What we don’t | 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 Stock Options Granted with an Exercise Price Less Than Fair Market Value✘ . All stock options are granted with an exercise price at the closing market price on the grant date.
|
✗
| 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. |
TABLE OF CONTENTS
Governance of Executive Compensation Program Role of the Compensation Committee The 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 incentive
compensation; 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 competitive includes a balance between hiring and retaining the best possible talent and maintaining a reasonable and responsible cost structure. Compensation-Setting Process We 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 peer group; •the scope of each NEO’s role compared to other similarly situated executives at the companies in our compensation 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 work as part of a team, all of which reflect our core values; •compensation parity among our NEOs; •with respect to NEOs other than our CEO and Ms. Tucker, our Executive Chair,Co-CEOs, the recommendations of the CEO;Co-CEOs; and •the compensation practices of our compensation peer group and the positioning of each NEO’s compensation in a ranking of peer company compensation levels. These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunities for each NEO. Role of Management
The Compensation Committee believes each of our CEO,Co-CEOs, CFO, Chief People Officer, and CLAO has valuable insight into the contributions of our NEOs and solicits advice and input from each with respect to performance objectives under our annual bonus plan. In addition, our CFO provides input with respect to the establishment of metrics and targets for our annual incentive plan and our performance-based equity awards. Our CEOCo-CEOs also providesprovide 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 compensation for our CEO and our Executive Chair)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 externalindependent compensation consultant with our CEO (other than with respect to compensation for our CEO and our Executive Chair) 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 Consultant
The 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 TABLE OF CONTENTS
resulting from its annual executive compensation review. For 2022,2023, the Compensation Committee retained Compensia to serve as its compensation advisor. This compensation consultant serves at the discretion of the Compensation Committee. During 2022,2023, 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;
•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 2022,2023, 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 Positioning
To 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 20222023 pay decisions, the Compensation Committee used compensation data derived from the compensation peer group as updated in August 2021.2022. 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 $368$473 million (for Q4 of 2021)2022); •similar market capitalization - ~0.3x to ~3.0x our market capitalization of approximately $6.2$4.0 billion (around the time of the peer group review in August 2021)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 20222023 compensation decisions: | | | | | | | | |
Alteryx | New Relic | | Everbridge
| | | Qualys Rapid7 | Anaplan AppFolio | PagerDuty | | LivePerson
| | | Rapid7 Smartsheet | Appfolio Appian | Paylocity Holding | | nCino
| | | Smartsheet SPS Commerce | Appian Coupa Software | Procore Technologies | | New Relic
| | | Varonis Systems Tenable Holdings | Avalara Five9 | Q2 Holdings | | Pager Duty
| | | Workiva Varonis Systems | Bill.com Holdings nCino | Qualys | | Paylocity Holding
| | | | Coupa Software
| | | Q2 Holdings
| | | Workiva |
TABLE OF CONTENTS
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.
Stockholder Advisory Votes on Named Executive Officer Compensation and Stockholder Engagement
Our 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'NEOs’ compensation annually and the Say-on-Frequency vote every six years. Our next Say-on-Frequency vote will be held in 2025. At the 2022our 2023 annual meeting, over 94%a minority of the advisory votes cast on our NEOs’ 2021stockholders supported our compensation voted to approvepractices. Our Board and there was no vote on the frequency of this advisory vote. We believe that the results ofCompensation Committee took this vote affirm ouroutcome very seriously and was highly focused on gathering and responding to stockholders’ support of our approach to executive compensation, and therefore we have not made any significant changes tofeedback regarding our executive compensation program.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 outstanding shares. We will consider the resultsengaged 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 Chair. In these meetings, we received important feedback from this year’sstockholders and future years’ stockholder advisory votesdescribe below how we have acted on NEO compensation when making decisions about our executive compensation program.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. |
Individual Compensation Elements
In 2022,2023, the primary elements of our executive compensation program consisted of base salary, an annual cash bonus opportunity, and long-term equity incentive compensation in the form of time-based RSU and optionPSU awards.
Base Salary
Base salary represents the fixed portion of the compensation of our NEOs and is 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. In March 2022, effective as of April 1, 2022, the Compensation Committee reviewed and approved an increase to the base salary of each of our NEOs other than Mr. Woodhams. In determining these adjustments, the Compensation Committee considered a competitive market data analysis provided by Compensia, and the recommendations of our CEO (other than with respect to base salaries for our CEO and our Executive Chair).
In June 2022, effective as of June 1, 2022, the Compensation Committee reviewed and approved an increase to the base salary of Mr. Woodhams. In determining this adjustment, the Compensation Committee considered a competitive market data analysis provided by Compensia, and the recommendations of our CEO.
The annual base salaries for our NEOs that were in effect as of the end of 20212022 and 2022,2023, respectively, are set forth below: Therese Tucker | | | $328,000 | | | $344,000 | | | 4.9% | Marc Huffman | | | $475,000 | | | $500,000 | | | 5.3% | Mark Partin | | | $390,000 | | | $410,000 | | | 5.1% | Karole Morgan-Prager | | | $370,000 | | | $390,000 | | | 5.4% | Mark Woodhams | | | $380,000 | | | $400,000 | | | 5.3% |
| | | | | | | | | | | | | | | | | | | | | 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 salaryTABLE OF CONTENTS
Target Annual Cash Bonus Opportunities
Each NEO participated in the 20212023 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 net incomeoperating margin goal). Additionally, 20% of the Compensation Committee hasperformance under the discretionbonus 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 determine achievementthe market; delivering experiences that customers value; and continuing our development of a discretionary component (weighted 20%), as described below.an agile, inclusive, and highly engaged workforce.
Each NEO was assigned a target annual cash bonus opportunity for 2022,2023, representing a percentage of his or her annual base salary. In March 2022,February 2023, the Compensation Committee reviewed the target annual cash bonus opportunities of our NEOs for 2022,2023, taking into consideration a competitive market analysis prepared by Compensia, and the recommendations of our CEOCo-CEOs (for all NEOs other than our CEO and our Executive Chair)Co-CEOs). Following this review, the Compensation Committee determined No adjustments were made to increase the target annual cash bonus opportunity percentage for Mr. Partin from 60% to 70% in consideration of the positioning of Mr. Partin’s cash compensation in relation to the market analysis. The Compensation Committee did not make any changes to the target annual cash bonus opportunity percentages of our other NEOs.
The 20222023 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 |
Therese Tucker | | | 75% | | | $258,000 | Marc Huffman | | | 100% | | | $500,000 | Mark Partin | | | 70% | | | $287,000 | Karole Morgan-Prager | | | 50% | | | $195,000 | Mark Woodhams | | | 100% | | | $400,000 |
(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, 2023
Each NEO participant in the 20222023 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 20222023 Bonus Plan. As described in the section “2022“2023 Bonus Plan Performance Matrix” below, overperformance against the bonus plan components could result in payments in excess of each NEO's target opportunity, while underperformance would result in payments below that target opportunity, or in no payment being earned with respect to one or more components. 2022
2023 Bonus Plan Performance Matrix
In March 2022,2023, the Compensation Committee, with input from management, approved revenue and non-GAAP net incomeoperating margin as the performance measures for the financial component under the 20222023 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 20222023 Bonus Plan was to be funded based on (i) the extent of our achievement against the target level of each of the financial 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% |
Revenue
| | | Financial Component
| | | $536.0 million
| | | 50%
| Net Income
| | | Financial Component
| | | $12.4 million
| | | 30%
| Discretionary
| | | Discretionary Component
| | | $—
| | | 20%
|
TABLE OF CONTENTS
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% |
97.5% | | | 60% | 100.0% | | | 100% | 102.0% | | | 150% | 104.0% | | | 200% |
The non-GAAP net incomeoperating 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% |
85.5% | | | 50% | 100.0% | | | 100% | 132.3% | | | 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). *
| If Revenue and Net Income achievement during 2022 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 20222023 Bonus Plan, the financial performance measures had the following meanings: | | | | | |
Performance Measure | | | Meaning | | Revenue | Revenue
| | | “Revenue” is defined as the sum of the Company’s total subscription, support, and professional services revenue recognizedrevenue; all determined under Generally Accepted Accounting Principles (“GAAP”) during the Performance Period,U.S. GAAP, excluding revenuesrevenue from acquisitions completed in 2022 withduring the exception of FourQ. | Company’s applicable fiscal year. | | Net Income
| | Non-GAAP Operating Margin | “Net Income”Non-GAAP Operating Margin” is defined as the Company’s non-GAAP netNon-GAAP income from operations divided by its total Revenue.
