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| ☐ | Preliminary Proxy Statement | ||||
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| BLACKLINE, INC. | ||
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Also, please let us know if you plan to attend the virtual annual meeting by marking the appropriate box on the enclosed proxy card, if you requested to receive printed proxy materials, or, if you vote by telephone or over the Internet, by indicating your plans when prompted.
  |  | ||||||||
Therese Tucker | |||||||||
Woodland Hills, California | |||||||||
March 27, 2024 | |||||||||
BLACKLINE, INC.
| Time and Date | 9:00 a.m., 2024 | ||||
Place | The annual meeting will be a virtual meeting held | ||||
Items of Business | (1) To elect as Class II directors the | ||||
(2) To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. | |||||
(3) compensation of our named executive officers. | |||||
(4) To transact other business that may properly come before the annual meeting or any adjournments or postponements thereof. | |||||
Adjournments andPostponements | |||||
Any action on the items of business described above may be considered at the annual meeting at the time and on the date specified above or at any time and date to which the annual meeting may be properly adjourned or postponed. | |||||
Record Date | March 15, 2024 | ||||
Only holders of record of our common stock as of March | |||||
Meeting Admission | You are invited to attend the virtual annual meeting if you are a stockholder of record or a beneficial owner of shares of our common stock as of the Record Date. You can attend the virtual annual meeting by visiting www.virtualshareholdermeeting.com/ | ||||
Availability of Proxy Materials | The Notice Regarding the Internet Availability of Proxy Materials, which contains instructions on how to access the proxy materials and our | ||||
| Voting | |||||
Your vote is very important. You may vote by proxy |
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BLACKLINE, INC.
2024
In this proxy statement, the terms “BlackLine,” “we,” “our,” and “Company” refer to BlackLine, Inc., a Delaware corporation.
What if other matters are properlymay be brought before the annual meeting?
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Who is entitled to vote at the annual meeting?
Beneficial Owner of Shares Held in “Street Name”: Shares Registered in the Name of a Broker, Bank or Other Nominee
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or Internetonline voting will depend on the voting process of your broker, bank or other nominee.As discussed above, if you are a beneficial owner, you may notonly vote your shares electronically at the annual meeting unlessif you obtain a legal proxy from your broker, bank or other nominee.
Beneficial Owner of Shares Held in “Street Name”: Shares Registered in the Name of a Broker, Bank or Other Nominee.Nominee.If you are the beneficial owner of your shares, you must contact the broker, bank or other nominee holding your shares and follow their instructions to change your vote or revoke your proxy.
Record Date.
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entitled to vote at the annual meeting will constitute a quorum to transact business at the annual meeting. Abstentions, “WITHHOLD” votes, and “broker non-votes” are counted as present and entitled to vote for purposes of determining a quorum. If there is no quorum, the chairmanChair of the meeting may adjourn the meeting to another time or place.
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Proposal No. 3: ApprovalAdvisory Non-Binding Vote to Approve the Compensation of the 2018 Employee Stock Purchase PlanNamed Executive Officers. The approvaladvisory non-binding vote to approve the fiscal 2023 compensation of the 2018 Employee Stock Purchase Plan by usour named executive officers requires the affirmative vote of a majority of the voting power of the shares present virtually or represented by proxy at the annual meeting and entitled to vote.vote on the proposal. You may vote “FOR,” “AGAINST,” or “ABSTAIN” on this proposal. Abstentions will count towards the quorum requirement for the annual meeting and will have the same effect as a vote against the proposal. Broker non-votes will not affect the outcome of voting on this proposal.
Because this vote is advisory only, it will not be binding on our Board. The Compensation Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation.
In addition, if any other matters are properly brought before the annual meeting or any adjournments or postponements thereof, the persons named as proxies will be authorized to vote or otherwise act on those matters in accordance with their judgment.
compensation of our named executive officers.
American Stock Transfer &Equiniti Trust Company, LLC6201 15th AvenueBrooklyn, NY 11219
at:
You will have the same rights and opportunities that would be afforded by an in-person meeting.
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How are proxies solicited for the annual meeting and who is paying for such solicitation?
If you choose to access the proxy materials and/or vote over the Internet, you are responsible for Internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur.
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When are stockholder proposals due for next year’s annual meeting?
What are the implications of being an “emerging growth company”?
We are an “emerging growth company” under applicable federal securities laws and therefore permitted to take advantage of certain reduced public company reporting requirements. As an emerging growth company, we provide in this proxy statement the scaled disclosure permitted under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, including certain executive compensation disclosures required of a “smaller reporting company,” as that term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In addition, as an emerging growth company, we are not required to conduct votes seeking approval, on an advisory basis, of the compensation of our named executive officers or the frequency with which such votes must be conducted. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the completion of our initial public offering, (ii) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more, (iii) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities or (iv) the date on which we are deemed to be a “large accelerated filer” as defined in the Exchange Act.
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We are party to
Silver Lake Sumeru is entitled to designate: (i) seven directors of up tobeneficially own a 13 member Board for so long as Silver Lake Sumeru beneficially owns more than 35% of the totalsufficient number of shares of our common stock then outstanding; (ii) six directors for so long as Silver Lake Sumeru beneficially owns 35% or less, but more than 25% of the total number of shares of our common stock then outstanding; (iii) three directors for so long as Silver Lake Sumeru beneficially owns 25% or less, but more than 20% of the total number of shares of our common stock then outstanding; (iv) two directors for so long as Silver Lake Sumeru beneficially owns 20% or less, but more than 10% of the total number of shares of our common stock then outstanding; and (v) one director for so long as Silver Lake Sumeru beneficially owns 10% or less, but at least 5% of the total number of shares of our common stock then outstanding.
Iconiq is entitled to designate one director for so long as Iconiq beneficially owns at least 5% of the total number of shares ofa designee on our common stock then outstanding.
Silver Lake Sumeru and Iconiq designees to our board of directors will each serve until the annual meeting of stockholders in the year in which their respective board terms expire. If Silver Lake Sumeru or Iconiq meet the applicable beneficial ownership thresholds as of 120 days prior to such annual meetings, the Silver Lake Sumeru or Iconiq designees will be nominated by our board of directors for election by the stockholders at such annual meeting. The Principal Stockholders will agree to vote their shares in favor of the directors nominated as set forth above. In addition, Silver Lake Sumeru and Iconiq shall be entitled to designate the replacement for any of their respective board nominees or designees, as applicable, whose board service terminates prior to the end of the director’s term. In each case, Silver Lake Sumeru’s and Iconiq’s nominees or designees, as applicable, must comply with applicable law and stock exchange rules.
Silver Lake Sumeru has designated Messrs. Babcoke and Brennan and Ms. Haynes pursuant to the Stockholders’ Agreement and Iconiq has designated Mr. Griffith pursuant to the Stockholders’ Agreement.
Board. Ms. Tucker and Mr. Spanicciati are also eachwill continue to be entitled to membership on our boardBoard for so long as she continues to hold 5% or more of directors, subject to the following:issued and outstanding Common Stock (the “Designation Threshold”) as of the Ownership Measurement Date (as defined in the Stockholder Agreement), provided, however, in the event that Ms. Tucker or Mr. Spanicciati ceases to be employed by the companyCompany for any reason and she or he beneficially owns less than 5% of the total number of shares of our common stock outstanding (i)Designation Threshold she or he will be required to immediately tender her or his resignation from our board of directorsBoard effective only upon acceptance by our board of directors,Board, and (ii) our board of directorsBoard may, in its sole discretion, accept or reject such resignation. If our board of directorsBoard rejects the resignation, Ms. Tucker or Mr. Spanicciati, as applicable, will continue to have the right to be designated for membership on our board of directors;Board; provided that our board of directorsBoard will have the right, by unanimous vote of the other directors (excluding both Ms. Tucker and Mr. Spanicciati)Tucker), to require such director’sher resignation from our board of directorsBoard if the our board of directorsBoard determines such resignation would be in the best interests of the company,Company, regardless of the number of shares of common stock held by Ms. Tucker or Mr. Spanicciati.
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Silver Lake Sumeru shall also have the right to have two designees serve on the compensation committee and two designees serve on the nominating and corporate governance committee, subject to compliance with applicable law and stock exchange rules, so long as Silver Lake Sumeru owns at least 15% of the total number of shares of our common stock then outstanding. The Stockholders’ Agreement, subject to certain exceptions, also prohibits us from increasing or decreasing the size of our board of directors without the prior written consent of Silver Lake Sumeru so long as Silver Lake Sumeru owns at least 15% of the total number of shares of our common stock then outstanding.Tucker. The affiliates of each of the Principal StockholdersStockholder Parties who continue to hold shares have agreed to vote their shares in favor of the directors designated as set forth above.
Ms. Tucker.
Name | Class | Age | Position | Director Since | Current Term Expires | Expiration of Term for Which Nominated | ||||||||||||
Nominees for Director | ||||||||||||||||||
Jason Babcoke | II | 45 | Director | 2013 | 2018 | 2021 | ||||||||||||
Kevin Thompson(1)(2) | II | 52 | Director | 2017 | 2018 | 2021 | ||||||||||||
Director Not Continuing | ||||||||||||||||||
Hollie Haynes(3)(4) | II | 46 | Director | 2013 | 2018 | — | ||||||||||||
Continuing Directors | ||||||||||||||||||
John Brennan(3)(5) | III | 53 | Chairman of the Board | 2013 | 2019 | — | ||||||||||||
William Griffith | III | 46 | Director | 2013 | 2019 | — | ||||||||||||
Graham Smith(1) | III | 58 | Director | 2015 | 2019 | — | ||||||||||||
Therese Tucker | I | 56 | Chief Executive Officer and Director | 2001 | 2020 | — | ||||||||||||
Mario Spanicciati | I | 37 | Chief Marketing Officer and Director | 2013 | 2020 | — | ||||||||||||
Thomas Unterman(1)(5) | I | 73 | Director | 2010 | 2020 | — | ||||||||||||
| Name | Class | Age | Position | Director Since | Current Term Expires | Expiration of Term for Which Nominated | ||||||||||||||||||||||||||||||||
| Nominees for Director | ||||||||||||||||||||||||||||||||||||||
| Owen Ryan | II | 61 | Chair of the Board and Co-Chief Executive Officer | 2018 | 2024 | 2027 | ||||||||||||||||||||||||||||||||
Sophia Velastegui(1)(4) | II | 48 | Director | 2020 | 2024 | 2027 | ||||||||||||||||||||||||||||||||
William Wagner(2)(4) | II | 57 | Director | 2023 | 2024 | 2027 | ||||||||||||||||||||||||||||||||
| Continuing Directors | ||||||||||||||||||||||||||||||||||||||
Camille Drummond(1)(5) | III | 55 | Director | 2024 | 2025 | — | ||||||||||||||||||||||||||||||||
Brunilda Rios(1)(4) | III | 58 | Director | 2023 | 2025 | — | ||||||||||||||||||||||||||||||||
Barbara Whye(3) | III | 56 | Director | 2021 | 2025 | — | ||||||||||||||||||||||||||||||||
Mika Yamamoto(2) | III | 51 | Director | 2019 | 2025 | — | ||||||||||||||||||||||||||||||||
| Therese Tucker | I | 62 | Co-Chief Executive Officer and Director | 2001 | 2026 | — | ||||||||||||||||||||||||||||||||
Thomas Unterman(2)(3) | I | 79 | Director | 2010 | 2026 | — | ||||||||||||||||||||||||||||||||
Amit Yoran(3)(4) | I | 53 | Director | 2023 | 2026 | — | ||||||||||||||||||||||||||||||||
| Directors Not Continuing | ||||||||||||||||||||||||||||||||||||||
Kevin Thompson(1)(2)(6) | II | 58 | Director | 2017 | 2024 | — | ||||||||||||||||||||||||||||||||
(5)Ms. Drummond joined our Board and our Audit Committee on March 15, 2024. (6)Mr. Thompson is not standing for re-election at the 2024 annual meeting, |
Jason Babcoke. Mr. Babcoke has served as a member of our boardBoard and the committees of directors since September 2013. Mr. Babcoke has served as a Managing Director of Sumeru Equity Partners, a private equity firm, since March 2014. Since July 2011, Mr. Babcoke has served as a Principal for Silver Lake Sumeru, a middle-market investment group of Silver Lake, a global private equity firm. From August 2008 to July 2011, Mr. Babcoke worked at Symphony Technology Group, a private equity firm. From July 2004 to August 2006, Mr. Babcoke served as a Senior Manager for Life Technologies, a biotech company. From February 2001 to March 2004, Mr. Babcoke served as Director of Engineering for Angstron Systems, Inc., a nano-deposition technology company, acquired by Novellus. From July 2000 to January 2001, Mr. Babcoke served as a Venture Capital Associate for The Spark Group, a technology-focused investment group. Currently, Mr. Babcoke serves aswhich he is a member until the expiration of his current term ending on the date of the board of directors2024 annual meeting.
Mr. Babcoke brings valuable experience in venture capital investing and knowledge of technology companies to the board of directors.
| Owen Ryan | Skills and Qualifications Provided to Our Board | ||||
Age: 61 Director Since: 2018 Chair of the Board Since: 2023 | •Significant strategic leadership, including as president or chief executive officer •Significant sales, marketing, and operational experience •Extensive financial and accounting expertise •Public company board and corporate governance experience •Certified public accountant •Expertise in strategy, operational and financial management | ||||
| Professional Experience Highlights | |||||
•BlackLine, Inc.: Co-Chief Executive Officer and Chairman (since 2023) •Geller Advisors LLC, a provider of strategic advisory and wealth management services: Chief Executive Officer (2019-2022) •Geller & Company, a provider of outsourced CFO and technology services: Chief Strategy Officer (2018-2022) and Managing Principal (2018-2022) •AEGIS Insurance Services, Inc., a mutual insurance company: Chief Executive Officer and President (2016-2017) •Deloitte Advisory, Deloitte & Touche LLP’s Risk Advisory practice: Chief Executive Officer and Managing Partner as well as various other roles (1985-2016) | |||||
| Other Public Company Boards | |||||
•Lincoln National Corp. (September 2023-present) | |||||
| Education | |||||
•M.B.A. from Columbia University •B.S. from New Jersey City University | |||||
| Sophia Velastegui | Skills and Qualifications Provided to Our Board | ||||
Age: 48 Independent Director Since: 2020 | •Extensive engineering, product development, and product leadership experience in the technology sector •Significant strategic leadership, operational experience, and management experience at technology and software companies •Expertise in strategy, artificial intelligence, and technology •Valuable expertise in cybersecurity provides our Board and its Technology and Cybersecurity Committee with deep knowledge in these areas | ||||
| Professional Experience Highlights | |||||
Committees: Audit Technology & Cybersecurity (Chair) | •Aptiv PLC, an automotive technology company: Senior Vice President and Chief Product Officer (since 2022) •National Artificial Intelligence (AI) Advisory Committee of the U.S. National Science Foundation, an independent federal agency that supports science and engineering: Member (since 2023) •Microsoft Corporation, a software and technology company: Chief Technology Officer, AI in Business Applications (2020-2022) and GM of AI Products & Search (2017-2020) •Doppler Labs, an audio technology company: Chief Product Officer (2017) •Nest Labs, Inc., a home automation specialist company that was acquired by Google: Head of Silicon/Architecture Roadmap (2014-2017) and Lead for Silicon/ Architecture Roadmap (2014-2017) | ||||
| Education | |||||
•M.S. in Mechanical Engineering from the University of California at Berkeley •B.S. in Mechanical Engineering from Georgia Institute of Technology | |||||
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Kevin Thompson. Mr. Thompson has served as a member of our board of directors since October 2017. Since March 2010, Mr. Thompson has served as President and Chief Executive Officer of SolarWinds Inc., an enterprise information technology infrastructure management software company, or SolarWinds, and has held several other positions since he joined SolarWinds in July 2006. From November 2005 to March 2006, Mr. Thompson served as Chief Financial Officer of Surgient, Inc., a software company. From September 2004 to November 2005, Mr. Thompson served as Senior Vice President and Chief Financial Officer of SAS Institute, a business intelligence software company. From October 2000 to August 2004, Mr. Thompson served as Executive Vice President and Chief Financial Officer of Red Hat, Inc., an enterprise software company. Currently, Mr. Thompson serves on the board of directors of Instructure, Inc., an educational technology company. Previously, Mr. Thompson served on the board of directors of Barracuda Networks, Inc., a data security and storage company, from September 2013 to June 2016 and the board of directors of NetSuite Inc., a business management software company, from September 2006 to its acquisition by Oracle Corporation, a global information technology provider. Mr. Thompson holds a B.B.A. from the University of Oklahoma.
Mr. Thompson is a valuable member of our board of directors, bringing extensive experience working with software and other technology companies.
Director Not Continuing
Hollie Haynes. Ms. Haynes has served as a member of our board of directors since September 2013. Ms. Haynes founded Luminate Capital Partners, a private equity firm, and has served as its Managing Partner since January 2015. Since June 2007, Ms. Haynes has served as Managing Director for Silver Lake Sumeru, a middle-market investment group of Silver Lake, a global private equity firm. Ms. Haynes joined Silver Lake in August 1999. From June 1993 to July 1997, Ms. Haynes served in various analyst roles for Hellman & Friedman, a private equity firm, and Morgan Stanley, an investment bank. Currently, Ms. Haynes serves as a member of the board of directors of various private companies. Ms. Haynes holds an M.B.A. from Stanford University Graduate School of Business and an A.B. in Economics from Harvard University. Ms. Haynes is a designee of Silver Lake Sumeru.
Ms. Haynes is a valuable member of our board of directors, bringing experience in the technology and financial industries and service as a board member for privately held companies.
William Wagner Skills and Qualifications Provided to Our Board Age: 57Independent Director Since: 2023•Significant strategic leadership and operational experience at technology and software companies, including as president or chief executive officer•Extensive sales and marketing leadership experience at technology companies•Significant public company board and corporate governance experience, including on the boards of global, public technology and software companies•In-depth knowledge of the technology sector and cybersecurityCommittees: Professional Experience Highlights CompensationTechnology & Cybersecurity•GoTo Group, Inc. (formerly known as LogMeIn, Inc.), a provider of software-as-a-service and cloud-based remote work tools: President and Chief Executive Officer (2015-2022), President and Chief Operating Officer (2015) and Chief Operating Officer (2013-2014). In 2020, GoTo transitioned from being a publicly-traded company to being privately held.•Vocus, Inc., a cloud marketing software provider: Executive Vice President and Chief Operating Officer (2010-2012) and Chief Marketing Officer (2006-2010)•Fiberlink Communications, a mobile management and security company: Chief Marketing Officer (2000-2006) Other Public Company Boards •Avery Dennison Corp. (October 2022-present)•Semrush Holdings, Inc. (September 2022-present)•Akamai Technologies, Inc. (April 2018-present)•GoTo Group, Inc. (formerly LogMeIn, Inc.) (Public 2015-2020, Private 2020-2022) Education •M.B.A from the Wharton School of Business, University of Pennsylvania•B.A. in History from Lafayette College
Therese Tucker. Ms. Tucker is our founder and has served as our Chief Executive Officer and a member of our board of directors since August 2001. Prior to founding the Company, Ms. Tucker served as Chief Technology Officer for SunGard Treasury Systems, Inc. and SunGard Trading Systems, Inc., providers of software solutions and information technology services, from 1998 to 2001. Ms. Tucker holds a B.S. in Computer Science and Mathematics from University of Illinois at Urbana-Champaign.
Ms. Tucker is a valuable member of our board of directors, possessing over 25 years of experience in the finance and technology industry and the operational insight and expertise she has accumulated as our founder and Chief Executive Officer.
Mario Spanicciati. Mr. Spanicciati joined us in 2004 and has served as our Chief Marketing Officer since October 2016. Previously, Mr. Spanicciati served as our Chief Strategy Officer from August 2015 to October 2016 and as our Executive Vice President. He has been a member of our board of directors since September 2013. Prior to joining us, Mr. Spanicciati served as an Analyst for Merrill Lynch’s Private Banking & Investment Group, a division of Merrill Lynch that offers personalized wealth management products and services from January 2003 to June 2004. Mr. Spanicciati holds a B.S. in Hotel Administration from Cornell University.
Mr. Spanicciati is a valuable member of our board of directors, bringing important perspective and experience as our Chief Marketing Officer. We also believe that he brings historical knowledge, operational expertise and continuity to the board of directors.
John Brennan. Mr. Brennan has served as a member of our board of directors since September 2013 and is the Chairman of our board of directors. Mr. Brennan cofounded Sumeru Equity Partners, a private equity firm and has served as Managing Director since March 2014. Since February 2008, Mr. Brennan has served as a Managing Director for Silver Lake Sumeru, a middle-market investment group of Silver Lake, a global private equity firm. From June 2003 to February 2008, Mr. Brennan served as Senior Vice President of Platform
| Camille Drummond | Skills and Qualifications Provided to Our Board | ||||
Age: 55 Independent Director Since: 2024 | •Extensive financial and accounting expertise at an international, FTSE10 company •Significant experience leading process transformation within the CFO office •A qualified accountant with expertise in strategy and financial management, including qualifying as a “financial expert” under applicable SEC rules | ||||
| Committees: | Professional Experience Highlights | ||||
Audit | BP p.l.c., an integrated energy business with operations globally: Senior Vice President for Global Business Services (GBS) (since 2018), Head of Group Planning and Performance (2016-2018), Global Head of Trading Business Services (2014-2016), Chief Financial Officer of European Gas and Power trading business (2011-2014), Senior Finance Officer (2009-2011), Chief of Staff to Group Deputy CFO (2007-2009), and prior to that various finance roles (1989-2007) | ||||
| Education | |||||
•M.B.A. from Henley Management College | |||||
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Software for Adobe Systems Incorporated,
| Brunilda Rios | Skills and Qualifications Provided to Our Board | ||||
Age: 58 Independent Director Since: 2023 | •Extensive financial and accounting expertise, including as chief accounting officer of a publicly traded company •Significant experience leading digital and process transformation within the CFO office •Extensive management experience in the technology industry •Expertise in strategy and financial management, including qualifying as a “financial expert” under applicable SEC rules | ||||
| Committees: | Professional Experience Highlights | ||||
Audit (Chair) Technology & Cybersecurity | Dell Technologies, a leading technology and IT solutions company: Chief Accounting Officer (since 2020), SVP Global Revenue (2018-2020), VP Corporate Accounting (2016-2018), Executive Director - Corporate Accounting and Reporting (2005-2016), and Dell Financial Services, Corporate and Treasury Accounting Manager (2000-2005) | ||||
| Education | |||||
•Bachelor’s degree in Accounting and Finance from the University of Puerto Rico | |||||
| Therese Tucker | Skills and Qualifications Provided to Our Board | ||||
Age: 62 Director Since: 2001 | •Vision and unique expertise as the Company’s founder •Extensive leadership experience in the finance and technology industry •Operational insight and expertise accumulated as our founder and an executive of our company, including as Chief Executive Officer •Experience in sales, marketing and product development in the technology industry, and deep knowledge of the Company’s customer base and product line | ||||
| Professional Experience Highlights | |||||
•BlackLine, Inc.: Co-Chief Executive Officer (since 2023), Executive Chair of the Board (2021-2023), and Chief Executive Officer and Founder (2001-2021) •SunGard Treasury Systems, Inc. and SunGard Trading Systems, Inc., providers of software solutions and information technology services: Chief Technology Officer (1997-2001) | |||||
| Education | |||||
•B.S. in Computer Science and Mathematics from University of Illinois at Urbana-Champaign | |||||
| Thomas Unterman | Skills and Qualifications Provided to Our Board | ||||
Age: 79 Independent Director Since: 2010 | •Substantial experience as an investment professional •Substantial experience as an executive officer of a public company and as a director of private technology companies •Historical knowledge of the Company and ability to bring continuity to the Board •Expertise in strategy and operational and financial management | ||||
| Professional Experience Highlights | |||||
Committees: Compensation Nominating & Corporate Governance | •Rustic Canyon Partners, an early stage venture capital investment firm: Founding partner (since 1999) •Times Mirror Company, a newspaper publishing company that was acquired by Tribune Co.: Executive Vice President and Chief Financial Officer (1992-1999) •Morrison & Foerster, an international law firm: Attorney (1986-1992) •Orrick, Herrington, an international law firm: Attorney (1969-1986) | ||||
| Other Relevant Boards | |||||
•Various Rustic Canyon Partners portfolio companies •Various civil rights nonprofit organizations | |||||
| Education | |||||
•B.A. from the Woodrow Wilson School of Public Affairs at Princeton University •J.D. from University of Chicago | |||||
| Barbara Whye | Skills and Qualifications Provided to Our Board | ||||
Age: 56 Independent Director Since: 2021 | •Extensive experience in fostering inclusion and diversity •Leadership experience in the technology industry, where she has led and overseen the maturation of strategy at a publicly traded company •In-depth knowledge of the technology sector | ||||
| Professional Experience Highlights | |||||
Committees: Nominating & Corporate Governance (Chair) | •Apple Inc., a consumer electronics and technology company: Vice President of Inclusion and Diversity (since 2021) •Intel Corporation, a semiconductor chip and technology company: Chief Diversity and Inclusion Officer and Corporate Vice President of Social Impact (2017-2021), Director of Strategy and External Alliances (2015-2017), Director of Diversity in Technology Initiative (2015), Director of Global Strategic Initiatives (2009-2015), and Business Operations and Talent Manager (1997-1999) | ||||
| Education | |||||
•B.S. in Electrical Engineering from the University of South Carolina (USC) •M.B.A. from USC’s Darla Moore School of Business | |||||
| Mika Yamamoto | Skills and Qualifications Provided to Our Board | ||||
Age: 51 Independent Director Since: 2019 | •Leadership and management experience as an executive of a publicly-traded software company. •Significant expertise in enterprise marketing in the software industry •In-depth knowledge of the technology sector and software-as-a-service | ||||
| Professional Experience Highlights | |||||
Committees: Compensation (Chair) | •Freshworks, a cloud-based customer service software company: Chief Customer and Marketing Officer (since 2023) •F5 Networks, Inc., an enterprise network monitoring and technology company: Chief Customer Engagement and Marketing Officer (2019-2023) •Marketo, Inc., an Adobe Company: Global President of Marketo (2018) and then SVP and General Manager of Marketo at Adobe after it was acquired (2018-2019) •SAP SE, an enterprise business application company: Chief Digital Marketing Officer (2017-2018) and Chief Marketing Officer of SMB (2016-2017) •Amazon.com, Inc., a retail and cloud computing company: Head of Marketing & Merchandising - Amazon Books (2015-2016) •Drumroll, a brand experience agency: Growth Officer and Strategist (2013-2015) | ||||
| Education | |||||
•Bachelor of Commerce, Economics and Marketing from Queen’s University | |||||
| Amit Yoran | Skills and Qualifications Provided to Our Board | ||||
Age: 53 Independent Director Since: 2023 | •Extensive background leading technology and software companies, including as president or chief executive officer of three high-growth technology companies •Significant public company board and corporate governance experience, including on the boards of technology and software companies •Extensive cybersecurity experience | ||||
| Professional Experience Highlights | |||||
Committees: Nominating & Corporate Governance Technology & Cybersecurity | •Tenable Holdings, Inc., a cybersecurity company: President (since 2018) and Chief Executive Officer and Chairman (since 2016) •RSA Security, an identity and access management software company: President (2014-2016) and Senior Vice President, Product (2011-2014) •NetWitness, a network forensics company: Chief Executive Officer and Founder (2006-2011) •United States Computer Emergency Readiness Team (US-CERT) program in the U.S. Department of Homeland Security: Founding Director (1997-1998) | ||||
| Other Public Company Boards | |||||
•Tenable Holdings, Inc. (December 2016-present) | |||||
| Other Relevant Boards | |||||
•Center for Internet Security (CIS) | |||||
| Education | |||||
•B.S. in Computer Science from the United States Military Academy at West Point •M.S. in Computer Science from The George Washington University | |||||
| Kevin Thompson | Skills and Qualifications Provided to Our Board | ||||
Age: 58 Independent Director Since: 2017 | •Extensive background leading technology and software companies, including as president or chief executive officer of two technology companies •Significant public company board and corporate governance experience, including on the boards of technology and software companies •Expertise in strategy and operational and financial management, including qualifying as a “financial expert” under applicable SEC rules | ||||
| Professional Experience Highlights | |||||
Committees: Audit Compensation | •Tricentis, a company that provides software testing automation and software quality assurance products for enterprise software: Chief Executive Officer and Chairman (since 2021) •SolarWinds Corporation, an enterprise information technology infrastructure management software company: Chief Executive Officer and President (2010-2020), Chief Financial Officer and Treasurer (2006-2010) and Chief Operating Officer (2007-2010) •Surgient, Inc., a software company: Chief Financial Officer (2005-2006) •SAS Institute, a business intelligence software company: Senior Vice President and Chief Financial Officer (2004-2005) •Red Hat, Inc., an enterprise software company: Executive Vice President and Chief Financial Officer (2000-2004) | ||||
| Other Public Company Boards | |||||
•SolarWinds Corporation (February 2016-December 2020) •Instructure, Inc. (November 2016-February 2020) •Barracuda Networks, Inc. (September 2013-June 2016) •NetSuite Inc. (September 2006-November 2016) | |||||
| Education | |||||
•B.B.A. from the University of Oklahoma | |||||
| Board Diversity Matrix (As of March 15, 2024) | ||||||||||||||
| Total Number of Directors | 11 | |||||||||||||
| Male | Female | Non-Binary | Did Not Disclose Gender | |||||||||||
| Part I: Gender Identity | ||||||||||||||
| Directors | 4 | 6 | — | 1 | ||||||||||
| Part II: Demographic Background | ||||||||||||||
| African American or Black | — | 2 | — | — | ||||||||||
| Alaskan Native or Native American | — | — | — | — | ||||||||||
| Asian | — | 1 | — | — | ||||||||||
| Hispanic or Latinx | — | 1 | — | — | ||||||||||
| Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||
| White | 4 | 1 | — | — | ||||||||||
| Two or More Races or Ethnicities | — | 1 | — | — | ||||||||||
| LGBTQ+ | — | |||||||||||||
| Did Not Disclose Demographic Background | 1 | |||||||||||||
Mr. Brennan brings valuable management experience as well as experience in venture capital investing and knowledge of technology companiesbring to the boardBoard. All information is as of directors.
