
125,000
|
|
Richard M. DeMartini
|
|
|
|
|
|
|
|
James B. Hawkes
|
|
|
125,000
|
|
|
125,000
|
|
Karin Hirtler-Garvey
|
|
|
125,000
|
|
|
125,000
|
|
Robert J. Hurst
|
|
|
|
|
|
|
|
Alan H. Rappaport
|
|
|
125,000
|
|
|
125,000
|
|
-
(1)
-
Represents
director fees earned by our directors in respect of service during 2018. In 2018, Messrs. Hawkes and Rappaport elected to receive all, and
Ms. Hirtler-Garvey elected to receive 20%, of their director fees in fully-vested shares of the Company's Class B common stock.
15
Table of Contents
CORPORATE GOVERNANCE
Corporate Governance Guidelines
We have adopted Corporate Governance Guidelines that guide our board of directors on matters of corporate governance,
including:
-
-
Composition and leadership structure of the board of directors
-
-
Selection and retirement of directors
-
-
Obligations with respect to board of directors and committee meetings
-
-
Committees of the board of directors
-
-
Specific functions related to management succession, executive compensation and director compensation
-
-
Certain expectations related to, among other things, meeting attendance and participation, compliance with our Code of Business Conduct, other
directorships and continuing education
-
-
Evaluation of board performance
-
-
Board access to management and independent advisors
A
copy of the Corporate Governance Guidelines is available under the Investor Relations link on our website at
www.vcm.com
. We will
provide a printed copy of the guidelines to stockholders upon request.
Board Effectiveness
On an annual basis, the board of directors, through the Nominating and Corporate Governance Committee, conducts a self-evaluation to evaluate
its effectiveness in fulfilling its obligations. In addition, each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee completes an annual self-evaluation.
Code of Business Conduct and Ethics
We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers
responsible for financial reporting. The code satisfies applicable SEC requirements and NASDAQ listing standards. The code is available under the Investor Relations link on our website at
www.vcm.com
.
We will provide a printed copy of the code to stockholders upon request.
Board Oversight of Risk Management
Our board of directors in conjunction with our Audit Committee, is responsible for overseeing management in the execution of its
responsibilities and for assessing our general approach to risk management. In addition, an overall review of risk is inherent in the consideration of our business, long-term strategies and other
matters presented to our board of directors. Our board of directors exercises its risk oversight responsibilities periodically as part of its meetings and also through its
16
Table of Contents
standing
committees, each of which is responsible for overseeing various components of enterprise risk as summarized below.
|
|
|
Board/Committee
|
|
Primary Areas of Risk Oversight
|
Full Board
|
|
Oversight of strategic, financial, operational (including cybersecurity) and execution risks in connection with the Company's business operations and the operating environment.
|
Audit Committee
|
|
Oversight of risks, including reviewing and discussing with management the Company's risk assessment and risk management
policies, in particular risks related to financial matters (especially financial reporting and accounting practices and policies) and significant tax, legal and compliance matters.
|
Nominating and Corporate Governance Committee
|
|
Oversight of risks associated with director independence, potential conflicts of interest, director qualification,
management and succession planning and overall effectiveness of the board of directors.
|
Compensation Committee
|
|
Oversight of risks associated with compensation policies, plans and practices, including whether the compensation program
provides appropriate incentives that do not encourage excessive risk taking.
|
Senior
management is responsible for assessing and managing risk, including strategic, operational, cybersecurity, regulatory, investment, and execution risks, on a day-to-day basis,
including the creation of appropriate risk management programs. The board of directors periodically reviews information presented by senior management regarding the assessment and management of the
Company's risk.
The
role of the board of directors in risk oversight of the Company is consistent with our leadership structure, with the Chief Executive Officer and other members of senior management
having responsibility for assessing and managing our risk exposure, and our board of directors and its committees providing oversight in connection with those efforts. We believe this division of risk
management responsibilities provides a consistent and effective approach for identifying, managing and mitigating risks throughout the Company.
Nomination of Directors
Our Corporate Governance Guidelines provide that the Nominating and Corporate Governance Committee is responsible for identifying the nominees
to stand for election to the board of directors and recommending such nominees for selection by the board of directors, and for recommending to the board of directors individuals to fill vacancies
occurring between annual meetings of stockholders. The Nominating and Corporate Governance Committee is responsible for developing criteria for the evaluation of candidates for directorship, taking
into consideration the requirements of NASDAQ and applicable law and other factors as deemed appropriate by the committee, which criteria are approved by the board of directors. In accordance with our
Corporate Governance Guidelines, any nominee to the board of directors should demonstrate the following qualities, which are criteria used by the Nominating and Corporate Governance Committee in
evaluating candidates for election to the board of directors:
-
-
The highest personal and professional ethics and integrity.
-
-
Proven achievement and competence in the nominee's field and the ability to exercise sound business judgment.
-
-
Skills that are complementary to those of the existing members of the board of directors.
17
Table of Contents
-
-
The ability to assist and support management and make significant contributions to the Company's success.
-
-
An understanding of the fiduciary responsibilities that are required of a member of the board of directors and the commitment of time and
energy necessary to diligently carry out those responsibilities.
The
Nominating and Corporate Governance Committee seeks to create a board that consists of a diverse group of qualified individuals that function effectively as a group. Qualified
candidates are those who, in the judgment of the committee, possess strong personal attributes and relevant business experience to assure effective service on our board of directors. Personal
attributes include effective leadership qualities, a high standard of integrity and ethics, professional and sound judgment, strong interpersonal skills, and a collaborative attitude. Experience and
qualifications include professional experience with corporate boards, financial acumen, industry knowledge, diversity of viewpoints, and special business experience and expertise in an area relevant
to the Company. When the committee reviews a potential new candidate, the committee will look specifically at the candidate's qualifications in light of the needs of our board of directors and the
Company at that time given the then current make-up of our board of directors. Candidates are selected on the basis of qualifications and experience without discriminating on the basis of gender, age,
race or ethnicity.
The
Nominating and Corporate Governance Committee, at least annually, assesses the appropriate size of the board of directors and any committee thereof. In the event that vacancies are
anticipated or otherwise arise, the committee will seek to identify director candidates based on input provided by a number of sources. The committee also has the authority to consult with or retain
advisors or search firms to assist in the identification and evaluation of qualified director candidates. In addition to the above considerations, the committee will consider the Company's obligations
under our Shareholders' Agreement to nominate individuals designated by Crestview Victory and Reverence Capital when identifying, selecting or recommending nominees for the board of directors. For
more information on our obligations under our Shareholders' Agreement, see "Proposal 1: Election of Class I DirectorsDirector Designation Rights Under the Shareholders' Agreement."
Once
director candidates have been identified, the Nominating and Corporate Governance Committee will evaluate each candidate in light of his or her qualifications and credentials, and
any additional factors that the committee deems necessary or appropriate, including those set forth above. The committee will evaluate whether a prospective candidate is qualified to serve as a
director and, if so qualified, will seek the approval of the full board of directors for the nomination of the candidate or the election of such candidate to fill a vacancy on the board of directors.
All
of the nominees recommended for election at the Annual Meeting are current members of our board of directors. Based on the Nominating and Corporate Governance Committee's evaluation
of each nominee's satisfaction of the qualifications described above and their past performance as
directors, the committee has recommended the nominees for re-election and the board of directors has approved such recommendation.
Our
amended and restated bylaws establish procedures by which stockholders may recommend nominees to our board of directors. The Nominating and Corporate Governance Committee will
consider nominees recommended by stockholders and evaluate such candidates in the same manner as any other candidate. The committee did not receive any director nominees from stockholders for the
Annual Meeting. Nominations for consideration at the Company's 2020 annual meeting of stockholders must be submitted to the Company in writing with the information required by our amended and restated
bylaws, in accordance with the procedures described below.
18
Table of Contents
Stockholder Proposals and Director Nominations for the 2020 Annual Meeting of Stockholders
Stockholders who, in accordance with the SEC's Rule 14a-8, wish to submit a proposal for consideration at our 2020 annual meeting of
stockholders and include that proposal in our 2020 proxy materials should submit their proposal by certified mail, return receipt requested to Victory Capital Holdings, Inc., c/o Corporate
Secretary, 4900 Tiedeman Road, 4
th
floor, Brooklyn, Ohio 44144. Proposals must be received no later than November 23, 2019 and satisfy the requirements under applicable SEC
Rules (including SEC Rule 14a-8) to be included in the proxy materials for the 2020 annual meeting.
Our
amended and restated bylaws also establish an advance notice procedure for stockholders who wish to present a proposal, including any proposal for the nomination of a director for
election, before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy materials. For such a proposal to be properly brought before the 2020 annual meeting
of the stockholders, written notice of the proposal must be received by the Corporate Secretary no earlier than January 2, 2020 nor later than February 1, 2020. Any such stockholder
notice must contain the information required by and be provided in the manner set forth in our amended and restated bylaws.
Communications with the Board of Directors
Stockholders or other interested parties wishing to contact the board of directors, the non-management directors or any individual director may
send correspondence to the address provided below.
Victory
Capital Holdings, Inc.
c/o: Corporate Secretary
4900 Tiedeman Road, 4th Floor
Brooklyn, Ohio 44144
Communications
are distributed to the board of directors, or to any individual director as appropriate.
19
Table of Contents
EXECUTIVE OFFICERS
The names of our executive officers and their ages, positions and biographies are set forth below. To our knowledge, there are no family
relationships among any of our directors or executive officers.
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
David C. Brown
|
|
46
|
|
Chief Executive Officer and Chairman
|
Michael D. Policarpo
|
|
44
|
|
President, Chief Financial Officer and Chief Administrative Officer
|
Kelly S. Cliff
|
|
49
|
|
President, Investment Franchises
|
Nina Gupta
|
|
44
|
|
Chief Legal Officer
|
David C. Brown
has served as our Chief Executive Officer since our acquisition from KeyCorp in August 2013 and Chairman of our board of
directors since April 2014. Mr. Brown's full biography is set forth above in the description of our current board of directors.