“Non-GAAP income from operations” is defined as the Company’s GAAP income (loss) forfrom operations, adjusted for: amortization of intangible assets, stock-based compensation, the Performance Period as definedchange in the Company’s Earnings Release filed on February 10, 2022 on Form 8-K. The Net Income performance measure shall exclude expensesfair value of contingent consideration, transaction-related costs, legal settlement gains and costs, restructuring charges, impairment charges related to acquisitions completed duringgoodwill, impairment charges related to tangible and intangible assets, and the Company’s 2022 fiscal year with the exceptioncosts of FourQ. Please see Appendix A to this proxy statement for a reconciliation of GAAP and non-GAAP net income (loss).natural disasters. | |
The discretionary component was included
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 provide 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 and
Compensation Committee with flexibility to incent achievement of business goals and objectives that may evolve afterreview our progress against an OKR scorecard. The aggregate progress against OKRs for the beginning of the year. The Compensation Committee believed that retaining discretion to fund ayear results in this portion of the 2022bonus target able to be earned, comprising from 0-20% of the total bonus opportunity.
2023 Bonus Plan irrespective of achievement of the financial component was important to reward our NEOs for achievements not directly captured by these financial performance measures.Decisions 2022 Bonus Plan Decisions
In February 2023,2024, the Compensation Committee reviewed our overall performance for 2022,2023, including performance against the performance measures established under the 20222023 Bonus Plan. Using the 20222023 Bonus Plan performance measures, the discretion it reserved under the discretionary component, the target performance, actual performance and relative weighting were as follows: Revenue
| | | $536.0 million
| | | $522.9 million
| | | 61%
| Net Income
| | | $12.4 million
| | | $46.3 million
| | | 125%
| Discretionary
| | | $—
| | | $—
| | | 70%
|
The Compensation Committee determined the payment percentage under the discretionary component after assessing the contributions of our NEOs in 2022 toward our executioncorporate OKRs based on key initiatives that we expectpositive results with respect to have long-term benefits on our business and to drive stockholder value over the long-term, including strong TABLE OF CONTENTS
achievements in bookings, execution on expense control, opening the India Development Center, product roadmap and integration, our BeyondTheBlack user conference and increasing the number of premier customers, beating our premier customers.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 this levelachievement of achievement,these financial performance measures and the 2022OKRs, the 2023 Bonus Plan was funded at 82%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 20222023 are as follows: | NEO | | Target Annual Cash
Bonus Opportunity | | Total
Actual
2022 Cash
Bonus
Payment | NEO | | Target Annual Cash Bonus Opportunity | | Total Actual 2023 Cash Bonus Payment | Therese Tucker | | $258,000 | | $211,570 | Therese Tucker | | $485,000 | | $207,095 | Marc Huffman | | $500,000 | | $410,020 | Owen Ryan(1) | | Owen Ryan(1) | | $485,000 | | $170,782 | Mark Partin | | $287,000 | | $235,351 | Mark Partin | | $301,000 | | $128,527 | Karole Morgan-Prager | | $195,000 | | $159,908 | Karole Morgan-Prager | | $205,000 | | $87,535 | Mark Woodhams | | $400,000 | | $328,016 | 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 Compensation
The 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 Awards In March 2022, the Compensation Committee reviewed its past practice of granting a mix of time-based restricted stock unit awards that are settled in shares of our common stock (RSUs) and stock options to our executive officers in light of an analysis of long-term equity compensation granted by its peers that was created by its compensation consultant, Compensia. Based on this analysis, the Compensation Committee determined that awards of long-term equity compensation to our executive officers for 2022 would be made in a mix of RSUs and performance-based restricted stock units that are settled in shares of our common stock (PSUs).
In February and March and April 2022,2023, the Compensation Committee determined the sizes of the 20222023 equity awards for our NEOs and granted equity awards to all our NEOs other than Ms. Tucker in the form of 50% time-based RSU awards and 50% performance-based PSUs. InPSU 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 Ms. Tucker’s role as Executive Chair in 2022, we granted herthe size of an initial equity awards for 2022 ingrant that would be required to hire a CEO from outside the form of time-based RSU awards only. The Compensation Committee believed that providing an equal mix of time-based RSUs and performance-based PSUs for NEOs other than Ms. Tucker was important to remain competitive with our compensation peer companies, many of whom use a similar mix and to provide a performance-based element to more directly align such NEOs’ compensation with stockholder value creation. RSU awards provide retention incentives for our NEOs and reward them for long-term stock price appreciation while at the same time providing some value even if the market price of our common stock declines. PSU awards provide these same benefits, along incentives for our NEOs to achieve performance milestones intended to grow our business and drive value for our stockholders.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 20222023 as part of its annual compensation review and after taking into consideration a competitive market analysis, the recommendations of our CEO (except with respect to long-term equity compensation for our CEO and our Executive Chair),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 dilution
to 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)1 | | PSUs (number of shares)2 | | Equity 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 |
_________________TABLE OF CONTENTS
In April 2022, the Compensation Committee granted annual equity awards to our NEOs, the material terms of which are described below:
Therese Tucker | | | 65,230 | | | — | | | $5,000,000 | Marc Huffman | | | 65,230 | | | 65,230 | | | $10,000,000 | Mark Partin | | | 32,620 | | | 32,620 | | | $5,000,000 | Karole Morgan-Prager | | | 16,960 | | | 16,960 | | | $2,600,000 | Mark Woodhams | | | 19,570 | | | 19,570 | | | $3,000,000 |
(1) (1)
| The number of shares was determined by dividing 50% (100% for Ms. Tucker) of the targeted grant value by the 30 trading day average price ended on March 15, 2022 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 March 15, 2022 and rounding up to the nearest 10 shares. |
The RSU award listed in the table above for Ms. Tucker vests as to 50% of the shares underlyingtargeted grant value by the award30-trading day average price ended on each of February 20,28, 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 20, 2024, subject28, 2023 and rounding up to her continued service with us through the applicable date.nearest 10 shares.
Each of the RSU awards listed in the table above for our other NEOs vests as to 25% of the shares underlying the award on February 20, 20232024 and as to 1/16th16th 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, 2023, 2024, 2025 and 2025,2026, 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, 20232024, were determined at the time of grant, relate to our performance in 2022,2023, and are detailed in the section “2022 Performance-Based Restricted Stock Unit“2023 PSU Performance Matrix” below. Ms. Tucker’s annual equity grant was made entirely in time-based RSUs, and not performance-based PSUs, taking into account corporate governance considerations in light of Ms. Tucker’s role as Executive Chair of our Board, with responsibility for oversight of the Company.