William Griffith. Mr. Griffith has served as a member of our board of directors since September 2013. Since January 2013, Mr. Griffith has served as a partner of ICONIQ Capital Group, L.P., the parent company of an independent SEC Registered Investment Advisor and one of our Principal Stockholders. From January 2012 to December 2012, Mr. Griffith was a private investor. From August 2000 to December 2011, Mr. Griffith was employed by Technology Crossover Ventures, a private equity and venture capital firm, and served as a General Partner starting in 2003. Prior to joining Technology Crossover Ventures, Mr. Griffith served as an Associate for Beacon Group Ventures, a private equity firm acquired by JP Morgan Chase & Co. Before joining Beacon Group Ventures, Mr. Griffith served as an Investment Banking Analyst at Morgan Stanley, a financial services company. Currently, Mr. Griffith servesMarch 15, 2024.
| Capability | Description | Number of Directors | ||||||
| Cybersecurity | Deep insight in cybersecurity infrastructure, prioritization, and risk | 6 | ||||||
| SaaS Operations Leadership | Experience growing successful SaaS companies, strong knowledge of the operating model, evolution, and scaling of SaaS businesses | 6 | ||||||
| Investment | Experience creating long-term value through investment, acquisitions, and growth strategies | 6 | ||||||
| Executive Experience | Experience as a functional leader at a large, complex, global company | 11 | ||||||
| Modern Cloud Technologist | Deep knowledge in technology architecture, including SaaS, cloud-based platforms, integrated solutions and customer data journey | 7 | ||||||
| Sales | Experience building global sales capability for cloud services and enterprise software | 5 | ||||||
| Marketing | Marketing and brand-building capability in rapidly changing industries, including new markets and opportunities for innovation and disruption | 6 | ||||||
| Finance | Financial expert with expertise in financial strategy, accounting and reporting | 5 | ||||||
| People and Compensation | Expertise in aligning company culture, performance, reward and talent with strategy, as well as remote and flexible work strategies | 7 | ||||||
| Governance, Risk and Compliance | Experience in public company corporate governance, privacy, compliance, policy, activism and creating long term sustainable value | 6 | ||||||
Mr. Griffith brings valuable experience to the board of directors, both as an investment professional in the technology industry and as a result of his service as a board member for private and publicly traded companies.
Graham Smith. Mr. Smith has served as a member of our board of directors since May 2015. Mr. Smith served as Executive Vice President and Chief Financial Officer of Salesforce, Inc., a provider of customer relationship management software from March 2008 to August 2014. From January 2003 to December 2007, Mr. Smith served as Chief Financial Officer of Advent Software, Inc., a provider of portfolio accounting software. Mr. Smith has served as a member of the board of directors for Splunk Inc., a provider of operational intelligence software, since July 2011, MINDBODY, Inc., a provider of software to the wellness industry, since February 2015, Xero, Inc., a provider of online accounting software, since February 2015 and Citrix Systems, Inc., a provider of workplace software, since December 2015. Mr. Smith holds a B.Sc. in Economics and Politics from University of Bristol in England and qualified as a chartered accountant in England and Wales.
Mr. Smith brings valuable experience to our board of directors, including his experience in the software industry and service as an executive and a director for publicly traded companies, where he has served on various committees and held leadership roles.
Thomas Unterman. Mr. Unterman has served as a member of our board of directors since 2010. Since September 1999, Mr. Unterman has served as Partner for Rustic Canyon Partners, an early stage venture capital firm, which he founded in September 1999. From August 1992 to December 1999, Mr. Unterman served as Executive Vice President and Chief Financial Officer of The Times Mirror Company, a newspaper publishing companybelieves that was acquired by Tribune Co. Currently, Mr. Unterman serves as Chairman of the UCLA Technology Development Corp. He is a Director of the California Community Foundation, the Los Angeles Mayors Fund and several civil rights non-profit companies. He also serves as a director for several of the Rustic Canyon portfolio companies. Mr. Unterman holds a J.D. from University of Chicago and a B.A. from the Woodrow Wilson School of Public Affairs at Princeton University.
Mr. Unterman is a valuable member of our board of directors, bringing substantial experience as an executive officerit should consist of a public company, as an investment professionalsubstantial majority of independent directors, and as a director of private technology companies. We also believe that Mr. Unterman brings historical knowledge and continuity to the board of directors.
Our board of directors has undertaken a review of its composition the composition of its committees and the independence of each director. Based upon information requested from and provided by each director
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concerning his or her background, employment and affiliations, including family relationships, and considering the relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, our board of directorsThe Board has determined that, except for Mr. Ryan and Ms. Tucker, each of ourthe other nine current directors other than Ms. Tucker and Mr. Spanicciati, are “independent directors” as defined underis independent within the meaning of the listing rules of the NASDAQ Stock Market.Nasdaq. In addition, our boardBoard has undertaken a review of directorsthe members of its committees serving as of March 15, 2024 and has determined that Messrs. Smith,that:
We are no longer a “controlled company” within the meaning of the corporate governance rules of the NASDAQ Stock Market because the Principal Stockholders no longer control more than a majority of our outstanding stock. Although we previously qualified as a “controlled company,” we elected not to take advantage of the “controlled company” exemption and are in full compliance with all corporate governance requirements under the NASDAQ Stock MarketNasdaq rules.
Currently, the roles of Chief Executive Officer and Chairman are separate and Mr. Brennan, an independent director, serves as the Chairman of the Board. Our board of directors
and on the Board, ensures strategic and operational direction and enhances the Company's ability to communicate its message and strategy clearly and consistently to its stockholders, employees, customers and partners. At this time, the Board believes that stockholders are best served by this leadership structure.
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oversight responsibilities with respect to risks relating to our corporate governance practices, the independence of the board of directorsNominating and Corporate Governance Committee and potential conflicts of interest. interest, as well as our policies and practices with regard to environmental, social and governance matters. In addition, as part of its oversight of the composition of our Board, our Nominating and Corporate Governance Committee takes into account the Company's business, risks and strategies to determine the appropriate expertise needed on our Board.
Board. Further, our Board and Compensation Committee review and discuss with management matters related to human capital management, including our commitments and progress on inclusion and diversity, employee engagement, compensation and benefits, business conduct and compliance, and executive succession planning. During 2023, the Board and its committees also reviewed and discussed with management on a regular basis the impact of unfavorable macroeconomic trends on BlackLine’s operations, as well as management’s strategies and initiatives to respond to and mitigate adverse impacts of economic uncertainty, such economic risk and risks related to longer sales cycles.
All information below is as of March 15, 2024.
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2023.
Ms. Yamamoto, with Ms. Yamamoto serving as Chair.
2023.
Chair.
14
Our nominatingNominating and corporate governance committeeCorporate Governance Committee operates under a written charter approved by our board of directorsBoard and that satisfies the applicable rules and regulations of the SEC and the NASDAQNasdaq listing rules. The charter is available on our website at http://investors.blackline.com. Our nominatingNominating and corporate governance committeeCorporate Governance Committee held five meetings in 2023.
Board.
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requirements set forth in our amended and restated bylaws and the rules and regulations of the SEC. Any nomination should be sent in writing to BlackLine, Inc., 21300 Victory Boulevard, 12th Floor, Woodland Hills, California 91367, Attention: Corporate Secretary. To be timely for our 20192025 annual meeting of stockholders, our corporate secretary must receive the nomination no earlier than January 6, 201911, 2025 and no later than February 5, 2019.10, 2025. Any notice of director nomination submitted must include the additional information required by Rule 14a-19(b) under the Exchange Act. Please see the section entitled “Stockholder Proposal Deadlines for 20192025 Annual Meeting”Meeting” in this proxy statement for more information.
In cases where stockholders wish to
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discrimination or retaliation. We maintain a formal whistleblower policy which describes the means by which employees, directors and officers can report suspected violations of our code of business conduct and ethics. Reports of suspected violations may be made directly to human resources or the legal department, or through our reporting hotline, which allows anonymous reporting where permitted by law. Retaliation is strictly prohibited under both our code of business conduct and ethics and our whistleblower policy.
Our board of directors adopted our Outside Director Compensation Policy in connection with our initial public offering.
Policy at any time they are serving as employees of the Company.
Each
$40,000 per year for service
| Board/Committee | Member ($) | |||||||
| Board | 40,000 | |||||||
| Audit Committee | 10,000 | |||||||
| Compensation Committee | 7,500 | |||||||
| Nominating and Corporate Governance Committee | 4,000 | |||||||
$20,000 per year additionally for service as chaircommittee Chair was eligible to receive the following additional cash retainers:
Board: $43,000
$7,500 per year additionally for service as chair of the nominating30,000
Corporate Governance Committee Chair: $8,000
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| Name | Fees Earned or Paid in Cash($)(1) | Option Awards ($) | Stock Awards ($)(2) | Total ($) | |||||||||||||||||||||||||
Camille Drummond(5) | — | — | — | — | |||||||||||||||||||||||||
Brunilda Rios(6) | 58,222 | — | 262,089 | (3) | 320,311 | ||||||||||||||||||||||||
Owen Ryan(7) | 19,022 | — | 19,022 | ||||||||||||||||||||||||||
Kevin Thompson(8) | 57,500 | — | 184,998 | (3) | 242,498 | ||||||||||||||||||||||||
Thomas Unterman(9) | 76,167 | — | 184,998 | (3) | 261,165 | ||||||||||||||||||||||||
Sophia Velastegui(10) | 50,000 | — | 184,998 | (3) | 234,998 | ||||||||||||||||||||||||
William Wagner(11) | 9,891 | — | 123,325 | (4) | 133,216 | ||||||||||||||||||||||||
Barbara Whye(12) | 48,000 | — | 184,998 | (3) | 232,998 | ||||||||||||||||||||||||
Mika Yamamoto(13) | 55,000 | — | 184,998 | (3) | 239,998 | ||||||||||||||||||||||||
Amit Yoran(14) | 50,789 | — | 262,089 | (3) | 312,878 | ||||||||||||||||||||||||
Name | Fees Earned or Paid in Cash | Option Awards ($)(1) | Stock Awards ($)(1) | All other Compensation | Total ($) | ||||||||||
Jason Babcoke | — | — | — | — | — | ||||||||||
John Brennan | — | — | — | — | — | ||||||||||
William Griffith | — | — | — | — | — | ||||||||||
Hollie Haynes | — | — | — | — | — | ||||||||||
Graham Smith(2) | 60,000 | (3) | — | — | — | 60,000 | |||||||||
Kevin Thompson(4) | 10,000 | (5) | 55,051 | 55,001 | — | 120,052 | |||||||||
Thomas Unterman(6) | 45,000 | (7) | — | — | — | 45,000 | |||||||||
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(3)Messrs. Thompson, Unterman, and Yoran and Mses. Rios, Velastegui, Whye, and Yamamoto were each awarded RSUs covering 3,387 shares of our common stock on May 10, 2023. 100% of the shares subject to the RSUs will vest upon the earlier of May 10, 2024 or the day prior to our next annual meeting of stockholders, subject to each of their continued services with us through such date.
Messrs. Babcoke
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Fiscal Year Ended | ||||||
2017 | 2016 | |||||
Audit Fees(1) | $ | 1,443,100 | $ | 1,854,775 | ||
Audit-related Fees | $ | — | $ | — | ||
Tax Fees(2) | $ | 23,000 | $ | 134,830 | ||
All Other Fees | $ | 4,500 | $ | 4,140 | ||
Total Fees | $ | 1,470,600 | $ | 1,993,745 | ||
| Fiscal Year Ended | ||||||||||||||
| 2023 | 2022 | |||||||||||||
Audit Fees(1) | $ | 2,465,125 | $ | 2,794,000 | ||||||||||
| Audit-related Fees | — | — | ||||||||||||
Tax Fees(2) | 80,500 | 66,500 | ||||||||||||
| All Other Fees | 2,000 | 12,900 | ||||||||||||
| Total Fees | $ | 2,547,625 | $ | 2,873,400 | ||||||||||
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2024.
Graham Smith
This audit committeeAudit Committee report shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or to the liabilities of Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any prior or subsequent filing by BlackLine under the Securities Act of 1933, as amended, or the Securities Act, or the Exchange Act, except to the extent BlackLine specifically requests that the information be treated as “soliciting material” or specifically incorporates it by reference.5Ms. Drummond joined the Audit Committee on March 15, 2024, after the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 with the SEC.2721ADVISORY NON-BINDING VOTE TO APPROVE THE COMPENSATION OF THE BLACKLINE, INC. 2018 EMPLOYEE STOCK PURCHASESummaryNAMED EXECUTIVE OFFICERSOur board of directorsBoard is asking companyCompany stockholders to cast an advisory, non-binding vote to approve a new employee stock purchase plan, the BlackLine, Inc. 2018 Employee Stock Purchase Plan (the “2018 Employee Stock Purchase Plan”). Our board of directors has determined that it is in the best interestscompensation of our company and stockholders to have an employee stock purchase plan and has adopted the 2018 Employee Stock Purchase Plan, subject to approval from the stockholders at the annual meeting. If approved by our stockholders, the 2018 Employee Stock Purchase Plan will become effectivenamed executive officers during 2023 as of February 13, 2018, which is the date our board of directors approved the 2018 Employee Stock Purchase Plan, and will expire 20 years from such date, unless terminated earlierdisclosed in this proxy statement in accordance with the 2018 Employee Stock Purchase Plan.Reasons for Votingrequirements of Section 14A of the Exchange Act. This Proposal gives our stockholders the opportunity to Approveexpress their views on the 2018 Employee Stock Purchase PlanIf approved, the 2018 Employee Stock Purchase Plan will be a significant partdesign and effectiveness of our overall equityexecutive compensation strategy, especially with respect to our non-executive employees. The 2018 Employee Stock Purchase Plan allows our employees to buy our sharesprogram.Advisory Vote on Compensation of company common stock (the “Shares”) at a discount through payroll deductions. In the highly competitive technology industry in which we compete for talent, weNamed Executive OfficersWe believe that offering an employee stock purchaseBlackLine’s compensation philosophy and program, as described below in the “Compensation Discussion and Analysis” section of this proxy statement, are effective in achieving our goals, and that the executive compensation reported in this proxy statement is appropriate, competitive, and aligned with our 2023 results. The compensation program for our named executive officers is focused on pay-for-performance principles. The program is critical to our ability to maintain competitiveness. If the proposed 2018 Employee Stock Purchase Plan is not approved by the company’s stockholders, we may be restricted in our ability to offer competitive compensation to existing employees and qualified candidates, and our business and ability to increase long-term stockholder value could be adversely affected.Description of the 2018 Employee Stock Purchase PlanThe following is a summary of the principal features of the 2018 Employee Stock Purchase Plan and its operation. However, this summary is not a complete description of all of the provisions of the 2018 Employee Stock Purchase Plan and is qualified in its entirety by the specific language of the 2018 Employee Stock Purchase Plan. A copy of the 2018 Employee Stock Purchase Plan is provided as Appendix A to this proxy statement.Purpose. The purpose of the 2018 Employee Stock Purchase Plan is to provide our employees and employees of our subsidiaries or our affiliates (“participating subsidiaries”) with an opportunity to purchase our Shares through accumulated payroll deductions or other contributions that we may permit. The 2018 Employee Stock Purchase Plan is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended, or Section 423. In addition, the 2018 Employee Stock Purchase Plan authorizes the grant of purchase rights that do not qualify under Section 423 pursuant to rules, procedures or sub-plans adopted by our board of directors or other committee administering the 2018 Employee Stock Purchase Plan that are designed to achieve desired tax or other objectives.Shares Available for Issuance. If our stockholders approve this proposal, a total of 1,500,000 Shares will be reserved for issuance under the 2018 Employee Stock Purchase Plan.Plan Administration. Our board of directors or a committee appointed by our board of directors administers the 2018 Employee Stock Purchase Plan, or the Administrator. The Administrator has fullattract, motivate, and exclusive discretionary authority to construe, interpret, and apply the terms of the 2018 Employee Stock Purchase Plan, to designate separate offerings under the 2018 Employee Stock Purchase Plan, to adjudicate disputed claims under the 2018 Employee Stock Purchase Plan, and to establish such procedures that it deems necessary for the administration of the 2018 Employee Stock Purchase Plan. The Administrator is further authorized to adopt rules and procedures regarding eligibility to participate, the definition of “compensation,” handling of contributions, and making of contributions to the 2018 Employee Stock Purchase Plan, among other responsibilities.Eligibility. All common law employees of the company, including ourretain executive officers and employees of any subsidiaries of the company that are designated by the Administrator to participate in the 2018 Employee Stock Purchase Plan, are eligible to participate in the 2018 Employee Stock Purchase Plan if they are employed by us or a participating subsidiarycompetitive market for at least 20 hours per week andexecutive talent, reward them with more than five months in any calendar22year, or any lesser number of hours per week and/or number of months in any calendar year established by the Administrator (if required under applicable law). However, an employee may not be granted rights to purchase stock under an offering that qualifies under Section 423 of the 2018 Employee Stock Purchase Planbase salary if such employee:immediately after the grant would own stock possessing 5% or more of the total combined voting power or value of all classes of the capital stock of the company or any subsidiary of the company; orhold rights to purchase stock under all of our employee stock purchase plans that accrue at a rate that exceeds $25,000 worth of stock (determined at the fair market value of the stock at the time such purchase right is granted) for each calendar year in which the offering period is outstanding at any time.Offering Periods. Our 2018 Employee Stock Purchase Plan is intended to qualify under Section 423. The 2018 Employee Stock Purchase Plan also authorizes the grant of rights to purchase Shares that do not qualify under Section 423 and such rights will be available under a separate offering from offerings intended to qualify under Section 423. Unless otherwise determined by the Administrator, each offering period under the 2018 Employee Stock Purchase Plan will have a duration of approximately 12 months, commencing on the first trading day on or after May 10 or November 10 of each year and terminating on the first trading day on or before May 10 or November 10, approximately 12 months later; provided, however, that the first offering period will commence with the first trading day on or after November 10, 2018 and will terminate on the first trading day on or before November 10, 2019. The Administrator, in its discretion, may modify the terms of offering periods before they begin, provided that no offering period may last more than 27 months. If the fair market value of a Share on an exercise date is less than the fair market value of a Share on the first trading day of the offering period, participants automatically will be withdrawn from the current offering period and will be automatically re-enrolled in a new offering period.Each offering period will include two purchase periods, which will be approximately six months in length.Once an employee becomes a 2018 Employee Stock Purchase Plan participant, the employee automatically will participate in each successive offering period until the employee withdraws from the 2018 Employee Stock Purchase Plan, the employee is not eligible, or the employee’s employment with the company or one of the company’s participating subsidiaries terminates, whichever occurs earlier. On the first trading day of each offering period, each participant automatically is granted a right to purchase Shares. The 2018 Employee Stock Purchase Plan purchase rights expire upon the earlier of (i) the end of the offering period, (ii) the date the participant withdraws from the 2018 Employee Stock Purchase Plan, or (iii) the date of a termination of the participant’s employment. At the end of each six-month purchase period during an offering period, the participant’s 2018 Employee Stock Purchase Plan purchase rights are exercised and the participants purchase shares based on the amount payroll deductions accumulated during such purchase period. A participant may purchase a maximum of 2,000 Shares during a purchase period. Participants may withdraw their participation at any time during an offering period and will be paid their accrued contributions that have not yet been used to purchase Shares.Contributions. Our 2018 Employee Stock Purchase Plan permits participants to purchase Shares through payroll deductions of up to 15% of their eligible compensation, which includes base straight time gross earnings and payments for overtime and shift premium, and commissions (to the extent such commissions are an integral, recurring part of compensation), but excludes payments for incentive compensation, bonuses, equity compensation income, and other similar compensation.Purchase Price. Shares are purchased at the end of each six-month purchase period to the extent ofBlackLine achieves challenging financial performance goals, and align the payroll deductions accumulated during such period. The purchase price ofofficers’ interests with the Shares is 85% of the lower of the fair market valueinterests of our Shares onstockholders to create long-term shareholder value, while at the first trading daysame time avoiding the encouragement of each offering period or onexcessive risk-taking.For a more detailed discussion of our compensation philosophy, objectives, principles, and programs, we strongly encourage our stockholders to review this proxy statement, and in particular the purchase date. The Administrator may determine a different purchase price for future offering periods subject to applicable laws.The fair market value of the Shares on any relevant date will be the closing price per share as reported on any established stock exchange or a national market system, or the mean between the high bid and low asked23prices, if the Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, in both instances, as quoted on such exchange or reported in The Wall Street Journal, or such other source the Administrator deems reliable. In the absence of an established market for the Shares, the fair market value will be determined by the Administrator.Non-Transferability. Neither contributions credited to a participant’s account nor any rights granted under the 2018 Employee Stock Purchase Plan may be assigned, transferred, pledged, or otherwise disposed of in any way, other than by will, the laws of descent and distribution, or through a beneficiary designated under the 2018 Employee Stock Purchase Plan.Certain Adjustments. In the event of certain changes in our corporate structure affecting our Shares, to prevent dilution or enlargement of the benefits or potential benefits available under the 2018 Employee Stock Purchase Plan, the Administrator will adjust the number and class of Shares that may be delivered under the 2018 Employee Stock Purchase Plan, the purchase price per share and the number of Shares covered by each 2018 Employee Stock Purchase Plan purchase right and the numerical share limits set forthinformation contained in the 2018 Employee Stock Purchase Plan. In“Compensation Discussion and Analysis” section below and in the eventcompensation tables and narrative that follow it in the “Executive Compensation” section of this proxy statement.The vote on executive compensation is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our proposed liquidation or dissolution, the offering period thennamed executive officers described in progress will be shortened, and a new exercise date will be set to occur prior to the proposed transaction, unless determined otherwise by the Administrator. The Administrator will notify each participant in writing that the exercise date has been changed and that the participant’s 2018 Employee Stock Purchase Plan purchase right will be exercised automatically on the new exercise date unless prior to such date the participant has withdrawn from the offering period.Merger or Change in Control. In the event of our merger or change in control, as defined under the 2018 Employee Stock Purchase Plan, each outstanding 2018 Employee Stock Purchase Plan purchase right will be assumed or an equivalent purchase right substituted by the successor corporation (or parent or subsidiary of the successor corporation). If the successor corporation refuses to assume or substitute for the outstanding purchase right, the offering period then in progress will be shortened, and a new exercise date will be set to occur prior to the proposed transaction. The Administrator will notify each participant that the exercise date has been changed and that the participant’s 2018 Employee Stock Purchase Plan purchase right will be exercised automatically on the new exercise date unless prior to such date the participant has withdrawn from the offering period.Amendment; Termination. The Administrator may at any time amend, suspend, or terminate the 2018 Employee Stock Purchase Plan, including the term of any offering period then-outstanding. Generally, no such termination may adversely affect 2018 Employee Stock Purchase Plan purchase rights previously granted.Upon its approval by the stockholders, the 2018 Employee Stock Purchase Plan will continue until the earlier to occur of (i) the termination of the 2018 Employee Stock Purchase Plan by thethis proxy statement.Our Board or (ii) February 13, 2038 (the date which is 20 years from the adoption of the 2018 Employee Stock Purchase Plan by the Board).U.S. Federal Income Tax ConsequencesThe following paragraphs are intended as a summary of the U.S. federal income tax consequences to U.S. taxpayers and the company of the purchase of Shares under the 2018 Employee Stock Purchase Plan. This summary does not attempt to describe all possible federal or other tax consequences of such participation or based on particular circumstances. In addition, it does not describe any state, local or non-U.S. tax consequences.The 2018 Employee Stock Purchase Plan is intended to be an employee stock purchase plan within the meaning of Section 423. The 2018 Employee Stock Purchase Plan also authorizes the grant of rights to purchase Shares that do not qualify under Section 423. Under an employee stock purchase plan that qualifies under Section 423, no taxable income will be recognized by a participant, and no deductions will be allowable to the company, upon either the grant or the exercise of the purchase rights. Taxable income will not be recognized until there is a sale or other disposition of the Shares acquired under the 2018 Employee Stock Purchase Plan or in the event the participant should die while still owning the purchased Shares. No participant may purchase Shares under the 2018 Employee Stock Purchase Plan at a rate of more than $25,000 of Shares in any calendar year during which the participating employee is enrolled in that offering period.If the participant sells or otherwise disposes of the purchased Shares within two years after the start date of the offering period in which the Shares were acquired or within one year after the actual purchase date of those Shares, then the participant generally will recognize ordinary income in the year of sale or disposition equal to24the amount by which the fair market value of the Shares on the purchase date exceeded the purchase price paid for those Shares, and the company will be entitled to an income tax deduction, for the taxable year in which such disposition occurs equal in amount to such excess. The amount of this ordinary income will be added to the participant’s basis in the Shares, and any resulting gain or loss recognized upon the sale or disposition will be a capital gain or loss. If the Shares have been held for more than one year since the date of purchase, the gain or loss will be long-term.If the participant sells or disposes of the purchased Shares more than two years after the start date of the offering period in which the Shares were acquired and more than one year after the actual purchase date of those Shares, then the participant generally will recognize ordinary income in the year of sale or disposition equal to the lesser of (i) the amount by which the fair market value of the Shares on the sale or disposition date exceeded the purchase price paid for those Shares, or (ii) 15% of the fair market value of the Shares on the start date of that offering period. Any additional gain upon the disposition will be taxed as a long-term capital gain. Alternatively, if the fair market value of the Shares on the date of the sale or disposition is less than the purchase price, there will be no ordinary income and any loss recognized will be a long-term capital loss. The company will not be entitled to an income tax deduction with respect to such disposition.If the participant still owns the purchased Shares at the time of death, the lesser of (i) the amount by which the fair market value of the Shares on the date of death exceeds the purchase price or (ii) 15% of the fair market value of the Shares on the start date of the offering period in which those Shares were acquired will constitute ordinary income in the year of death.SummaryOur board of directors believes that it is in the best interests of the companyCompany and our stockholders to provide employees withapprove the opportunity to acquire an ownership interest in the company through their participation in the 2018 Employee Stock Purchase Plan and2023 compensation of our named executive officers, thereby encouragesencouraging them to remain in the company’sCompany’s employ and more closely align their interests with those of our stockholders.Required VoteThe vote is advisory, which means that the vote is not binding on BlackLine, our Compensation Committee, or our Board. Abstentions are considered votes cast, and thus, will have the same effect as votes “against” the proposal. Broker non-votes will have no effect on the outcome of this proposal. Although the vote is non-binding, our Compensation Committee and Board value your opinion and will consider the outcome of the vote in making future compensation decisions.Board RecommendationOur board of directorsBoard recommends aan advisory non-binding vote “FOR” the proposal to approve the 2018 Employee Stock Purchase Plan.compensation of our named executive officers.2825The following table provides information regarding our executive officers as of March 15, 2018:2024:Name Age Position Owen RyanExecutive Officers:61 Therese Tucker56Chair of the BoardChiefCo-Chief Executive Officer and DirectorTherese TuckerChris Murphy4962 Chief RevenueCo-Chief Executive Officer and Director Mark Partin5056 Chief Financial Officer Karole Morgan-Prager5561 Chief Legal and Administrative Officer Mark WoodhamsMarc Huffman4761 Chief OperatingRevenue Officer
For Mr. Ryan’s biography, see “Nominees for Director” and for Ms. Tucker’s biography, see “Continuing Directors.Directors.”
