TripAdvisor 2015 Annual Report Download - page 26

We are currently relying on the “controlled company” exemption under NASDAQ Stock Market Listing Rules, pursuant to which “controlled companies” are
exempt from certain corporate governance requirements otherwise applicable under NASDAQ listing rules.
TheNASDAQStockMarket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,fromcertaincorporategovernancerequirements,includingthoserequirementsthat:
·AmajorityoftheBoardofDirectorsconsistofindependentdirectors;
·CompensationofofficersbedeterminedorrecommendedtotheBoardofDirectorsbyamajorityofitsindependentdirectorsorbyacompensation
committeecomprisedsolelyofindependentdirectors;and
·DirectornomineesbeselectedorrecommendedtotheBoardofDirectorsbyamajorityofitsindependentdirectorsorbyanominatingcommittee
thatiscomposedentirelyofindependentdirectors.
Wecurrentlyrelyonthecontrolledcompanyexemptionfromtheaboverequirements.Accordingly,ourstockholderswillnotbeaffordedthesame
protectionsgenerallyasstockholdersofotherNASDAQ-listedcompanieswithrespecttocorporategovernanceforsolongaswerelyontheseexemptionsfromthe
corporategovernancerequirements.
If we are unable to successfully maintain effective internal control over financial reporting, investors may lose confidence in our reported financial
information and our stock price and business may be adversely impacted.
Asapubliccompany,wearerequiredtomaintaininternalcontroloverfinancialreportingandourmanagementisrequiredtoevaluatetheeffectivenessof
ourinternalcontroloverfinancialreportingasoftheendofeachfiscalyear.Additionally,wearerequiredtodiscloseinourAnnualReportsonForm10-Kour
management’sassessmentoftheeffectivenessofourinternalcontroloverfinancialreportingandaregisteredpublicaccountingfirm’sattestationreportonthis
assessment.Ifwearenotsuccessfulinmaintainingeffectiveinternalcontroloverfinancialreporting,therecouldbeinaccuraciesoromissionsintheconsolidated
financialinformationwearerequiredtofilewiththeSEC.Additionally,eveniftherearenoinaccuraciesoromissions,wecouldberequiredtopubliclydisclose
theconclusionofourmanagementthatourinternalcontroloverfinancialreportingordisclosurecontrolsandproceduresarenoteffective.Theseeventscould
causeinvestorstoloseconfidenceinourreportedfinancialinformation,adverselyimpactourstockprice,resultinincreasedcoststoremediateanydeficiencies,
attractregulatoryscrutinyorlawsuitsthatcouldbecostlytoresolveanddistractmanagement’sattention,limitourabilitytoaccessthecapitalmarketsorcauseour
stocktobedelistedfromNASDAQoranyothersecuritiesexchangeonwhichwearethenlisted.
The market price and trading volume of our common stock may be volatile and may face negative pressure.
Ourstockpricehasexperienced,andcouldcontinuetoexperienceinthefuture,substantialvolatility.Themarketpriceofourcommonstockisaffectedbya
numberoffactors,includingtheriskfactorsdescribedinthissectionandotherfactorsbeyondourcontrol.Factorsaffectingthetradingpriceofourcommonstock
couldinclude:
·Quarterlyvariationsinourorourcompetitors’resultsofoperations;
·Changesinearningsestimatesorrecommendationsbysecuritiesanalysts;
·Failuretomeetmarketexpectations;
·Theannouncementofnewproductsorproductenhancementsbyusorourcompetitors;
·Repurchasesofourcommonstockpursuanttooursharerepurchaseprogramwhichcouldalsocauseourstockpricetobehigherthanitwouldbein
theabsenceofsuchaprogramandcouldpotentiallyreducethemarketliquidityforourstock;
·Developmentsinourindustry,includingchangesingovernmentalregulations;and
·Generalmarketconditionsandotherfactors,includingfactorsrelatedtoouroperatingperformanceortheoperatingperformanceofourcompetitors.
Furthermore,thestockmarketshaveexperiencedpriceandvolumefluctuationsthathaveaffectedandcontinuetoaffectthemarketpricesofequity
securitiesofmanycompanies.Thesefluctuationsoftenhavebeenunrelatedordisproportionatetotheoperatingperformanceofthosecompanies.Thesebroad
marketandindustryfluctuationsandgeneraleconomic,politicalandmarketconditions,suchasrecessions,interestratechangesorinternationalcurrency
fluctuations,maynegativelyimpactthemarketpriceofourcommonstockregardlessofouractualoperatingperformance.
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