All of these awards are subject to additional vesting acceleration as described in the “Potential Payments Upon Termination or Change of Control” section below. 2022 Performance-Based Restricted Stock Unit
2023 PSU Performance Matrix
In March 2022,February 2023, the Compensation Committee, with input from management, approved revenue, annualized recurring revenue (ARR)(“ARR”), and non-GAAP net incomeoperating margin as the performance measures for 2022 as the performance metrics for the portion of each of the 2022 performance-based RSUs scheduledand 2023 PSUs eligible to vest on February 20, 2023.2024. 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.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 performance-based RSUs scheduledand 2023 PSUs eligible to vest on February 20, 20232024 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: Revenue
| | | $536 million
| | | 40%
| ARR
| | | $569 million
| | | 30%
| Non-GAAP net income
| | | $12.4 million
| | | 30%
|
| | | | | | | | | | | | | | | 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% |
TABLE OF CONTENTS
The portion of the 2022 performance-based RSUs2023 PSUs scheduled to vest on February 20, 20232024 that is subject to the revenue metric will be available for vesting based on attainment of that performance measuremetric 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: 97.57% | | | 50% | 100.0% | | | 100% | 102.0% | | | 125% | 104.0% and above | | | 150% |
| | | | | | | | | Percentage 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 2022 performance-based RSUs2023 PSUs scheduled to vest on February 20, 20232024 that is subject to the ARR metric will be available for vesting based on attainment of that performance measure as follows: 93.67% | | | 50% | 100.0% | | | 100% | 104.9% | | | 125% | 110.0% and above | | | 150% |
| | | | | | | | | 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 2022 performance-based RSUs2023 PSUs scheduled to vest on February 20, 20232024 that is subject to the non-GAAP net incomeoperating margin metric will be available for vesting based on attainment of that performance measure as follows: 85.5% | | | 50% | 100.0% | | | 100% | 164.5% | | | 125% | 229.0% | | | 150% |
| | | | | | | | | 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 and non-GAAP net income achievement during 2022 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 the nearest hundred thousand dollars). |
*If Revenue, ARR or 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 the nearest hundred thousand dollars).
For purposes of the portion of the 2022 performance-based RSUs2023 PSUs scheduled to vest on February 20, 2023,2024, the financial performance measures had the following meanings:
| | | | | | Performance Measure | Performance
Measure
| | | Meaning | | Revenue | Revenue
| | | “Revenue” is defined as the sum of the Company’s total subscription, support, and professional services revenue recognizedrevenue; all determined under Generally Accepted Accounting Principles (“GAAP”) during the Performance Period,U.S. GAAP, excluding revenuesrevenue from acquisitions completed in 2022 withduring the exception of FourQ. | Company’s applicable fiscal year. | ARR | ARR
| | | “ARR” is defined as the Company’s 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 any acquisitions completed during the company’s 2022Company’s applicable fiscal year with the exception of FourQ. | year. | Non-GAAP Operating Margin | Net Income
| | | The Company’s “non-GAAP net income (loss)” for“Non-GAAP Operating Margin” is defined as the Company’s 2022 fiscal year as determined in accordance with how such term is defined in the Company’s annual report filed on its Form 10-K for the Company’s 2022 fiscal year, excluding expenses related to acquisitions completed during 2022 with the exception of FourQ. Please see Appendix A to this proxy statement for a reconciliation of GAAP and non-GAAP net income (loss).
| |
2022 Performance-Based Restricted Stock Unit Performance Decisions
In February 2023, the Compensation Committee reviewed our overall performance for 2022, including performance against the performance measures established under the 2022 performance-based PSU awards for
TABLE OF CONTENTS
shares eligible to vest on February 20, 2023. Considering the performance measures established for those awards, the target performance, actual performance, and percent available for vesting before relative weighting were as follows:
Revenue
| | | $536.0 million
| | | $522.9 million
| | | 0%
| ARR
| | | $569.0 million
| | | $533.4 million
| | | 50.6%
| Non-GAAP net income | | | $12.4 million
| | | $46.2 million
| | | 150%
|
For context, we believe the target for non-GAAP net income was the appropriate goal for that metric despite it being lower than the Company’s fiscal 2021 non-GAAP net income. When the target was set in early 2022, we believed that integration costs and dilution associated with our FourQ acquisition, increased hosting costs associated with our continued migration to the public cloud, and additional investments to accelerate our go-to-market strategy made the achievement of $12.4 million in non-GAAP net income a rigorous goal. Our overachievement in 2022 with respect to non-GAAP net income was the result of focused work and leadership related to our cost structure as we addressed the challenging macroeconomic environment that developed during the year. Based on this level of achievement, the Compensation Committee determined that, with respect to the shares eligible to vest on February 20, 2023 under the 2022 performance-based PSU awards, 60.2% of the target amount for each of our NEOs were eligible to vest.
The numbers of shares available for vesting on February 20, 2023 under the 2022 performance-based PSUs for each of our NEOs are as follows:
Therese Tucker | | | — | | | — | Marc Huffman | | | 21,743 | | | 13,082 | Mark Partin | | | 10,873 | | | 6,541 | Karole Morgan-Prager | | | 5,653 | | | 3,401 | Mark Woodhams | | | 6,523 | | | 3,924 |
Retention Long-Term Equity Awards
In the fall and winter of 2022, the Compensation Committee considered an additional grant of long-term equity awards to our executive officers in light of an analysis of the retentive value of long-term equity compensation granted by the Company’s peers that was created by its compensation consultant, Compensia. Based on this analysis and concerns over the retentive value the then current outstanding long-term equity awards for our executive officers, the Compensation Committee determined to grant additional awards of performance-based PSUs for Mr. Huffman and of time-based RSUs for our other executive officers. Ms. Tucker’s award was granted in connection with her assumption of an operating role at the Company as she transitioned away from service as Executive Chair of the Board while continuing to serve on our Board.
In December 2022, the Compensation Committee approved retention equity awards to our NEOs, the material terms of which are described below:
Therese Tucker | | | 23,680 | | | $1,500,000 | Marc Huffman | | | 189,400 | | | $12,000,000 | Mark Partin | | | 55,240 | | | $3,500,000 | Karole Morgan-Prager | | | 39,460 | | | $2,500,000 | Mark Woodhams | | | 28,410 | | | $1,800,000 |
(1)
| The number of shares was determined by dividing the targeted grant value by the 30 trading day average price ended on December 15, 2022 and rounding to the nearest 10 shares. |
(2)
| The award for Ms. Tucker was made effective as of January 1, 2023. All other awards listed here were made effective as of December 30, 2022. |
TABLE OF CONTENTS
The retention RSU award for Ms. Tucker listed in the table above vests as to 1/8th of the shares underlying the award on a quarterly basis, beginning on February 20, 2023, in each case subject to Ms. Tucker’s continued service with us through the applicable date.
Each of the retention RSU awards for our NEOs other than Ms. Tucker and Mr. Huffman listed in the table above vests as to 2/3rd of the shares underlying the award on November 20, 2024, and as to 1/3rd of the shares underlying the award on November 20, 2025, in each case subject to the NEO’s continued service with us through the applicable date.
The retention performance-based PSU award for Mr. Huffman listed in the table above was eligible to vest as to up to 200% of the shares available for vesting under the award on February 20, 2026, or, if not then vested, on February 20, 2027, in each case subject to Mr. Huffman’s continued service with us through the applicable date, and subject to our satisfaction of applicable performance-based conditions, as described in the following section. Because Mr. Huffman’s employment terminated prior to February 20, 2026, he forfeited all of this award.