Chris Murphy has served as our Chief Revenue Officer since March 2014. Prior to joining us, Mr. Murphy served as Senior Vice President and General Manager of the Financial Solutions Group for Infor, Inc., a provider of business management enterprise software, from March 2004 to February 2014. From May 2003 to February 2004, Mr. Murphy served as the Vice President of Global Sales Operations for Melita International, a provider of customer contact management solutions. From October 1999 to May 2003, Mr. Murphy served as the Vice President of Sales Operations for divine, inc., an internet incubator. From October 1991 to June 1999, Mr. Murphy served in various financial roles for Platinum Technology Inc., a management software and database company, Information Resources, Inc, a market research company, and United States Cellular Corporation, a provider of wireless services. Mr. Murphy holds an M.B.A. from DePaul University, Charles H. Kellstadt Graduate School of Business, a B.S. in finance from University of South Carolina, Darla Moore School of Business and a B.A. in French from University of South Carolina, Columbia.
Policies and Practices paid to our CEO and certain other current and former executive officers that are “covered employees” within the meaning of Section 162(m) of the Code to $1 million per individual per year, subject to certain exceptions. The regulations promulgated under Section 162(m) of the Code contain a transition rule that applies to companies, such as ours, that become subject to Section 162(m) of the Code by reason of becoming publicly held. Pursuant to this rule, certain compensation granted during a transition period (which ended on the 2020 annual meeting for us) currently is not counted toward the deduction limitations of Section 162(m) of the Code if the compensation is paid under a compensation arrangement that was in existence before the effective date of the initial public offering and certain other requirements are met. While certain of our equity awards may be eligible to be excluded from our deductibility limitation of Section 162(m) of the Code pursuant to this transition rule, the Compensation Committee has not adopted a policy that all equity or other compensation must be deductible. target shares. The Discussion and Analysis—Individual Compensation Elements – Annual Long Term Incentive Awards.” (13)Twenty-five percent (25%) of the shares underlying this option vest on the first anniversary of the vesting commencement date (February 20, 2021), and 1/16th of the shares subject to the option vest every three months thereafter on the same day of the month as the vesting commencement date, subject to continued service with us through each vesting date. Mr. Woodhams: To receive the severance benefits upon a qualifying termination, an executive officer must sign and not revoke our standard separation agreement and release of claims within the timeframe set forth in the Policy. If any of the payments provided for under the Policy or otherwise payable to an executive officer would constitute “parachute payments” within the meaning of Section 280G of the Code and would be subject to the related excise tax under Section 4999 of the Code, then the executive officer will be entitled to receive either full payment of benefits or such lesser amount which would result in no portion of the benefits being subject to the excise tax, whichever results in the greater amount of after-tax benefits to him or her. The Policy does not require us to provide any tax gross-up payments to any executive officer. Description of Relationships Between Compensation Actually Paid and Performance Registration Rights Agreement We have entered into indemnification agreements with our directors and executive officers, in addition to the indemnification provided for in our amended and restated certificate of incorporation and amended and restated bylaws, and intend to enter into indemnification agreements with any new directors and executive officers in the future.Mark Partinhas served as our Chief Financial Officer since January 2015 and as our Treasurer since February 2015. Prior to joining us, Mr. Partin served as the Chief Financial Officer for Fiberlink Communications Corporation (now MaaS360, an IBM Company), an Enterprise Mobility Management company, from 2005 to 2014. From 1995 to 2005, Mr. Partin served in various senior financial roles for companies such as Headhunter.net, Inc. (now Careerbuilder.com), Contour Medical, Inc. (acquired by Sun Healthcare Group, Inc.), American Health Imaging, and Williams Group International. From 1991 to 1995, Mr. Partin was a CPA and auditor with Arthur Andersen & Co. in Atlanta, Ga. Mr. Partin holds an M.B.A. from Harvard Business School and a B.S. in business administrationBusiness Administration from the University of Tennessee.Karole Morgan-Pragerhas served as our Chief Legal and Administrative Officer since May 2015 andOctober 2016, as our Secretary since August 2015, and was namedas our Chief Legal and Administrative Officer in October 2016.since May 2015. Prior to joining us, Ms. Morgan-Prager served as General Counsel and Corporate Secretary of The McClatchy Company, a newspaper and internet publisher, from July 1995 to May 2015. She was named Vice President of The McClatchy Company in May 1998 and Vice President, Corporate Development in May 2012. From November 1992 to June 1995, Ms. Morgan-Prager served as Associate General Counsel for The Times Mirror Company, a newspaper publishing company that was acquired by Tribune Co. From October 1987 to October 1992, Ms. Morgan-Prager was an Associate with the law firm Morrison & Foerster LLP, working on corporate securities matters. Ms. Morgan-Prager holds a J.D. from the University of California, Los Angeles and a B.A. in Journalism and Political Science from University of Nevada.Marc Huffman Mark Woodhamshas served as our Chief OperatingRevenue Officer since February 2018.January 2021 and as our Senior Vice President of Global Sales from July 2018 to January 2021. Prior to joining us, Mr. HuffmanWoodhams served in various roles at NetSuite, including managing director from August 2014 to June 2018 and EMEA Sales director from February 2012 to August 2014. Mr. Woodhams has more than 35 years of experience with leading cloud and financial and professional services companies including NetSuite, Oracle, Hyperion, CapGemini and Citicorp.29OTHER EXECUTIVESThe following table provides information regarding our other executives as of March 15, 2024:Name Age Position Mary Ainsworth 40 Chief People Officer Emily Campbell 53 Chief Marketing Officer Sumit Johar 47 Chief Information Technology Officer Mary Ainsworth has served as President, Worldwide Sales and Distribution of NetSuite Inc., a global cloud ERP software provider (acquired by Oracle Corporation), from April 2014 to February 2018, Senior Vice President of North American Verticals, Channels and APAC of NetSuite from 2010 to April 2014, Senior Vice President of Sales, North America of NetSuite from 2008 to 2010 and Vice President of Sales of NetSuite from December 2003 to 2008.our Chief People Officer since September 2023. Prior to joining NetSuite, Mr. Huffmanus, Ms. Ainsworth served as EVP and Chief People Officer for Medallia Inc., a directorcloud experience management pioneer, from September 2019 to September 2023. From January 2011 to August 2019, Ms. Ainsworth served in various HR leadership roles for CallidusCloud, a sales performance management leader that was acquired by SAP, most recently as its EVP and Chief People Officer. Ms. Ainsworth holds a B.A. in Liberal Arts from St. Mary’s College of sales responsibleCalifornia.Emily Campbell has served as our Chief Marketing Officer since January 2024. Prior to joining us, Ms. Campbell served as Chief Marketing Officer for CanadaInfinite Electronics, Inc., a supplier of electronic components, from June 2021 to January 2024. From October 2019 to June 2021, Ms. Campbell served as CMO and the central United States at Oracle Corporation. Currently, Mr. Huffman serves on the boardExecutive Vice President for Berlin Packaging, a supplier of directors of Channel Advisor Corporation,packaging services. From 2016 to 2019, Ms. Campbell served in various marketing leadership roles for Arrow Electronics, a provider of software-as-a-servicetechnology products, services, and solutions. From June 2014 to May 2016, Ms. Campbell served as Director, eBusiness at National Instruments, a provider of software-connected automated test and measurement systems. From 1999 to 2014, Ms. Campbell served in various roles at Dell Technologies, a leading technology and IT solutions that help retailers and branded manufacturers improve their online performance. Mr. Huffmancompany. Ms. Campbell holds a B.S. with emphasis on marketingin Marketing and International Business from California Statethe University Chico.of Colorado.Sumit Johar has served as our Chief Information Technology Officer since February 2024. Prior to joining us, Mr. Johar served as Chief Information Officer for Automation Anywhere, a robotic process automation software, from July 2021 to February 2024. From November 2016 to 2021, Mr. Johar served as the Chief Information Officer at MobileIron, a mobile device management and enterprise mobility management solution company. From 2007 to 2016, Mr. Johar served in various business systems leadership roles for TIBCO Software, Inc., a business integration software company, most recently as its Senior Director, Business Systems. Mr. Johar holds a Bachelor of Technology in Computer Engineering from the National Institute of Technology Kurukshetra.3026Compensation Discussion and AnalysisThe section below provides information regardingfollowing Compensation Discussion and Analysis describes our executive compensation program and the fiscal 2017material elements of our 2023 compensation forprogram applicable to our named executive officers or NEOs, who consist(“NEOs”).The purpose of this section is to provide a detailed discussion of our principal executive officercompensation program, policies, practices, and related corporate governance. This section is designed to assist our twostockholders in understanding the approach we take to executive compensation, including how our program is designed and linked to our financial performance, and how our executive compensation practices align with the evolution of our business and organizational culture.Our NEOs for 2023 are:Therese Tucker, Co-Chief Executive Officer (“Co-CEO”)Owen Ryan, Co-Chief Executive Officer (“Co-CEO”)Mark Partin, Chief Financial Officer (“CFO”)Karole Morgan-Prager,Chief Legal and Administrative Officer (“CLAO”)Mark Woodhams, Chief Revenue Officer (“CRO”)Marc Huffman, our former President and former Chief Executive Officer is an NEO under the relevant securities laws. Because he was not involved in our regular compensation programs, we have summarized the material elements of his 2023 compensation separately at the end of this Compensation Discussion and Analysis instead of discussing him throughout.Management ChangesEffective as of January 1, 2023, Ms. Tucker, our founder and former Chief Executive Officer, transitioned from her role as Executive Chair of the Board, and Mr. Ryan, who had been serving as Lead Independent Director, assumed the role of Chair of the Board. At that time, Ms. Tucker continued to serve as a member of the Board and as an employee of the Company. Effective as of March 6, 2023, Mr. Huffman ceased to serve as our President and Chief Executive Officer, and Ms. Tucker and Mr. Ryan were appointed as our Co-CEOs.Following this transition, Ms. Tucker and Mr. Ryan continue to serve as members of our Board, and Mr. Ryan continues to serve as Chair of the Board.Fiscal Year 2023 Business HighlightsOur mission is to transform how finance and accounting departments operate by modernizing accounting through unifying data and processes, automating repetitive work, and driving accountability through visibility. We have created a comprehensive cloud-based software platform designed to automate, centralize, and streamline financial close operations and other most highly compensatedkey Finance & Accounting processes for large and midsize organizations. In fiscal year 2023, we delivered strong results from a financial and operational standpoint, as highlighted by the following:•Total GAAP Revenue grew to $590.0 million, an increase of 13% from 2022.•GAAP operating margin of 2.4%, compared to (10.7)% in 2022.•Non-GAAP operating margin of 16.5%, compared to 6.1% in 2022.•GAAP net income was $52.8 million, or $0.81 per diluted share.•Non-GAAP net income attributable to BlackLine was $145.2 million, or $1.96 per diluted share.•Operating cash flow was $126.6 million, compared to $56.0 million from 2022.•Free cash flow was $99.0 million, compared to $25.7 million from 2022.•In October 2023, we completed our acquisition of Data Interconnect Limited, a leader in e-invoice presentment and payment technology.Please see Appendix A to this proxy statement for a reconciliation of GAAP and non-GAAP net income and free cash flow.31Fiscal Year 2023 Compensation Highlights2023 Executive Compensation HighlightsCOMPENSATION HIGHLIGHT UNDERLYING PHILOSOPHY/CONSIDERATIONS Co-CEO Discussion •When we made the decision to retain Ms. Tucker and Mr. Ryan as Co-CEOs, it was important to the Compensation Committee to holistically assess the compensation offered to each of them. Two key compensation principles that were used in this assessment were that we wanted to ensure that the initial equity grants made to our Co-CEOs did not exceed the level of equity grant that would have been required to hire a CEO from outside of BlackLine and we assessed the aggregate level of pay across our executive team to ensure that it was reasonable.Stockholder Feedback •The perspective of our stockholders is an important consideration in the design of our compensation programs. In the fall of 2023, we conducted an extensive stockholder engagement program, led by our Compensation Committee chair, and have described the feedback from that program below.•Although the decisions described in this compensation discussion and analysis were made in early 2023 and therefore could not be impacted by the results of that engagement, changes resulting from stockholder feedback are described below.Pay-for-performance alignment •We strive to maintain a pay-for-performance alignment by allocating a meaningful portion of the overall compensation opportunity for our NEOs in the form of performance-based compensation that is at risk and directly tied to specific financial objectives.•Our performance-based compensation philosophy seeks to align the interests of our NEOs to the interests of our stockholders.32Alignment of performance metricswith key strategic objectives•Identifying and selecting the right performance metrics for our performance-based compensation is key to incentivizing our executives to achieve our strategic plan, which promotes the interest of our stockholders.•In 2023, our strategic focus was to grow our top-line toward profitability in a manner aligned with our long-term planning. With this in mind, we modified the performance metrics used in both our annual cash bonus plan and performance-based restricted stock unit awards (“PSUs”):◦The annual cash bonus plan design was based on revenue (as in prior years) but we switched to the use of a non-GAAP operating margin metric from non-GAAP net income so that our focus on responsible growth is clear. Additionally, we determined that the portion of the annual cash bonus that we previously determined on a discretionary basis after the end of the year will instead be assessed against previously-established objectives and key results.◦The shift to the use of non-GAAP operating margin was also made in our PSU awards along with revenue and annualized recurring revenue (which were also used in 2022).•We moved away from a discretionary component in our annual bonus plan whereby results were determined entirely after completion of the year to a process of establishing key financial and non-financial objectives with identified key results (OKRs) so that we can assess performance against these OKRs after the year was completed.•We understand that some investors prefer that there not be overlap between the goals for our annual bonuses and long-term equity incentive awards and considered that in our goal setting for 2023, but ultimately determined that the importance of focusing on responsible growth justified the use of the same metrics in both plans. For 2024, we moved away from the use of overlapping metrics between our annual bonus and long-term equity. The 2024 annual bonus is tied to equally-weighted metrics of revenue and non-GAAP operating margin. The 2024 PSU award is tied 50% to annualized recurring revenue (ARR) to be determined in three annual tranches and 50% to relative total shareholder return (“TSR”) measured over a three-year period.Market-based base salary increases •We adjusted the base salaries of each of our NEOs in 2023, in each case to better align their base salaries with our competitive market and their expected contributions to our business.Continued focus on executiverecruitment and retention•While we seek to develop our executive compensation program so that it closely aligns with our pay-for-performance philosophy and rewards achievement of performance goals, this objective must complement other important objectives, including the hiring and retention of executives.•To improve recruitment and strengthen retention, we continued our practice in 2023 of granting each NEO a portion of their annual equity awards in RSUs that vest solely over a time-based schedule and are not tied to Company performance with the remaining portion of their annual equity awards granted in PSUs as discussed below.•As described in last year’s proxy statement, in connection with retention grants made to other executives in December 2022, we made a retention grant in January 2023 for Ms. Tucker. During our stockholder engagement process, we heard clearly from some stockholders that they disfavor special retention awards and we do not intend to make any in the future without unique circumstances.Our Compensation PhilosophyWe are committed to developing a compensation program that rewards our executives in direct alignment with the achievement of both near- and long-term business and strategic objectives (i.e., pay-for-performance). In furtherance of this objective, our Compensation Committee routinely considers appropriate adjustments to the design of our compensation program to reflect our strategic direction and evolving needs of our business. Additionally, our Compensation Committee seeks to set compensation levels for our executive officers who were serving asat competitive levels so that we can attract, retain, and motivate highly33qualified executives to contribute to our success. In assessing the overall compensation for executive officers, the Compensation Committee generally considers our financial performance, stockholder returns and position vs. selected peers, market compensation data, executive’s performance, awards given in previous years, and recommendations of our independent consultant.When making executive compensation decisions, the Compensation Committee is guided by the following principles:•Attracting and retaining senior executives with the right expertise necessary to achieve our strategic objectives and grow our organization.•Paying for performance to ensure that a significant portion of executives’ compensation is realized when the organization meets its financial results.•Aligning interests of our executives with stockholders to ensure that executives’ compensation payouts align with the achievement of results that are correlated with long-term value and stock price appreciation.•Rewarding achievement by providing appropriate levels of awards for attaining both short-term and long-term financial results.Our 2023 executive compensation program consisted of the following core elements:•base salary;•annual cash bonuses;•long-term equity compensation (RSUs and PSUs); and•retirement and health benefits on the same terms as for similarly situated non-executive employees.Pay-for-PerformanceOur executive compensation program is reasonable, competitive, and rigorously balances the goals of December 31, 2017.Processattracting, motivating, rewarding, and Procedureretaining our NEOs. To ensure our NEOs’ interests are aligned with those of our stockholders and to motivate and reward individual initiative and effort, a substantial portion of their annual target total direct compensation opportunity is “at-risk” and the actual amounts payable to our NEOs will vary above or below target levels commensurate with our performance.We emphasize performance-based compensation that appropriately rewards our NEOs for delivering financial, operational, and strategic results that meet or exceed pre-established goals through our cash bonus plan and equity awards.For SEC-mandated disclosure on pay versus performance for our CEO and other NEOs, please see the “Pay Versus Performance” section below.The graphics below illustrate at-risk pay versus fixed and time-based pay for Ms. Tucker and Mr. Ryan, our then-Co-CEOs, and other NEOs for fiscal year 2023.*
34_________________* The percentages do not take into account the retention award granted to Ms. Tucker in January 2023, which was described extensively in the proxy statement for our fiscal 2022 annual meeting.Executive Compensation DecisionsWe maintain sound governance standards consistent with our executive compensation policies and practices. The decisions with respectCompensation Committee evaluates our executive compensation program regularly to fiscal 2017ensure that it supports our short-term and long-term goals given the dynamic nature of our business and the market in which we compete for executive officer compensation, includingtalent. These policies and practices were in effect during 2023:What we do✔ Independent Compensation CommitteeAdvisor. The Compensation Committee engaged its own independent compensation consultant to assist with the design of the 2023 executive compensation program.✔ Annual Executive Compensation Review. The Compensation Committee conducts an annual review of compensation for our NEOs and a review of compensation-related risks.✔ Compensation At-Risk. The executive compensation program is designed so that a significant portion of executive annual compensation is “at risk” to align the interests of our NEOs and our stockholders. The 2023 Bonus Plan achievement for our NEOs was 42.7% of target based on the challenging goals set by the Compensation Committee and its review of our performance.✔ Multi-Year Vesting Requirements. The equity awards granted to our NEOs vest over multiple years and generally no portion of these awards vests until approximately 12 months after the grant date, consistent with current market practice and our retention objectives.✔ Limited Perquisites. We provide minimal perquisites and other personal benefits to our NEOs, except where they serve a legitimate business purpose.✔ Stock Ownership Guidelines. We have robust stock ownership guidelines in order to encourage stock ownership among our directors and executive officers.✔ Clawback policy. In 2023, our Board adopted a Compensation Recovery Policy that satisfies new Nasdaq listing standards regarding clawback policies. Our Compensation Recovery Policy provides for the recoupment of certain incentive-based compensation in the event the Company is required to restate its financial statements due to the Company’s material noncompliance with any financial reporting requirements under the securities laws.What we don't do✘ No “Golden Parachute” Tax Reimbursements. We do not provide any tax reimbursement payments (including “gross-ups”) on any tax liability that our NEOs might owe as a result of the application of Sections 280G or 4999 of the Internal Revenue Code (the “Code”).✘ No Special Retirement Plans. We do not offer, nor do we have plans to provide, pension arrangements, retirement plans or nonqualified deferred compensation plans or arrangements exclusively to our NEOs.✘ No Special Health and Welfare Benefits. Our NEOs participate in the same Company-sponsored health and welfare benefits programs as our other full-time, salaried employees.✘ No “Single Trigger” Change of ControlArrangements. No change of control payments or benefits are triggered simply by the occurrence of a change of control. All change-of-control payments and benefits are based on a “double-trigger” arrangement (that is, they either require both a change of control of the Company plus a qualifying termination of employment before payments and benefits are paid or, in the case of certain performance awards, require a change of control of the Company and the award is not assumed in the acquisition).✘ No Hedging or Pledging. We have a policy that restricts employees from hedging our securities or pledging our securities as collateral.Governance of Executive Compensation ProgramRole of the Compensation CommitteeThe Compensation Committee discharges the responsibilities of our Board relating to the compensation of our NEOs. With respect to our NEOs, the Compensation Committee reviews and approves at the beginning of the year, or more frequently as warranted, their annual base salaries; cash bonus opportunities and cash bonus payments; long-term equity incentive35compensation; employment offers (including post-employment compensation arrangements); and other compensation, perquisites, and other personal benefits, if any.The Compensation Committee’s practice of developing and maintaining compensation arrangements that are madecompetitive includes a balance between hiring and retaining the best possible talent and maintaining a reasonable and responsible cost structure.Compensation-Setting ProcessWe do not establish a specific target for setting the target total direct compensation opportunity of our NEOs. When determining and setting the amount of each compensation element, the Compensation Committee considers the following factors:•our performance against the financial and operational objectives established by the Compensation Committee and our Board;•each individual NEO’s skills, experience, and qualifications relative to other similarly situated executives at the companies in our compensation committee, with input frompeer group;•the scope of each NEO’s role compared to other similarly situated executives at the companies in our chief executive officercompensation peer group;•the performance of each individual NEO, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function, and chief legal and administrative officer (except work as part of a team, all of which reflect our core values;•compensation parity among our NEOs;•with respect to each of her own compensation) and Compensia, an independent compensation consultant withinNEOs other than our Co-CEOs, the meaningrecommendations of the rulesCo-CEOs; and•the compensation practices of the SECour compensation peer group and the NASDAQ Stock Market. Compensia was engaged by ourpositioning of each NEO’s compensation committee pursuant toin a ranking of peer company compensation levels.These factors provide the authority delegated under its charter,framework for compensation decision-making and serves at the discretion offinal decisions regarding the compensation committee.Our compensation committeeopportunities for each NEO.Role of ManagementThe Compensation Committee believes each of our chief executive officer, chief financial officer,Co-CEOs, CFO, Chief People Officer, and chief legal and administrative officerCLAO has valuable insight into the day-to-day contributions of our executive officers,NEOs and solicits the advice and input from each with respect to performance objectives under our annual bonus plan. Our chief executive officer alsoIn addition, our CFO provides input with respect to the targetestablishment of metrics and targets for our annual incentive plan and our performance-based equity awards. Our Co-CEOs also provide input with respect to adjustments to annual base salaries, annual cash bonus opportunities, long-term equity incentive compensation opportunities, program structures, and other compensation-related matters for our NEOs (other than with respect to their own compensation). The Compensation Committee reviews and discusses this advice and input, along with the information, analysis and other advice it receives from its independent compensation consultant and uses them as factors in determining and approving the compensation for our NEOs. None of our officers is involved in decisions regarding their own compensation.Role of Compensation ConsultantThe Compensation Committee engages an external compensation consultant to assist it by providing information, analysis, and other advice relating to our executive compensation program and the decisions resulting from its annual executive compensation review. For 2023, the Compensation Committee retained Compensia to serve as its compensation advisor. This compensation consultant serves at the discretion of the Compensation Committee.During 2023, Compensia regularly attended the meetings of the Compensation Committee and provided the following services:•consulting with the Compensation Committee Chair and other members between Compensation Committee meetings;•providing competitive market data based in part on the compensation peer group for our NEO positions and evaluating how the compensation we pay our NEOs compares both to our performance and to how the companies in our compensation peer group compensate their executives;36•assessing executive compensation trends within our industry, and updating on corporate governance and regulatory issues and developments;•providing competitive market data based on the compensation peer group for our Board and evaluating how the compensation we pay the non-employee members of our Board compares to how the companies in our compensation peer group compensate their boards of directors; and•reviewing market equity compensation practices, including “burn rate” and “overhang.”In 2023, Compensia did not provide any services to us other than the consulting services provided to the Compensation Committee. The Compensation Committee regularly reviews the objectivity and independence of the advice provided by its compensation consultant on executive compensation. The Compensation Committee has considered the six specific independence factors adopted by the SEC and reflected in the listing standards of Nasdaq and determined that the work of Compensia did not raise any conflicts of interest.Competitive PositioningTo compare our executive compensation against the competitive market, the Compensation Committee reviews and considers the compensation levels and practices of a group of comparable technology companies. The companies in