Michael D. Policarpo
has served as our President, Chief Financial Officer and Chief Administrative Officer since March 1, 2019,
responsible for all finance, accounting and treasury functions for the firm and the day-to-day operations of the integrated business platform, including all administrative functions. In addition,
Mr. Policarpo provides support in inorganic growth sourcing, evaluation and execution and business platform integration. Mr. Policarpo joined the firm in 2005 and served as our Chief
Financial Officer from our acquisition from KeyCorp in August 2013 until July 1, 2017, and our Chief Operating Officer from February 2016 until February 28, 2019 among various other
roles. Prior to joining Victory, he served as Vice President of Finance for Gartmore Global Investments, Inc. where he was responsible for strategic planning in conjunction with Gartmore's
senior management teams. He held several other positions during his five years at Gartmore, including Chief Financial Officer of Advisor Services and corporate controller. Prior to his tenure with
Gartmore, he worked for Ernst & Young LLP as a senior accountant in the Assurance & Advisory Business Services unit with a focus on investment management companies, registered
investment companies and broker-dealers. Mr. Policarpo holds a Bachelor of Science degree in accounting and finance from Lehigh University. He is a Certified Public Accountant and holds
Series 7, 24, 27 and 99 securities licenses.
Kelly S. Cliff
has served as our President, Investment Franchises since November 2015 and was on our board of directors from November 2015
until January 2018. In his role as our President, Investment Franchises, he serves as a strategic resource for our Franchises, focusing on best practices in alpha generation, risk management and
alignment of investment management capabilities with client needs. He is also responsible for providing tactical analysis of our existing Franchises as well as evaluating the capabilities of potential
new franchises as part of our acquisition strategy. Mr. Cliff oversees the centralized investment functions that support our Investment Franchises, including trading, quantitative analysis and
risk management. He is also a member of the VCM investment committee. Prior to joining Victory in 2014, Mr. Cliff spent 22 years with Callan Associates, most recently serving as the
Chief Investment Officer of public markets and co-lead of the Global Manager Research Group. Previously, he was Chief Investment Officer of Callan's Trust Advisory Group. Mr. Cliff graduated
from the University of the Pacific with a Bachelor of Science in Business Administration and has earned the Chartered Financial Analyst designation and the Chartered Alternative Investment Analyst
designation.
Nina Gupta
has served as our Chief Legal Officer and Secretary since July 2016. Previously, Ms. Gupta was General Counsel and
Secretary of RS Investment Management Co. LLC, or RS Investments, from April 2013 until RS Investments was acquired by Victory in July 2016. Prior to joining RS Investments,
Ms. Gupta worked at BlackRock Inc., where she was a Managing Director and Deputy General Counsel of BlackRock Institutional Trust Company, responsible for providing legal advice in
connection with corporate matters, counterparty trading, transactional documentation and regulatory issues in connection with a variety of different fund structures and accounts. Previously,
Ms. Gupta was an associate at the law firm of Shearman & Sterling LLP in New York, NY and Menlo
20
Table of Contents
Park,
CA, where her practice focused on general corporate, structured finance and banking matters. Ms. Gupta has extensive legal and regulatory experience in the financial services industry and
had also executed several transactions in the asset management sector during her legal career. Ms. Gupta earned a law degree from the University of London in 1996 and a Masters in Law from the
University of Cambridge in 1997.
21
Table of Contents
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our common stock as of March 5, 2019 by (1) each person, or group of
affiliated persons, known by us to be the beneficial owner of 5% or more of either class of our outstanding common stock, (2) each of our directors, (3) each of our named executive
officers and (4) all of our directors and executive officers as a group.
To
our knowledge, each person named in the table has sole voting and investment power with respect to all of the securities shown as beneficially owned by such person, except as
otherwise set forth in the notes to the table. The number of securities shown represents the number of securities the person "beneficially owns," as determined by the rules of the SEC. The SEC has
defined "beneficial" ownership of a security to mean the possession, directly or indirectly, of voting power and/or investment power. A security holder is also deemed to be, as of any date, the
beneficial owner of all securities that such security holder has the right to acquire within 60 days after that date through (1) the exercise of
any option, warrant or right, (2) the conversion of a security, (3) the power to revoke a trust, discretionary account or similar arrangement, or (4) the automatic termination of
a trust, discretionary account or similar arrangement. These shares, and shares of unvested restricted stock (which have voting rights but are subject to future vesting based on time or performance
criteria), are deemed to be outstanding and beneficially owned by the person holding such securities for the purpose of computing the percentage ownership and voting of that person, but they are not
treated as outstanding for the purpose of computing the percentage ownership or voting of any other person.
The
percentages reflect beneficial ownership as determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934 (the "Exchange Act") and are based on 14,565,975
shares of our Class A common stock and 52,930,026 shares of our Class B common stock outstanding as of March 5, 2019 (excluding 2,611,181 shares of unvested restricted stock).
Unless otherwise noted below, the address for each of the stockholders in the table below is c/o Victory Capital Holdings, Inc., 4900 Tiedeman Road, 4th Floor, Brooklyn, OH 44144.
22
Table of Contents
Principal Stockholders Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Benefically Owned As of 3.5.19
|
|
Name
|
|
# of
Class A
Shares(1)
|
|
% of
Class A
Shares
|
|
# of
Class B
Shares
|
|
% of
Class B
Shares
|
|
% of Total
Common
Stock
|
|
% of Total
Voting
Power(2)
|
|
5% Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crestview GP(3)
|
|
|
|
|
|
*
|
|
|
35,251,136
|
|
|
66.6
|
%
|
|
52.2
|
%
|
|
64.8
|
%
|
Reverence Capital Partners LLC(4)
|
|
|
|
|
|
*
|
|
|
9,711,740
|
|
|
18.3
|
%
|
|
14.4
|
%
|
|
17.9
|
%
|
Employee Shareholders Committee(5)
|
|
|
1,139,297
|
|
|
7.8
|
%
|
|
14,714,606
|
|
|
23.7
|
%
|
|
20.7
|
%
|
|
23.4
|
%
|
Azora Capital LP, Azora Capital GP LLC and Ravi Chopra(6)
|
|
|
791,631
|
|
|
5.4
|
%
|
|
|
|
|
*
|
|
|
1.2
|
%
|
|
*
|
|
Granahan Investment Management, Inc.(7)
|
|
|
789,003
|
|
|
5.4
|
%
|
|
|
|
|
*
|
|
|
1.2
|
%
|
|
*
|
|
Impax Asset Management LLC(8)
|
|
|
1,585,710
|
|
|
10.9
|
%
|
|
|
|
|
*
|
|
|
2.3
|
%
|
|
*
|
|
Directors and Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David C. Brown(9)(10)
|
|
|
16,500
|
|
|
*
|
|
|
2,499,889
|
|
|
4.6
|
%
|
|
3.6
|
%
|
|
4.5
|
%
|
Michael D. Policarpo(9)(11)
|
|
|
|
|
|
*
|
|
|
1,265,408
|
|
|
2.3
|
%
|
|
1.8
|
%
|
|
2.3
|
%
|
Kelly S. Cliff(9)(12)
|
|
|
|
|
|
*
|
|
|
854,147
|
|
|
1.6
|
%
|
|
1.3
|
%
|
|
1.5
|
%
|
Milton R. Berlinski(13)
|
|
|
|
|
|
*
|
|
|
470,659
|
|
|
*
|
|
|
*
|
|
|
*
|
|
Alex Binderow
|
|
|
|
|
|
*
|
|
|
|
|
|
*
|
|
|
*
|
|
|
*
|
|
Lawrence Davanzo(14)
|
|
|
20,000
|
|
|
*
|
|
|
149,470
|
|
|
*
|
|
|
*
|
|
|
*
|
|
Richard M. DeMartini
|
|
|
|
|
|
*
|
|
|
|
|
|
*
|
|
|
*
|
|
|
*
|
|
James B. Hawkes(15)
|
|
|
346,371
|
|
|
2.4
|
%
|
|
680,955
|
|
|
1.3
|
%
|
|
1.5
|
%
|
|
1.3
|
%
|
Karin Hirtler-Garvey
|
|
|
|
|
|
*
|
|
|
20,407
|
|
|
*
|
|
|
*
|
|
|
*
|
|
Robert J. Hurst
|
|
|
|
|
|
*
|
|
|
|
|
|
*
|
|
|
*
|
|
|
*
|
|
Alan H. Rappaport(16)
|
|
|
10,000
|
|
|
*
|
|
|
405,651
|
|
|
*
|
|
|
*
|
|
|
*
|
|
All Directors and executive officers as a group (12 Persons)
|
|
|
392,871
|
|
|
2.7
|
%
|
|
6,465,639
|
|
|
12.0
|
%
|
|
10.0
|
%
|
|
11.8
|
%
|
-
*
-
Represents
beneficial ownership of less than 1%.
-
(1)
-
The
persons who hold shares of our Class B common stock (which are convertible, at the option of the holder, into an equal number of shares of Class A
common stock) are currently deemed to have beneficial ownership over a number of shares of our Class A common stock equal to the number of shares of our Class B common stock reflected in
the table above. Because we have disclosed the ownership of shares of our Class B common stock, the shares of Class A common stock underlying Class B common stock are not
separately reflected in the table above.
-
(2)
-
Percentage
of total voting power represents voting power with respect to all shares of our Class A and Class B common stock, as a single class,
calculated on the basis of beneficial ownership. The holders of our Class B common stock are entitled to ten votes per share, and holders of our Class A common stock are entitled to one
vote per share.
-
(3)
-
This
number does not include 28,282,252 shares of Class B common stock owned by other parties to the Shareholders' Agreement for which Crestview GP may
be deemed to have beneficial ownership. See "Certain Relationships and Related Party TransactionsAmended and Restated Shareholders' Agreement." Crestview GP disclaims beneficial
ownership of all such shares. Crestview GP may be deemed to be the beneficial owner of 35,251,136 shares of Class B common
23
Table of Contents
stock
owned directly by Crestview Victory. Crestview Victory GP, LLC is the general partner of Crestview Victory. Crestview Partners II, L.P., Crestview Partners II
(TE), L.P., Crestview Partners II (FF), L.P., Crestview Offshore Holdings II (Cayman), L.P., Crestview Offshore Holdings II (FF Cayman), L.P.
and Crestview Offshore Holdings II (892 Cayman), L.P. (collectively, the "Crestview Funds") are members of Crestview Victory GP, LLC and limited partners of Crestview Victory.