Retention Performance-Based Restricted Stock Unit Performance Matrix
In December 2022, the Compensation Committee, with input from management, approved performance metrics for the retention performance-based PSU award granted to Mr. Huffman, relating to the Company’s revenue growth, operating margin, and relative total shareholder return (relative TSR). The Compensation Committee selected these performance measures because it believed that they were aligned with our long-range plan and provided appropriate drivers for our business as they provide a balance between growing our business and managing our expenses, which enhance stockholder value, and directly address our stock performance relative to our peers.
The percentage of retention performance-based RSUs for Mr. Huffman that would have been eligible to vest on February 20, 2026 will equal the product of (i) the revenue growth plus operating margin multiplier for 2025 determined under the first table below, multiplied by (ii) the relative TSR multiplier determined under the second table below.
If the revenue growth plus operating margin multiplier for 2025 was less than 100%, then an additional percentage of the retention performance-based RSUs for Mr. Huffman would become eligible to vest under this award on February 20, 2027, which will equal the excess, if any, of (A) the revenue growth plus operating margin multiplier for 2026 (or if lower, 100%) over (B) the revenue growth plus operating margin multiplier for 2025, in each case determined under the first table below.
For purposes of these awards, the revenue growth plus operating margin multiplier for a given year will be determined based on the sum of the Company’s revenue growth for that year, and the Company’s operating margin for that year, as provided in the following table:
40% | | | 160% | 39% | | | 125% | 38% | | | 100% | 36% | | | 75% | 32% | | | 50% | Below 32% (or in any case, if revenue growth is below 20%) | | | 0% |
*
| For performance falling between two adjacent “bands” in the first column, the multiplier will be calculated by linear interpolation between (a) the two adjacent bands represented as percentages of growth plus margin and (b) the two achievement percentages set forth in the multiplier column that correspond to the two adjacent bands of percentages of growth plus margin. |
TABLE OF CONTENTS
For purposes of these awards, the relative TSR multiplier will be determined based on the Company’s total shareholder return for the period beginning on December 31, 2022 (measured based on the average closing price for the 20 trading days ending on that date) and ending on December 31, 2025 (measured based on the average closing price for the 20 trading days ending on that date) relative to the corresponding TSRs of the members of the S&P Software and Services Select Industry Index, expressed as a percentile, as provided in the following table:
75th or higher
| | | 125%
| 50th
| | | 100%
| 25th or below
| | | 75%
|
*
| For performance falling between two adjacent “bands” in the first column, the multiplier will be calculated by linear interpolation between (a) the two adjacent bands represented as percentiles of relative TSR and (b) the two achievement percentages set forth in the multiplier column that correspond to the two adjacent bands of percentages of growth plus margin. |
For purposes of the retention performance-based PSU awards granted to Mr. Huffman, the financial performance measures had the following meanings:
| Revenue growth
| | | The sum of Company’s subscription revenue plus services revenue for the given fiscal year, divided by the sum of the Company’s subscription revenue plus services revenue for the Company’s immediately prior fiscal year; all as determined under GAAP, but excluding revenue related to acquisitions during the performance period to the extent that any such acquisition is of an entity with greater than $50M in trailing twelve-month revenue at the time of the acquisition.
| | | Non-GAAP operating margin
| | | The Company’s non-GAAP income from operations divided by its total revenues, as determined under GAAP.Revenue.
| | |
“Non-GAAP income from operations | | | The Company's non-GAAP income from operations meansoperations” 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. To the extent the Company completes an acquisition of an entity with greater than $50 million in trailing twelve-month revenue, the revenue and transaction costs associated with that transaction shall be removed from the calculation of Revenue Growth and Non-GAAP income from operations for the purposes of calculated achievement.
| |
2023 PSU Performance Decisions
In 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:
| | | | | | | | | | | | | | | | | | | | | | | | | | | Performance 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 Benefits
Our 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 2022,2023, we paid discretionary matching contributions that are fully vested.
In addition, our 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)(“ESPP”).
TABLE OF CONTENTS
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 competitive market.
Perquisites, Special Bonuses and Other Personal Benefits
Currently, 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 Arrangements
We have entered into written employment offer letters with each of our NEOs, other than Ms. Tucker and Mr. Ryan, and Ms. Tucker, and an employment agreement with each of Ms. Tucker and Mr. Ryan and Ms. Tucker.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.
On 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.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 Compensation
We entered into written participation agreements under our Change of Control and Severance Policy or the Policy,(the “Policy”) with each of our NEOs (other than Ms. Tucker)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 areis 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 TABLE OF CONTENTS
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 2022,2023, see “Executive Employment Arrangements” and “Potential Payments Upon Termination or Change of Control” below.
Other Compensation Policies and Practices Policy Prohibiting Hedging or Pledging of Our Equity Securities
Our Insider Trading Compliance Policy prohibits all our employees, including our NEOs, and the members of our Board from engaging in derivative securities transactions, including hedging, with respect to our common stock and from pledging our securities as collateral or holding our securities in a margin account. Executive Stock Ownership Guidelines
In 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 the CEO and Executive Chair, if applicable)our Co-CEOs) the executive officer’s annual base salary. For purposes of this requirement, shares countedowned outright count toward these guidelines include any shares owned outright 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, 2022,2023, all of our executive officers had exceededwere in compliance with the currentstock ownership requirements under the guidelines. Tax and Accounting Considerations Deductibility of Executive Compensation
Section 162(m) of the Code generally limits the amount we may deduct from our federal income taxes for compensation 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.
In approving the amount and form of compensation for our NEOs, in the future, the Compensation Committee generally considers all elements of the cost to us of providing such compensation, including the TABLE OF CONTENTS
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 willmay or may not be deductible when it believes that such payments are appropriate to attract, retain or motivate executive talent. Accounting for Stock-Based Compensation
We 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 Considerations
The Compensation Committee, in cooperation with management, reviewed our 20222023 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-termshort-
term 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 Arrangements Therese Tucker. On August 24, 2016, we entered into an employment agreement with Ms. Tucker, which remained in effect through March 5, 2023. The employment agreement had an initial term of three years from January 1, 2016 and was expected to automatically renew on each year thereafter, unless either party provided the other with at least 30 days written notice. The employment agreement automatically renewed for a one-year term on January 1, 2022. In the event of a “change in control” (as defined in Ms. Tucker’s agreement), the term would extend for an additional two years from the date of such change in control. The employment agreement provided Ms. Tucker with an initial annual base salary of $350,000 and an on-target bonus opportunity equal to 100% of her base salary, based upon achievement of performance objectives to be determined by our Compensation Committee. Effective January 2021, in connection with her transition to Executive Chair, Ms. Tucker’s annual base salary was reduced to $328,000 and her on-target bonus opportunity was reduced to 75% of her base salary. Effective April 1, 2022, Ms. Tucker’s annual base salary was increased to $344,000.
Ms. Tucker’s employment agreement also provided that if her employment was terminated by us without “cause” (excluding by death or disability), we decided to not renew Ms. Tucker’s agreement, or Ms. Tucker resigned for “good reason” (as such terms were defined in Ms. Tucker’s agreement), Ms. Tucker would 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 COBRA 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 provided that if her employment was terminated by us without “cause” (excluding by death or disability), we decided to not renew Ms. Tucker’s agreement, or Ms. Tucker resigned 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 would 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
TABLE OF CONTENTS
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 would vest and, to the extent applicable, become exercisable.