this compensation peer group were selected on the basis of their similarity to us in size and industry focus. For 2023 pay decisions, the Compensation Committee used compensation data derived from the compensation peer group as updated in August 2022. The companies in this compensation peer group were selected on the basis of their similarity to us, based on these criteria:•similar revenue size - ~0.5x to ~2.0x our last four fiscal quarter revenue of approximately $473 million (forQ4 of 2022);•similar market capitalization - ~0.3x to ~3.0x our market capitalization of approximately $4.0 billion (around the time of the peer group review in August 2022);•similar revenue growth and market-capitalization to revenue ratio;•industry - application software, internet services and infrastructure, and systems software;•executive positions similar in breadth, complexity, and/or scope of responsibility; and•competitors for executive talent.After consultation with Compensia, the Compensation Committee approved the following compensation peer group for 2023 compensation decisions:Alteryx New Relic Rapid7 AppFolio PagerDuty Smartsheet Appian Paylocity Holding SPS Commerce Coupa Software Procore Technologies Tenable Holdings Five9 Q2 Holdings Varonis Systems nCino Qualys Workiva To analyze the executive compensation practices of the companies in our compensation peer group, Compensia gathered data from public filings. This information is supplemented with survey data from the Radford Global Compensation Survey database of companies that are similar to us in revenue, market capitalization and industry for purposes of providing additional perspective in the case of executive positions where the compensation peer group offered a limited number of relevant data points. This market data was then used as a reference point for the Compensation Committee to assess our current executive compensation levels in its deliberations on compensation forms and amounts. The market data reviewed in setting the compensation of our Co-CEOs was the average of the data shown in public filings for each peer company’s CEO and second-highest paid executive, a typical approach based on Compensia’s experience.The Compensation Committee reviews our compensation peer group at least annually and adjusts its composition, taking into account changes in both our business and the businesses of the companies in the peer group.37Stockholder Advisory Votes on Named Executive Officer Compensation and Stockholder EngagementOur stockholders have an opportunity to cast an advisory vote to approve (i) our NEOs’ compensation and (ii) the frequency of the vote to approve the NEOs’ compensation (“Say-on-Frequency”). We hold the advisory vote on our NEOs’ compensation annually and the Say-on-Frequency vote every six years. Our next Say-on-Frequency vote will be held in 2025. At our 2023 annual meeting, a minority of our stockholders supported our compensation practices. Our Board and Compensation Committee took this vote outcome very seriously and was highly focused on gathering and responding to stockholders’ feedback regarding our executive officers, includingcompensation practices. Accordingly, we engaged in an extensive shareholder engagement process regarding compensation in fall 2023.In that process, we contacted stockholders representing 70% of our NEOs, other than herself. No executive officer provides input on his or her own compensation, which is determinedoutstanding shares. We engaged in 12 meetings with stockholders representing 33% of our outstanding shares (all stockholders who requested a meeting). The Company’s team at each of these meetings was led by our compensation committee, in its discretion. AtCompensation Committee Chair. In these meetings, we received important feedback from stockholders and describe below how we have acted on that feedback.What we heard How we responded Longer Performance Periods. Many stockholders expressed a perspective that the one-year performance periods we have been using for our long-term incentive plan should instead measure performance over longer periods.In our 2024 long-term equity incentive awards, a portion is now tied to our three-year performance as compared to an industry index. More Disclosure. We heard that stockholders would like more information about how performance metrics for annual and long-term incentives are selected, and the rationale for changes.In this proxy statement, we have provided more information regarding such reasoning and intend to continue providing this type of disclosure. Long-term Incentive Metrics. Some stockholders expressed an interest in having long-term incentive metrics that are tied to the Company’s stock price performance over a three or more year period.In our 2024 long-term equity incentive awards, 50% is now tied to our three-year TSR performance relative to an industry index. Avoid Overlapping Metrics. Some investors indicated a preference that there not be overlap between the goals for our annual bonuses and long-term equity incentive awards.The Compensation Committee considered this in our goal setting for 2023, but ultimately, given strategic and leadership transitions during the year, it determined that the importance of focusing on responsible growth justified the use of the same metrics in both plans for 2023. However, as discussed above, for 2024, we moved away from the use of overlapping metrics between our annual bonus and long-term equity. Co-CEO Matters. Some stockholders asked for more information regarding the decision to implement a Co-CEO structure and how the Compensation Committee assessed the initial compensation arrangements for our Co-CEOs and how it will be assessed going forward.In this proxy statement, we have provided more information on our reasoning underlying this and intend to continue providing this type of disclosure. 38Individual Compensation ElementsIn 2023, the request of our compensation committee, Compensia provides an assessment of the competitivenessprimary elements of our executive compensation program as compared withconsisted of base salary, an annual cash bonus opportunity, and long-term equity incentive compensation in the form of RSU and PSU awards.Base SalaryBase salary represents the fixed portion of the compensation of our competitors,NEOs and our compensation committee uses this assessment as one of several factors in approving target levelsis an important element of compensation intended to attract and retain highly talented individuals. Generally, we establish the initial base salaries of our NEOs through arm’s-length negotiation at the time we hire the individual NEO, taking into account competitive market data, his or her position, qualifications, experience, prior salary level, and the base salaries of our other NEOs. Thereafter, the Compensation Committee reviews the base salaries of our NEOs annually and makes adjustments to base salaries as it determines to be necessary or appropriate.The annual base salaries for our NEOs that were in effect as of the end of 2022 and 2023, respectively, are set forth below:NEO 2022 Base Salary 2023 Base Salary Percentage Increase Therese Tucker $344,000 $485,000 41.0%(1)Owen Ryan N/A $485,000 N/A Mark Partin $410,000 $430,000 4.9% Karole Morgan-Prager $390,000 $410,000 5.1% Mark Woodhams $400,000 $412,000 3.0% (1) Ms. Tucker’s role expanded substantially from 2022 to 2023, which accounts for the increase in base salaryAnnual Cash Bonus OpportunitiesEach NEO participated in the 2023 Bonus Plan, which was designed to motivate our NEOs to drive “top line” growth (using a revenue goal) as well as “bottom line” profitability (using a non-GAAP operating margin goal). Additionally, 20% of the performance under the bonus plan was determined based on our performance against a set of objectives and key results that were established early in 2023 and focused on: driving responsible, profitable growth at scale; delivering valuable solutions, support, and services to the market; delivering experiences that customers value; and continuing our development of an agile, inclusive, and highly engaged workforce.Each NEO was assigned a target annual cash bonus opportunity for 2023, representing a percentage of his or her annual base salary. In February 2023, the Compensation Committee reviewed the target annual cash bonus opportunities of our NEOs for 2023, taking into consideration a competitive market analysis prepared by Compensia, and the recommendations of our Co-CEOs (for all NEOs other than our Co-CEOs). No adjustments were made to the cash bonus opportunity for any of our NEOs.The 2023 target annual cash bonus opportunities of the NEOs were as follows:NEO 2023 Target Annual Cash Bonus Opportunity (as a percentage of base salary) 2023 Target Annual Cash Bonus Opportunity Therese Tucker 100% $485,000 Owen Ryan 100% $485,000(1)Mark Partin 70% $301,000 Karole Morgan-Prager 50% $205,000 Mark Woodhams 100% $412,000 (1) Mr. Ryan’s 2023 target annual cash bonus opportunity was prorated to $399,959 for his partial year of service as Co-CEO and employee of the company from March 6, 2023Each NEO participant in the 2023 Bonus Plan was eligible to earn a payment with respect to the financial portion applicable to his or her target annual cash bonus opportunity depending on our actual performance for the year as measured against the financial performance components, and additional amounts under the discretionary component of the 2023 Bonus Plan. As described in the section “2023 Bonus Plan Performance Matrix” below, overperformance against the bonus plan components could result in payments in excess of each executive officer. Other factors our compensation committee considersNEO's target opportunity, while underperformance would result in setting executive compensation includepayments below that target opportunity, or in no payment being earned with respect to one or more components.392023 Bonus Plan Performance MatrixIn March 2023, the Compensation Committee, with input from management, approved revenue and non-GAAP operating margin as the performance measures for the financial component under the 2023 Bonus Plan. The Compensation Committee selected these performance measures because it believed that they were appropriate drivers for our business as they provided a balance between growing our business, and managing our expenses, which enhance stockholder value over the short term.The 2023 Bonus Plan was to be funded based on (i) the extent of our achievement against the target level of each of the following: individualfinancial metrics and (ii) the discretion exercised by the Compensation Committee under the discretionary component, all as set forth below:2023 Bonus Plan Performance Measure Category Target Level Weighting (%) Revenue Financial Component $602.8 million 50% Non-GAAP Operating Margin Financial Component 8.5% 30% Objectives and Key Results Mix of financial and non-financial N/A 20% The revenue measure funded with respect to that performance measure as follows:Percentage Achievement of 2023 Revenue target* Payment Percentage of
Revenue Measure*98.1% 60% 100.0% 100% 104.0% 200% The non-GAAP operating margin measure funded with respect to that performance measure as follows:Percentage Achievement of 2023 non-GAAP Operating Margin target* Payment Percentage of
non-GAAP Operating Margin Measure*85.4% 50% 100.0% 100% 150.0% 125% _________________*If Revenue and Non-GAAP Operating Margin achievement during 2023 is between the percentage levels identified above, then the payment percentage with respect to the applicable performance metric is calculated based on a linear interpolation between those levels (rounded to one decimal).For purposes of the 2023 Bonus Plan, the financial performance measures had the following meanings:Performance Measure Meaning Revenue “Revenue” is defined as the sum of the Company’s subscription, support, and professional services revenue; all determined under U.S. GAAP, excluding revenue from acquisitions completed during the Company’s applicable fiscal year. Non-GAAP Operating Margin “Non-GAAP Operating Margin” is defined as the Company’s Non-GAAP income from operations divided by its total Revenue.“Non-GAAP income from operations” is defined as the Company’s GAAP income (loss) from operations, adjusted for: amortization of intangible assets, stock-based compensation, the change in the fair value of contingent consideration, transaction-related costs, legal settlement gains and costs, restructuring charges, impairment charges related to goodwill, impairment charges related to tangible and intangible assets, and the costs of natural disasters.Twenty percent of our 2023 Bonus Plan target is based on progress against corporate objectives and key results (OKRs) that are focused on: driving responsible, profitable growth at scale; delivering valuable solutions, support, and services to the market; delivering experiences that customers value; and continuing our development of an agile, inclusive, and highly engaged workforce. Our corporate OKRs were established in the first quarter of 2023 and our Board and40Compensation Committee review our progress against an OKR scorecard. The aggregate progress against OKRs for the year results in this portion of the bonus target able to be earned, comprising from 0-20% of the total bonus opportunity.2023 Bonus Plan DecisionsIn February 2024, the Compensation Committee reviewed our overall performance for 2023, including performance against the performance measures established under the 2023 Bonus Plan. Using the 2023 Bonus Plan performance measures, the discretion it reserved under the discretionary component, the target performance, actual performance and skills, management input, internal relative alignmentweighting were as follows:Performance Measure Target Performance Level Actual Performance Level Per Measure Payment Percentage Weighted Payment Percentage Revenue $602.8 million $589.1 million —% —% Non-GAAP Operating Margin 8.5% 16.2% 125% 37.5% Objectives and Key Results (OKRs) N/A N/A 26% 5.2% Total 42.7% The Compensation Committee determined the payment percentage under the corporate OKRs based on positive results with respect to increasing the number of premier customers, beating our goals with respect to growth and profitability, and increasing our services revenue. On the other hand, our customer acquisition costs exceeded our targets, we slightly missed our goals with respect to downtime, and our employee engagement scores were below where we targeted.Based on achievement of these financial performance measures and the OKRs, the 2023 Bonus Plan was funded at 42.7% of the target amount for each of our NEOs. The target annual cash bonus opportunities and the actual cash bonus payments made to the NEOs for 2023 are as follows:
_________________NEO Target Annual Cash Bonus Opportunity Total Actual 2023 Cash Bonus Payment Therese Tucker $485,000 $207,095 Owen Ryan(1)$485,000 $170,782 Mark Partin $301,000 $128,527 Karole Morgan-Prager $205,000 $87,535 Mark Woodhams $412,000 $175,924 (1) The target annual cash bonus opportunity for Mr. Ryan for 2023 was prorated to $399,959 for his partial year of service as Co-CEO and an employee of the Company, beginning on March 6, 2023.Long-Term Equity CompensationThe Compensation Committee believes long-term equity compensation is an effective means for focusing our NEOs on driving increased stockholder value over a multi-year period, providing a meaningful reward for appreciation in our stock price and long-term value creation, and motivating them to remain employed with us.Annual Long-Term Equity AwardsIn February and March 2023, the Compensation Committee determined the sizes of the 2023 equity awards for our NEOs and granted equity awards to all our NEOs in the form of 50% RSU awards and 50% PSU awards. Ms Tucker’s and Mr. Ryan’s awards were determined in connection with establishing their employment arrangements as our Co-CEOs based on CEO compensation at our peer companies and in consideration of the size of an initial equity grant that would be required to hire a CEO from outside the Company.As with their other elements of compensation, the Compensation Committee determined the amount of long-term equity incentive compensation for our other NEOs for 2023 as part of its annual compensation review and after taking into consideration a competitive market analysis, the recommendations of our Co-CEOs, each NEO’s skills, experience, and role within the organization, the outstanding equity holdings of each NEO (including the vested and unvested status of such equity holdings), the proportion of our total shares outstanding used for annual employee long-term equity compensation awards (our “burn rate”) in relation to the companies in our compensation peer group, the potential voting power dilution41to our stockholders (our “overhang”) in relation to the companies in our compensation peer group, and the other factors described above.NEO RSUs (number of shares)1PSUs (number of shares)2Equity Awards (Targeted Grant Value) Therese Tucker 69,880 69,880 $10,000,000 Owen Ryan 69,880 69,880 $10,000,000 Mark Partin 34,940 34,940 $5,000,000 Karole Morgan-Prager 23,060 23,060 $3,300,000 Mark Woodhams 20,970 20,970 $3,000,000 _________________(1) The number of shares was determined by dividing 50% of the targeted grant value by the 30-trading day average price ended on February 28, 2023 and rounding up to the nearest 10 shares.(2) The number of shares was determined by dividing 50% of the targeted grant value by the 30-trading day average price ended on February 28, 2023 and rounding up to the nearest 10 shares.Each of the RSU awards listed in the table above vests as to 25% of the shares underlying the award on February 20, 2024 and as to 1/16th of the shares underlying the award each quarter thereafter, subject to the NEO’s continued service with us through the applicable date.Each of the PSU awards listed in the table above vests as to one-third of the shares underlying the award on each of February 20, 2024, 2025 and 2026, in each case subject to the NEO’s continued service with us through the applicable date, and in each case subject to our satisfaction of applicable performance-based conditions for the calendar year preceding the vesting date. These performance goals will be determined on an annual basis. The performance goals for vesting of the PSU awards, which were eligible to vest on February 20, 2024, were determined at the time of grant, relate to our performance in 2023, and are detailed in the section “2023 PSU Performance Matrix” below.All of these awards are subject to additional vesting acceleration as described in the “Potential Payments Upon Termination or Change of Control” section below.2023 PSU Performance MatrixIn February 2023, the Compensation Committee, with input from management, approved revenue, annualized recurring revenue (“ARR”), and non-GAAP operating margin as the performance measures for the portion of each of the 2022 and 2023 PSUs eligible to vest on February 20, 2024. The Compensation Committee selected these performance measures because it believed that they were appropriate drivers for our business as they provided a balance between growing our business and managing our expenses, which enhance stockholder value over the short term (as noted above, we have shifted to the use of longer performance periods in our 2024 long-term incentive awards). In all cases, the revenue and non-GAAP operating margin targets and scales were designed to ensure self-funding at every point along the curve.The portion of the 2022 and 2023 PSUs eligible to vest on February 20, 2024 was determined to be available for vesting based on the extent of our achievement against the target level of each of the financial metrics, as set forth below:2023 PSU Plan Performance Measure Target Level Weighting Revenue $602.8 million 40% ARR $627.2 million 30% Non-GAAP Operating Margin 8.5% 30% The portion of the 2023 PSUs scheduled to vest on February 20, 2024 that is subject to the revenue metric will be available for vesting based on attainment of that performance metric as follows with the threshold performance required for our Revenue target increased from 97.5% in 2022 to 98.1% in 2023 (based on changes to our annual operating plan). Because our threshold performance requirement was higher, we made a corresponding increase in the amount earned at the threshold. The final scale for 2023 was as follows:42Percentage Achievement of 2023 Revenue target* Percentage of Subject Award Available for Vesting* 98.1% 60% 100.0% 100% 104.0% and above 150% The portion of the 2023 PSUs scheduled to vest on February 20, 2024 that is subject to the ARR metric will be available for vesting based on attainment of that performance measure as follows:Percentage Achievement of 2023 ARR target* Percentage of Subject Award Available for Vesting* 96.8% 50% 100.0% 100% 110.0% and above 150% The portion of the 2023 PSUs scheduled to vest on February 20, 2024 that is subject to the non-GAAP operating margin metric will be available for vesting based on attainment of that performance measure as follows:Percentage Achievement of 2023 non-GAAP operating margin target* Percentage of Subject Award Available for Vesting* 85.4% 50% 100.0% 100% 150% 150% _________________*If Revenue, ARR or non-GAAP operating margin achievement during 2023 is between the percentage levels anticipated futureidentified above, then the payment percentage with respect to the applicable performance metric is calculated based on a linear interpolation between those levels (rounded to the nearest hundred thousand dollars).For purposes of the portion of the 2023 PSUs scheduled to vest on February 20, 2024, the financial performance measures had the following meanings:Performance Measure Meaning Revenue “Revenue” is defined as the sum of the Company’s subscription, support, and professional services revenue; all determined under U.S. GAAP, excluding revenue from acquisitions completed during the Company’s applicable fiscal year. ARR “ARR” is defined as contracted annualized recurring subscription and support revenue. ARR denominated in a currency other than USD shall be revalued using foreign exchange rates as of the balance sheet date for each quarterly reporting period. ARR shall exclude the impact of acquisitions completed during the Company’s applicable fiscal year. Non-GAAP Operating Margin “Non-GAAP Operating Margin” is defined as the Company’s Non-GAAP income from operations divided by its total Revenue.“Non-GAAP income from operations” is defined as the Company’s GAAP income (loss) from operations, adjusted for: amortization of intangible assets, stock-based compensation, the change in the fair value of contingent consideration, transaction-related costs, legal settlement gains and costs, restructuring charges, impairment charges related to goodwill, impairment charges related to tangible and intangible assets, and the costs of natural disasters.2023 PSU Performance DecisionsIn February 2024, the Compensation Committee reviewed our overall performance for 2023, including performance against the performance measures established for 2023 under the PSU awards described above. Considering the performance measures established for those awards, the target performance, actual performance, and percent available for vesting before relative weighting were as follows:43Performance Measure Target Performance Level Actual Performance Level Pre-Weighting Vesting Percentage Weighted Vesting Percentage Revenue $602.8 million $589.1 million —% —% ARR $627.2 million $602.0 million —% —% Non-GAAP Operating Margin 8.5% 16.2% 150% 45% Total 45% Based on this level of achievement, the Compensation Committee determined that, with respect to the shares eligible to vest on February 20, 2024 under the 2023 PSU awards, 45% of the target amount for each of our NEOs were eligible to vest.The numbers of shares available for vesting on February 20, 2024 under the 2023 PSUs for each of our NEOs are as follows:Named Executive Officer Target 2022 and 2023 PSUs Eligible to Vest on 2/20/2024
(Number of Shares)Total 2022 and 2023 PSUs Earned and Vested on 2/20/2024
(Number of shares)Therese Tucker 23,293 10,481 Owen Ryan 23,293 10,481 Mark Partin 22,519 10,132 Karole Morgan-Prager 13,339 6,001 Mark Woodhams 13,513 6,080 Employee BenefitsOur NEOs are eligible to participate in our employee retirement benefit programs on the same basis as our other full-time, salaried employees. We sponsor a Section 401(k) profit-sharing plan, which is intended to qualify for favorable tax treatment under Section 401(a) of the Code. Our eligible U.S. employees, including the NEOs, are entitled to participate on the first day of the month following the date of hire. The Section 401(k) plan includes a salary deferral arrangement under which participants may elect to defer up to 100% of their current eligible compensation up to the statutorily prescribed limit. All participants’ interests in their deferrals are 100% vested when contributed. The Section 401(k) plan permits us to make matching contributions and profit-sharing contributions to eligible participants. In 2023, we paid discretionary matching contributions that are fully vested.In addition, our company,NEOs are eligible to participate in our employee welfare benefit programs on the same basis as all of our employees. These benefits include medical, dental and vision benefits, disability insurance, basic life insurance coverage, health savings accounts, and accidental death and dismemberment insurance. All NEOs, except for Ms. Tucker, are also eligible to participate in our employee stock purchase plan (“ESPP”).We design our employee benefits programs to be affordable and competitive in relation to the market, as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices and the judgmentcompetitive market.Perquisites, Special Bonuses and experienceOther Personal BenefitsCurrently, we do not view perquisites, special bonuses, or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not provide perquisites, special bonuses, or other personal benefits to our NEOs, except in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our NEOs more efficient and effective, and for recruitment and retention purposes.Employment ArrangementsWe have entered into written employment offer letters with each of our NEOs, other than Ms. Tucker and Mr. Ryan, and an employment agreement with each of Ms. Tucker and Mr. Ryan. Each of these employment arrangements was approved on our behalf by the Compensation Committee or, in certain instances, by our Board. Each of these employment arrangements provides for “at will” employment and set forth the compensation arrangements for the NEO, including base salary and an annual cash bonus opportunity.44On March 5, 2023, in connection with Ms. Tucker’s transition to become Co-CEO, we entered into an employment agreement with Ms. Tucker, which supersedes her prior employment agreement. We entered into an employment agreement with Mr. Ryan at the same time on substantially the same terms. In connection with this transition, the Compensation Committee approved an increase to Ms. Tucker’s base salary in connection with her transition from Executive Chair to Co-CEO. In determining this adjustment, the Compensation Committee considered the substantial increase in Ms. Tucker’s duties and responsibilities as a result of this transition, and took into account a competitive market data analysis provided by Compensia.In filling each of our executive positions, our Board or the Compensation Committee, as applicable, recognized that it would need to develop competitive compensation packages to attract qualified candidates in a dynamic labor market. At the same time, our Board and the Compensation Committee were sensitive to the need to integrate new executive officers into the executive compensation structure that we were seeking to develop, balancing both competitive and internal equity considerations.For information on the specific terms and conditions of the employment arrangements of the NEOs, see the discussion of “Executive Employment Arrangements” below.Post-Employment CompensationWe entered into written participation agreements under our Change of Control and Severance Policy (the “Policy”) with each of our NEOs (other than Ms. Tucker and Mr. Ryan) and a written employment agreement with Ms. Tucker and Mr. Ryan, providing for change of control and severance payments and benefits.On March 5, 2023, in connection with Ms. Tucker’s transition to become Co-CEO, we entered into an employment agreement providing for post-employment compensation with Ms. Tucker, which supersedes her prior employment agreement.On March 5, 2023, in connection with Mr. Ryan’s transition to become Co-CEO, we entered into an employment agreement providing for post-employment compensation with Mr. Ryan.We believe that having in place reasonable and competitive post-employment compensation arrangements is essential to attracting and retaining highly qualified executive officers. Our post-employment compensation arrangements are designed to provide reasonable compensation to executive officers who leave our Company under certain circumstances to facilitate their transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits.We do not consider specific amounts payable under these post-employment compensation arrangements when establishing annual compensation. We do believe, however, that these arrangements are necessary to offer compensation packages that are competitive.We believe that these arrangements are designed to align the interests of management and stockholders when considering the long-term future for the Company. The primary purpose of these arrangements is to keep our most senior executive officers focused on pursuing all corporate transaction activity that is in the best interests of stockholders regardless of whether those transactions may result in their own job loss. Reasonable post-acquisition payments and benefits should serve the interests of both the executive and our investors.All payments and benefits in the event of a change of control of the Company are payable only if there is a subsequent loss of employment by an executive officer (a so-called “double-trigger” arrangement). In the case of the acceleration of vesting of outstanding equity awards, we use this double-trigger arrangement to protect against the loss of retention power following a change of control and to avoid windfalls, both of which could occur if vesting accelerated automatically as a result of the transaction.We do not use excise tax payments (or “gross-ups”) relating to a change of control of the Company and have no such obligations in place with respect to any of our NEOs.For information on the change of control and severance agreements for the NEOs, as well as an estimate of the potential payments and benefits payable under these agreements as of the end of 2023, see “Executive Employment Arrangements” and “Potential Payments Upon Termination or Change of Control” below.45Other Compensation Policies and PracticesPolicy Prohibiting Hedging or Pledging of Our Equity SecuritiesOur Insider Trading Compliance Policy prohibits all our employees, including our NEOs, and the members of our compensation committee.Our compensation committee makes the final decisionsBoard from engaging in derivative securities transactions, including hedging, with respect to allour common stock and from pledging our securities as collateral or holding our securities in a margin account.Executive Stock Ownership GuidelinesIn February 2020, the Compensation Committee and the Nominating and Corporate Governance Committee recommended, and our Board approved, stock ownership guidelines for our executive officers. Under these guidelines, each executive officer is expected to attain minimum levels of stock ownership equal to 1x (or 5x, in the case of our Co-CEOs) the executive officer’s annual base salary. For purposes of this requirement, shares owned outright count toward these guidelines and, prior to February 2024, when the Compensation Committee modified the methodology, the calculations included the in-the-money value of vested but unexercised stock options. The value for purposes of satisfying this requirement is the 90-day trailing average of the closing price of our common stock as of the last trading day of the fiscal year prior to the compliance date. Executive officers have a phase-in period that lasts until the later of February 2025 or, if applicable, the fifth anniversary of the date they become an executive officer or are appointed to their position to comply with these guidelines. If an executive officer does not achieve the minimum level of ownership by the executive officer’s compliance date, then 50% of the after-tax value of the executive officer’s exercised options or vested RSUs will be retained until the minimum level of ownership for the executive officer is met. As of December 31, 2023, all of our executive officers were in compliance with the stock ownership requirements under the guidelines.Tax and Accounting ConsiderationsDeductibility of Executive CompensationSection 162(m) of the Code generally limits the amount we may deduct from our federal income taxes for compensation decisions.In approving the amount and form of compensation for our NEOs, the Compensation Committee generally considers all elements of the cost to us of providing such compensation, including the potential impact of Section 162(m) of the Code, as well as our need to maintain flexibility in compensating executive officers in a manner designed to promote our goals. The Compensation Committee may, in its judgment, authorize compensation payments that may or may not be deductible when it believes that such payments are appropriate to attract, retain or motivate executive talent.Accounting for Stock-Based CompensationWe follow the Financial Accounting Standard Board’s Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”) for our stock-based compensation awards. FASB ASC Topic 718 requires us to measure the compensation expense for all share-based payment awards made to our employees and members of our Board, including options to purchase shares of our common stock and other stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may never realize any value from their awards.Risk ConsiderationsThe Compensation Committee, in cooperation with management, reviewed our 2023 compensation programs. Our Compensation Committee believes that the mix and design of the elements of such programs do not encourage our employees to assume excessive risks and accordingly are not reasonably likely to have a material adverse effect on our Company. We have designed our compensation programs to be balanced so that our employees are focused on both short and long-term financial and operational performance. In particular, the weighting towards long-term equity incentive compensation discourages short-46term risk taking. Goals are appropriately set with targets that encourage growth in the business, while doing so in a manner that encourages profitability.Executive Employment ArrangementsTherese Tucker. On March 5, 2023, in connection with Ms. Tucker’s transition to Co-CEO, effective as of March 6, 2023, we entered into an employment agreement with Ms. Tucker, which supersedes her prior employment agreement. Under this new employment agreement (the “Tucker Employment Agreement”), as Co-CEO, Ms. Tucker will earn an annual base salary of $485,000 and have a target bonus of 100% of her salary. The Tucker Employment Agreement also provided for equity awards that have been granted with a value of $10,000,000, which were made up of 50% RSUs that will vest over four years, subject to Ms. Tucker’s continued full-time employment, and 50% PSUs that will vest on the same performance terms as awards granted to our other executives in 2023, as determined by the Compensation Committee.The Tucker Employment Agreement provides that if her employment is terminated by us without “cause” (as such term is defined in the Tucker Employment Agreement) other than for death or disability, outside of the period beginning 3 months prior to a “change of control” (as such term is defined in the Tucker Employment Agreement) and ending 12 months following the change of control, Ms. Tucker will be eligible to receive: (i) a lump sum cash payment equal to 100% of her annual salary and (ii) reimbursement by the Company for COBRA premiums Ms. Tucker pays to maintain group health insurance benefits for herself and her dependents under COBRA for up to 12 months following the date of termination.The Tucker Employment Agreement also provides that if her employment is terminated by us during the period beginning 3 months prior to a change of control and ending 12 months following the change of control without cause other than for death or disability or she resigns for “good reason” (as defined in the Tucker Employment Agreement), then she will be eligible to receive (i) a lump sum cash payment equal to 150% of her annual salary, (ii) a lump sum cash payment equal to a prorated portion of her target annual bonus for the year of termination and (iii) reimbursement by the Company for COBRA premiums she pays to maintain group health insurance benefits for herself and her dependents under COBRA for up to 18 months following the termination date, and (iv) 100% of all of her outstanding equity awards will become vested and fully exercisable effective as of the later of the date of termination or the date of the consummation of the change of control (and with respect to any Company performance-based equity awards, for which the applicable performance period has (x) been completed as of her termination date, based on actual achievement of the applicable performance objectives or (y) not been completed as of her termination date, assuming achievement of the applicable performance objectives at target).Owen Ryan. On March 5, 2023, in connection with Mr. Ryan’s transition to Co-CEO, effective as of March 6, 2023, we entered into an employment agreement on the same terms described above with respect to the Tucker Employment Agreement.Mark Partin. We entered into an employment letter with Mr. Partin. The employment letter has no specific term and provides for “at-will” employment. As of December 31, 2022, Mr. Partin’s annual base salary was $410,000 and his annual on-target bonus opportunity was 70% of his annual base salary.Karole Morgan-Prager. We entered into an employment letter with Ms. Morgan-Prager. The employment letter has no specific term and provides for “at-will” employment. As of December 31, 2022, Ms. Morgan-Prager’s annual base salary was $390,000 and her annual on-target bonus opportunity was 50% of her annual base salary.Mark Woodhams. We entered into an employment letter with Mr. Woodhams. The employment letter has no specific term and provides for “at-will” employment. As of December 31, 2022, Mr. Woodhams' annual base salary was $400,000 and his annual on-target bonus opportunity was 100% of his annual base salary.Marc Huffman Separation ArrangementsEffective March 2023, the Company entered into a separation agreement and release with Mr. Huffman in connection with his separation from the Company. In accordance with Mr. Huffman’s existing rights under the terms of his participation agreement under the Company’s change of control and severance policy for a termination without cause, the separation agreement provided for payment of 12 months of salary and continuation of benefits for 12 months, as well as accrued compensation through the date of his departure. In addition, to ensure a successful transition, Mr. Huffman agreed to provide certain consulting services for 12 months following the end of his employment with the Company during which time his time-based equity awards continued to vest based on the original terms of such awards and he was paid $80,000 in consulting fees. Mr. Huffman forfeited all other outstanding equity awards he held, including the retention award granted to him in December 2022.47Compensation Committee ReportThe Compensation Committee has reviewed and discussed with management the section titled “Executive Compensation” (the “Executive Compensation Disclosure”), including, without limitation, the disclosure under the heading “Compensation Discussion and Analysis,” summary executive compensation tables and related narrative information included in this proxy statement. Based on such review and discussion, the Compensation Committee has recommended to the Board that the section titled “Executive Compensation Disclosure” be included in this proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.Respectfully submitted by the members of the Compensation Committee of the Board:Mika Yamamoto (Chair)Kevin ThompsonThomas UntermanWilliam Wagner6This Compensation Committee report shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or to the liabilities of Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any prior or subsequent filing by BlackLine under the Securities Act of 1933, as amended, or the Securities Act, or the Exchange Act, except to the extent BlackLine specifically requests that the information be treated as “soliciting material” or specifically incorporates it by reference.6Mr. Wagner joined our Compensation Committee in February 2024. Mr. Yoran served as a member of our Compensation Committee from January 2023 to February 2024.48Summary Compensation TableThe following table presents information concerning the total compensation of our NEOs for services rendered to us in all capacities during the yearyears ended December 31, 20172023, 2022, and December 31, 2016.Name and Principal PositionYearSalary ($)Bonus ($)Option
Awards ($)(1)Non-Equity
Incentive
Plan
Compensation
($)(2)All Other
Compensation ($)Total ($)Therese Tucker
Chief Executive Officer 2017 375,000 — — 187,500 — 562,500 2016 336,634 — 635,365 235,900 769 1,208,668 Chris Murphy
Chief Revenue Officer 2017 350,000 — — 87,500 10,800(3) 448,300 2016 320,248 — 317,682 235,900 10,868 884,698 Mark Partin
Chief Financial Officer 2017 350,833 — — 87,708 10,800(3) 449,341 2021.Name and Principal Position Year Salary
($)Stock Awards($)(1)(2)Performance Stock Awards($)(1)(3)Option Awards($)(1)Non-Equity Incentive Plan Compensation($)(4)All Other Compensation($)(5)Total ($) Therese Tucker(6)2023 468,833 6,286,793 1,564,591 — 207,095 — 8,527,312 Co-CEO 2022 340,000 4,935,302 — — 211,570 — 5,486,872 2021 328,000 2,087,842 — 2,006,179 283,555 1,567 4,707,143 Owen Ryan(7)2023 398,655 4,693,840 1,564,591 — 170,782 13,200 6,841,068 Co-CEO Marc Huffman(8)2023 91,025 — — — — 611,674 702,699 Former President and Former
Chief Executive Officer2022 493,750 4,935,302 16,020,535 — 410,020 12,300 21,871,907 2021 475,000 2,504,964 — 2,505,522 547,514 13,686 6,046,686 Mark Partin 2023 425,000 2,346,920 1,512,601 — 128,527 13,200 4,426,248 Chief Financial Officer 2022 405,000 6,184,024 822,651 — 235,351 12,200 7,659,226 2021 387,500 1,252,482 — 1,252,761 269,723 13,889 3,176,355 Karole Morgan-Prager 2023 405,000 1,548,940 895,981 — 87,535 13,200 2,950,656 Chief Legal and
Administrative Officer2022 385,000 3,937,668 427,706 — 159,908 32,552 4,942,834 2021 367,500 710,446 — 710,086 213,242 495,437 2,496,711 Mark Woodhams 2023 409,000 1,408,555 907,668 — 175,924 12,100 2,913,247 Chief Revenue Officer 2022 391,667 3,391,807 493,530 — 328,016 12,200 4,617,220 2021 380,000 835,360 — 835,515 438,012 33,723 2,522,610 _________________(1)The amounts in these columns(1)The amounts in this column represent the aggregate grant date fair value of stock option awards as computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718, or ASC 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in Note 2 to our financial statements appearing at the end of our Annual Report on Form 10-K for the year ended December 31, 2017. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. With respect to Ms. Tucker’s performance-based option to purchase 482,800 shares of our common stock, or the Performance-Based Option, although the award has been legally granted, as of December 31, 2017, we could not determine that the achievement of the performance targets is probable. This is due to the fact that the vesting is based, in part, on the achievement of yearly cash flow targets through 2019 that have yet to be established. The cash flow targets for each year are determined by our board of directors concurrently with the annual budget process and because each yearly cash flow target has not yet been set, there is no grant date and therefore no grant date fair value. Accordingly, the award has not been included in the table. If each yearly cash flow target is met through 2019, but the full cumulative annual recurring target through 2019 is not met, Ms. Tucker is still able to vest in the award if an additional cash flow target for 2020 and a cumulative annual27recurring revenue target through 2020 are achieved. If the Performance-Based Option was valued as though the date of legal grant was also the accounting grant date, assuming 100% achievement of all performance-based targets, the Performance-Based Option would have a grant date fair value of $3,176,824. See “CEO Equitystock and option awards as computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718 or ASC 718. The assumptions used in calculating the grant date fair value of the awards reported in these columns are set forth in Note 2 to our financial statements appearing at the end of our Annual Report on Form 10-K for the year ended December 31, 2023. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.(2)The amounts reported in the Stock Awards” below for additional details column reflect the aggregate grant date fair value of the RSUs granted to our NEOs in fiscal 2023, 2022, and 2021.(3)The amounts reported in the Performance Stock Awards Column reflect the aggregate grant date fair value of the PSUs granted to our NEOs in fiscal 2023 and 2022, as computed in accordance with ASC Topic 718. For fiscal 2023, the estimated fair value of PSUs is calculated based on the termsprobable outcome of the performance measures for the applicable performance period as of the date on which the PSUs were granted for accounting purposes. For PSUs approved in years prior to 2023 for which performance conditions were approved in 2023, the grant date for purposes of this award.disclosure is deemed to be in 2023. PSUs vest upon achievement of corporate performance goals. The assumptions used in the valuation of these awards are consistent with the valuation methodologies specified in the notes to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.The grant date fair value of the fiscal 2023 PSUs assuming that the highest level of performance is achieved under the applicable performance measures is presented below. The estimated grant date fair value for these PSUs presented in the table above is different from (and lower than) the maximum value set forth below. These amounts do not necessarily correspond to the actual value recognized by our NEOs.Name (2)Maximum Value of 2023 PSUs Therese Tucker The amounts in these columns represent annual incentives earned for 2017 under our 2017 Annual Bonus Plan—Executive Officer Bonus Plan, or 2017 Bonus Plan, as described in additional detail below.$2,346,853 Owen Ryan $2,346,853 Marc Huffman N/A Mark Partin $2,268,869 Karole Morgan-Prager $1,343,937 Mark Woodhams $1,361,468 (4)The amounts in this column represent annual incentives earned under our bonus plans for the applicable fiscal year.(5)In 2023, this amount consists of: (a) for Mr. Ryan, Mr. Partin, and Ms. Morgan-Prager, 401(k) plan matching contributions in the amount of $13,200 each and (b) for Mr. Woodhams, 401(k) plan matching contributions in the amount of $12,100. For Mr. Huffman, the amounts consist of: (a) $500,000 in severance benefits under the separation agreement and release with Mr. Huffman in connection with his separation from the Company; (b) $80,000 in payment for services provided under the consulting agreement entered into with the Company in connection with his separation; (c) $18,474 in payment for continuation of benefits in connection with his separation; and (d) $13,200 in 401(k) plan matching contribution.(6)Ms. Tucker was appointed Co-CEO of the Company on March 6, 2023. During 2023, prior to this date, Mr. Tucker served as an employee of the Company. Ms. Tucker also served as a director of the Company for all of 2023.(7)Mr. Ryan was appointed Co-CEO of the Company and became a Company employee on March 6, 2023. During 2023, Mr. Ryan served as Chair of the Board of Directors of the Company. Compensation for Mr. Ryan’s services as a Board member prior to March 6, 2023 are reflected in the Director Compensation Table above.(8)Mr. Huffman ceased to serve as our President and CEO on March 6, 2023.49(3)Consists of 401(k) plan matching contributions.Grants of Plan-Based Awards During 2023The following table presents information regarding grants of plan-based awards made to our NEOs during 2023:Estimated Future Payouts Under Non-EquityIncentive Plan Awards ($)(1)Estimated Future Payouts Under
Equity Incentive Plan AwardsNumber of Securities Underlying Restricted Stock Units (#) Grant DateFair ValueofStock andOptionAwards($)(2)Name Executive Officer Grant
DateThreshold ($) Target
($)Maximum ($) Threshold (#) Target
(#)Maximum (#) Therese Tucker 2/15/2023 315,250 485,000 763,875 1/1/2023(3)23,680 1,592,954 3/7/2023(3)69,880 4,693,840 3/7/2023(5)12,578 23,293 34,939 1,564,591 Owen Ryan 2/15/2023 259,973 399,959 629,935 3/7/2023(3)69,880 4,693,840 3/7/2023(5)12,578 23,293 34,939 1,564,591 Marc Huffman 2/15/2023 500,000 Mark Partin 2/15/2023 195,650 301,000 474,075 3/7/2023(3)34,940 2,346,920 3/7/2023(4)5,871 10,873 16,309 730,339 3/7/2023(5)6,288 11,646 17,469 782,262 Karole Morgan-Prager 2/15/2023 133,250 205,000 322,875 3/7/2023(3)23,060 1,548,940 3/7/2023(4)3,052 5,653 8,479 379,712 3/7/2023(5)4,150 7,686 11,529 516,269 Mark Woodhams 2/15/2023 267,800 412,000 648,900 3/7/2023(3)20,970 1,408,555 3/7/2023(4)3,522 6,523 9,784 438,150 3/7/2023(5)3,774 6,990 10,485 469,518 _________________(1)Amounts in the “Estimated Future Payouts Under Non-Equity Incentive Plan CompensationEach ofAwards” columns relate to cash incentive compensation opportunities under our NEOs participated2017section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements – 2023 Bonus Plan which providedPerformance Matrix” and “—2023 Bonus Plan Decisions.” Mr. Ryan’s target opportunity under our 2023 Bonus Plan award was prorated from $485,000 for cash incentives for certain company executives, including our NEOs, for 2017 performance. Target bonuses forhis partial year of service as Co-CEO and an employee beginning on March 6, 2023.(2)The amount in this column represents the NEOs wereaggregate grant date fair value of stock awards as computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718, or ASC 718. The fair value of the PSUs is calculated based on a percentage of his or her 2017 annual base salary as follows: Ms. Tucker (100%), Mr. Partin (50%), and Mr. Murphy (100%).2017 Bonus Plan was designed to fund based on company performance, measured by gross annual recurring revenue bookings less churned (lost) annual recurring revenue, or Net New ARR, and free cash flow. The 2017 Bonus Plan provides that ifassumptions used in calculating the free cash flow threshold was achieved, then the 2017 Bonus Plan would fund as to: (a) 50%, if between 80% and 84.99%grant date fair value of the Net New ARR target was achieved, (b) 62.5%, if between 85% and 89.99% of the Net New ARR target was achieved, (c) 75%, if between 90% and 94.99% of the Net New ARR target was achieved, (d) 87.5%, if between 95% and 99.99% of the Net New ARR target was achieved, or (e) 100%, if 100% or above of the Net New ARR target was achieved. To the extent the Net New ARR achievement was between applicable percentages, the funding percentage would be funded based on a linear interpolation between those levels. Each NEO’s bonus payment under the 2017 Bonus Plan was based on the percentage at which the 2017 Bonus Plan funded as described above. The Net New ARR target was based on the targeted growth of Net New ARR from the end of the year 2016 to the end of the year 2017 and the free cash flow threshold was based on cash flow from operations less capital expenditures for 2017. Our compensation committee administers the 2017 Bonus Plan, and reserved the discretion to modify or change the formula for paying bonuses.After the end of 2017, our compensation committee determined that we achieved the free cash flow threshold, but did not achieve any Net New ARR threshold under the 2017 Bonus Plan. However, after consideration of the achievements we made during 2017 with respect to our overall financial performance and the scaling of our operations and of each NEO’s contributions to those achievements, our compensation committee exercised its discretion under the 2017 Bonus Plan to award bonuses under the 2017 Bonus Planawards reported in the amountsthis column are set forth in Note 2 to our financial statements in our Annual Report on Form 10-K for the “Non-Equity Incentive Plan Compensation” columnyear ended December 31, 2023.(3)Reflects the award of RSUs for such NEOs as described in the Summary section titled “Executive Compensation—Compensation Table.(4)Reflects the award of PSUs at the threshold, target and maximum award levels for the 2022 PSUs scheduled to vest on February 20, 2024 as described in the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements—2023 PSU Performance Matrix.” For PSUs approved in years prior to 2023 for which performance conditions were approved in 2023, the grant date for purposes of this disclosure is deemed to be in 2023. Further information on the threshold, target, maximum, and actual award level achievement of this PSU award, as well as descriptions of the performance goals for this PSU award is available in such section and the section “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements—2023 PSU Performance Decisions.”(5)Reflects the award of PSUs at the threshold, target and maximum award levels for the 2023 PSUs scheduled to vest on February 20, 2024 as described in the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements—2023 PSU Performance Matrix.” Further information on the threshold, target, maximum, and actual award level achievement of this PSU award as well as descriptions of the performance goals for this PSU award is available in such section and the section “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements—2023 PSU Performance Decisions.50Outstanding Equity Awards at Year-EndThe following table presents information concerning all outstanding equity awards held by each of our named executive officersNEOs as of December 31, 2017:
Securities
Underlying
Unexercised
Options #
ExercisableNumber of
Securities
Underlying
Unexercised
Options #
UnexercisableNumber of
Securities
Underlying
Unexercised
Unearned
OptionsOption
Exercise
Price ($)Option
Expiration
DateTherese Tucker 10/17/16(2) — — 482,800 14.00 10/16/2026 10/17/16(3) 24,140 72,420 — 14.00 10/16/2026 Chris Murphy 3/3/2014(4) 375,000 125,000 — 5.00 3/2/2024 10/17/2016(5) 12,070 36,210 — 14.00 10/16/2026 Mark Partin 3/30/2015(6) 280,088 280,088 — 14.00 3/29/2025 10/17/2016(5) 12,070 36,210 — 14.00 10/16/2026 Option Awards Stock Awards Named Executive Officer GrantDate(1)Number of Securities Underlying Unexercised Options # Exercisable Number of Securities Underlying Unexercised Options # Unexercisable Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested Market Value of Shares or Units That Have Not Vested ($)(2)Therese Tucker 10/17/2016(4)96,560 — 14.00 10/16/2026 3/6/2018(6)95,080 — 44.41 3/5/2028 5/15/2019(9)99,270 — 48.65 5/15/2029 4/15/2020(10)127,723 18,247 57.11 4/15/2030 4/15/2020(11)8,387 523,684 3/6/2021(12)40,790 — 111.53 3/6/2031 4/4/2022(15)32,615 2,036,481 1/1/2023(18)11,840 739,290 3/7/2023(19)69,880 4,363,307 3/7/2023(21)23,293 1,454,415 Owen Ryan 8/10/2018(8)2,874 — 47.64 8/10/2028 3/7/2023(19)69,880 4,363,307 3/7/2023(21)23,293 1,454,415 Marc Huffman 4/15/2020(10)11,180 3,727 57.11 4/15/2030 4/15/2020(11)1,713 106,960 3/6/2021(13)33,646 3,059 111.53 3/6/2031 3/6/2021(14)1,404 87,666 4/4/2022(16)4,077 254,568 Mark Partin 3/30/2015(3)92,676 — 14.00 3/29/2025 10/17/2016(5)48,280 — 14.00 10/16/2026 3/6/2018(6)56,760 — 44.41 3/5/2028 5/15/2019(9)64,950 — 48.65 5/15/2029 4/15/2020(10)100,170 14,310 57.11 4/15/2030 4/15/2020(11)6,578 410,730 3/6/2021(13)16,822 7,648 111.53 3/6/2031 3/6/2021(14)3,510 219,164 4/4/2022(16)18,349 1,145,712 12/30/2022(17)55,240 3,449,186 3/7/2023(19)34,940 2,181,654 3/7/2023(20)10,873 678,910 3/7/2023(21)11,646 727,176 51(1)Each of the outstanding equity awards was granted pursuant to our 2014 Equity Incentive Plan, or 2014 Plan.(2)The shares vest based on achievement of certain performance metrics and Ms. Tucker’s continued service with us through the date on which achievement is determined by our board of directors or its authorized committee. See “CEO Equity Awards” below for additional details on the terms of this award.28(3)Option Awards Stock Awards Named Executive Officer GrantDate(1)Number of Securities Underlying Unexercised Options # Exercisable Number of Securities Underlying Unexercised Options # Unexercisable Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested Market Value of Shares or Units That Have Not Vested ($)(2)Karole Morgan-Prager 10/17/2016(5)117,260 — 14.00 10/16/2026 3/6/2018(6)28,300 — 44.41 3/5/2028 5/15/2019(9)25,600 — 48.65 5/15/2029 4/15/2020(10)33,390 4,770 57.11 4/15/2030 4/15/2020(11)2,193 136,931 3/6/2021(13)9,535 4,335 111.53 3/6/2031 3/6/2021(14)1,992 124,380 4/4/2022(16)9,540 595,678 12/30/2022(17)39,460 2,463,882 3/7/2023(19)23,060 1,439,866 3/7/2023(20)5,653 352,973 3/7/2023(21)7,686 479,914 Mark Woodhams 8/7/2018(7)89,093 — 49.04 8/7/2028 5/15/2019(9)33,900 — 48.65 5/15/2029 4/15/2020(10)33,390 4,770 57.11 4/15/2030 4/15/2020(11)2,193 136,931 3/6/2021(13)11,220 5,100 111.53 3/6/2031 3/6/2021(14)2,342 146,234 4/4/2022(16)11,009 687,402 12/30/2022(17)28,410 1,773,920 3/7/2023(19)20,970 1,309,367 3/7/2023(20)6,523 407,296 3/7/2023(21)6,990 436,456 _________________(1)Each of the outstanding equity awards was granted pursuant to our 2014 Equity Incentive Plan, or 2014 Plan or 2016 Plan, as applicable.(2)These market values are determined by multiplying the number of shares by the fair market value per share of common stock on December 29, 2023 (the last trading day of 2023), or $62.44.(3)Twenty-five percent (25%) of the shares (rounded down to the nearest whole number of shares) vest on each of the first four anniversaries of the vesting commencement date (January 1, 2016), subject to continued service with us through each applicable vesting date.(4)Twenty-five percent (25%) of the shares (rounded down to the nearest whole number of shares) vest on each of the first four anniversaries of the vesting commencement date (March 3, 2014), subject to continued service with us through each applicable vesting date.(5)Twenty-five percent (25%) of the shares (rounded down to the nearest whole number of shares) vest on each of the first four anniversaries of the vesting commencement date (September 27, 2016), subject to continued service with us through each applicable vesting date.(6)Twenty-five percent (25%) of the shares (rounded down to the nearest whole number of shares) vest on each of the first four anniversaries of the vesting commencement date (January 20, 2015), subject to continued service with us through each applicable vesting date.Ms. Tucker received two stock option awards in 2016.Performance-Based Option. The first stock option award is the Performance-Based Option covering 482,800 shares of our common stock. The shares subject to the Performance-Based Option vest based on achievement of certain performance metrics and Ms. Tucker’s continued service with us through the date on which achievement is determined by our board of directors or its authorized committee. For the period beginning on January 1, 2016 and ending on December 31, 2019, or the Performance Period, if we achieve yearly cash flow targets as determined by our board of directors concurrently with the annual budget process for each of our fiscal years, or the Cash Flow Metric, then the Performance-Based Option vests based on the extent of our achievement of cumulative annual recurring revenue targets during the Performance Period. If our board of directors determines that the Cash Flow Metric was met during the Performance Period but we did not achieve the full cumulative annual recurring revenue targets during the Performance Period, then the portion of the Performance-Based Option that becomes eligible to vest and become exercisable but failed to vest during the Performance Period may be eligible to vest and becomes exercisable based on the extent of our achievement of an additional cash flow target for 2020 and a cumulative annual recurring revenue target during the period beginning on January 1, 2016 and ending on December 31, 2020.If, upon a “change of control” (as defined in Ms. Tucker’s employment agreement), the Performance-Based Option is not vested and exercisable and is not assumed or substituted for, then it is intended that, immediately prior to such change of control, the Performance-Based Option will vest as to 100% of the shares subject to the Performance-Based Option. If, upon a change of control, the Performance-Based Option is assumed and substituted for and cumulative annual recurring revenue thresholds are met (which are based on the year in which the change of control occurs), then, immediately prior to the change of control, the Performance-Based Option will vest and become exercisable as to the number of shares subject to the Performance-Based Option equal to 1/48th of the number of shares subject to the Performance-Based Option multiplied by the total number of completed months between the date the Performance-Based Option is granted and the consummation of the change of control, rounded down to the nearest whole share, and the remaining shares will become vested and exercisable at a rate of 1/48th of the number of shares subject to the Performance-Based Option per month through the four year anniversary of the date the Performance-Based Option is granted, subject to Ms. Tucker’s continued service with us through each such vesting date.Time-Based Option. The second stock option award is the Time-Based Option covering 96,560 shares of our common stock. 