Crestview GP is the general partner of each of the Crestview Funds. Crestview GP and the Crestview Funds may be deemed to be beneficial owners of the shares owned directly by Crestview
Victory. Crestview GP has voting and investment control over such shares. Decisions by Crestview GP to vote or dispose of such shares require the approval of a majority of the nine
members of its investment committee, which is composed of the following individuals: Barry S. Volpert, Thomas S. Murphy, Jr., Jeffrey A. Marcus, Robert J. Hurst,
Richard M. DeMartini, Robert V. Delaney, Jr., Brian P. Cassidy, Alexander M. Rose and Adam J. Klein. None of the foregoing persons has the power individually to vote or dispose of such shares. Each of
the foregoing individuals disclaims beneficial ownership of all such shares. The address of each of the foregoing is c/o Crestview, 590 Madison Avenue, 36th Floor, New York, NY 10022.
-
(4)
-
This
number does not include 53,821,648 shares of Class B common stock owned by other parties to the Shareholders' Agreement for which RCP GenPar
Holdco LLC and RCP Co-Invest GP LLC (the "RCP Entities") may be deemed to have beneficial ownership. See "Certain Relationships and Related Party TransactionsAmended
and Restated Shareholders' Agreement." The RCP Entities disclaim beneficial ownership of all such shares. The RCP Entities may be deemed to be the beneficial owners of 9,711,740 shares of
Class B common stock owned directly by Reverence Capital Partners Opportunities Fund I, L.P., Reverence Capital Partners Opportunities Fund I (Cayman), L.P., and
Reverence Capital Partners Opportunities Fund I (AI), L.P. (collectively, the "Reverence Capital Funds") and RCP Lake Co-Invest, L.P. RCP GenPar Holdco LLC is the general partner
of each of the Reverence Capital Funds and RCP Co-Invest GP LLC is the general partner of RCP Lake Co-Invest, L.P. The RCP Entities, Reverence Capital Funds and RCP Lake
Co-Invest, L.P. may be deemed to be beneficial owners of the shares. The RCP Entities have voting and investment control over such shares. Decisions by each of the RCP Entities to vote or
dispose of such shares require the approval of a majority of the three members of the investment committee, which is composed of the following individuals: Milton Berlinski, Peter Aberg and Alexander
Chulack. None of the foregoing persons has the power individually to vote or dispose of such shares. Each of the foregoing individuals disclaims beneficial ownership of all such shares. The address of
each of the foregoing is c/o Reverence Capital Partners, 477 Madison Ave., 23rd Floor, New York, NY 10022.
-
(5)
-
Upon
the completion of the Company's initial public offering in 2018, or IPO, a substantial majority of our employee stockholders entered into the Employee
Shareholders' Agreement pursuant to which they granted an irrevocable voting proxy with respect to the shares of our common stock they have acquired from us and any shares they may acquire from us in
the future to the Employee Shareholders Committee initially consisting of Mr. Brown, Mr. Policarpo and Mr. Cliff. All shares subject to the Employee Shareholders' Agreement will
be voted in accordance with the majority decision of those three members. Shares originally subject to the agreement cease to be subject to it when sold by the employee or upon the termination of the
employee's employment with us. The number of shares of common stock in this row includes the shares of common stock currently beneficially owned by current employees party to the Employee
Shareholders' Agreement, which consist of (i) 5,599,995 shares of Class B common stock, (ii) 2,595,120 unvested restricted shares of Class B common stock,
(iii) 6,519,491 shares of Class B common stock issuable upon the exercise of options, and (iv) 1,139,297 shares of Class A common stock converted from Class B common
stock in 2018. As members of our Employee Shareholders Committee, Mr. Brown, Mr. Policarpo and Mr. Cliff share voting power over all of these shares. Other than as shown in the
row applicable to each of them individually, none of Mr. Brown,
24
Table of Contents
Mr. Policarpo
or Mr. Cliff has investment power with respect to any of the shares subject to the Employee Shareholders' Agreement, and each disclaims beneficial ownership of such shares.
See "Certain Relationships and Related Party TransactionsEmployee Shareholders' Agreement."
This
number does not include 47,679,485 shares of Class B common stock owned by other parties to the Shareholders' Agreement for which the Employee Shareholders Committee may be deemed to have
beneficial ownership. The Employee Shareholders Committee disclaims beneficial of all such shares.
-
(6)
-
Based
solely on a Schedule 13G filed with the SEC on February 14, 2019. The Schedule 13G was filed by Azora Capital LP, Azora
Capital GP LLC and Ravi Chopra. According to the Schedule 13G, Azora Capital LP, Azora Capital GP LLC and Ravi Chopra each had (i) sole power to vote
or direct the vote of 0 shares, (ii) shared power to vote or direct the vote of 791,631 shares of Class A common stock, (iii) sole power to dispose or to direct the disposition of
0 shares and (iv) shared power to dispose or direct the disposition of 791,631 shares of Class A common stock.
-
(7)
-
Based
solely on a Schedule 13G filed with the SEC on February 14, 2019. The Schedule 13G was filed by Granahan Investment
Management, Inc. According to the Schedule 13G, Granahan Investment Management, Inc. had (i) sole power to vote or direct the vote of 639,319 shares, (ii) shared
power to vote or direct the vote of 0 shares of Class A common stock, (iii) sole power to dispose or to direct the disposition of 789,003 shares and (iv) shared power to dispose
or direct the disposition of 0 shares of Class A common stock.
-
(8)
-
Based
solely on a Schedule 13G filed with the SEC on February 14, 2019. The Schedule 13G was filed by Impax Asset Management Group plc
and Impax Asset Management LLC. According to the Schedule 13G, Impax Asset Management Group plc and Impax Asset Management LLC each had (i) sole power to vote or
direct the vote of 1,585,710 shares, (ii) shared power to vote or direct the vote of 0 shares of Class A common stock, (iii) sole power to dispose or to direct the disposition of
1,585,710 shares and (iv) shared power to dispose or direct the disposition of 0 shares of Class A common stock.
-
(9)
-
Pursuant
to the Employee Shareholders Agreement, Mr. Brown, Mr. Policarpo and Mr. Cliff each granted an irrevocable voting proxy with respect to
all of the shares of our Class B common stock he has acquired from us and any shares he may acquire from us in the future to the Employee Shareholders Committee as described in footnote 5
above. Each retains investment power with respect to the shares of our common stock he holds, which are the shares reflected in the row applicable to each person. This amount does not include shares
owned by other parties to the Employee Shareholders Agreement for which each of Mr. Brown, Mr. Policarpo and Mr. Cliff may be deemed to have beneficial ownership. Each of such
persons disclaims beneficial ownership of all such shares.
-
(10)
-
Consists
of (i) 16,500 shares of Class A common stock, (ii) 868,264 shares of Class B common stock, (iii) 835,224 unvested
restricted shares of Class B common stock and (iv) 796,401 shares of Class B common stock issuable upon the exercise of options. Excludes 54,952 shares of Class B common
stock issuable upon the exercise of unvested options.
-
(11)
-
Consists
of (i) 332,990 shares of Class B common stock, (ii) 472,512 unvested restricted shares of Class B common stock and
(iii) 459,906 shares of Class B common stock issuable upon the exercise of options. Excludes 55,456 shares of Class B common stock issuable upon the exercise of unvested options.
-
(12)
-
Consists
of (i) 77,040 shares of Class B common stock, (ii) 428,279 unvested restricted shares of Class B common stock and
(iii) 348,828 shares of Class B common stock issuable upon the exercise of options. Excludes 75,346 shares of Class B common stock issuable upon the exercise of unvested options.
25
Table of Contents
-
(13)
-
Consists
of (i) 286,428 shares of Class B common stock held of record by Mr. Berlinski and (ii) 184,231 shares of Class B common
stock held of record by MRB ICBC LLC, an entity which Mr. Berlinski controls.
-
(14)
-
Consists
of (i) 20,000 shares of Class A common stock and (ii) 149,470 shares of Class B common stock, in each case held of record by
the Lawrence E. Davanzo and Christine Davanzo Revocable Trust, for which Mr. Davanzo serves as trustee.
-
(15)
-
Consists
of (i) (A) 202,000 shares of Class A common stock held of record by Mr. Hawkes, (B) 90,000 shares of Class A common
stock held of record by Hawkes Family LLC, an entity which Mr. Hawkes controls, and (C) 54,371 shares of Class A common stock held of record by James B. Hawkes 2012
Revocable Trust, for which Mr. Hawkes serves as trustee and (ii) (A) 388,270 shares of Class B common stock held of record by Mr. Hawkes and (B) 292,685
shares of Class B common stock held of record by Hawkes Family LLC.
-
(16)
-
Consists
of (i) 10,000 shares of Class A common stock held of record by ADR Partners, an entity which Mr. Rappaport controls and
(ii) (A) 116,790 shares of Class B common stock held of record by Mr. Rappaport and (B) 288,861 shares of Class B common stock held of record by ADR Partners.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth the total shares of our common stock authorized and issued (or to be issued) under our equity compensation plans
as of December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities
to be issued upon exercise of
outstanding options,
warrants and rights
(a)(1)
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights (b)
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)) (c)(2)
|
|
Equity compensation plans approved by security holders
|
|
|
9,070,052
|
|
$
|
6.12
|
|
|
3,471,781
|
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
9,070,052
|
|
$
|
6.12
|
|
|
3,471,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Reflects
9,067,690 shares of our Class B common stock issuable upon the exercise of options outstanding as of December 31, 2018 which were granted
under the Victory Capital Holdings, Inc. Equity Incentive Plan (the "2013 Plan"), and 2,362 shares of our Class B common stock issuable upon the exercise of options outstanding as of
December 31, 2018 which were granted under the Victory Capital Holdings, Inc. 2018 Stock Incentive Plan (the "2018 Plan").
-
(2)
-
Reflects
3,372,484 shares of Class A and Class B common stock reserved for issuance under the 2018 Plan and 350,388 shares of our Class A common
stock reserved for issuance under the Victory Capital Holdings, Inc. 2018 Employee Stock Purchase Plan (the "2018 ESPP"). Except with respect to the issuances described in footnote
(1) above, no further shares will be issued or distributed under the 2013 Plan. As of December 31, 2018, the Company also had issued 3,792,516 restricted shares of Class B common
stock under the 2013 Plan, 245,948 restricted shares of Class B common stock under the 2018 Plan, and 2,781 shares of Class A common stock under the 2018 ESPP, which are not reflected in
the table because they are treated as issued and outstanding and will not have additional dilutive impact on the Company when any applicable restrictions lapse.