Ms. Tucker’s employment agreement also provided that if her employment was terminated due to her death or disability, Ms. Tucker would 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 Ms. Tucker’s target bonus, pro-rated to reflect time served in the year of termination.
Any receipt of severance benefits by Ms. Tucker was 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 resulted in the greater amount of after-tax benefits to her. Ms. Tucker’s employment agreement did not require us to provide any tax gross-up payments.
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. Ms. Tucker’s March 2023 employment agreementThe Tucker Employment Agreement also providesprovided for equity awards [thatthat have been granted]granted with a value of $10,000,000, which arewere made up of 50% restricted stock unitsRSUs that will vest over four years, subject to Ms. Tucker’s continued full-time employment, and 50% restricted stock unitsPSUs that will vest on the same performance terms as awards granted to our other executives in 2023, as determined by the Compensation Committee. Ms. Tucker’s March 2023 employment agreement
The Tucker Employment Agreement provides that if her employment is terminated by us without “cause” (as such term is defined in that employment agreement)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 that employment agreement)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 and (iii) approximately 25% of the original shares subject to each of her then-outstanding equity awards that are eligible to vest solely on the basis of continued employment will become vested and fully exercisable (if the number of unvested shares is less than the calculated number, she will only vest in the then-unvested portion).termination. Ms. Tucker’s March 2023 employment agreement
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 that employment agreement)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). Marc Huffman. We
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 letteragreement on the same terms described above with Mr. Huffman in connection with his commencement of employment with us in 2018. The employment letter had no specific term and provided for “at will” employment. As of December 31, 2022, Mr. Huffman’s annual base salary was $500,000 and his annual on-target bonus opportunity was 100% of his annual base salary. This employment agreement also provided Mr. Huffman with equity awards that have been previously granted and severance and change ofrespect to the Tucker Employment Agreement.
TABLE OF CONTENTS
control payments and benefits under the Policy (described below). Mr. Huffman is also reimbursed for travel in compliance with the Company’s travel policy. Mr. Huffman received severance benefits under the Policy in connection with the termination of his employment, effective March 6, 2023 (described below).
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 Arrangements
Effective 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.
Compensation Committee Report The 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, 2022.2023. Respectfully submitted by the members of the Compensation Committee of the Board:
Mika Yamamoto (Chair)
Kevin Thompson
Thomas Unterman
Amit YoranWilliam Wagner6
This 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.
Summary Compensation Table
The following table presents information concerning the total compensation of our NEOs for services rendered to us in all capacities during the years ended December 31, 2023, 2022, 2021, and 2020.2021. Therese Tucker
Co-CEO and Former Executive Chair | | | 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 | | 2020 | | | 401,250 | | | 3,831,510 | | | — | | | 3,837,376 | | | 366,559 | | | 1,000 | | | 8,437,695 | Marc Huffman
Former President and Former Chief Executive Officer | | | 2022 | | | 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 | | 2020 | | | 374,792 | | | 1,565,385 | | | — | | | 1,567,601 | | | 344,208 | | | 12,400 | | | 3,864,386 | Mark Partin
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 | | 2020 | | | 375,625 | | | 3,005,128 | | | — | | | 3,009,542 | | | 203,842 | | | 12,400 | | | 6,606,537 | Karole Morgan-Prager
Chief Legal and Administrative Officer | | | 2022 | | | 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 | | 2020 | | | 357,083 | | | 1,001,709 | | | — | | | 1,003,181 | | | 160,928 | | | 387,913 | | | 2,910,814 | Mark Woodhams
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 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 Officer | 2022 | | 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 Officer | 2022 | | 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 this column represent the aggregate grant date fair value of stock 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. (1)
| The amounts in this column represent the aggregate grant date fair value of stock 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, 2022. 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 column reflect the aggregate grant date fair value of the RSUs granted to our NEOs in fiscal 2020, 2021, and 2022. |
(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 2022, including a second award of PSUs granted to Mr. Huffman in fiscal 2022, as computed in accordance with ASC Topic 718. For fiscal 2022, the estimated fair value of PSUs is calculated based on the probable outcome of the performance measures for the applicable performance period as of the date on which the PSUs were granted for accounting purposes. 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, 2022. |
(2)The amounts reported in the Stock Awards 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 probable 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 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 20222023 PSUs assuming that the highest level of performance is achieved under the applicable performance measures is presented below. For Mr. Huffman, the maximum value assumes the highest level of performance under all performance awards granted in fiscal 2022. 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 | | | Maximum Value of 20222023 PSUs | Therese Tucker | | | N/A $2,346,853 | Marc Huffman Owen Ryan | | | $31,218,533
(aggregate value of all PSU awards) 2,346,853 | Mark Partin Marc Huffman | | | $1,233,977 N/A | Karole Morgan-Prager Mark Partin | | | $641,5592,268,869 | Karole Morgan-Prager | | $1,343,937 | Mark Woodhams | | | $740,2951,361,468 |
(4)
| The amounts in this column represent annual incentives earned under our bonus plans for the applicable fiscal year. |
(5)
| In 2022, this amount consists of: (a) for Messrs. Huffman, Partin and Woodhams and Ms. Morgan-Prager, 401(k) plan matching contributions in the amount of $12,200 each; (b) for Ms. Morgan-Prager, $11,855 in tax equalization payments related to her service in the United Kingdom at our request and $8,497 tax gross up associated with such tax equalization costs; and (c) for Mr. Huffman, $100 in taxable fringe benefits. |
(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) $13,200 in 401(k) plan matching contribution. (6)Ms. Tucker was appointed Co-CEO of the Company on March 6, 2023. During 2023, prior to this date, Mr. Tucker served as an employee of the Company. Ms. Tucker also served as a director of the Company for all of 2023. (7)Mr. Ryan was appointed Co-CEO of the Company and became a Company employee on March 6, 2023. During 2023, Mr. Ryan served as Chair of the Board of Directors of the Company. Compensation for Mr. Ryan’s services as a Board member prior to March 6, 2023 are reflected in the Director Compensation Table above. (8)Mr. Huffman ceased to serve as our President and CEO on March 6, 2023.