25% of the shares subject to the Time-Based Option (rounded down to the nearest whole number of shares) will vest on each of the first four anniversaries of the Time-Based Option’s vesting commencement date (January 20, 2015), subject to Ms. Tucker’s continued service with us through each suchapplicable vesting date. If, upon a changeAt December 31, 2023, all shares were vested.(4)Twenty-five percent (25%) of control, the Time-Based Option is not vestedshares (rounded down to the nearest whole number of shares) vest on each of the first four anniversaries of the vesting commencement date (January 1, 2016), subject to continued service with us through each applicable vesting date. At December 31, 2023, all shares were vested.(5)Twenty-five percent (25%) of the shares (rounded down to the nearest whole number of shares) vest on each of the first four anniversaries of the vesting commencement date (September 27, 2016), subject to continued service with us through each applicable vesting date. At December 31, 2023, all shares were vested.(6)Twenty-five percent (25%) of the shares underlying this option vest on the first anniversary of the vesting commencement date (February 20, 2018), and exercisable and is not assumed or substituted for, then immediately prior to such change of control, the Time-Based Option will vest as to 100%1/16th of the shares subject to the Time-Based Option. If, upon a changeoption vest every three months thereafter on the same day of control, the Time-Based Option is assumed or substituted formonth as the vesting commencement date, subject to continued service with us through each vesting date. At December 31, 2023, all shares were vested.(7)Twenty-five percent (25%) of the shares underlying this option vest on the first anniversary of the vesting commencement date (August 20, 2018) and Ms. Tucker experiences a qualifying termination1/16th of the shares subject to this option vest every three months thereafter on the same day of the month as described in her employment agreement, then the Time-Based Option willvesting commencement date, subject to continued service with us through each vesting date. At December 31, 2023, all shares were vested.(8)One hundred percent (100%) of the shares underlying this option vested on May 7, 2019. At December 31, 2023, all shares were vested.(9)Twenty-five percent (25%) of the shares underlying this option vest as to 100%on the first anniversary of the vesting commencement date (February 20, 2019), and 1/16th of the shares subject to the Time-Based Option.Bothoption vest every three months thereafter on the Performance-Based Optionsame day of the month as the vesting commencement date, subject to continued service with us through each vesting date. At December 31, 2023, all shares were vested.(10)Twenty-five percent (25%) of the shares underlying this option vest on the first anniversary of the vesting commencement date (May 20, 2020), and 1/16th of the Time-Based Option were grantedshares subject to the termsoption vest every three months thereafter on the same day of the month as the vesting commencement date, subject to continued service with us through each vesting date.(11)Twenty-five percent (25%) of the shares underlying this RSU award vest on the first anniversary of the vesting commencement date (May 20, 2020) and conditions1/16th of our 2014 Planthe shares underlying this RSU award will vest every three months thereafter on the same day of the month as the vesting commencement date, subject to continued service with us through each vesting date.(12)Fifty percent (50%) of the shares underlying this option vest on each of February 20, 2022 and the option agreements thereunder.February 20, 2023, subject to continued service with us through each vesting date. At December 31, 2023, all shares were vested.5229(14)Twenty-five percent (25%) of the shares underlying this RSU award vest on the first anniversary of the vesting commencement date (February 20, 2021) and 1/16th of the shares underlying this RSU award will vest every three months thereafter on the same day of the month as the vesting commencement date, subject to continued service with us through each vesting date.(15)Fifty percent (50%) of the shares underlying this RSU award vest February 20, 2023 and February 20, 2024, subject to continued service with us through each vesting date.(16)Twenty-five percent (25%) of the shares underlying this RSU award vest on the first anniversary of the vesting commencement date (February 20, 2022), and 1/16th of the shares underlying this RSU award will vest every three months thereafter on the same day of the month as the vesting commencement date, subject to continued service with us through each applicable vesting date.(17)Two-thirds of the shares underlying this RSU award vest on the two-year anniversary of the vesting commencement date (November 20, 2022) and one-third of the shares underlying this RSU award will vest on the third anniversary of the vesting commencement date, subject to continued service with us through each vesting date.(18)Twelve and a half percent (12.5%) of the shares underlying this RSU award vest on the three-month anniversary of the vesting commencement date (November 20, 2022) and 12.5% will vest every three months thereafter on the same day of the month as the vesting commencement date, subject to continued service with us through each applicable vesting date.(19)Twenty-five percent (25%) of the shares underlying this RSU award vest on the first anniversary of the vesting commencement date (February 20, 2023), and 1/16th of the shares underlying this RSU award will vest every three months thereafter on the same day of the month as the vesting commencement date, subject to continued service with us through each applicable vesting date.(20)Reflects one-third of the total number of shares underlying the 2022 PSU award, for which performance metrics were established on March 7, 2023 for the 2023 performance period. These shares will vest on February 20, 2024, subject to the satisfaction of applicable performance-based conditions for the calendar year preceding the vesting date, which performance-based conditions are to be determined on an annual basis, and in each case subject to continued service with us through the applicable vesting date.(21)Reflects one-third of the total number of shares underlying this PSU award. One-third of the total number of shares will vest on each of February 20, 2024, February 20, 2025, and February 20, 2026, in each case subject to the satisfaction of applicable performance-based conditions for the calendar year preceding the vesting date, which performance-based conditions will be determined on an annual basis, and in each case subject to continued service with us through each applicable vesting date. Please refer to the section titled “2023 PSU Performance Matrix” above. The grant date and performance-based conditions for calendar year 2024 and calendar year 2025 have not yet been established. If the full amount was granted on March 7, 2023 for each of Ms. Tucker, Mr. Ryan, Mr. Partin, Ms. Morgan-Prager, and Mr. Woodhams, the value of such awards at December 31, 2023 would be, $4,363,307, $4,363,307, $2,181,654, $1,439,866, and $1,309,367, for Ms. Tucker, Mr. Ryan, Mr. Partin, Ms. Morgan-Prager, and Mr. Woodhams, respectively.Stock Option Exercises and Stock Awards Vested During 2023The following table sets forth the number of shares acquired and the value realized upon exercise of stock options during 2023 by each of our NEOs. The value realized on exercise of stock options is calculated based on the difference between the market price of our common stock upon exercise and the exercise price of the stock options.Option Awards Stock Awards Named Executive Officer Number of Shares Acquired on Exercise (#)(1)Value Realized on Exercise($)(2)Number of Shares Acquired on Vesting (#) Value Realized on Vesting
($)Therese Tucker — — 73,541 4,903,746 Owen Ryan — — 3,401 182,056 Marc Huffman 262,690 5,739,781 55,734 3,620,615 Mark Partin 45,000 2,398,201 38,708 2,461,799 Karole Morgan-Prager — — 17,560 1,126,042 Mark Woodhams — — 19,751 1,270,952 _________________(1)Reflects the aggregate number of shares of common stock underlying the stock options that were exercised in 2023.(2)Calculated by multiplying (i) the difference between (x) the sale price for shares of common stock sold concurrently with the exercise of an option, and if not, the fair market value of common stock on the option exercise date, which was determined using the closing price on NASDAQ of a share of common stock on the option exercise date, and (y) the exercise price of the option, by (ii) the number of shares of common stock acquired upon exercise.53TABLE OF CONTENTSExecutive Employment ArrangementsPotential Payments Upon Termination or Change of ControlThe following table provides information concerning the estimated payments and benefits that would be provided in the circumstances described below, assuming that the triggering event took place on December 31, 2023, the last day of our fiscal year.Named Executive Officer Qualifying Termination
Not in Connection with a
Change of Control ($)Qualifying Termination in Connection with aChange of Control ($)(1)Therese Tucker Cash severance(2)485,000 1,212,500 Continued health coverage(3)23,375 34,650 Accelerated equity vesting(4)(5)— 10,668,910 Owen Ryan Cash severance(2)485,000 1,127,459 Continued health coverage(3)32,106 47,592 Accelerated equity vesting(4)(5)— 7,272,199 Mark Partin Cash severance(6)212,500 425,000 Continued health coverage(3)16,245 32,106 Accelerated equity vesting(4)(7)— 9,616,168 Karole Morgan-Prager Cash severance(6)202,500 405,000 Continued health coverage(3)4,863 9,611 Accelerated equity vesting(4)(7)— 6,099,150 Mark Woodhams Cash severance(6)204,500 409,000 Continued health coverage(3)14,085 27,838 Accelerated equity vesting(4)(7)— 5,359,548 _________________(1)A qualifying termination of employment is considered “in connection with a change of control” if such termination occurs within the period commencing on (or three (3) months before for Ms. Tucker or Mr. Ryan) and ending twelve (12) months after a “change of control”.(2)These estimates of cash severance payable to Ms. Tucker and Mr. Ryan include: for a qualifying termination not in connection with a change in control, lump sum payments of twelve (12) months of base salary and COBRA premium costs; and for a qualifying termination in connection with a change of control, lump sum payment of eighteen (18) months of base salary and COBRA premium costs and prorated portion of the executive’s target annual bonus for the year of termination.(3)These estimates of continued coverage reflect the present value of monthly COBRA premium payments for the applicable severance period.(4)For purposes of valuing accelerated vesting, the values indicated in the table are calculated, with respect to stock options, as the aggregate difference between $62.44, the closing price of a share of our common stock on December 29, 2023 (the last trading day of 2023), and the exercise price of the applicable option, multiplied by the number of unvested shares accelerated, with respect to RSUs, $62.44 multiplied by the number of unvested RSUs accelerated, and, with respect to PSUs, $62.44 multiplied by the number of PSUs for which performance conditions would be satisfied, or for which time-based vesting requirements would be accelerated.(5)These estimates of accelerated equity vesting for Ms. Tucker and Mr. Ryan include: for a qualifying termination in connection with a change of control, acceleration of one hundred percent (100%) of the executive’s then-outstanding equity awards.(6)These estimates of cash severance payable to Mr. Partin, Ms. Morgan-Prager and Mr. Woodhams include: for a qualifying termination not in connection with a change of control, a lump sum payment of 6 months of base salary; and for a qualifying termination in connection with a change of control, a lump sum payment of twelve (12) months of base salary.(7)These estimates of accelerated equity vesting for Mr. Partin, Ms. Morgan-Prager and Mr. Woodhams include: for termination upon a qualifying termination in connection with a change of control, acceleration of one hundred percent (100%) of the executive’s then-outstanding and unvested equity awards granted in 2020 through 2022 or in connection with his or her hiring or promotion, as applicable.Therese Tucker. On August 24, 2016, weTucker and Owen RyanWe entered into an employment agreement with Therese Tucker, our Chief Executive Officer. The employment agreement has an initial term of three years from January 1, 2016 and is expected to automatically renew on each year thereafter, unless we or Ms. Tucker provides the other party at least 30 days written notice. In the event of a “change in control” (as defined in Ms. Tucker’s agreement), the term will extend for an additional two years from the date of such change in control.The employment agreement provides Ms. Tucker with an initial annual base salary of $350,000 and an on-target bonus equal to 100% of her base salary, based upon achievement of performance objectives to be determined by our compensation committee.Ms. Tucker’s employment agreement also provides that if her employment is terminated by us without “cause” (excluding by death or disability), we decide to not renew Ms. Tucker’s agreement, or Ms. Tucker resigns for “good reason” (as such terms are defined in Ms. Tucker’s agreement), Ms. Tucker will receive (i) a lump sum payment equal to 18 months of Ms. Tucker’s base salary then in effect; (ii) a lump sum payment equal to the premium costs for Ms. Tucker and her eligible dependents to continue health insurance coverage under COBRAMr. Ryan that provide for 18 months; (iii) a lump sum amount equal to the prorated portion of Ms. Tucker’s annual bonus for the year of termination that would have been paid to Ms. Tucker had Ms. Tucker been employed by us for the entire fiscal year of termination, based on actual performance for the year (and assuming any individual performance goals would have been met at target levels); and (iv) a lump sum amount equal to the earned but unpaid bonus for the prior fiscal year, if any.Ms. Tucker’s employment agreement also provides that if Ms. Tucker’s employment is terminated by us without “cause” (excluding by death or disability), we decide to not renew Ms. Tucker’s agreement, or Ms. Tucker resigns for “good reason” and such termination occurs in connection with, or within three months before or 24 months after a “change of control” (as such term is expected to be defined in Ms. Tucker’s agreement), Ms. Tucker will receive (i) a lump sum payment equal to 12 months of Ms. Tucker’s base salary then in effect, or, if greater, as in effect immediately prior to the change of control; (ii) a lump sum payment equal to the premium costs for Ms. Tucker and her eligible dependents to continue health insurance coverage under COBRA for 12 months; (iii) a lump sum amount equal to the earned but unpaid bonus for the prior fiscal year, if any; and (iv) 100% of the shares subject to Ms. Tucker’s outstanding Company equity awards will vest and, to the extent applicable, become exercisable.Ms. Tucker’s employment agreement also provides that if her employment is terminated due to her death or disability, Ms. Tucker will receive (i) a lump sum amount equal to the earned but unpaid bonus for the prior fiscal year, if any and (ii) a lump sum amount equal to the Ms. Tucker’s target bonus, pro-rated to reflect time served in the year of termination.Any receipt of severance benefits by Ms. Tucker will be contingent upon her execution and non-revocation of a separation agreement and release of claims against us. In the event any of the payments provided for under Ms. Tucker’s employment agreement or otherwise payable to Ms. Tucker would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, or the Code, could be subject to the related excise tax under Section 4999 of the Code, she would be entitled to receive either full payment of benefits or such lesser amount which would result in no portion of the benefits being subject to the excise tax, whichever results in the greater amount of after-tax benefits to her. Ms. Tucker’s employment agreement does not require us to provide any tax gross-up payments.Mark Partin. On September 29, 2016, we entered into a confirmatory employment letter with Mr. Partin. The confirmatory employment letter has no specific term and provides for at-will employment. The confirmatory employment letter supersedes Mr. Partin’s original employment offer letter. The vesting accelerationcontrol and severance benefits have been replaced by the Policy as describedunder certain circumstances. See “Executive Employment Arrangements—54Mark Partin, Karole Morgan-Prager, and Mark WoodhamsOur Change in the “Change of Control and Severance Policy” below. Mr. Partin is also eligible to receive severance benefits as described in the “Change of Control and Severance Policy” below. Mr. Partin’s current annual base salary is $365,000 and Mr. Partin’s current annual on-target bonus is 50% of his annual base salary.Chris Murphy. On September 29, 2016, we entered into a confirmatory employment letter with Mr. Murphy. This employment letter has no specific term and provides for at-will employment. The confirmatory employment letter supersedes Mr. Murphy’s original employment offer letter. The vesting acceleration has been replaced by the Policy described in the “Change of Control and Severance Policy” below. Mr. Murphy is also eligible to30receive severance benefits as described in the “Change of Control and Severance Policy” below. Mr. Murphy’s current annual salary is $350,000 and Mr. Murphy’s current annual on-target bonus is 100% of his annual base salary.Change of Control and Severance PolicyOur board of directors approved provides for the following change of control and severance benefits for our executive officers (including Messrs.Mr. Partin, Ms. Morgan-Prager and Murphy) and other key employees, other than Ms. Tucker, that are set forth in our Change of Control and Severance policy, or the Policy:If we terminate anthe executive officer’s employment other than for “cause,” death or “disability” or such participantexecutive officer resigns for “good reason” during the period from the period beginning on a “change of control” (as such terms are defined in the Policy) and ending 12 months following a change of control (the “change of control period”), such executive officer will be eligible to receive the following severance benefits (less applicable tax withholdings):•100% of the executive officer’s then-outstanding and unvested equity awards granted in 2020 through 2022 or in connection with his or her hiring or promotion, as applicable, will become fully vested and exercisable and any applicable performance goals will be deemed achieved at 100% of target levels;•A lump sum cash amount equal to six monthsone year of the executive officer’s base salary in effect immediately prior to the termination (or if the termination is due to a resignation for good reason based on a material reduction in base salary, then the executive officer’s annual base salary in effect immediately prior to such reduction) or the change of control, whichever is greater; and•Payment or reimbursement of continued health coverage for the executive officer and the executive officer’s eligible dependents under COBRA for a period of up to 12 months or a taxable lump sum payment in lieu of payment or reimbursement, as applicable.If we terminate an executive officer’s employment other than for “cause,” death, or “disability” outside of the applicable change of control period, such executive officer will be eligible to receive the following severance benefits (less applicable tax withholdings):•A lump sum cash amount equal to six months of the executive officer’s base salary in effect immediately prior to the termination; and•Payment or reimbursement of continued health coverage for the executive officer and the executive officer’s eligible dependents under COBRA for a period of up to six months or a taxable lump sum payment in lieu of payment or reimbursement, as applicable.If we terminate an executive officer’s employment other than for “cause,” death, or “disability” outside of the change of control period, such executive officer will be eligible to receive the following severance benefits (less applicable tax withholdings):A lump sum cash amount equal to six months of the executive officer’s base salary in effect immediately prior to the termination; andPayment or reimbursement of continued health coverage for the executive officer and the executive officer’s eligible dependents under COBRA for a period of up to six months or a taxable lump sum payment in lieu of payment or reimbursement, as applicable.We maintainMarc HuffmanOn March 5, 2023, we entered into a tax-qualified retirement plan, or our 401(k) plan, that provides eligible employeesseparation agreement and release with an opportunity to save for retirement on a tax-advantaged basis. Eligible employees are able to participateMr. Huffman in connection with his separation from the 401(k) planCompany, effective as of March 6, 2023. Because Mr. Huffman’s separation was a termination without cause under the first dayPolicy, in accordance with Mr. Huffman’s existing rights under the Policy for a termination without cause, under the terms of that separation agreement, in exchange for Mr. Huffman’s written release, we provided Mr. Huffman with payment of 12 months of salary with a total value of $500,000 and continuation of benefits for 12 months with a value of $18,474, as well as accrued compensation through the monthdate of Mr. Huffman’s departure. In addition, pursuant to that separation agreement, Mr. Huffman agreed to provide certain consulting services for 12 months following the date they meetend of his employment with the 401(k) plan’s eligibility requirements,Company during which time his time-based equity awards continued to vest based on the original terms of such awards and participants are able to defer up to 100% of their eligible compensation subject to applicable annual Code limits. All participants’ interestshe was paid $80,000 in their deferrals are 100% vested when contributed. The 401(k) plan permits us to make matching contributions and profit sharing contributions to eligible participants. In 2017, we paid discretionary matching contributions that vest over a 3-year period.consulting fees.5531The following table summarizes information about our equity compensation plans as of December 31, 2017.2023. Information is included for equity compensation plans approved by our stockholders. We do not have any non-stockholder approved equity compensation plans.Plan Category(a) Number
of Securities
to be Issued
Upon
Exercise of
Outstanding
Options,
Warrants
and Rights(b) Weighted-
average
Exercise
Price of
Outstanding
Options,
Warrants
and Rights(c) Number of
Securities
Remaining
Available for
Future
Issuance
Under Equity
Compensation
Plans
(excluding
securities
reflected in
column (a))Equity compensation plans approved by security holders: 5,019,083(1) $13.90(2) 8,344,315(3) Equity compensation plans not approved by security holders: — — — Total 5,019,083 $13.90 8,344,315 Plan Category (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (b) Weighted-average Exercise Price of Outstanding Options, Warrants and Rights (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 4,249,082 (1) $45.67 (2) 19,631,698 (3) Equity compensation plans not approved by security holders — — — Total 4,249,082 $45.67 19,631,698 _________________(1)The amount consists of (i) 1,693,238 options to purchase shares of our common stock under our 2016 Plan and 2014 Plan that contain service-only vesting conditions; (ii) 2,207,925 shares subject to outstanding RSUs; and (iii) 347,919 shares subject to outstanding RSUs with service and performance conditions.(2)Indicates a weighted average price for outstanding options to purchase 1,693,238 shares of our common stock under our 2016 Plan and 2014 Plan that contain service-only vesting conditions and does not reflect the shares that will be issued upon the vesting of outstanding awards of RSUs, which have no exercise price.(3)Consists of 18,881,575 shares of our common stock reserved for issuance under our 2016 Plan and 750,123 shares of our common stock reserved for issuance under our 2018 Employee Stock Purchase Plan. Our 2016 Plan provides that on the first day of each fiscal year beginning with the 2017 fiscal year, the number of shares of our common stock available for issuance thereunder will be increased in an amount equal to the least of (i) 6,196,000 shares, (ii) 5% of the total number of shares of our common stock outstanding on the last day of the immediately preceding fiscal year or (iii) a lower number of shares determined by our Board or a committee thereof. On January 1, 2024, the number of shares of our common stock reserved for issuance under our 2016 plan increased by 3,075,755 shares pursuant to this provision. This increase is not reflected in the table above.CEO Pay RatioUnder rules adopted pursuant to the Dodd-Frank Act, we are required to calculate and disclose the total compensation paid to our median paid employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to our Chief Executive Officer (the “CEO Pay Ratio”). The paragraphs that follow describe our methodology and the resulting CEO Pay Ratio.Measurement DateWe identified the median employee using our employee population on November 1, 2023 (including all employees, whether employed on a full-time, part-time, seasonal or temporary basis).Consistently Applied Compensation Measure (CACM)Under the relevant rules, we are required to identify the median employee by use of a “consistently applied compensation measure,” or CACM. We chose a CACM that closely approximates the annual target total direct compensation of our employees. Specifically, we identified the median employee by aggregating, for each employee: a) annual base pay, b) annual target cash incentive opportunity, and c) the estimated grant date fair value for equity awards granted as of November 1, 2023. In identifying the median employee, we converted compensation amounts paid in foreign currencies based on the applicable year-to-date average exchange rate as of November 1, 2023, and annualized the compensation values of individuals that joined our Company during 2023. We did not exclude workers in non-U.S. countries and did not make any cost-of-living adjustments.Methodology and Pay RatioAfter applying our CACM methodology, we identified a median employee with anomalous compensation characteristics. Therefore, we substituted an employee near the median whose compensation was viewed as more representative of our median employee. Once the median employee was identified, we calculated the median employee’s annual target total direct compensation in accordance with the requirements of the Summary Compensation Table.Our median employee compensation as calculated using Summary Compensation Table requirements was $174,313. Our Co-Chief Executive Officer, Therese Tucker’s, compensation as reported in the Summary Compensation Table was $8,527,312. Therefore, her CEO Pay Ratio for 2023 is approximately 49 to 1. Our Co-Chief Executive Officer, Owen Ryan’s, compensation56as reported in the Summary Compensation Table was $6,841,068. Therefore, his CEO Pay Ratio for 2023 is approximately 39 to 1.This information is being provided for compliance purposes and is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Neither the Compensation Committee nor management of the Company used the CEO Pay Ratio measure in making compensation decisions.57Pay Versus PerformanceUnder rules adopted pursuant to the Dodd-Frank Act, we are required to disclose certain information about the relationship between the compensation actually paid to our named executive officers and certain measures of Company performance. The material that follows is provided in compliance with these rules, however, additional information regarding our compensation philosophy, the structure of our performance-based compensation programs, and compensation decisions made this year is described above in our “Compensation Discussion and Analysis”.The following table provides information regarding compensation actually paid to our principal executive officer, or PEO, and other NEOs for each year from 2020 to 2023, compared to our TSR from December 31, 2019 through the end of each such year, and our net income and revenue for each such year.Year Summary Compensation Table Total for Tucker(1)(2)Compensation Actually Paid to Tucker(1)(3)Summary Compensation Table Total for Ryan(1)(2)Compensation Actually Paid to Ryan(1)(3)Summary Compensation Table Total for Huffman(1)(2)Compensation Actually Paid to Huffman(1)(3)Average Summary Compensation Table Total for Non-PEO Named Executive Officers(4)Average Compensation Actually Paid to Non-PEO Named Executive Officers(5)Value of Initial Fixed $100 Investment Based On: Net Income (in millions)(8)Revenue(in millions)(9)Total Shareholder Return(6)S&P 500 Software & Services Select IndexTotal Shareholder Return(7)2023 $ 8,527,312 $ 6,738,346 $ 6,841,068 $ 5,553,701 $ 702,699 $ (17,755,110) $ 3,430,050 $ 1,895,498 $121 $151 $53 $590 2022 $ — $ — $ — $ — $ 21,871,907 $ 14,430,973 $ 5,676,538 $ 1,071,621 $130 $109 $(29) $523 2021 $ — $ — $ — $ — $ 6,046,686 $ (706,678) $ 3,169,239 $ (2,564,663) $201 $165 $(115) $426 2020 $ 8,437,695 $ 34,909,416 $ — $ — $ — $ — $ 4,066,289 $ 20,466,019 $259 $153 $(47) $352 _________________(1)Our PEO for 2020 was Therese Tucker. Our PEO for 2021 and 2022 was Marc Huffman, who succeeded Ms. Tucker as our Chief Executive Officer as of January 1, 2021. Mr. Huffman resigned as CEO on March 6, 2023. Ms. Tucker and Owen Ryan were appointed as Co-CEOs effective March 6, 2023.(2)Represents the total compensation paid to our PEO in each listed year, as shown in our Summary Compensation Table for such listed year.