26
Table of Contents
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act and regulations of the SEC require our directors, executive officers and, with certain exceptions,
persons who own more than 10% of a registered class of our equity securities, as well as certain affiliates of such persons, to file with the SEC reports of ownership of, and transactions in, our
equity securities. These reporting persons are further required to provide us with copies of these reports.
Based
solely on our review of such reports and written representations by the reporting persons, we believe that during the fiscal year ended December 31, 2018, our directors,
officers and owners of more than 10% of a registered class of our equity securities complied with all applicable filing requirements.
27
Table of Contents
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
The following table sets forth information regarding the compensation awarded to, earned by or paid to certain of our executive officers during
the fiscal year ended December 31, 2018. As an emerging growth company, we have chosen to comply with the executive compensation disclosure rules applicable to "smaller reporting companies" as
such term is defined in the rules promulgated under the Securities Act of 1933, as amended (the "Securities Act"), which require compensation disclosure for our principal executive officer and our
next two most highly compensated executive officers. Throughout this proxy statement, these three officers are referred to as our "named executive officers."
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)(1)
|
|
Stock
Awards
($)(3)
|
|
Option
Awards
($)
|
|
Nonqualified
Deferred
Compensation
Earnings
($)(4)
|
|
All Other
Compensation
($)(5)
|
|
Total
($)
|
|
David C. Brown
|
|
|
2018
|
|
|
600,000
|
|
|
2,540,000
|
|
|
8,750,064
|
(2)
|
|
|
|
|
|
|
|
105,349
|
|
|
11,995,413
|
|
Chief Executive Officer and
|
|
|
2017
|
|
|
600,000
|
|
|
3,684,135
|
|
|
3,000,000
|
|
|
113,970
|
|
|
|
|
|
460,776
|
|
|
7,858,881
|
|
Chairman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael D. Policarpo
|
|
|
2018
|
|
|
425,000
|
|
|
855,000
|
|
|
5,000,037
|
(2)
|
|
|
|
|
|
|
|
46,722
|
|
|
6,326,759
|
|
Chief Operating Officer(6)
|
|
|
2017
|
|
|
375,000
|
|
|
830,979
|
|
|
1,700,000
|
|
|
410,293
|
|
|
|
|
|
272,612
|
|
|
3,588,884
|
|
Kelly S. Cliff
|
|
|
2018
|
|
|
425,000
|
|
|
850,000
|
|
|
4,250,020
|
(2)
|
|
|
|
|
|
|
|
53,022
|
|
|
5,578,042
|
|
President, Investment Franchises
|
|
|
2017
|
|
|
425,000
|
|
|
914,978
|
|
|
1,850,000
|
|
|
615,439
|
|
|
|
|
|
212,152
|
|
|
4,017,569
|
|
-
(1)
-
The
amounts reported as earned in this column represent the bonuses earned with respect to 2017 and 2018 by each executive pursuant to our annual bonus plan. 2018
amounts were paid in 2019. For additional information, please see "Summary Compensation TableNarrative to Summary Compensation TableAnnual Bonus Plan" below.
-
(2)
-
On
January 1, 2018, Victory granted one-time restricted stock awards under the 2013 Plan to our named executive officers to provide incremental long-term
incentives for future business performance. Such grants consisted 50% of time-vested restricted shares, which will vest 50% on January 1, 2021, 25% on January 1, 2022 and 25% on
January 1, 2023, and 50% of performance-vested restricted shares, which will be earned based on achievement of share price targets as follows: one-third of the performance-vested restricted
shares will vest when the fair market value of a share equals or exceeds $19.98; one-third of the performance-vested restricted shares will vest when the fair market value of a share equals or exceeds
$22.84; and one-third of the performance-vested restricted shares will vest when the fair market value of a share equals or exceeds $25.69.
-
(3)
-
Amounts
reported represent the aggregate grant date fair value of the shares of restricted stock granted to our named executive officers in 2017 and 2018. With
respect to performance-vesting shares of restricted stock, the grant date fair value was determined based on the probable outcome of the performance conditions as of the grant date. For additional
information with respect to shares of restricted stock granted during 2018, including a discussion of the assumptions made in valuation, see note 14 to our consolidated financial statements
included in our Annual Report on Form 10-K for the year ended December 31, 2018. The amounts above reflect our aggregate accounting expense for these awards and do not necessarily
correspond to the actual value that will be recognized by our named executive officers, which depends on the market value of our Class B common stock on a date in the future.
-
(4)
-
Our
named executive officers had no above-market or preferential earnings on deferred compensation during 2018.
-
(5)
-
The
amounts reported as earned by each named executive officer in this column represent employer matching contributions made to Messrs. Brown, Policarpo and
Cliff of $16,500, $16,500 and $11,243, respectively, under our 401(k) plan during 2018, as well as employer matching contributions made to Messrs. Brown, Policarpo and Cliff of $55,500, $8,192
and $0, respectively, under our nonqualified deferred compensation plan. Amounts reported also include dividend payments in respect of outstanding equity-based awards of $33,349, $22,030 and $41,779
for Messrs. Brown, Policarpo and Cliff, respectively.
-
(6)
-
Effective
March 1, 2019, Mr. Policarpo became our President, Chief Financial Officer and Chief Administrative Officer.
Narrative to Summary Compensation Table
Certain of the compensation paid to our named executive officers reflected in the Summary Compensation Table was provided pursuant to the
agreements, plans and programs which are summarized below. For a discussion of the severance pay and other benefits to be provided to our
28
Table of Contents
named
executive officers in connection with a termination of employment and/or a change in control, please see "Potential Payments Upon Termination or Change in Control" below.
Employment Agreement with David C. Brown.
We entered into an employment agreement with Mr. Brown, dated March 20, 2017, which
took
effect as of February 12, 2018, in connection with the IPO, and which superseded Mr. Brown's prior employment agreement with us, dated August 5, 2014 (the terms of which were
substantially similar to those of the current employment agreement, except with respect to term, annual incentive award mechanics, and certain severance mechanics). Pursuant to the employment
agreement, which has an indefinite term, Mr. Brown serves as the Chief Executive Officer of VCM and as a director on our board of directors (of which he is currently the Chairman), and is
entitled to an annual base salary of $600,000, an annual bonus of $600,000 which is payable quarterly, and a target annual incentive award, which award is to be determined by our board of directors
and Compensation Committee each year during the term and be payable partly in cash and partly in fully-vested (unless otherwise stated in the equity grant agreement) equity based on achievement of
specified performance criteria (as discussed under "Annual Incentive Compensation" below). In addition, Mr. Brown's employment agreement provides for certain severance
entitlements, which are discussed under "Potential Payments Upon Termination or Change in Control" below.
Annual Incentive Compensation.
Certain employees, including our named executive officers, are eligible to participate in the Victory
Capital
Holdings, Inc. Bonus Plan (the "Bonus Plan"), pursuant to which participants are eligible to earn a bonus with respect to each fiscal year, typically paid in the first calendar quarter of the
calendar year following the year for which the bonus is earned, subject to the participant remaining employed with us through the payment date. Individual awards may be discretionary or earned based
on individual, Company or other criteria determined by our Compensation Committee. 2018 annual bonuses for our named executive officers, which were paid in March 2019, were determined at the
discretion of the Compensation Committee after consideration of
both Company and individual performance and, in the case of Messrs. Policarpo and Cliff, recommendations from Mr. Brown. For 2018, Messrs. Brown, Policarpo and Cliff were awarded
actual bonuses of $2,540,000 (which included the annual bonus of $600,000 which is payable quarterly), $855,000 and $850,000, respectively. Messrs. Brown, Policarpo and Cliff did not have
target bonuses for 2018, and the Compensation Committee determined the amount of their bonuses after considering market competitiveness, Company performance factors and individual performance. None of
our named executive officers received any annual bonus amounts that were payable in shares of our Class B common stock. Under the Bonus Plan, for each fiscal year, the Company establishes an
annual bonus pool, which, unless otherwise determined by our board of directors or Compensation Committee in accordance with the Bonus Plan, will be equal to 35% of pre-bonus EBITDA, of which 30% is
payable in cash and 5% is payable in shares of our Class B common stock, subject to the discretion of our board of directors to adjust such bonus pool based on extraordinary events, non-cash
GAAP charges or transactions. For this purpose, and subject to additional adjustments as may be determined by our board of directors in its discretion, pre-bonus EBITDA is generally calculated using
our "Adjusted EBITDA," to which we add back pre-IPO governance expenses, director fees, and board-related expenses, and from which we deduct compensation in excess of expected levels due to
acquisitions and lease amortization costs, to arrive at Management reported EBITDA. We then add back our incentive compensation expense to Management reported EBITDA to arrive at pre-bonus EBITDA.
Equity Plans.
In 2018, prior to the completion of the IPO and the effective date of the 2018 Plan, we granted equity-based awards to
our named
executive officers pursuant to the 2013 Plan. The 2013 Plan authorized the Company to grant stock options, restricted shares and other stock based awards to our key employees, directors and
consultants. While we will not make further grants under the 2013 Plan, certain of the outstanding equity-based awards held by our named executive officers are governed by its terms, and on
January 1, 2018, Victory granted one-time restricted stock awards to our named executive officers to provide incremental long-term incentives for future business performance. In
29
Table of Contents
connection
with such grant, Messrs. Brown, Policarpo and Cliff received 613,179, 350,388 and 297,829 restricted shares, respectively. Such grant consisted 50% of time-vested restricted shares,
which will vest 50% on January 1, 2021, 25% on January 1, 2022 and 25% on January 1, 2023, and 50% of performance-vested restricted shares, which will be earned based on
achievement of share price targets as follows: one-third of the performance-vested restricted shares will vest when the fair market value of a share equals or exceeds $19.98; one-third of the
performance-vested restricted shares will vest when the fair market value of a share equals or exceeds $22.84; and one-third of the performance-vested restricted shares will vest when the fair market
value of a share equals or exceeds $25.69. Except as may otherwise be provided in an employment agreement, as discussed under "Potential Payments Upon Termination or Change in Control"
below, the restricted shares granted in 2018, or the 2018 restricted shares, are not subject to accelerated vesting upon a change in control and will generally be forfeited upon a termination of
employment for any reason prior to vesting.