Grants of Plan-Based Awards During 20222023The following table presents information regarding grants of plan-based awards made to our NEOs during 2022:2023: | | | | | Estimated Future Payouts Under
Non-Equity
Incentive Plan Awards ($)(1) | | Estimated Future Payouts Under
Equity Incentive Plan Awards | | | Number of
Securities
Underlying
Restricted
Stock Units (#) | | Grant Date
Fair Value
of
Stock and
Option
Awards
($)(2) | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1) | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1) | | Estimated Future Payouts Under Equity Incentive Plan Awards | | Number of Securities Underlying Restricted Stock Units (#) | | Grant Date Fair Value of Stock and Option Awards ($)(2) | Name Executive
Officer | | Grant
Date | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | Number of
Securities
Underlying
Restricted
Stock Units (#) | | Grant Date
Fair Value
of
Stock and
Option
Awards
($)(2) | Therese Tucker | | N/A | | | | 258,000 | | | | | | | | | | | | 4/4/2022(3) | | | | | | | | | | | | | | 65,230 | | 4,935,302 |
| | | | | | | | | | | | | | | | | | | Therese Tucker | | | Therese Tucker | | | | 1/1/2023(3) | | | | 3/7/2023(3) | | | | 3/7/2023(5) | | Owen Ryan | | | | 3/7/2023(3) | | | 3/7/2023(3) | | | | 3/7/2023(5) | | Marc Huffman | | N/A | | | | 500,000 | | | | | | | | | | | | | | | 4/4/2022(3) | | | | | | | | | | | | | | 65,230 | | 4,935,302 | | | 4/4/2022(4) | | | | | | | | | | 21,743 | | 32,615 | | | | 1,645,075 | | | 12/30/2022(5) | | | | | | | | | | 189,400 | | 378,800 | | | | 14,375,460 |
| | | | | | | | | | | | | | | | | | | Mark Partin | | N/A | | | | 287,000 | | | | | | | | | | | | | | | 4/4/2022(3) | | | | | | | | | | | | | | 32,620 | | 2,468,029 | | | 4/4/2022(4) | | | | | | | | | | 10,873 | | 16,310 | | | | 822,651 | | | 12/30/2022(6) | | | | | | | | | | | | | | 55,240 | | 3,715,995 |
| | | | | | | | | | | | | | | | | | | Mark Partin | | | | 3/7/2023(3) | | | 3/7/2023(4) | | | 3/7/2023(5) | | Karole
Morgan-Prager | | N/A | | | | 195,000 | | | | | | | | | | | | | | | 4/4/2022(3) | | | | | | | | | | | | | | 16,960 | | 1,283,194 | | | 4/4/2022(4) | | | | | | | | | | 5,653 | | 8,480 | | | | 427,706 | | | 12/30/2022(6) | | | | | | | | | | | | | | 39,460 | | 2,654,474 |
| | | | | | | | | | | | | | | | | | | Karole Morgan-Prager | | | | 3/7/2023(5) | | Mark Woodhams | | N/A | | | | 400,000 | | | | | | | | | | | | | | | 4/4/2022(3) | | | | | | | | | | | | | | 19,570 | | 1,480,666 | | | 4/4/2022(4) | | | | | | | | | | 6,523 | | 9,785 | | | | 493,530 | | | 12/30/2022(6) | | | | | | | | | | | | | | 28,410 | | 1,911,141 | Mark Woodhams | | | | 3/7/2023(5) | |
_________________ (1)Amounts in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” columns relate to cash incentive compensation opportunities under our 2023 Bonus Plan, as described in the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements – 2023 Bonus Plan Performance Matrix” and “—2023 Bonus Plan Decisions.” Mr. Ryan’s target opportunity under our 2023 Bonus Plan award was prorated from $485,000 for his partial year of service as Co-CEO and an employee beginning on March 6, 2023. (1)
| Amounts in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” columns relate to cash incentive compensation opportunities under our 2022 Bonus Plan, as in the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements – 2022 Bonus Plan Performance Matrix” and “—2002 Bonus Plan Decisions.” |
(2)
| The amount in this column represents the aggregate grant date fair value of stock and option awards as computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718, or ASC 718. The fair value value of the PSUs is calculated based on target shares. 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, 2022. |
(3)
| Reflects the award of Time-Based RSUs for such NEOs as described in the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements – Annual Long Term Incentive Awards.” |
(4)
| Reflects the award of performance-based RSUs at the threshold, target and maximum award levels for the 2022 performance-based RSUs scheduled to vest on February 20, 2023 as described in the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements—2022 Performance-Based Restricted Stock Unit Performance Matrix”. Further information on the threshold, target, maximum, and actual award level achievement of this PRSU award as well as descriptions of the performance goals for this PRSU award is available in such section and the section “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements—2022 Performance-Based Restricted Stock Unit Performance Decisions.” |
(5)
| Reflects the award of performance-based RSUs at the threshold, target and maximum award levels for the Retention Long Term Equity Awards granted to Mr. Huffman as described in the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements—Retention Long-Term Equity Awards” and “—Retention Performance-Based Restricted Stock Unit Performance Matrix.” Further descriptions of the performance goals for this performance-based RSU award is available in such section. |
(6)
| Reflects the award of RSUs for such NEOs as described in the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements – Retention Long-Term Equity Awards.” |
(2)The amount in this column represents the aggregate 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 target shares. 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 in our Annual Report on Form 10-K for the year ended December 31, 2023. (3)Reflects the award of RSUs for such NEOs as described in the section titled “Executive Compensation—Compensation Discussion and Analysis—Individual Compensation Elements – Annual Long Term Incentive Awards.” (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.
Outstanding Equity Awards at Year-End The following table presents information concerning all outstanding equity awards held by each of our NEOs as of December 31, 2022:2023: Therese Tucker | | | 10/17/2016(3) | | | 96,560 | | | — | | | 14.00 | | | 10/16/2026 | | | | | | | | 3/6/2018(4) | | | 95,080 | | | — | | | 44.41 | | | 3/5/2028 | | | | | | | | 5/15/2019(5) | | | 93,065 | | | 6,205 | | | 48.65 | | | 5/15/2029 | | | | | | | | 5/15/2019(6) | | | | | | | | | | | | | | | 2,953 | | | 198,648 | | 4/15/2020(7) | | | 91,230 | | | 54,740 | | | 57.11 | | | 4/15/2030 | | | | | | | | 4/15/2020(8) | | | | | | | | | | | | | | | 25,160 | | | 1,692,513 | | 3/6/2021(9) | | | 20,395 | | | 20,395 | | | 111.53 | | | 3/6/2031 | | | | | | | | 3/6/2021(10) | | | | | | | | | | | | | | | 9,360 | | | 629,647 | | 4/4/2022(11) | | | | | | | | | | | | | | | 65,230 | | | 4,388,022 | Marc Huffman | | | 2/13/2018(12) | | | 187,100 | | | — | | | 33.13 | | | 2/12/2028 | | | | | | | | 5/15/2019(5) | | | 31,135 | | | 3,460 | | | 48.65 | | | 5/15/2029 | | | | | | | | 5/15/2019(6) | | | | | | | | | | | | | | | 1,647 | | | 110,794 | | 4/15/2020(7) | | | 37,268 | | | 22,362 | | | 57.11 | | | 4/15/2030 | | | | | | | | 4/15/2020(8) | | | | | | | | | | | | | | | 10,280 | | | 691,536 | | 3/6/2021(13) | | | 21,411 | | | 27,529 | | | 111.53 | | | 3/6/2031 | | | | | | | | 3/6/2021(14) | | | | | | | | | | | | | | | 12,634 | | | 849,889 | | 4/4/2022(15) | | | | | | | | | | | | | | | 65,230 | | | 4,388,022 | | 4/4/2022(16) | | | | | | | | | | | | | | | 21,743 | | | 1,462,652 | | 12/30/2022(17) | | | | | | | | | | | | | | | 189,400 | | | 12,740,938 | Mark Partin | | | 3/30/2015(18) | | | 137,676 | | | — | | | 14.00 | | | 3/29/2025 | | | | | | | | 10/17/2016(19) | | | 48,280 | | | — | | | 14.00 | | | 10/16/2026 | | | | | | | | 3/6/2018(4) | | | 56,760 | | | — | | | 44.41 | | | 3/5/2028 | | | | | | | | 5/15/2019(5) | | | 60,890 | | | 4,060 | | | 48.65 | | | 