(3)Represents the compensation actually paid to each PEO. Compensation actually paid does not mean that our PEO was actually paid those amounts in the listed year. This dollar amount is derived from the starting point of Summary Compensation Table total compensation under the methodology prescribed under the SEC's rules, as shown in the table below.Therese Tucker Owen Ryan Marc Huffman Summary compensation table total $ 8,527,312 $ 6,841,068 $ 702,699 Subtract grant date fair value of option awards and stock awards granted in fiscal year (7,851,384) (6,258,431) — Add fair value at fiscal year-end of outstanding and unvested option awards and stock awards granted in fiscal year 5,757,084 5,017,794 — Adjust for change in fair value of outstanding and unvested option awards and stock awards granted in prior fiscal years (286,778) — (65,934) Add fair value at vesting of option awards and stock awards granted in fiscal year that vested during fiscal year 695,807 — — Adjust for change in fair value as of vesting date of option awards and stock awards granted in prior fiscal years for which applicable vesting conditions were satisfied during fiscal year (103,695) (46,730) (861,145) Subtract fair value as of prior fiscal year-end of option awards and stock awards granted in prior fiscal years that failed to meet applicable vesting conditions during fiscal year — — (17,530,730) Compensation actually paid $ 6,738,346 $ 5,553,701 $ (17,755,110) *The assumptions used for determining the fair values of outstanding and unvested option awards shown in this table are different from those used to determine the fair values disclosed as of the grant date of such awards. The assumptions used for determining fair values shown in this table are: 3.80-4.82 years for Expected life, 58.99% - 61.98% for Volatility, 3.76% - 4.48% for the Risk-free rate, and 0% for the Expected dividend yield.(4)Represents the average of the total compensation paid to each of our NEOs other than our PEO in each listed year, as shown in our Summary Compensation Table for such listed year. The names of our NEOs other than our PEO for each such year are listed in the table below.2023 2022 2021 2020 Mark Partin Therese Tucker Therese Tucker Marc Huffman Karole Morgan-Prager Mark Partin Mark Partin Mark Partin Mark Woodhams Karole Morgan-Prager Peter Hirsch Karole Morgan-Prager Mark Woodhams Mark Woodhams Peter Hirsch 58(5)This figure is the average of compensation actually paid for our NEOs other than our PEO in 2023. Compensation actually paid does not mean that these NEOs were actually paid those amounts in the listed year, but this is a dollar amount derived from the starting point of Summary Compensation Table total compensation under the methodology prescribed under the SEC's rules as shown in the table below.2023 Summary compensation table total (1)$The amount consists3,430,050 Subtract grant date fair value of options to purchase sharesoption awards and stock awards granted in fiscal year(2,873,555) Add fair value at fiscal year-end of our commonoutstanding and unvested option awards and stock under our 2016 Planawards granted in fiscal year2,106,038 Adjust for change in fair value of outstanding and 2014 Planunvested option awards and stock awards granted in prior fiscal years(354,091) Add fair value at vesting of option awards and stock awards granted in fiscal year that contain service-only vesting conditions. The amount excludes options granted to purchase 682,800 shares of common stock at an exercise price of $14.00 per share to two executive officersvested during fiscal 2016year— Adjust for change in fair value as of vesting date of option awards and stock awards granted in prior fiscal years for which applicable vesting conditions were satisfied during fiscal year (412,944) Subtract fair value as of prior fiscal year-end of option awards and stock awards granted in prior fiscal years that vest upon meeting certain performancefailed to meet applicable vesting conditions and continued service.(2)Indicates a weighted average price for outstanding options to purchase 5,019,083 shares of our common stock under our 2016 Plan and 2014 Plan that contain service-only vesting conditions.(3)Consists of 8,344,315 shares of our common stock reserved for issuance under our 2016 Plan. Our 2016 Plan provides that on the first day of eachduring fiscal year beginning with the 2017 fiscal year, the number of shares of our common stock available for issuance thereunder will be increased in an amount equal to the least of (i) 6,196,000 shares, (ii) 5% of the total number of shares of our common stock outstanding on the last day of the immediately preceding fiscal year or (iii) a lower number of shares determined by our board of directors or a committee thereof. On January 1, 2018, the number of shares of our common stock reserved for issuance under our 2016 Plan increased by 2,649,148 shares pursuant to this provision. This increase is not reflected in the table above.— Compensation actually paid $ 1,895,498 *The assumptions used for determining the fair values of outstanding and unvested option awards shown in this table are different from those used to determine the fair values disclosed as of the grant date of such awards. The assumptions used for determining fair values shown in the table are: 3.80-4.82 years for Expected life, 58.99% - 61.98% for Volatility, 3.76% - 4.48% for the Risk-free rate, and 0% for the Expected dividend yield.(6)TSR is calculated by assuming that a $100 investment was made on the day prior to the first fiscal year reported below and reinvesting all dividends until the last day of each reported fiscal year.(7)The peer group used is the S&P Software & Services Select index, as used in the Company's performance graph in our annual report. TSR is calculated by assuming that a $100 investment was made on the day prior to the first fiscal year reported below and reinvesting all dividends until the last day of each reported fiscal year.(8)The dollar amounts reported are the Company's GAAP net income reflected in the Company's audited financial statements.(9)In the Company's assessment, GAAP revenue is the most important financial performance measure (other than stock price) used by the Company in 2023 to link compensation actually paid to performance.Tabular List of Performance MeasuresThe list below includes the financial performance measures that in our assessment represent the most important financial performance measures used to link compensation actually paid to our NEOs, for 2023, to Company performance.Performance Measure8:•Revenue•Non-GAAP Net Income•Annualized Recurring Revenue (ARR)•Stock Price5932Compensation Actually Paid, as determined under rules adopted pursuant to the Dodd-Frank Act and reflected in the Pay Versus Performance table above (“CAP”) for our CEOs was lower than Summary Compensation Table Total compensation in 2023, aligning with the decrease in cumulative TSR over the period. Average NEO CAP reflected similar alignment, falling below Summary Compensation Table values. This pattern is also seen in prior years, reflecting the alignment of CEO and NEO compensation with shareholder returns.In 2023, our TSR underperformed the TSR of the S&P 500 Software & Services Select Index.Over the four-year period covered by this disclosure, both our TSR and our peer group TSR remain positive, reflecting the value provided to shareholders.Our net income was positive in 2023, reflecting a shift from the years 2020 – 2022. Despite this increase, CAP was lower than in prior years. This reflects a change from the directional alignment of our CEO CAP and average NEO CAP with net income from 2020 - 2022.Our revenue increased each year from 2020 to 2023. These increases are not directionally aligned with overall decreases in our CEO CAP and average NEO CAP from 2020 to 2023, but are directionally aligned with increases in our CEO CAP and average NEO CAP from 2021 to 2022._________________8 Please see Appendix A to this proxy statement for reconciliation of non-GAAP financial measures to GAAP financial measures.60SECURITY OWNERSHIPThe following table sets forth the beneficial ownership of our capital stock as of March 1, 2024 by:•each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our common stock;•each of our named executive officers;•each of our directors and nominees for director; and•all executive officers and directors as a group.Applicable percentage ownership is based on 61,794,000 shares of our common stock outstanding at March 1, 2024. Shares of common stock issuable upon the exercise of stock options exercisable or pursuant to RSUs that are subject to vesting conditions within 60 days of March 1, 2024, are deemed to be outstanding and beneficially owned by the person holding the options, or the RSUs, for the purpose of computing the percentage of beneficial ownership of that person and any group of which that person is a member, but are not deemed outstanding for the purpose of computing the percentage of beneficial ownership for any other person.Unless otherwise indicated in the footnotes below, each stockholder named in the following table possesses sole voting and investment power over the shares listed. The information does not necessarily indicate beneficial ownership for any other purpose. Unless otherwise noted below, the address of each person listed on the table is c/o BlackLine, Inc., 21300 Victory Boulevard, 12th Floor, Woodland Hills, CA 91367. Common Stock Name of Beneficial Owner Number Percent Greater than 5% Stockholders: Funds Affiliated with Vanguard(1)6,737,888 10.90% Funds Affiliated with Clearlake(2)5,712,300 9.24% Funds Affiliated with BlackRock(3)4,842,715 7.84% Funds Affiliated with FMR LLC(4)3,420,167 5.53% Named Executive Officers and Directors: Camille Drummond — * Marc Huffman(5)14,388 * Karole Morgan-Prager(6)240,785 * Mark Partin(7)474,895 * Brunilda Rios(8)1,146 * Owen Ryan(9)31,709 * Kevin Thompson(10)12,009 * Therese Tucker(11)4,812,403 7.73% Thomas Unterman(12)98,083 * Sophia Velastegui(13)8,977 * William Wagner — * Barbara Whye(14)5,378 * Mark Woodhams(15)197,833 * Mika Yamamoto(16)6,709 * Amit Yoran(17)1,146 * All current directors and executive officers as a group (14 people)(18)5,891,073 _________________*Represents beneficial ownership of less than 1%.(1)Based on a Schedule 13G filed February 13, 2024, by The Vanguard Group, or Vanguard, 100 Vanguard Blvd., Malvern, PA 19355, Vanguard may be deemed to be the beneficial owner of 6,737,888 shares of common stock, over which it has (i) sole dispositive power over 6,578,680 shares held by Vanguard, (ii) shared dispositive power over 159,208 shares, (iii) sole voting power over 0 shares, and (iv) shared voting power over 104,422 shares.(2)Based on a Schedule 13G filed February 14, 2023, by Clearlake Capital Group, L.P., or Clearlake, 233 Wilshire Blvd., Suite 800, Santa Monica, CA 90401, Clearlake may be deemed to be the beneficial owner of 5,712,300 shares of common stock, over which it has (i) sole dispositive power over 0 shares, (ii) shared dispositive power over 5,712,300 shares, (iii) sole voting power over 0 shares and (iv) shared voting power over 5,712,300 shares. Pursuant to the Schedule 13G, the shares are held for the account of Clearlake Capital Partners VII Finance, L.P., a Delaware limited partnership61(“Clearlake Capital Partners VII”). Clearlake Capital Group serves as the investment adviser and general partner to Clearlake Capital Partners VII. Jose Enrique Feliciano and Behdad Eghbali are Managing Partners of Clearlake Capital Group.(3)Based on a Schedule 13G filed January 26, 2024, by BlackRock, Inc., or BlackRock, 50 Hudson Yards, New York, NY 10001. BlackRock may be deemed to be the beneficial owner of 4,842,715 shares of common stock, over which it has (i) sole dispositive power over 4,842,715 shares held by BlackRock, (ii) shared dispositive power over 0 shares, (iii) sole voting power over 4,771,377 shares and (iv) shared voting power over 0 shares.(4)Based on a Schedule 13G filed February 9, 2024, by FMR LLC, or FMR, 245 Summer Street, Boston, MA 02210, FMR may be deemed to be the beneficial owner of 3,420,167 shares of common stock, over which it has (i) sole dispositive power over 3,420,167 shares, (ii) shared dispositive power over 0 shares, (iii) sole voting power over 3,418,758 shares and (iv) shared voting power over 0 shares.(5)Includes 14,388 shares of common stock held by Mr. Huffman.(6)Includes (i) 23,448 shares of common stock held by Ms. Morgan-Prager and (ii) 217,337 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 1, 2024.(7)Includes (i) 86,552 shares of common stock held by Mr. Partin and (ii) 388,343 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 1, 2024.(8)Includes 1,146 shares of common stock held by Ms. Rios.(9)Includes (i) 28,835 shares of common stock held by Mr. Ryan and (ii) 2,874 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 1, 2024.(10)Includes (i) 7,613 shares of common stock held by Mr. Thompson and (ii) 4,396 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 1, 2024.(11)Includes (i) 1,509,881 shares of common stock held by the Brian and Therese Tucker Living Trust dated 12/19/2014, (ii) 874,128 shares of common stock held by the Tucker Legacy Trust dated 12/30/2014, (iii) 577,200 shares of common stock held by the Isaac Tucker 2012 Irrevocable Gift Trust, (iv) 577,200 shares of common stock held by the Roseanna Tucker 2012 Irrevocable Gift Trust, (v) 250,916 shares of common stock held by the Tucker-Seimetz Safety Net Trust dated 09/28/2015, (vi) 54,074 shares of common stock held by the Claire Seimetz 2015 Trust dated 9/28/2015, (vii) 100,178 shares of common stock held by the Tucker Family CLAT, (viii) 129,897 shares of common stock held by the Tucker Legacy Trust II, (ix) 100,178 shares of common stock held by the Brian & Therese Tucker Charitable Remainder Trust, (x) 170,205 shares of common stock held by Therese Tucker, and (xi) 468,546 shares of common stock subject to options which are exercisable within 60 days of March 1, 2024. Ms. Tucker has shared voting and dispositive power over 1,409,193 shares.(12)Includes (i) 50,000 shares of common stock held by ETU Rustic Canyon Trust of which Mr. Unterman is the trustee and (ii) 48,083 shares of common stock held by Mr. Unterman.(13)Includes 8,977 shares of common stock held by Ms. Velastegui.(14)Includes 5,378 shares of common stock held by Ms. Whye.(15)Includes (i) 26,825 shares of common stock held by Mr. Woodhams and (ii) 171,008 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 1, 2024.(16)Includes (i) 5,943 shares of common stock held by Ms. Yamamoto and (ii) 766 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 1, 2024.(17)Includes 1,146 shares of common stock held by Mr. Yoran.(18)Includes 1,253,270 shares of common stock subject to options which are exercisable within 60 days of March 1, 2024.62Related Person TransactionsThe following is a summary of transactions since January 1, 20172023 to which we have been or will be a party, in which the amount involved exceeded or will exceed $120,000, and in which any of our executive officers, directors, nominees for director, promoters or beneficial holders of more than 5% of any class of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest, other than compensation arrangements which are described under the section of this proxy statement titled “Executive Compensation.Compensation Discussion and Analysis.”Stockholders’ AgreementWe are party to the Stockholders’ Agreement, which contains specific rights, obligations and agreements of our Principal StockholdersStockholder Parties as owners of our common stock. In addition, the Stockholders’ Agreement contains provisions related to the composition of our board of directors and its committees,Board, which are discussed under the section titled “Board of Directors and Corporate Governance—CompositionGovernance-Composition of the Board.Board.”Voting Agreement.AgreementUnder the Stockholders’ Agreement, our Principal StockholdersStockholder Parties have agreed to take all necessary action, including casting all votes to which such existing owners are entitled to cast at any annual or special meeting of stockholders, so as to ensure that the composition of our board of directorsBoard and its committees complies with (and includes all of the nominees in accordance with) the provisions of the Stockholders’ Agreement related to the composition of our board of directors and its committees,Board, which are discussed under the section titled “Board of Directors and Corporate Governance—CompositionGovernance-Composition of the Board.Board.”Silver Lake Sumeru Approvals. Under the Stockholders’ Agreement and subject to our amended and restated certificate of incorporation and amended and restated bylaws, and applicable law, for so long as the Principal Stockholders collectively own or hold of record, directly or indirectly, in the aggregate at least 40% of their collective “Post-IPO Shares” (as defined in the Stockholders’ Agreement), as adjusted for any reorganization, recapitalization, stock dividend, stock split, reverse stock split or similar changes in the Company’s capitalization, the following actions will require the approval of our board of directors, including the affirmative vote of at least two Silver Lake Sumeru directors:any voluntary liquidation, winding up or dissolution or any action relating to a voluntary bankruptcy, reorganization or recapitalization of the Company or its subsidiaries;certain dispositions of assets with a value in excess of $50 million or entry into joint ventures requiring a capital contribution in excess of $50 million, in each case, by the Company or its subsidiaries;fundamental changes in the Company’s or its subsidiaries’ existing lines of business or the entry into a new significant line of business;any amendments to the Company’s amended and restated certificate of incorporation and amended and restated bylaws;incurrence of indebtedness in excess of $150 million;appointment or termination of the Chief Executive Officer; andchange of control transactions.Transfer Restrictions. Under the Stockholders’ Agreement, each of Iconiq, Ms. Tucker and Mr. Spanicciati have agreed, subject to certain limited exceptions, not to transfer, sell, exchange, assign, pledge, hypothecate, convey or otherwise dispose of or encumber any shares of our common stock without the consent of Silver Lake Sumeru until the earlier of (i) two years following the completion our initial public offering, or November 2, 2018, and (ii) Silver Lake Sumeru’s reduction of its holdings of common stock following our initial public offering by 50%. In connection with the sale of shares under our shelf registration statement on March 12, 2018, Silver Lake Sumeru’s ownership was reduced by more than 50% of its holdings of common stock following our initial public offering and these transfer restrictions were terminated.Drag Along Right. For so long as Silver Lake Sumeru holds greater than 10% of our common stock then outstanding, if Silver Lake Sumeru approves a change of control transaction, each of Iconiq, Ms. Tucker and33Mr. Spanicciati will be required to vote in favor of and not oppose such transaction and, if structured as a sale of shares, sell its shares to a prospective buyer on the same terms that are applicable to Silver Lake Sumeru.We are party to an Amended and Restated Registration Rights Agreement with our Principal Stockholders,Stockholder Parties, dated as of October 27, 2016 or the (“Registration Rights Agreement.Agreement”). Under the Registration Rights Agreement, our Principal Stockholders areMs. Tucker is entitled to certain S-3 registration rights with respectand we will be required to the registration of their shares under the Securities Act. We will pay the registration expenses (other than underwriting discounts and commissions and stock transfer taxes) of the holders of the shares registered pursuantregistered. The registration rights have terminated as to the registrations described below.Silver Lake Sumeru will be entitled to certain S-1 and S-3 registration rights onother parties. We filed one or more occasions. Iconiq will be entitled to certain S-3 registration rights on one or more occasions. Beginning two years following the completion of our initial public offering, or November 2, 2018, Ms. Tucker and Mr. Spanicciati will also be entitled to certain S-3 registration rights on one or more occasions. In addition, if we or a Principal Stockholder proposes to register the offer and sale of our capital stock under the Securities Act, the other Principal Stockholders will be entitled to certain “piggyback” registration rights allowing the holders to include their shares in such registration, subject to certain marketing and other limitations set forth in the registration rights agreement. On November 13, 2017, we filed a shelf registration statement on Form S-3 in 2017 for the sale of 33,738,329 shares of our common stock then held by our Principal StockholdersStockholder Parties and for the sale of up $100,000,000 of any combination of our common stock, preferred stock, depositary shares, debt securities, warrants, subscription rights and units. This registration statement was declared effective by the SEC on November 17, 2017.The registration rights described above apply to (i) shares of our common stock held by our Principal StockholdersMs. Tucker and their respectiveher affiliates, and (ii) any of our capital stock (or that of our subsidiaries) issued or issuable with respect to the common stock described in clause (i) with respect to any dividend, distribution, recapitalization, reorganization, or certain other corporate transactions, or Registrable Securities. These registration rights are also for the benefit of any subsequent holder of Registrable Securities; provided that any particular securities will cease to be Registrable Securities when they have been sold in a registered public offering, sold in compliance with Rule 144 of the Securities Act or repurchased by us or our subsidiaries. In addition, with the consent of the companyCompany and holders of a majority of Registrable Securities, any Registrable Securities held by a person other than Silver Lake Sumeru and its affiliates will cease to be Registrable Securities if they can be sold without limitation under Rule 144 of the Securities Act.Employment ArrangementIsaac Tucker, who is the son of Ms. Tucker, our Chief Executive Officer, has been employed by us since 2006 and currently serves as Chief Product Officer. His 2017 total compensation, which is comprised of a base salary and bonus, was $292,000 and was in line with similar roles at the company. Effective December 1, 2017, Mr. Tucker’s base salary was $300,000 per year with a 40% bonus target.Indemnification of Officers and DirectorsOur amended and restated certificate of incorporation contains provisions that eliminate, to the maximum extent permitted by the General Corporation Law of the State of Delaware, the personal liability of our directors and executive officers for monetary damages for breach of their fiduciary duties as directors or officers. Our amended and restated certificate of incorporation and amended and restated bylaws provide that we must indemnify our directors and executive officers and may indemnify our employees and other agents to the fullest extent permitted by the General Corporation Law of the State of Delaware.Section 145 of the General Corporation Law of the State of Delaware provides that a corporation may indemnify any person made a party to an action by reason of the fact that he or she was a director, executive officer, employee or agent of the corporation or is or was serving at the request of a corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except63that, in the case of an action by or in right of the corporation, no indemnification may generally be made in respect of any claim as to which such person is adjudged to be liable to the corporation.34We have purchased and intend to maintain insurance on behalf of each and any person who is or was one of our directors or officers against any loss arising from any claim asserted against him or her and incurred by him or her in any such capacity, subject to certain exclusions.Certain RelationshipsFrom time to time, we do business with other companies affiliated with Silver Lake Sumeru and Iconiq. We believe that all such arrangements have been entered into in the ordinary course of business and have been conducted on an arms-length basis.Policies and Procedures for Related Party TransactionsIn connection with our initial public offering, our audit committeeAudit Committee and our board of directorsBoard approved a Related Party Transactions Policy which provides that our audit committeeAudit Committee is responsible for reviewing and approving any related party transaction, taking into account whether the transaction is on an arms-length basis, whether there are business reasons for the transaction, whether the transaction would impair a director’s independence and whether the related party transaction would present an improper conflict of interest. The Related Party Transaction Policy applies to any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we are to be a participant, the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest. Our full board of directorsBoard (with any interested director recusing him or herself) reviewed and approved our related party transactions prior to our initial public offering and following our initial public offering, our audit committeeAudit Committee will approve all of our related party transactions.We believe that we have executed all the transactions described above on terms no less favorable to us than we could have obtained from unaffiliated third parties. It is our intention to ensure that all future related party transactions are approved by our audit committee,Audit Committee, and are on terms no less favorable to us than those that we could obtain from unaffiliated third parties.6435The following table sets forth the beneficial ownership of our capital stock as of March 15, 2018 by:each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our common stock;OTHER MATTERSeach of our named executive officers;each of our directors and nominees for director; andall executive officers and directors as a group.Applicable percentage ownership is based on 53,442,175 shares of our common stock outstanding at March 15, 2018. Shares of common stock subject to options currently exercisable or exercisable within 60 days of March 15, 2018 which are subject to vesting conditions expected to occur within 60 days of March 15, 2018 are deemed to be outstanding and beneficially owned by the person holding the options for the purpose of computing the percentage of beneficial ownership of that person and any group of which that person is a member, but are not deemed outstanding for the purpose of computing the percentage of beneficial ownership for any other person.Unless otherwise indicated in the footnotes below, each stockholder named in the following table possesses sole voting and investment power over the shares listed. The information does not necessarily indicate beneficial ownership for any other purpose. Unless otherwise noted below, the address of each person listed on the table is c/o BlackLine, Inc., 21300 Victory Boulevard, 12th Floor, Woodland Hills, CA 91367. Common StockName of Beneficial OwnerNumberPercentGreater than 5% Stockholders: Funds Affiliated with Silver Lake Sumeru(1) 7,583,873 14.19%Funds Affiliated with ICONIQ(2) 4,701,176 8.80%Named Executive Officers and Directors: Jason Babcoke(3) — — John Brennan(4) — — William Griffith(5) 17,102 *Hollie Haynes(6) — — Chris Murphy(7) 462,070 *Mark Partin(8) 432,202 *Graham Smith(9) 50,000 *Mario Spanicciati(10) 2,856,091 5.34%Kevin Thompson(11) 5,245 *Therese Tucker(12) 6,008,280 11.23%Thomas Unterman(13) 164,307 *All directors and executive officers as a group (13 people)(14) 10,149,612 18.60%*Represents beneficial ownership of less than 1%.(1)Includes (i) 7,516,748 shares held by Silver Lake Sumeru Fund, L.P. (“SLS”), a Delaware limited partnership, and (ii) 67,125 shares held by Silver Lake Technology Investors Sumeru, L.P. (“SLTI”), a Delaware limited partnership (collectively, the “Silver Lake Sumeru Shares”). Silver Lake Technology Associates Sumeru, L.P. (the “Lower GP”), a Delaware limited partnership, is the general partner of each of SLS and SLTI. SLTA Sumeru (GP), L.L.C. (the “Upper GP”), a Delaware limited liability company, is the general partner of the Lower GP. Silver Lake Group, L.L.C. (“SLG”), a Delaware limited liability company, and Ajay Shah are the managing members of the Upper GP. The managing members of SLG are Michael Bingle, James Davidson, Egon Durban, Kenneth Hao and Greg Mondre (collectively, the “Managing Members”). The address for Messrs. Bingle and Mondre is c/o Silver Lake, 9 West 57th Street, 32nd Floor, New York, NY 10019. The address for Messrs. Davidson, Durban, Hao and Shah, SLS, SLTI, the Lower GP, the Upper GP and SLG is c/o Silver Lake, 2775 Sand Hill Road, Suite 100, Menlo Park, CA 94025. In connection with the sale of shares under our shelf registration statement on March 12, 2018, SLS and SLTI granted to the underwriters a 30-day option to purchase up to an additional 1,200,000 shares. If the underwriters exercise such option in full by April 11, 2018, SLS’s beneficial ownership would decrease by 1,189,379 shares of common stock and SLTI’s beneficial ownership would decrease by 10,621 shares of common stock.(2)Includes (i) 2,919,220 shares held by ICONIQ Strategic Partners, L.P. (“ICONIQ”), (ii) 732,666 shares held by ICONIQ Strategic Partners-B, L.P. (“ICONIQ B”), (iii) 916,983 shares held by ICONIQ Strategic Partners Co-Invest, L.P., BL Series (“ICONIQ BL”) and (iv) 132,307 shares held by ICONIQ Strategic Partners Co-Invest, L.P., BL 2 Series (“ICONIQ BL2”) (collectively, the “ICONIQ36Shares”). Iconiq Strategic Partners GP, L.P. (the “ICONIQ GP”), is the general partner of each of ICONIQ, ICONIQ B, ICONIQ BL and ICONIQ BL2. ICONIQ Strategic Partners TT GP, Ltd. (the “ICONIQ Parent GP”) is the general partner of the ICONIQ GP. Divesh Makan and William Griffith (collectively, the “Managing Holders”) are the sole equity holders and directors of the ICONIQ Parent GP. The addresses of each of the entities and individuals listed in this footnote are c/o ICONIQ Strategic Partners, 394 Pacific Avenue, 2nd Floor, San Francisco, CA 94111.(3)Mr. Babcoke, who is one of our directors, is a Principal of Silver Lake Sumeru. Mr. Babcoke has no voting or investment power over the Silver Lake Sumeru Shares. The address for Mr. Babcoke is c/o Silver Lake Sumeru, 2775 Sand Hill Road, Suite 100, Menlo Park, CA 94025.(4)Mr. Brennan, who is one of our directors, is a Managing Director of Silver Lake Sumeru. Mr. Brennan has no voting or investment power over the Silver Lake Sumeru Shares. The address for Mr. Brennan is c/o Silver Lake Sumeru, 2775 Sand Hill Road, Suite 100, Menlo Park, CA 94025.