In
2018, there were no equity-based awards granted to our named executive officers pursuant to 2018 Plan, which took effect upon the completion of the IPO and which replaced the 2013
Plan as the Company's principle equity-based compensation plan following completion of the IPO. A total of 3,372,484 shares of either Class A common stock or Class B common stock, or any
combination thereof, as determined by the Compensation Committee, are reserved and available for issuance under the 2018 Plan. Under the 2018 Plan, the Company may grant stock options, restricted
stock awards, restricted stock units, stock appreciation rights, performance awards and other awards that may be settled in or based upon shares of our Class A common stock or Class B
common stock, though all currently outstanding awards under the 2018 Plan are based upon shares of our Class B common stock.
Health and Welfare Plans.
Our named executive officers are eligible to participate in the employee benefit plans that we offer to our
employees
generally, including medical, dental, vision, life and accidental death and dismemberment, disability, supplemental life, a health savings account, health and dependent care flexible spending
accounts, critical illness and accident benefit plans, as well as commuter benefits and health and wellness rewards.
Nonqualified Deferred Compensation Plan.
Messrs. Brown, Policarpo and Cliff currently participate in the Victory Capital
Management Inc. Deferred Compensation Plan, or the NQDC Plan, a nonqualified deferred compensation plan maintained by us primarily for the benefit of a select group of management or highly
compensated employees. Pursuant to the NQDC Plan, participants may elect to defer up to 100% of their base compensation and cash incentive compensation. In addition, we currently provide a matching
contribution equal to 100% of a participant's deferral contribution, up to a maximum of the lesser of 6% of compensation in excess of the Internal Revenue Code Section 401(a)(17) limit for the
applicable year or $3,000,000 per year. We may also elect to provide discretionary contributions pursuant to the NQDC Plan. Deferred amounts and employer contributions are contributed to individual
accounts in the NQDC Plan trust, and participants self-direct the notional investment of deferred contribution accounts in various investment funds. A participant is 100% vested in his deferral
contributions when contributed, and will become 100% vested in our matching contributions and discretionary contributions after three years of continuous service. The vested balance of a participant's
account may be distributed in a lump sum, in five equal installments or in another approved form upon a participant's death, disability, separation from service (including retirement), a change in
control event, or on a time or fixed schedule, in each case, as elected by the participant in accordance with the terms of the NQDC Plan. Messrs. Brown, Policarpo and Cliff are fully vested in
their NQDC account balances. For a summary of the treatment of named executive officers' account balances under the NQDC Plan in connection with certain terminations of employment and/or a change in
control, see "Potential Payments Upon Termination or Change in Control" below.
401(k) Plan.
We sponsor a retirement plan intended to qualify for favorable tax treatment under Section 401(a) of the Internal
Revenue Code,
containing a cash or deferred feature that is intended to
30
Table of Contents
meet
the requirements of Section 401(k) of the Internal Revenue Code. Full-time employees, other than nonresident aliens and leased employees, who are paid from our U.S. payroll are generally
eligible to participate in the plan. Participants may make pre-tax contributions to the plan from their eligible earnings up to the statutorily prescribed annual limit on pre-tax contributions under
the Internal Revenue Code, and may also make post-tax contributions. Participants who are 50 years of age or older may contribute additional amounts based on the statutory limits for catch-up
contributions. All employee and employer contributions are allocated to each participant's individual account and are then invested in selected investment alternatives according to the participant's
directions. Pre-tax contributions by participants and contributions that we make to the plan and the income earned on those contributions are generally not taxable to participants until withdrawn, and
all contributions are generally deductible by us when made. Participant contributions are held in trust as required by law. No minimum benefit is provided under the plan. An employee is 100% vested in
his pre-tax deferrals and any employer contributions when contributed. The plan provides for an employer matching contribution for employees who have completed at least one year of service equal to
100% of a participant's 401(k) contributions, up to 6% of the participant's compensation subject to limits set by the Internal Revenue Service, as well as discretionary profit sharing contributions.
Outstanding Equity Awards at Fiscal Year End
The following table sets forth outstanding equity awards to acquire shares of our Class B common stock held by each of our named
executive officers as of December 31, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
Grant
Date
|
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)(1)(5)
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)(2)(5)
|
|
Option
Exercise
Price
($)(6)
|
|
Option
Expiration
Date
|
|
Number
of Shares
or Units
of Stock
That Have
Not Vested
(#)(3)(5)
|
|
Market
Value of
Shares Or
Units of
Stock That
Have Not
Vested
($)(4)
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares or
Units of
Stock That
Have Not
Vested
(#)(3)(5)
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares or
Units of
Stock That
Have Not
Vested
($)(4)
|
|
David C. Brown
|
|
|
7/31/2013
|
|
|
385,112
|
|
|
0
|
|
|
0
|
|
$
|
2.45
|
|
|
7/31/2023
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
2/5/2014
|
|
|
87,597
|
|
|
0
|
|
|
0
|
|
$
|
2.45
|
|
|
2/5/2024
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
12/17/2014
|
|
|
40,670
|
|
|
0
|
|
|
0
|
|
$
|
4.73
|
|
|
12/17/2024
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
3/11/2016
|
|
|
43,283
|
|
|
18,550
|
|
|
0
|
|
$
|
7.52
|
|
|
3/11/2026
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
4/15/2016
|
|
|
180,346
|
|
|
77,292
|
|
|
0
|
|
$
|
7.52
|
|
|
4/15/2026
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
3/10/2017
|
|
|
8,696
|
|
|
8,328
|
|
|
1,479
|
|
$
|
13.52
|
|
|
3/10/2027
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
3/31/2017
|
|
|
0
|
|
|
0
|
|
|
0
|
|
$
|
|
|
|
|
|
|
111,022
|
|
$
|
1,134,645
|
|
|
111,023
|
|
$
|
1,134,655
|
|
|
|
|
1/1/2018
|
|
|
0
|
|
|
0
|
|
|
0
|
|
$
|
|
|
|
|
|
|
306,589
|
|
$
|
3,133,340
|
|
|
306,590
|
|
$
|
3,133,350
|
|
Michael D Policarpo
|
|
|
7/31/2013
|
|
|
179,719
|
|
|
0
|
|
|
0
|
|
$
|
2.45
|
|
|
7/31/2023
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
2/5/2014
|
|
|
36,790
|
|
|
0
|
|
|
0
|
|
$
|
2.45
|
|
|
2/5/2024
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
12/17/2014
|
|
|
31,284
|
|
|
0
|
|
|
0
|
|
$
|
4.73
|
|
|
12/17/2024
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
3/11/2016
|
|
|
32,462
|
|
|
13,912
|
|
|
0
|
|
$
|
7.52
|
|
|
3/11/2026
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
4/15/2016
|
|
|
108,208
|
|
|
46,374
|
|
|
0
|
|
$
|
7.52
|
|
|
4/15/2026
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
3/10/2017
|
|
|
31,308
|
|
|
29,976
|
|
|
5,329
|
|
$
|
13.52
|
|
|
3/10/2027
|
|
|
11,102
|
|
$
|
113,462
|
|
|
|
|
$
|
|
|
|
|
|
3/31/2017
|
|
|
0
|
|
|
0
|
|
|
0
|
|
$
|
|
|
|
|
|
|
55,512
|
|
$
|
567,333
|
|
|
55,510
|
|
$
|
567,312
|
|
|
|
|
1/1/2018
|
|
|
0
|
|
|
0
|
|
|
0
|
|
$
|
|
|
|
|
|
|
175,194
|
|
$
|
1,790,483
|
|
|
175,194
|
|
$
|
1,790,483
|
|
Kelly S. Cliff
|
|
|
9/8/2014
|
|
|
75,083
|
|
|
0
|
|
|
0
|
|
$
|
4.73
|
|
|
9/8/2024
|
|
|
0
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
10/29/2015
|
|
|
21,273
|
|
|
3,754
|
|
|
0
|
|
$
|
5.81
|
|
|
10/29/2025
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
3/11/2016
|
|
|
12,624
|
|
|
5,410
|
|
|
0
|
|
$
|
7.52
|
|
|
3/11/2026
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
4/15/2016
|
|
|
144,276
|
|
|
61,834
|
|
|
0
|
|
$
|
7.52
|
|
|
4/15/2026
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
3/10/2017
|
|
|
46,962
|
|
|
44,964
|
|
|
7,994
|
|
$
|
13.52
|
|
|
3/10/2027
|
|
|
19,428
|
|
$
|
198,554
|
|
|
|
|
$
|
|
|
|
|
|
3/31/2017
|
|
|
0
|
|
|
0
|
|
|
0
|
|
$
|
|
|
|
|
|
|
55,512
|
|
$
|
567,333
|
|
|
55,510
|
|
$
|
567,312
|
|
|
|
|
1/1/2018
|
|
|
0
|
|
|
0
|
|
|
0
|
|
$
|
|
|
|
|
|
|
148,915
|
|
$
|
1,521,911
|
|
|
148,914
|
|
$
|
1,521,901
|
|
-
(1)
-
Historically,
the options granted to our named executive officers have consisted of 60% options subject to time-vesting conditions, or time-vesting options, which
vest over a period of four years, 25% per year, beginning on the first anniversary of the applicable grant date, and 40% options subject to performance-vesting conditions, or performance-vesting
options, which are earned based on level of achievement of the performance goals described in footnote 2 below prior to the applicable expiration date.
