TripAdvisor 2013 Annual Report Download - page 146

The Board of Directors has determined that each of Ms. Singh Cassidy and Messrs. Miller, Nishar, Philips,
Rascoff and Wiesenthal is an “independent director” as defined by the NASDAQ 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 NASDAQ 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
NASDAQ Rules for audit committee members and by the SEC, NASDAQ Rules and the Internal Revenue
Service for compensation committee members.
Controlled Company Status
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 14.0% of the outstanding shares of common stock
and 100% of the outstanding shares of Class B common stock, respectively. Assuming the conversion of all of
Liberty’s shares of Class B common stock into common stock, Liberty would beneficially own 21.7% 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 56.7% 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.
The NASDAQ 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 governance
requirements under the NASDAQ Rules, including, among other items, the requirement that our Board of
Directors be comprised of a majority of independent directors. On this basis, TripAdvisor is relying on the
exemption for controlled companies from certain requirements under the NASDAQ Rules, including, among
others, the requirement that the Compensation Committee be composed solely of independent directors and
certain requirements relating to the nomination of directors. We may, in the future, rely on other exemptions
available to a controlled company, including, among others, the requirement that a majority of the Board of
Directors be composed of independent 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
us with the benefit of Mr. Maffei’s oversight of TripAdvisor’s strategic goals and vision, coupled with the benefit
of a full-time Chief Executive Officer dedicated to focusing on the day-to-day management and continued
growth of TripAdvisor and its operating businesses. We believe that it is in the best interests of our stockholders
for the Board of Directors to make a determination regarding the separation or combination of these roles each
time it elects a new Chairman or Chief Executive Officer based on the relevant facts and circumstances
applicable at such time.
Independent members of the Board of Directors chair our Audit Committee, Compensation Committee and
Section 16 Committee.
Meeting Attendance
The Board of Directors met seven times in 2013. During such period, each member of the Board of
Directors attended at least 75% of the meetings of the Board and the Board committees on which they served.
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