(5)Includes 17,102 shares of common stock held by a family trust of which Mr. Griffith controls. Mr. Griffith, who is one of our directors, is an equity holder and director of ICONIQ Parent GP. Mr. Griffith has voting and investment power over the ICONIQ Shares as described above in note 2. The address for Mr. Griffith is c/o ICONIQ Strategic Partners, 394 Pacific Avenue, 2nd Floor, San Francisco, CA 94111.(6)Ms. Haynes, who is one of our directors, is a Managing Director of Silver Lake Sumeru. Ms. Haynes has no voting or investment power over the Silver Lake Sumeru Shares. The address for Ms. Haynes is c/o Silver Lake Sumeru, 2775 Sand Hill Road, Suite 100, Menlo Park, CA 94025.(7)Includes 462,070 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 15, 2018.(8)Includes 432,202 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 15, 2018.(9)Includes (i) 25,000 shares of common stock held by Mr. Smith and (ii) 25,000 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 15, 2018.(10)Includes (i) 2,157,163 shares of common stock held by the Spanicciati Family 2013 Irrevocable Trust and (ii) 698,928 shares of common stock held by the Spanicciati Family 2013 Dynasty Trust.(11)Includes (i) 3,633 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 15, 2018 and (ii) 1,612 shares of common stock issuable pursuant to restricted stock units that will vest within 60 days of March 15, 2018.(12)Includes (i) 3,282,610 shares of common stock held by the Brian and Therese Tucker Living Trust dated 12/19/2014, (ii) 1,200,000 shares of common stock held by the Tucker Legacy Trust dated 12/30/2014, (iii) 577,200 shares of common stock held by the Isaac Tucker 2012 Irrevocable Trust, (iv) 577,200 shares of common stock held by the Roseanna Tucker 2012 Irrevocable Trust, (v) 250,916 shares of common stock held by the Tucker-Seimetz Safety Net GRAT dated 09/28/2015, (vi) 54,074 shares of common stock held by the Claire Seimetz 2015 Trust dated 9/28/2015, (vii) 18,000 shares of common stock held by Therese Tucker, and (viii) 48,280 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 15, 2018.(13)Includes (i) 100,000 shares of common stock held by ETU Rustic Canyon Trust of which Mr. Unterman is the trustee, (ii) 51,807 shares of common stock held by Thomas Unterman, (iii) and 12,500 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 15, 2018.(14)Includes 1,139,612 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 15, 2018.37Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities (collectively, the “Reporting Persons”), to file reports of ownership and changes of ownership on Forms 3, 4 and 5 with the SEC. Such directors, executive officers and 10% stockholdersReporting Persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.Based solely on our review of the copies of such forms we have received and written representations from certain reporting personsReporting Persons that they filed all required reports, we believe that all of our executive officers, directors and greater than 10% stockholders complied with all Section 16(a) filing requirements applicable to them with respect to transactions during 2017, with the exception noted below:A late Form 4 report was filed for Mario Spanicciati on December 1, 2017 to report a sale of 12,750 shares of common stock on November 27, 2017.them.20172023 Annual ReportOur financial statements for our fiscal year ended December 31, 20172023 are included in our 20172023 annual report, which we will make available to stockholders at the same time as this proxy statement. You may also obtain a copy of our 20172023 annual report, including the financial statements and the financial statement schedules, free of charge, by sending a written request to our Investor Relations department at BlackLine, Inc., 21300 Victory Boulevard, 12th floor, Woodland Hills, CA 91367, Attention: Investor Relations.Company WebsiteWe maintain a website at www.blackline.com. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this proxy statement, and references to our website address or links to information contained on our website in this proxy statement are inactive textual references only.Availability of BylawsA copy of our bylaws may be obtained by accessing BlackLine’s filings on the SEC’s website at www.sec.gov. You may also contact our corporate secretary at our principal executive offices for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.6538Stockholder Proposals for Inclusion in Proxy StatementStockholders may present proper proposals for inclusion in our proxy statement and for consideration at the next annual meeting of stockholders by submitting their proposals in writing to our corporate secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for our next annual meeting of stockholders, our corporate secretary must receive the written proposal at our principal executive offices not later than November 22, 2018.29, 2024. In addition, stockholder proposals must comply with the requirements of Rule 14a-8 under the Exchange Act regarding the inclusion of stockholder proposals in company-sponsoredCompany-sponsored proxy materials. Proposals should be addressed to:BlackLine, Inc.Attn: Corporate Secretary21300 Victory Boulevard, 12th FloorStockholder Proposals and Director Nominations Not for Inclusion in Proxy StatementOur bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders, but do not intend for the proposal to be included in our proxy statement and for stockholders to nominate directors for election at an annual meeting of stockholders. In order to be properly brought before our 20192025 annual meeting of stockholders, the stockholder must have given timely notice of such proposal or nomination, in proper written form. To be timely for our 20192025 annual meeting of stockholders, a stockholder’s notice of a matter that the stockholder wishes to present, or the person or persons the stockholder wishes to nominate as a director, must be delivered to our corporate secretary at our principal executive offices:•not earlier than January 6, 2019,11, 2025, and•not later than the close of business on February 5, 2019.10, 2025.
In addition, stockholders who intend to solicit proxies in support of director nominees other than the event thatCompany's nominees must also comply with the additional requirements of Rule 14a-19(b). If we hold our 20192025 annual meeting of stockholders more than 30 days before or more than 60 days after the one-year anniversary date of the 20182024 annual meeting, then such written notice must be received no earlier than the close of business on the 120th day before the 20192025 annual meeting and no later than the close of business on the later of the following two dates:
If a stockholder who has notified us of his, her or its intention to present a proposal at an annual meeting does not appear to present his, her or its proposal at such annual meeting, we are not required to present the proposal for a vote at such annual meeting. To be in proper written form, a stockholder’s notice must include the specified information concerning the proposal or nominee as described in our bylaws. Notices should be addressed to:
39
We know of no other matters to be submitted at the 20182024 annual meeting. If any other matters properly come before the 20182024 annual meeting, the persons named in the proxy will have discretion to vote the shares of our common stock they represent in accordance with their own judgment on such matters. Discretionary authority with respect to such other matters is granted by a properly submitted proxy.
40
Appendix A
| Year Ended December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Non-GAAP Operating Income: | |||||||||||
| Operating income (loss) | $ | 14,348 | $ | (56,198) | |||||||
| Amortization of intangible assets | 20,608 | 19,731 | |||||||||
Stock-based compensation(1) | 80,068 | 75,884 | |||||||||
| Change in fair value of contingent consideration | (33,549) | (35,130) | |||||||||
| Transaction-related costs | 5,078 | 16,831 | |||||||||
| Legal settlement costs | — | 1,709 | |||||||||
| Impairment of cloud computing implementation costs | — | 5,330 | |||||||||
| Restructuring costs | 10,964 | 3,841 | |||||||||
| Total non-GAAP operating income | $ | 97,517 | $ | 31,998 | |||||||
| GAAP operating margin | 2.4 | % | (10.7) | % | |||||||
| Non-GAAP operating margin | 16.5 | % | 6.1 | % | |||||||
| Year Ended December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Non-GAAP Net Income (Loss) Attributable to BlackLine, Inc.: | |||||||||||
| Net income (loss) attributable to BlackLine, Inc. | $ | 52,833 | $ | (29,391) | |||||||
| Benefit from income taxes related to acquisitions | (1,196) | (13,634) | |||||||||
| Amortization of intangible assets | 20,608 | 19,731 | |||||||||
Stock-based compensation(1) | 79,588 | 75,576 | |||||||||
| Amortization of debt issuance costs | 5,535 | 5,511 | |||||||||
| Change in fair value of contingent consideration | (33,549) | (35,130) | |||||||||
| Transaction-related costs | 5,078 | 16,831 | |||||||||
| Legal settlement costs | — | 1,709 | |||||||||
| Impairment of cloud computing implementation costs | — | 5,330 | |||||||||
| Restructuring costs | 10,964 | 3,841 | |||||||||
| Adjustment to redeemable non-controlling interest | 5,334 | (4,131) | |||||||||
| Total non-GAAP net income attributable to BlackLine, Inc. | $ | 145,195 | $ | 46,243 | |||||||
| Year Ended December 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Free Cash Flow: | |||||||||||
| Net cash provided by operating activities | $ | 126,613 | $ | 56,013 | |||||||
| Adjustments: | |||||||||||
| Capitalized software development costs | (21,644) | (19,208) | |||||||||
| Purchases of property and equipment | (5,953) | (10,974) | |||||||||
| Financed purchases of property and equipment | — | (84) | |||||||||
| Free cash flow | $ | 99,016 | $ | 25,747 | |||||||
1. Purpose. The purpose To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the Plan is to provide employeesnominee(s) on the line below. BLACKLINE, INC. 21300 VICTORY BLVD, 12TH FLOOR WOODLAND HILLS, CA 91367 01) Owen Ryan 02) Sophia Velastegui 03) William Wagner Nominees: 3. Approval, on a non-binding, advisory basis, of the Company2023 compensation of the Company's named executive officers. 2. To ratify the appointment of PricewaterhouseCoopers LLP ("PwC") as the Company's independent registered public accounting firm for its fiscal year ending December 31, 2024. 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. NOTE: In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting of Shareholders or any adjournments or postponements thereof. 1. Election of Directors The Board of Directors recommends you vote FOR the following: The Board of Directors recommends you vote FOR proposals 2 and its Designated Companies with3. VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on May 8, 2024. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an opportunityelectronic voting instruction form. During The Meeting - Go to purchase Common Stock through accumulated Contributions. The Company intendswww.virtualshareholdermeeting.com/BL2024 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 up until 11:59 p.m. Eastern Time on May 8, 2024. 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. SCAN TO VIEW MATERIALS & VOTEw
2. Definitions.
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the date of the appointment or election. For purposes ofdirected herein. If no such direction is made, this subsection (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or
For purposes of this definition, Personsproxy will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.
Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
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purposes of the 423 Component, only the Company and its Subsidiaries may be Designated Companies, provided, however that at any given time, a Subsidiary that is a Designated Company under the 423 Component shall not be a Designated Company under the Non-423 Component.
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closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination (or on the last preceding Trading Day if the date of determination is not a Trading Day), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
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3. Eligibility.
4. Offering Periods. The Plan will be implemented by consecutive, overlapping Offering Periods with a new Offering Period commencing on the first Trading Day on or after May 10 and November 10 each year, or on such other date as the Administrator will determine; provided, however, that the first Offering Period under the Plan will commence with the first Trading Day on or after November 10, 2018 and end on the first Trading Day on or before November 10, 2019. The Administrator will have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future Offerings without stockholder approval if such change is announced prior to the scheduled beginning of the first Offering Period to be affected thereafter; provided, however, that no Offering Period may last more than 27 months.
5. Participation. An Eligible Employee may participate in the Plan pursuant to Section 3(a) by (i) submitting to the Company’s stock administration office (or its designee), on or before a date determined by the Administrator prior to an applicable Enrollment Date, a properly completed subscription agreement authorizing Contributions in the form provided by the Administrator for such purpose, or (ii) following an electronic or other enrollment procedure determined by the Administrator, in either case on or before a date determined by the Administrator prior to an applicable Enrollment Date.
6. Contributions.
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Contributions made on such day applied to his or her account under the then-current Purchase Period or Offering Period). The Administrator, in its sole discretion, may permit all Participants in a specified Offering to contribute amounts to the Plan through payment by cash, check or other means set forth in the subscription agreement prior to each Exercise Date of each Purchase Period. A Participant’s subscription agreement will remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.
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Stock (or any other time that a taxable event related to the Plan occurs). At any time, the Company or the Employer may, but will not be obligated to, withhold from the Participant’s compensation the amount necessary for the Company or the Employer to meet applicable withholding obligations, including any withholding required to make available to the Company or the Employer any tax deductions or benefits attributable to the sale or early disposition of Common Stock by the Eligible Employee. In addition, the Company or the Employer may, but will not be obligated to, withhold from the proceeds of the sale of Common Stock or any other method of withholding the Company or the Employer deems appropriate to the extent permitted by U.S. Treasury Regulation Section 1.423 2(f).
7. Grant of Option. On the Enrollment Date of each Offering Period, each Eligible Employee participating in such Offering Period will be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of Common Stock determined by dividing such Eligible Employee’s Contributions accumulated prior to such Exercise Date and retained in the Eligible Employee’s account as of the Exercise Date by the applicable Purchase Price; provided that in no event will an Eligible Employee be permitted to purchase during each Purchase Period more than 2,000 shares of Common Stock (subject to any adjustment pursuant to Section 18) and provided further that such purchase will be subject to the limitations set forth in Sections 3(c) and 13 and in the subscription agreement. The Eligible Employee may accept the grant of such option by electing to participate in the Planvoted in accordance with the requirementsBoard of Section 5. The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of Common Stock that an Eligible Employee may purchase during each Purchase Period of an Offering Period. Exercise of the option will occur as provided in Section 8, unless the Participant has withdrawn pursuant to Section 10. The option will expire on the last day of the Offering Period.
8. Exercise of Option.
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9. Delivery. As soon as reasonably practicable after each Exercise Date on which a purchase of shares of Common Stock occurs, the Company will arrange the delivery to each Participant of the shares purchased upon exercise of his or her option in a form determined by the Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The Company may permit or require that shares be deposited directly with a broker designated by the Company or to a trustee or designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer. The Company may require that shares of Common Stock be retained with such broker, trustee, or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions or other dispositions of such shares. No Participant will have any voting, dividend, or other stockholder rights with respect to shares of Common Stock subject to any option granted under the Plan until such shares have been purchased and delivered to the Participant as provided in this Section 9.
10. Withdrawal.
11. Termination of Employment. Upon a Participant’s ceasing to be an Eligible Employee for any reason, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to such Participant’s account during the Offering Period but not yet used to purchase shares of Common Stock under the Plan will be returned to such Participant or, in the case of his or her death, to the person or persons entitled thereto, and such Participant’s option will be automatically terminated. Unless determined otherwise by the Administrator in a manner that, with respect to an Offering under the 423 Component, is permitted by, and compliant with, Section 423 of the Code, a Participant whose employment transfers between entities through a termination with an immediate rehire (with no break in service) by the Company or a Designated Company will not be treated as terminated under the Plan; however, if a Participant transfers from an Offering under the 423 Component to the Non-423 Component, the exercise of the option will be qualified under the 423 Component only to the extent it complies with Section 423 of the Code.
12. Interest. No interest will accruesigned on the Contributions of a participant in the Plan, except as may be required by Applicable Law, as determined by the Company, and if so required by the laws of a particular jurisdiction, shall, with respect to Offerings under the 423 Component, apply to all Participants in the relevant Offering, except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423 2(f).
13. Stock.
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14. Administration. The Plan will be administered by the Board or a Committee appointed by the Board, which Committee will be constituted to comply with Applicable Laws. The Administrator will have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to delegate ministerial duties to any of the Company’s employees, to designate separate Offerings under the Plan, to designate Subsidiaries and Affiliates as participating in the 423 Component or Non-423 Component, to determine eligibility, to adjudicate all disputed claims filed under the Plan and to establish such procedures that it deems necessary or advisable for the administration of the Plan (including, without limitation, to adopt such procedures, sub-plans, and appendices to the enrollment agreement as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed outside the U.S., the terms of which sub-plans and appendices may take precedence over other provisions of this Plan, with the exception of Section 13(a) hereof, but unless otherwise superseded by the terms of such sub-plan or appendix, the provisions of this Plan shall govern the operation of such sub-plan or appendix). Unless otherwise determined by the Administrator, the Eligible Employees eligible to participate in each sub-plan will participate in a separate Offering under the 423 Component, or if the terms would not qualify under the 423 Component, in the Non-423 Component, in either case unless such designation would cause the 423 Component to violate the requirements of Section 423 of the Code. Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding eligibility to participate, the definition of Compensation, handling of Contributions, making of Contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates that vary with applicable local requirements. The Administrator also is authorized to determine that, to the extent permitted by U.S. Treasury Regulation Section 1.423 2(f), the terms of an option granted under the Plan or an Offering to citizens or residents of a non-U.S. jurisdiction will be less favorable than the terms of options granted under the Plan or the same Offering to employees resident solely in the U.S. Every finding, decision and determination made by the Administrator will, to the full extent permitted by law, be final and binding upon all parties.
15. Transferability. Neither Contributions credited to a Participant’s account nor any rights with regard to the exercise of an option or to receive shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution) by the Participant. Any such attempt at assignment, transfer, pledge or other disposition will be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof.
16. Use of Funds. The Company may use all Contributions received or held by it under the Plan for any corporate purpose, and the Company will not be obligated to segregate such Contributions except under Offerings or for Participants in the Non-423 Component for which Applicable Laws require that Contributions to the Plan by Participants be segregated from the Company’s general corporate funds and/or deposited with an independent third party, provided that, if such segregation or deposit with an independent third party is required by Applicable Laws, it will apply to all Participants in the relevant Offering under the 423 Component, except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423 2(f). Until shares of Common Stock are issued, Participants will only have the rights of an unsecured creditor with respect to such shares, and no right to vote or receive dividends or any other rights as a stockholder will exist with respect to such shares.
17. Reports. Individual accounts will be maintained for each Participant in the Plan. Statements of account will be given to participating Eligible Employees at least annually, which statements will set forth the amounts of Contributions, the Purchase Price, the number of shares of Common Stock purchased and the remaining cash balance, if any.
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18. Adjustments, Dissolution, Liquidation, Merger or Change in Control.
19. Amendment or Termination.
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Such modifications or amendments will not require stockholder approval or the consent of any Participants.
20. Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan will be deemed to have been duly given when received in the form and manner specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares of Common Stock will not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign, including, without limitation, the U.S. Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and will be further subject to the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.
22. Section 409A. The Plan is intended to be exempt from the application of Section 409A, and, to the extent not exempt, is intended to comply with Section 409A and any ambiguities herein will be interpreted to so be exempt from, or comply with, Section 409A. In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the Administrator determines that an option granted under the Plan may be subject to Section 409A or that any provision in the Plan would cause an option under the Plan to be subject to Section 409A, the Administrator may amend the terms of the Plan and/or of an outstanding option granted under the Plan, or take such other action the Administrator determines is necessary or appropriate, in each case, without the Participant’s consent, to exempt any outstanding option or future option that may be granted under the Plan from or to allow any such options to comply with Section 409A, but only to the extent any such amendments or action by the Administrator would not violate Section 409A. Notwithstanding the foregoing, the Company shall have no liability to a Participant or any other party if the option to purchase Common Stock under the Plan that is intended to be exempt from or compliant with Section 409A is not so exempt or compliant or for any action taken by the Administrator with respect thereto. The Company makes no representation that the option to purchase Common Stock under the Plan is compliant with Section 409A.
23. Term of Plan. The Plan will become effective upon the earlier to occur of its adoption by the Board or its approval by the stockholders of the Company. It will continue in effect for a term of 20 years, unless sooner terminated under Section 19.
24. Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company within 12 months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
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25. Governing Law. The Plan shall be governed by, and construed in accordance with, the laws of the State of California (except its choice-of-law provisions).
26. No Right to Employment. Participation in the Plan by a Participant shall not be construed as giving a Participant the right to be retained as an employee of the Company or a Subsidiary or Affiliate, as applicable. Furthermore, the Company or a Subsidiary or Affiliate may dismiss a Participant from employment at any time, free from any liability or any claim under the Plan.
27. Severability. If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant, such invalidity, illegality or unenforceability shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as to such jurisdiction or Participant as if the invalid, illegal or unenforceable provision had not been included.
28. Compliance with Applicable Laws. The terms of this Plan are intended to comply with all Applicable Laws and will be construed accordingly.
29. Automatic Transfer to Low Price Offering Period. To the extent permitted by Applicable Laws, if the Fair Market Value of the Common Stock on any Exercise Date in an Offering Period is lower than the Fair Market Value of the Common Stock on the Enrollment Date of such Offering Period, then all Participants in such Offering Period will be automatically withdrawn from such Offering Period immediately after the exercise of their option on such Exercise Date and automatically re-enrolled in the immediately following Offering Period as of the first day thereof.
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EXHIBIT ABLACKLINE, INC.2018 EMPLOYEE STOCK PURCHASE PLANSUBSCRIPTION AGREEMENT
1. (“Employee”) hereby elects to participate in the BlackLine, Inc. 2018 Employee Stock Purchase Plan (the “Plan”) and subscribes to purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Plan. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Subscription Agreement.
2. Employee hereby authorizes and consents to payroll deductions from each paycheck in the amount of % (from 1% to 15%, a decrease in rate may be to 0%) of his or her Compensation on each payday during the Offering Period in accordance with the Plan. (Please note that no fractional percentages are permitted.)
3. Employee understands that the payroll deductions elected in the prior pargaraph will be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in accordance with the Plan. Employee understands that if he or she does not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise his or her option and purchase Common Stock under the Plan.
4. Employee has received a copy of the complete Plan and its accompanying prospectus. Employee understands that his or her participation in the Plan is in all respects subject to the terms of the Plan.
5. Shares of Common Stock purchased by Employee under the Plan should be issued in the name(s) of (Employee or Employee and spouse only).
6. Employee understands that if he or she disposes of any shares that he or she purchased under the Plan within two (2) years after the Enrollment Date (the first day of the Offering Period during which he or she purchased such shares) or one (1) year after the applicable Exercise Date, he or she will be treated for federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the fair market value of the shares at the time such shares were purchased over the price paid for the shares. Employee hereby agrees to notify the Company in writing within thirty (30) days after the date of any disposition of such shares and to make adequate provision for federal, state or other tax withholding obligations, if any, that arise upon the disposition of such shares. The Company may, but will not be obligated to, withhold from Employee’s compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to Employee’s sale or early disposition of such shares. Employee understands that if he or she disposes of such shares at any time after the expiration of the two (2)-year and one-(1) year holding periods, he or she will be treated for federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (i) the excess of the fair market value of the shares at the time of such disposition over the purchase price paid for the shares, or (ii) fifteen percent (15%) of the fair market value of the shares on the first day of the Offering Period. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain.
7. Employee hereby agrees to be bound by the terms of the Plan. The effectiveness of this Subscription Agreement is dependent upon Employee’s eligibility to participate in the Plan.
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8. Capitalized terms not otherwise defined herein will have the same meanings as such terms are defined in the Plan.
EMPLOYEE UNDERSTANDS THAT THIS SUBSCRIPTION AGREEMENT WILL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY EMPLOYEE.
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EXHIBIT B
BLACKLINE, INC.2018 EMPLOYEE STOCK PURCHASE PLANNOTICE OF WITHDRAWAL
The undersigned Participant in the Offering Period of the BlackLine, Inc. 2018 Employee Stock Purchase Plan that began on , (the “Offering Date”) hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period will be terminated automatically. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned will be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement. Capitalized terms not otherwise defined herein will have the same meanings as such terms are defined in the Plan.
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