5/15/2029 | | | | | | | | 5/15/2019(6) | | | | | | | | | | | | | | | 1,933 | | | 130,033 | | 4/15/2020(7) | | | 71,550 | | | 42,930 | | | 57.11 | | | 4/15/2030 | | | | | | | | 4/15/2020(8) | | | | | | | | | | | | | | | 19,733 | | | 1,327,439 | | 3/6/2021(13) | | | 10,705 | | | 13,765 | | | 111.53 | | | 3/6/2031 | | | | | | | | 3/6/2021(14) | | | | | | | | | | | | | | | 6,318 | | | 425,012 | | 4/4/2022(15) | | | | | | | | | | | | | | | 32,620 | | | 2,194,347 | | 4/4/2022(16) | | | | | | | | | | | | | | | 10,873 | | | 731,427 | | 12/30/2022(20) | | | | | | | | | | | | | | | 55,240 | | | 3,715,995 | Karole Morgan-Prager | | | 10/17/2016(19) | | | 117,260 | | | — | | | 14.00 | | | 10/16/2026 | | | | | | | | 3/6/2018(4) | | | 28,300 | | | — | | | 44.41 | | | 3/5/2028 | | | | | | | | 5/15/2019(5) | | | 24,000 | | | 1,600 | | | 48.65 | | | 5/15/2029 | | | | | | | | 5/15/2019(6) | | | | | | | | | | | | | | | 762 | | | 51,260 | | 4/15/2020(7) | | | 23,850 | | | 14,310 | | | 57.11 | | | 4/15/2030 | | | | | | | | 4/15/2020(8) | | | | | | | | | | | | | | | 6,578 | | | 442,502 | | 3/6/2021(13) | | | 6,067 | | | 7,803 | | | 111.53 | | | 3/6/2031 | | | | | | | | 3/6/2021(14) | | | | | | | | | | | | | | | 3,584 | | | 241,096 | | 4/4/2022(15) | | | | | | | | | | | | | | | 16,960 | | | 1,140,899 | | 4/4/2022(16) | | | | | | | | | | | | | | | 5,653 | | | 380,277 | | 12/30/2022(20) | | | | | | | | | | | | | | | 39,460 | | | 2,654,474 | Mark Woodhams | | | 8/7/2018(21) | | | 89,093 | | | | | | 49.04 | | | 8/7/2028 | | | | | | | | 5/15/2019(5) | | | 31,781 | | | 2,119 | | | 48.65 | | | 5/15/2029 | | | | | | | | 5/15/2019(6) | | | | | | | | | | | | | | | 1,009 | | | 67,875 | | 4/15/2020(7) | | | 23,850 | | | 14,310 | | | 57.11 | | | 4/15/2030 | | | | | | | | 4/15/2020(8) | | | | | | | | | | | | | | | 6,578 | | | 442,502 | | 3/6/2021(13) | | | 7,140 | | | 9,180 | | | 111.53 | | | 3/6/2031 | | | | | | | | 3/6/2021(14) | | | | | | | | | | | | | | | 4,214 | | | 283,476 | | 4/4/2022(15) | | | | | | | | | | | | | | | 19,570 | | | 1,316,474 | | 4/4/2022(16) | | | | | | | | | | | | | | | 6,523 | | | 438,802 | | 12/30/2022(20) | | | | | | | | | | | | | | | 28,410 | | | 1,911,141 |
(1)
| Each of the outstanding equity awards was granted pursuant to our 2014 Equity Incentive Plan, or 2014 Plan or 2016 Plan, as applicable. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | Named Executive Officer | | Grant Date(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 | |
TABLE OF CONTENTS (2)
| These market values are determined by multiplying the number of shares by the fair market value per share of common stock on December 31, 2022 (the last trading day of 2022), or $67.27. |
(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. At December 31, 2022, all shares were vested. |
(4)
| Twenty-five percent (25%) of the shares underlying this option vest on the first anniversary of the vesting commencement date (February 20, 2018), 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. At December 31, 2022, all shares were vested.
|
(5)
| Twenty-five percent (25%) of the shares underlying this option vest on the first anniversary of the vesting commencement date (February 20, 2019), 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.
|
(6)
| Twenty-five percent (25%) of the shares underlying this RSU award vest on the first anniversary of the vesting commencement date (February 20, 2019) 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.
|
(7)
| 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 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.
|
(8)
| 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 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.
|
(9)
| Fifty percent (50%) of the shares underlying this option vest on each of February 20, 2022 and February 20, 2023, subject to continued service with us through each vesting date. |
(10)
| Fifty percent (50%) of the shares underlying this RSU award vest on each of February 20, 2022 and February 20, 2023, subject to continued service with us through each vesting date. |
(11)
| 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. |
(12)
| Twenty-five percent (25%) of the shares vest on each of the first four anniversaries of the vesting commencement date (February 13, 2018), subject to Mr. Huffman’s continued service with us through each vesting date. At December 31, 2022, all shares were vested. |
(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.
|
(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)
| 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.
|
(16)
| 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, 2023, February 20, 2024 and February 20, 2025, 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 “2022 Performance-Based Restricted Stock Unit Performance Matrix” above. The grant date and performance-based conditions for calendar year 2023 and calendar year 2025 have not yet been established. If the full amount was granted on April 4, 2022 for each of Mr. Huffman, Mr. Partin, Ms. Morgan-Prager and Mr. Woodhams, the value of such awards at December 31, 2022 would be, $4,388,022, $2,194,347, $1,140,899, and $1,316,474, for Mr. Huffman, Mr. Partin, Ms. Morgan-Prager and Mr. Woodhams, respectively. |
(17)
| Subject to the terms of the underlying award agreement, this RSU award is eligible to vest as to zero to 200% of the shares underlying this PSU award on February 20, 2026 based on the results of performance against specified performance criteria and subject to continued service with us through each applicable vesting date. |
(18)
| 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. At December 31, 2022, all shares were vested. |
(19)
| 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, 2022, all shares were vested. |
(20)
| 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. |
(21)
| 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, 2022, all shares were vested. |
(22)
| Twenty-five percent (25%) of the shares underlying this option vest on the first anniversary of the vesting commencement date (August 20, 2018) and 1/16th of the shares subject to this 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.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | Named Executive Officer | | Grant Date(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 | |
53
_________________
(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 20, 2015), subject to continued service with us through each applicable vesting date. At December 31, 2023, all shares were vested. (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 (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 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. 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 1/16th of the shares subject to this 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. 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 on the first anniversary of the vesting commencement date (February 20, 2019), 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. 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 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. (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 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. (12)Fifty percent (50%) of the shares underlying this option vest on each of February 20, 2022 and February 20, 2023, subject to continued service with us through each vesting date. At December 31, 2023, all shares were vested.
(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. (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 $1,309,367, for Ms. Tucker, Mr. Ryan, Mr. Partin, Ms. Morgan-Prager, and Mr. Woodhams, respectively.