31
Table of Contents
-
(2)
-
Performance-vesting
options are reported at the target number of shares and vest based on the level of achievement of the certain performance goals prior to the
applicable expiration date. Performance-vesting options granted to our named executive officers in 2017 vest (1) with respect to 45% of the options, based on achievement of Management reported
EBITDA targets (50% vesting at $134.0 million, 75% vesting at $155.0 million (which became vested on April 30, 2018) and 100% vesting at $165.0 million), (2) with
respect to 35% of the options, based on achievement of revenue targets (50% vesting at $385.0 million, 75% vesting at $400.0 million and 100% vesting at $435.0 million), and
(3) with respect to 20% of the options, based on achievement of AUM targets (50% vesting at $57.0 billion, and 100% vesting at $61.0 billion (there is no 75% performance/vesting
level specified for the AUM performance goal)). All other performance-vesting options granted to our named executive officers vest (1) with respect to 45% of the options, based on achievement
of Management reported EBITDA targets (50% of which became vested in connection with the Munder Acquisition and/or the RS Acquisition, 75% vesting at $134.0 million and 100% vesting at
$155.0 million (which became vested on April 30, 2018)), (2) with respect to 35% of the options, based on achievement of revenue targets (50% of which became vested in connection
with the Munder Acquisition and/or the RS Acquisition, 75% vesting at $385.0 million and 100% vesting at $400.0 million), and (3) with respect to 20% of the options, based on
achievement of AUM targets (50% of which became vested in connection with the Munder Acquisition and/or the RS Acquisition, 75% vesting at $55.0 billion and 100% vesting at
$57.0 billion).
-
(3)
-
Restricted
shares granted on January 1, 2018 vest 50% based on continued employment (50% on January 1, 2021, 25% on January 1, 2022, and 25% on
January 1, 2023) and restricted shares granted on March 31, 2017 vest 50% based on continued employment through March 31, 2020. The balance of the restricted shares granted on
January 1, 2018 and March 31, 2017 vest when the value of a share of our Class B common stock first exceeds certain thresholds (one-third will vest when the value of a share
equals or exceeds $19.98; one-third will vest when the value equals or exceeds $22.84; and one-third will vest when the value of a share equals or exceeds $25.69), subject to continued employment
through the date on which such thresholds are exceeded. All other restricted shares vest 25% on each of the first four anniversaries of the grant date.
-
(4)
-
Values
determined based on the value of our Class B common stock at market close on December 31, 2018, or $10.22 per share.
-
(5)
-
Time-vesting
options, performance-vesting options and certain restricted shares are subject to additional vesting upon a termination of employment due to death or
"disability," by us without "cause" or by the named executive officer without "good reason" (each such term, as defined in the applicable equity plan), as discussed under "Potential
Payments Upon Termination or Change in Control" below.
-
(6)
-
Options
were adjusted in February 2017 due to declaration and payment of a special dividend to our stockholders. Amounts shown in the above table are
post-adjustment.
Potential Payments Upon Termination or Change in Control
The following summaries describe the potential payments and benefits that we would provide to our named executive officers in connection with a
termination of employment and/or a change in control.
We
have entered into an employment agreement with Mr. Brown, which provides for certain payments to be made in connection with certain terminations of employment and/or a change
in control. In addition, Messrs. Policarpo and Cliff are eligible to receive severance pursuant to our severance plan in connection with certain terminations of employment. Our named executive
officers are also entitled to additional vesting of options and restricted shares pursuant to the terms of the Equity Plans and their award agreements, as well as to distributions pursuant to the NQDC
Plan, in connection with certain terminations of employment.
Employment Agreement with David C. Brown.
Mr. Brown's employment agreement provides that if his employment is terminated by us
without "cause"
or by him for "good reason," each as defined in the employment agreement, subject to his execution of a release of claims, he will be entitled to severance benefits consisting of: (i) an amount
equal to two times a fraction, the numerator of which is the sum of the base salary, the annual cash bonus and the annual incentive award paid for the preceding two calendar years and the denominator
of which is two, payable in eight quarterly installments beginning within 30 days of the termination date; (ii) continuation of all medical benefits for up to 18 months following
termination or an amount equal to the cost of such benefits; and (iii) a payment in respect of accrued but unused vacation and sick days. The employment agreement also provides that, in the
event of a "change in control," as defined in the employment agreement, Mr. Brown will be entitled to accelerated vesting of all then-outstanding equity awards granted prior to March 11,
2017, and that in the event of a termination of employment by us without "cause" within 90 days prior to a "change in control," Mr. Brown will be entitled to accelerated vesting of all
equity awards (whether granted before or after March 11, 2017) that would have vested as of the date of the change in control but for the termination (or the economic equivalent of such
accelerated vesting). Such severance payments will be subject to a modified cutback provision which acts to reduce the amounts payable to Mr. Brown to the extent necessary so that no excise tax
would be imposed
32
Table of Contents
pursuant
to Section 280G of the Internal Revenue Code, but only if doing so would result in Mr. Brown retaining a larger after-tax amount. In the event of a termination of
Mr. Brown's employment due to death or "disability," as defined in the employment agreement, he will be entitled to (i) a payment in
respect of accrued but unused vacation and sick days, (ii) a prorated annual bonus for the year of termination and, (iii) for terminations due to disability, continuation of all medical
benefits at no cost for up to 18 months following termination or an amount equal to the cost of such benefits. The employment agreement subjects Mr. Brown to confidentiality restrictions
that apply while he is employed with us and indefinitely thereafter, to an inventions assignment commitment, to a non-compete restriction that applies during his employment with us and for one year
thereafter, and to a non-solicitation restriction with respect to our customers and employees that applies during his employment with us and for two years thereafter. For additional information
regarding Mr. Brown's employment agreement, see "Summary Compensation TableNarrative to Summary Compensation TableEmployment Agreement with David C.
Brown" above.
Victory Capital Management Inc. Severance Pay Plan.
Messrs. Policarpo and Cliff are participants in the Victory Capital
Management Inc. Severance Pay Plan, or the Severance Plan. Pursuant to the Severance Plan, in the event that a participant is terminated involuntarily without "cause," as defined in the
Severance Plan, as part of a restructuring or reduction in force, subject to the execution of a release of claims, the participant will receive a severance payment that will be determined by the plan
administrator (currently, Mr. Brown) in accordance with the following guidelines:
|
|
|
|
|
Benefit Type
|
|
Severance Formula
|
|
Maximum Payout(2)
|
Basic Benefit
|
|
Two weeks of pay for each full year of continuous service.
|
|
30 weeks of pay
|
Enhanced Benefit(1)
|
|
Four weeks of pay for each full year of continuous service.
|
|
52 weeks of pay
|
-
(1)
-
For
Chief Investment Officers, members of senior management and other designated participants. Messrs. Policarpo and Cliff would each be entitled to receive
the enhanced benefit.
-
(2)
-
Subject
to an additional limitation that the maximum payout may not exceed two times the lesser of (i) the Internal Revenue Code Section 401(a)(17)
limit for the applicable year or (ii) the participant's annualized compensation for the year preceding the year of the termination.
The
payment schedule for severance benefits under the Severance Plan is determined by the plan administrator, subject to a requirement that all benefits be paid no later than the last
day of the second taxable year following the taxable year in which the termination occurs. The Severance Plan provides that we have the right to amend, modify, suspend or terminate the plan at any
time by formal action by our board of directors or by the plan administrator.
Vesting of Options and Restricted Shares.
Our named executive officers are entitled to additional vesting of unvested options and
restricted shares
held by them in connection with certain terminations of employment pursuant to the 2013 Plan and their award agreements. Other than with respect to the 2017 and 2018 restricted shares, upon a
termination of employment due to death or "disability," by us without "cause" or by the named executive officer for "good reason" (each such term as defined in the
2013 Plan), time-vesting options and restricted shares will be subject to additional, pro-rated vesting, determined by multiplying the number of time-vesting options or restricted shares, as
applicable, that are unvested as of the termination date by a fraction, the numerator of which is the number of days elapsed between the most recent vesting date (or the grant date, if no vesting date
has occurred) and the termination date, and the denominator of which is the number of days between the most recent
33
Table of Contents
vesting
date (or the grant date, if no vesting date has occurred) and the final vesting date. In addition, performance-vesting options will vest assuming target levels of achievement enumerated in the
award agreements upon a termination of employment due to death or "disability," and based on actual performance measured as of the named executive officer's date of termination upon a termination by
us without "cause" or by the named executive officer for "good reason." Except as may otherwise be provided in an employment agreement, the 2017 and 2018 restricted shares are not subject to
accelerated vesting upon a change in control and will generally be forfeited upon a termination of employment for any reason prior to vesting
Nonqualified Deferred Compensation Plan.
The NQDC Plan provides that, in the event of a termination due to death or "disability" or a
"change in
control" (each such term, as defined in the NQDC Plan), a participant will become 100% vested in his accrued but unvested benefits attributable to our matching contributions and discretionary
contributions. In addition, the vested balance of a participant's NQDC Plan account may be distributed to such participant upon his death, disability, separation from service (including retirement) or
a change in control event, in each case, as elected by the participant in accordance with the terms of the NQDC Plan, as discussed under "Summary Compensation TableNarrative
to Summary Compensation TableNonqualified Deferred Compensation Plan" above.
34
Table of Contents
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Amended and Restated Shareholders' Agreement
On October 31, 2014, we entered into a Shareholders' Agreement with Crestview Victory, Reverence Capital, and certain other persons named
therein. In connection with our IPO, we amended and restated the Shareholders' Agreement.
Each
of Crestview Victory and Reverence Capital has rights to nominate a certain number of our directors depending on their ownership and each of the stockholders party to the
Shareholders' Agreement have agreed to vote, or cause to be voted, all of their outstanding shares to ensure the election of such directors. For more information on the rights of Crestview Victory and
Reverence Capital to nominate directors, see "Proposal 1: Election of Class I DirectorsDirector Designation Rights Under the Shareholders' Agreement."
The
Shareholders' Agreement provides for certain registration rights, pursuant to which either Crestview Victory or Reverence Capital may request us, (a) to file a
registration statement with the SEC, and (b) to file a shelf registration statement with the SEC, in each case, if the registration statement relates to a firmly underwritten public
offering, only if the expected aggregate gross proceeds are expected to be at least $25 million or either Crestview Victory or Reverence Capital propose to sell 100% of their respective shares.
Subject to certain conditions, we will not be obligated to (i) effect more than one underwritten offering involving substantial marketing effort in any consecutive 120-day period, and
(ii) effect more than five demand registrations for Crestview Victory and three demand registrations for Reverence Capital. In addition, each of Crestview Victory and Reverence Capital, and
each of the remaining 2% holders of registrable securities to the extent either Crestview Victory or Reverence Capital participate, have certain "piggyback" registration rights, pursuant to which,
subject to certain exceptions, it will be entitled to register its registrable securities alongside any offering of securities that we may undertake, subject to cutback in certain cases. The
Shareholders' Agreement also provides that we will pay certain expenses relating to such registrations and indemnify the holders against certain liabilities which may arise in connection with the
registration.
