TripAdvisor 2012 Annual Report Download - page 141

Inc., a privately-held online social networking and e-commerce company, and was an associate at Debevoise &
Plimpton, LLP, a New York law firm. Mr. Kalvert holds an A.B. degree from Brown University and a J.D.
degree from Columbia Law School.
Board of Directors
Director Independence
Under the NASDAQ Stock Market Listing Rules (the “Listing Rules”), the Board has a responsibility to
make an affirmative determination that those members of the Board who serve as independent directors do not
have any relationships that would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. In connection with the independence determinations described below, the Board
reviewed information regarding transactions, relationships and arrangements relevant to independence, including
those required by the Listing Rules. This information is obtained from director responses to questionnaires
circulated by management, as well as our records and publicly available information. Following this
determination, management monitors those transactions, relationships and arrangements that were relevant to
such determination, as well as solicits updated information potentially relevant to independence from internal
personnel and directors, to determine whether there have been any developments that could potentially have an
adverse impact on the Board’s prior independence determination. The Board of Directors has determined that
each of Ms. Singh Cassidy and Messrs. Miller, Philips and Wiesenthal is an “independent director” as defined by
the Listing Rules. In making its independence determinations, the Board of Directors considered the applicable
legal standards and any relevant transactions, relationships or arrangements. In addition to the satisfaction of the
director independence requirements set forth in the Listing Rules, members of the Audit Committee and
Compensation Committee have also satisfied separate independence requirements under the current standards
imposed by the SEC and the Listing Rules for audit committee members and by the SEC and the Internal
Revenue Service for compensation committee members.
Controlled Company Status
The Listing Rules exempt “controlled companies,” or companies of which more than 50% of the voting
power is held by an individual, a group or another company, such as TripAdvisor, from certain requirements
under the Listing Rules.
As of the record date, Liberty beneficially owned 18,159,752 shares of our common stock and 12,799,999
shares of our Class B common stock, which shares constitute 13.9% of the outstanding shares of common stock
and 100% of the outstanding shares of Class B common stock. Assuming the conversion of all of the Liberty’s
shares of Class B common stock into common stock, Liberty would beneficially own 21.6% of the outstanding
common stock (calculated in accordance with Rule 13d-3). Because each share of Class B common stock
generally is entitled to ten votes per share and each share of common stock is entitled to one vote per share,
Liberty may be deemed to beneficially own equity securities representing approximately 56.5% of our voting
power. Liberty has filed a Statement of Beneficial Ownership on Schedule 13D/A with respect to its TripAdvisor
holdings and related voting arrangements with the SEC. On this basis, TripAdvisor is relying on the exemption
for controlled companies from certain requirements under the Listing Rules, including, among others, the
requirement that a majority of the Board of Directors be composed of independent directors, the requirement that
the Compensation Committee be composed solely of independent directors and certain requirements relating to
the nomination of directors.
Board Leadership Structure
Mr. Maffei serves as the Chairman of the Board of Directors, and Mr. Kaufer serves as President and Chief
Executive Officer of TripAdvisor. The roles of Chief Executive Officer and Chairman of the Board of Directors
are currently separated in recognition of the differences between the two roles. This leadership structure provides
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