Employee Shareholders' Agreement
A substantial majority of our employee stockholders entered into the Employee Shareholders' Agreement upon the completion of the IPO, pursuant
to which they granted an irrevocable voting proxy with respect to the shares of our common stock they have acquired from us, and any shares they may acquire from us in the future, to the Employee
Shareholders Committee. The employee stockholders who are party to the agreement beneficially own in the aggregate approximately 21% of the total common stock and 15% of the total voting power of the
outstanding common stock and the unvested restricted shares as of March 5, 2019. Any shares of our common stock that we may issue in the future to our employees, including under the 2018 Plan,
will be subject to the Employee Shareholders' Agreement. Shares held by an employee stockholder will cease to be subject to the Employee Shareholders' Agreement upon termination of employment by such
employee stockholder (including by death).
The
members of the Employee Shareholders Committee must be our employees and holders of shares subject to the agreement. The Employee Shareholders Committee is currently composed of
David C. Brown (Chief Executive Officer and Chairman of the Board), Michael D. Policarpo, (President, Chief Financial Officer and Chief Administrative Officer) and Kelly S. Cliff (President,
Investment Franchises). Employee stockholders holding shares representing a majority of the shares subject to the
Employee Shareholders' Agreement will be entitled to remove and replace the Employee Shareholders Committee members (other than the Chief Executive Officer). Each member of the Employee Shareholders
Committee is entitled to indemnification from us in his or her capacity as a member of the Employee Shareholders Committee.
35
Table of Contents
The
Employee Shareholders Committee has the sole right to determine how to vote all shares subject to the Employee Shareholders' Agreement, and such shares will be voted in accordance
with the majority decision of those three members. Subject to its obligations under the Shareholders' Agreement, the Employee Shareholders Committee may in its discretion vote, or abstain from voting,
all or any of the shares subject to the Employee Shareholders' Agreement on any matter on which holders of shares of our common stock are entitled to vote, including, but not limited to, the election
of directors to our board of directors, amendments to our certificate of incorporation or bylaws, changes to our capitalization, a merger or consolidation, a sale of substantially all of our assets,
and a liquidation, dissolution or winding up.
Pre-IPO Governance Agreements
In connection with our 2013 management-led buyout with Crestview GP from KeyCorp, we entered into a monitoring agreement with Crestview
on November 22, 2013, pursuant to which Crestview provided advisory services to us and received fees and reimbursements of related out-of-pocket expenses. The monitoring agreement terminated
upon the completion of the IPO. Upon such termination, Crestview was entitled to any amounts that were accrued but unpaid under the agreement. The monitoring agreement also contains customary
indemnification provisions in favor of Crestview. During 2018, we paid $105,556 of monitoring fees to Crestview under the agreement.
In
connection with the Munder Acquisition, we entered into an investment agreement with Reverence Capital on April 16, 2014, pursuant to which, among other things, for so long as
Reverence Capital was entitled to appoint a director to our board of directors and in the event that any deal, monitoring or management fees were paid to Crestview, Reverence Capital had the right to
receive a fee based on its ownership of us relative to Crestview GP's ownership. The right to receive a fee under the investment agreement was terminated upon the completion of the IPO. Upon
such termination, Reverence Capital was entitled to any amounts that were accrued but unpaid under the agreement. During 2018, we paid $81,162 of monitoring fees to Reverence Capital under the
agreement.
Indemnification Agreements
We have entered into indemnification agreements with each of our directors, executive officers and members of the Employee Shareholders
Committee. The indemnification agreements and our amended and restated certificate of incorporation and bylaws require us to indemnify our directors and executive officers to the fullest extent not
prohibited by Delaware law. Subject to certain limitations, our amended and restated certificate of incorporation and bylaws also require us to advance expenses incurred by our directors and officers.
Investment Advisory Agreements
Victory Capital Management Inc. ("VCM") has agreements to serve as the investment adviser of the Victory Funds and VictoryShares, our ETF
brand, in each case with which certain of our employees are affiliated. Under the terms of the investment advisory agreements with the Victory Funds and the VictoryShares, the continuation of which is
subject to annual review and approval by the board of the Victory Funds and VictoryShares, VCM earns investment management fees based on a percentage of AUM, as delineated in the respective investment
advisory agreements and disclosed in the prospectus for each Victory Fund and each of the VictoryShares. The gross amount earned from advising the Victory Funds and the VictoryShares was
$258.0 million for the year ended December 31, 2018.
VCM
has agreed to waive its management fee and/or reimburse expenses for certain of the share classes of certain of the Victory Funds and for certain of the VictoryShares, to the extent
their respective expenses exceed certain levels. In addition, VCM may decide to voluntarily reduce additional fees or reimburse any Victory Fund or any of the VictoryShares for other expenses. The
amount VCM
36
Table of Contents
waived
or reimbursed for the Victory Funds and the VictoryShares was $13.1 million for the year ended December 31, 2018.
VCM
has agreements to serve as the investment adviser of the Victory Collective Funds. Under the terms of the investment advisory agreements with the Victory Collective Funds, VCM earns
investment management fees based on a percentage of AUM. Amount earned from advising the Victory Collective Funds was $3.8 million for the year ended December 31, 2018.
Administration Agreements
VCM has agreements to serve as the administrator and fund accountant for the Victory Funds and VictoryShares, with which certain of our
employees are affiliated. Under the terms of the administration agreements with the Victory Funds and VictoryShares, the continuation of which is subject to annual approval by the board of the Victory
Funds and VictoryShares, VCM earns administration fees based on a percentage of AUM as delineated in the respective administration agreements and disclosed in the statement of additional information
for each Victory Fund and each of the VictoryShares. The gross amount earned from providing administration and fund accounting services to the Victory Funds and VictoryShares was $24.0 million
for the year ended December 31, 2018.
VCM
pays a portion of these administration fees to an unaffiliated sub-administrator for services it provides as sub-administrator and sub-fund accountant to the Victory Funds and
VictoryShares. VCM has agreed to waive a portion of its administration fees for VictoryShares to the extent the fees earned exceed the portion of fees paid to the sub-administrator for services it
provides to the VictoryShares. The amount of administration fees waived by VCM for the VictoryShares was $0.8 million for the year ended December 31, 2018.
Distribution Agreements
Victory Capital Advisers, Inc., our broker-dealer subsidiary registered with the Securities and Exchange Commission (which we call VCA)
has agreements to serve as the distributor for the Victory Funds, with which certain of our employees are affiliated. Under the terms of the distribution agreements with the Victory Funds, the
continuation of which is subject to annual approval by the board of the Victory Funds, VCA is entitled to receive payments, if any, under the 12b-1 plan for the Victory Funds in accordance with the
terms thereof and payments, if any, of sales charges as set forth in the prospectus and statement of additional information of each Victory Fund. The amount earned from providing distribution services
to the Victory Funds was $37.2 million for the year ended December 31, 2018.
Compliance Services Agreement
VCM has an agreement to furnish a VCM employee to serve as the Chief Compliance Officer as well as other compliance personnel and resources
reasonably necessary to provide compliance design, administration and oversight services for the Victory Funds and VictoryShares with which certain of our employees are affiliated, in accordance with
Rule 38a-1 under the Investment Company Act. The term of the agreement began on July 1, 2017 and initially expires on July 1, 2019 but is subject to renewal thereafter. The amount
earned from providing these services to the Victory Funds and VictoryShares was $300,000 in the twelve months ended December 31, 2018.
Review, Approval or Ratification of Transactions with Related Persons
We have adopted a written policy regarding the approval, with certain exceptions, of any transaction or series of transactions in which we or
any of our subsidiaries is a participant, the amount involved exceeds $120,000, and a "related party" (a director, director nominee, executive officer, or a
37
Table of Contents
person
known to us to be the beneficial owner of more than 5% of our voting securities, or any immediate family member of any of the foregoing) has a direct or indirect material interest (a
"related-party transaction"). Under the policy, a related party must promptly disclose to our Chief Legal Officer any potential related-party transaction and all material facts about the transaction.
The Chief Legal Officer will then assess whether the transaction constitutes a related-party transaction. If the Chief Legal Officer determines a transaction qualifies as such, he or she will
communicate that information to the Audit Committee, or to the Chairperson of the Audit Committee, if the Chief Legal Officer in consultation with the Chief Executive Officer or Chief Financial
Officer determines it is impracticable or undesirable to wait until the next committee meeting. Based on its consideration of all of the relevant facts and circumstances, the Audit Committee or the
Chairperson of the Audit Committee, as applicable, will decide whether to approve such transaction and will generally approve only those transactions that are not inconsistent with our best interests.
If we become aware of a related-party transaction that was not approved under this policy before it was entered into, the transaction will be referred to the Audit Committee, which will evaluate all
options available, including ratification, amendment or termination of such transaction. Under the policy, any director who has an interest in a related-party transaction will recuse himself or
herself from any formal action with respect to the transaction as deemed appropriate by the Audit Committee.
38
Table of Contents
AUDIT COMMITTEE REPORT
The Audit Committee oversees the Company's financial reporting process on behalf of the board of directors. The duties and responsibilities of
the Audit Committee are more fully described in the committee's written charter, which is available under the Investor Relations link on our website at
www.vcm.com
.
The
Audit Committee consists of Karin Hirtler-Garvey (Chair), Lawrence Davanzo and Alan H. Rappaport. Our board of directors has affirmatively determined that each of Karin
Hirtler-Garvey, Lawrence Davanzo and Alan H. Rappaport meet the definition of "independent director" for purposes of serving on an audit committee under Rule 10A-3 and the NASDAQ rules. Each
member of the Audit Committee is able to read and understand fundamental financial statements as required by the listing rules of the NASDAQ. Karin Hirtler-Garvey has been identified as an "audit
committee financial expert" as that term is defined in the rules and regulations of the SEC.
In
fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed with management the audited financial statements of the Company for the fiscal year ended
December 31, 2018.
The
Audit Committee has discussed with the Company's independent auditors, Ernst & Young LLP, the matters required to be discussed by the applicable requirements of the
Public Company Accounting Oversight Board.
The
Audit Committee has also received the written disclosures and letter from Ernst & Young LLP as required by the applicable requirements of the Public Company Accounting
Oversight Board regarding the independent accountant's communications with the Audit Committee concerning independence, and has discussed with Ernst & Young LLP its independence.
Based
on the review and discussions referred to above in this report, the Audit Committee recommended to the board of directors that the audited financial statements be included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2018 for filing with the SEC.
|
|
|
|
|
Submitted by the Audit Committee of the Board of Directors:
|
|
|
Karin Hirtler-Garvey (Chairperson)
Lawrence Davanzo
Alan H. Rappaport
|
The
information contained in this report shall not be deemed to be "soliciting material" or "filed" or incorporated by reference in future filings with the SEC, or subject to the
liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates it
by reference into a document filed under the Securities Act or the Exchange Act.
39
Table of Contents
PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP FOR THE FISCAL YEAR ENDING DECEMBER 31, 2019
Our Audit Committee, in accordance with its charter and authority delegated to it by the board of directors, has appointed the firm of
Ernst & Young LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2019, and the board of
directors has directed that such appointment be submitted to our stockholders for ratification at the Annual Meeting.
Ernst &
Young LLP has served as the Company's auditor since 2013 and is considered by our Audit Committee to be well qualified. Our organizational documents do not require
that our stockholders ratify the selection of Ernst & Young LLP as our independent registered public accounting firm. We are doing so because we believe it is a matter of good corporate
practice. If the stockholders do not ratify the appointment of Ernst & Young LLP, the Audit Committee will reconsider the appointment, but may still retain Ernst &
Young LLP.
Representatives
of Ernst & Young LLP will be present at the Annual Meeting and will have an opportunity to make a statement if they desire to do so. They also will be
available to respond to appropriate questions from stockholders.
Recommendation of the Board of Directors
The board of directors and the Audit Committee recommend that you vote "FOR" the ratification of the appointment of Ernst &
Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.
Fees Paid to the Independent Registered Public Accounting Firm
Aggregate fees for professional services rendered for us by Ernst & Young LLP as of and for the fiscal years ended
December 31, 2018 and 2017 are set forth below. The aggregate fees included in the "Audit fees" category are fees billed for the fiscal year for the audits of our annual financial statements,
audits of statutory and regulatory filings, comfort letters and quarterly reviews. The aggregate fees included in the Audit-related, Tax and All other fees categories are fees for services performed
in the fiscal years.
|
|
|
|
|
|
|
|
|
|
Fiscal Year
2018
|
|
Fiscal Year
2017
|
|
Audit fees
|
|
$
|
1,188,370
|
|
$
|
1,508,804
|
|
Audit-related fees
|
|
$
|
750
|
|
$
|
69,459
|
|
Tax fees
|
|
$
|
124,000
|
|
$
|
149,000
|
|
All other fees
|
|
|
|
|
$
|
38,400
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,313,120
|
|
$
|
1,765,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit
fees for the fiscal years ended December 31, 2018 and 2017 include fees and expenses related to the annual audits of our consolidated financial statements and financial
statements for our broker-dealer and foreign subsidiaries, reviews of quarterly consolidated financial statements, comfort letters, reviews of registration statements, and services that are
customarily provided in connection with statutory or regulatory filings.
Audit-related
fees for the fiscal year ended December 31, 2018 were for foreign subsidiary XBRL services and for the fiscal year ended December 31, 2017 were for
consultations relating to accounting matters.
40
Table of Contents
Tax
fees for the fiscal years ended December 31, 2018 and 2017 were for domestic and foreign tax return compliance and consultations related to technical interpretations,
applicable laws and regulations and tax accounting.
All
other fees for the fiscal year ended December 31, 2017 included IPO-readiness consultation services.
Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services
The Audit Committee is required to pre-approve, or adopt appropriate procedures to pre-approve, all audit and non-audit services to be provided
by the independent auditors. The Audit Committee will typically pre-approve specific types of audit, audit-related, tax and other services on an annual basis. All services not pre-approved annually
are approved on an individual basis throughout the year as the need arises. The committee has delegated to its chairperson the authority to
pre-approve independent auditor engagements between meetings of the committee. Any such pre-approvals will be reported to and ratified by the entire committee at its next regular meeting.
Following
our IPO in February 2018, all audit, audit-related, tax and other services in fiscal 2018 were pre-approved by the Audit Committee. In all cases, the committee concluded that
the provision of such services by Ernst & Young LLP was compatible with the maintenance of Ernst & Young LLP's independence.
41
Table of Contents
ADDITIONAL INFORMATION
This proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 are available at
https://materials.proxyvote.com/92645B. Stockholders are directed to the 2018 Form 10-K for financial and other information about us. The 2018 Form 10-K is not part of this proxy
statement.
We
are required to file annual, quarterly and current reports, proxy statements and other reports with the SEC. Copies of these filings are available through the Investor Relations link
on our website at
www.vcm.com
or the SEC's website at
www.sec.gov
. We will furnish copies of our SEC
filings (without exhibits), including this proxy statement and our 2018 Form 10-K, without charge to any stockholder upon written or verbal request provided to us at Victory Capital
Holdings, Inc., 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144, Attn: Investor Relations, telephone: (216) 898-2412, email mdennis@vcm.com.
Additional
information about the Company, including the charters of our standing committees, our Corporate Governance Guidelines and our Code of Business Conduct can be found under the
Investor Relations link on our website at
www.vcm.com
. We will provide a printed copy of these documents to stockholders upon request.
Other Matters that May Come Before the Annual Meeting
Our board of directors knows of no matters other than those stated in the accompanying Notice of Annual Meeting of Stockholders that may
properly come before the Annual Meeting. However, if any other matter should be properly presented for consideration and voting at the Annual Meeting or any adjournments thereof, it is the intention
of the persons named as proxies on the enclosed form of proxy card to vote the shares represented by all valid proxy cards in accordance with their judgment of what is in the best interest of Victory.
We encourage you to read this proxy statement and submit your proxy or voting instructions as soon as possible. You may vote your shares by Internet or, if you
received printed proxy materials, by mailing the completed proxy card. Please refer to the section "How do I vote?" for detailed voting instructions.
|
|
|
|
|
By Order of the Board of Directors,
|
|
|
|
|
|
David C. Brown
Chairman of the Board of Directors and Chief Executive Officer
|
Brooklyn, Ohio
March 22, 2019
|
|
|
The
2018 Form 10-K, which includes audited consolidated financial statements, does not form any part of the material for the solicitation of proxies.
42
*** Exercise Your Right to Vote *** Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 1, 2019. VICTORY CAPITAL HOLDINGS, INC. XXXX XXXX XXXX XXXX (located on the following page). You are receiving this communication because you hold shares in the company named above. This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online at www.proxyvote.com or easily request a paper copy (see reverse side). We encourage you to access and review all of the important information contained in the proxy materials before voting. VICTORY CAPITAL HOLDINGS, INC. 4900 TIEDEMAN ROAD 4TH FLOOR BROOKLYN, OH 44144 proxy materials and voting instructions. E62385-P19483 See the reverse side of this notice to obtain Meeting Information Meeting Type: Annual Meeting For holders as of: March 5, 2019 Date: May 1, 2019 Time: 7:00 A.M. ET Location: Meeting live via the Internet-please visit www.virtualshareholdermeeting.com/VCTR2019. The company will be hosting the meeting live via the Internet this year. To attend the meeting via the Internet please visit www.virtualshareholdermeeting.com/VCTR2019 and be sure to have the information that is printed in the box marked by the arrow
Before You Vote How to Access the Proxy Materials Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the by the arrow XXXX XXXX XXXX XXXX (located on the following page) in the subject line. How To Vote Please Choose One of the Following Voting Methods XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions. the arrow XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions. E62386-P19483 Vote By Internet: Before The Meeting: Go to www.proxyvote.com. Have the information that is printed in the box marked by the arrow During The Meeting: Go to www.virtualshareholdermeeting.com/VCTR2019. Have the information that is printed in the box marked by Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. Proxy Materials Available to VIEW or RECEIVE: NOTICE AND PROXY STATEMENTFORM 10-K How to View Online: following page) and visit: www.proxyvote.com. How to Request and Receive a PAPER or E-MAIL Copy: If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: 1) BY INTERNET:www.proxyvote.com 2) BY TELEPHONE:1-800-579-1639 3) BY E-MAIL*:sendmaterial@proxyvote.com * If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before April 17, 2019 to facilitate timely delivery.
The Board of Directors recommends you vote FOR the following: 1. Election of three Class I Directors Nominees: 1a. Alex Binderow 1b. Lawrence Davanzo 1c. Karin Hirtler-Garvey The Board of Directors recommends you vote FOR the following proposal: 2. The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. E62387-P19483 Voting Items
E62388-P19483
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on April 30, 2019 for shares held directly and by 11:59 P.M. ET on April 25, 2019 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. VICTORY CAPITAL HOLDINGS, INC. 4900 TIEDEMAN ROAD 4TH FLOOR BROOKLYN, OH 44144 During The Meeting - Go to www.virtualshareholdermeeting.com/VCTR2019 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on April 30, 2019 for shares held directly and by 11:59 P.M. ET on April 25, 2019 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E62382-P19483 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. VICTORY CAPITAL HOLDINGS, INC. The Board of Directors recommends you vote FOR the following: 1. Election of three Class I Directors Nominees: For Against Abstain ! ! ! ! ! ! ! ! ! 1a. Alex Binderow 1b. Lawrence Davanzo 1c. Karin Hirtler-Garvey For Against Abstain The Board of Directors recommends you vote FOR the following proposal: ! ! ! 2. The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. E62383-P19483 VICTORY CAPITAL HOLDINGS, INC. Annual Meeting of Shareholders May 1, 2019 7:00 A.M. This proxy is solicited by the Board of Directors The undersigned hereby appoints, with full power of substitution to each MICHAEL D. POLICARPO and NINA GUPTA the power as proxy to vote all the shares of Common Stock which the undersigned would be entitled to vote if personally present and acting at the Annual Meeting of Shareholders of Victory Capital Holdings, Inc. to be held on May 1, 2019, at 7:00 A.M. at www.virtualshareholdermeeting.com/VCTR2019 and any adjournments or postponements thereof, as follows: This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Continued and to be signed on reverse side
Victory Capital (NASDAQ:VCTR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Victory Capital (NASDAQ:VCTR)
Historical Stock Chart
From Apr 2023 to Apr 2024