Stock Option Exercises and Stock Awards Vested During 20222023
The following table sets forth the number of shares acquired and the value realized upon exercise of stock options during 20222023 by each of our NEOs. The value realized on exercise of stock options is calculated based on the difference between the market price of our common stock upon exercise and the exercise price of the stock options. | | | Option Awards | | Stock Awards | | | Option Awards | | | | Option Awards | | Stock Awards | Named Executive Officer | | Number of
Shares
Acquired on
Exercise (#)(1) | | Value
Realized on
Exercise
($)(2) | | Number of
Shares
Acquired on
Vesting (#) | | Value
Realized on
Vesting ($) | Named Executive Officer | | Number of Shares Acquired on Exercise (#)(1) | | Value Realized on Exercise ($)(2) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) | Therese Tucker | | — | | — | | 40,797 | | 2,853,824 | Therese Tucker | | — | | 73,541 | | 4,903,746 | Owen Ryan | | Owen Ryan | | — | | 3,401 | | 182,056 | Marc Huffman | | — | | — | | 73,263 | | 5,455,262 | Marc Huffman | | 262,690 | | 5,739,781 | | 55,734 | | 3,620,615 | Mark Partin | | — | | — | | 27,499 | | 1,909,902 | Mark Partin | | 45,000 | | 2,398,201 | | 38,708 | | 2,461,799 | Karole Morgan-Prager | | — | | — | | 11,066 | | 770,163 | Karole Morgan-Prager | | — | | 17,560 | | 1,126,042 | Mark Woodhams | | — | | — | | 23,940 | | 1,691,515 | 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. (1)
| Reflects the aggregate number of shares of common stock underlying the stock options that were exercised in 2022. |
(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. |
Potential Payments Upon Termination or Change of Control
The 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, 2022,2023, 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 a Change 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 . Therese Tucker
| | | | | | | | | | Cash severance(2) | | | 757,469 | | | 258,000 | | | 363,932 | Continued health coverage | | | — | | | — | | | — | Accelerated equity vesting(3) | | | — | | | — | | | 7,580,526 | Marc Huffman
| | | | | | | | | | Cash severance(4) | | | 500,000 | | | — | | | 750,000 | Continued health coverage(5) | | | 16,287 | | | — | | | 24,147 | Accelerated equity vesting(3) | | | — | | | — | | | 23,460,824 | Mark Partin
| | | | | | | | | | Cash severance(6) | | | 205,000 | | | — | | | 410,000 | Continued health coverage(5) | | | 13,524 | | | — | | | 26,733 | Accelerated equity vesting(3) | | | — | | | — | | | 10,498,939 | Karole Morgan-Prager
| | | | | | | | | | Cash severance(6) | | | 195,000 | | | — | | | 390,000 | Continued health coverage(5) | | | 4,053 | | | — | | | 8,012 | Accelerated equity vesting(3) | | | — | | | — | | | 5,846,312 | Mark Woodhams
| | | | | | | | | | Cash severance(6) | | | 200,000 | | | — | | | 400,000 | Continued health coverage(5) | | | 11,745 | | | — | | | 23,216 | Accelerated equity vesting(3) | | | — | | | — | | | 5,522,787 |
(1)
| A qualifying termination of employment is considered “in connection with a change of control” if such termination occurs within the period commencing three (3) months before and ending twelve (12) months (or twenty-four (24) months for Ms. Tucker) after a “change of control”. |
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.TABLE OF CONTENTS (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. (2)
| These estimates of cash severance payable to Ms. Tucker include: for termination upon a qualifying termination not in connection with a change of control, lump sum payments of 18 months of base salary and COBRA premium costs and prorated annual bonus for the year of termination; for termination due to death or disability, a prorated annual bonus for the year of termination; and for a qualifying termination in connection with a change of control, lump sum payments of 12 months of base salary and COBRA premium costs. |
(3)
| For purposes of valuing accelerated vesting, the values indicated in the table are calculated, with respect to stock options, as the aggregate difference between $67.27, the closing price of a share of our common stock on December 31, 2022 (the last trading day of 2022), and the exercise price of the applicable option, multiplied by the number of unvested shares accelerated, with respect to time-based RSUs, $67.27 multiplied by the number of unvested RSUs accelerated, and, with repsect to performance-based PSUs, $67.27 multiplied by the number of PSUs for which performance conditions would be satisfied, or for which time-based vesting requirements would be accelerated. |
(4)
| These estimates of cash severance payable to Mr. Huffman include: for termination upon a qualifying termination not in connection with a change of control, a lump sum payment of 12 months of base salary; and for a qualifying termination in connection with a change of control, a lump sum payment of 18 months of base salary. |
(5)
| These estimates of continued health coverage reflect the present value of monthly COBRA premium payments for the applicable severance period. |
(6)
| These estimates of cash severance payable to Mr. Partin, Ms. Morgan-Prager and Mr. Woodhams include: for termination upon 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 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 and Owen Ryan We entered into an employment agreement with Ms. Tucker and Mr. Ryan that providesprovide for change of control and severance benefits under certain circumstances. See “Executive Employment Arrangements—Therese Tucker” and “Executive Employment Arrangements—Owen Ryan” for further details.
Mark Partin, Karole Morgan-Prager, and Mark Woodhams On May 12, 2022, our Compensation Committee conducted a periodic review of the severance and changeOur Change in control protections provided to our NEOs other than Ms. Tucker under the Change of Control and Severance Policy. Based on such review, conducted with Compensia, the committee made certain modifications to such protections to align them with protections provided at compensation peer companies.
For Mr. Huffman, upon a qualifying termination in connection with a change of control, his cash severance would increase from six months of base salary to 18 months of base salary and his benefits continuation protection would increase from six months to 18 months. In addition, the change of control protection period for Mr. Huffman was extended to include a three-month period prior to the change of control. Upon a qualifying termination outside of the change of control period, his cash severance would increase from six months of his base salary to 12 months of his base salary and his benefits continuation protection period would increase from six months to 12 months. No changes were made to provide increased equity acceleration.
For the Company's NEOs other than Ms. Tucker and Mr. Huffman, upon a qualifying termination in connection with a change of control, the NEO's cash severance will increase from six months of base salary to 12 months of base salary, and benefits continuation protection will increase from six months to 12 months. No changes were made to benefits for a qualifying termination outside of the change of control period, and no changes were made to provide increased equity acceleration.
After the modifications to the Policy on May 12, 2022, the Policy provides for the following change of control and severance benefits for our NEOsMr. Partin, Ms. Morgan-Prager and other key employees, other than Ms. Tucker:Mr. Woodhams:
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 (or for Mr. Huffman, three months prior to) 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 one year (or for Mr. Huffman, 18 months) 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 TABLE OF CONTENTS
•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 for Mr. Huffman, 18 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 (or for Mr. Huffman, 12 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 for Mr. Huffman, 12 months) or a taxable lump sum payment in lieu of payment or reimbursement, as applicable.
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.
Marc Huffman
On March 5, 2023, we entered into a separation agreement and release with Mr. Huffman in connection with his separation from the Company, effective as of March 6, 2023. Because Mr. Huffman’s separation was a termination without cause under the Policy, in accordance with Mr. Huffman’s existing rights under the Policy for a termination without cause, under the terms of that separation agreement, providesin 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 date of Mr. Huffman’s departure. In addition, pursuant to that separation agreement, Mr. Huffman has 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 will continuecontinued to vest based on the original terms of such awards and he will bewas paid $80,000 in consulting fees.
Equity Compensation Plan Information The following table summarizes information about our equity compensation plans as of December 31, 2022.2023. 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)) | 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 | | 5,029,489(1) | | $44.98(2) | | 17,348,731(3) | 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 | | — | | — | | — | Equity compensation plans not approved by security holders | | — | | | — | | | — | | Total | | 5,029,489 | | $44.98 | | 17,348,731 | 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. (1)
| The amount consists of (i) 2,431,255 options to purchase shares of our common stock under our 2016 Plan and 2014 Plan that contain service-only vesting conditions; (ii) 2,201,594 shares subject to outstanding RSUs; (iii) 207,240 shares subject to outstanding RSUs with service and performance conditions; and (iv) 189,400 shares subject to outstanding RSUs with service, performance, and market conditions. |
TABLE OF CONTENTS
(2)
| Indicates a weighted average price for outstanding options to purchase 2,431,255 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 16,421,759 shares of our common stock reserved for issuance under our 2016 Plan and 926,972 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, 2023, the number of shares of our common stock reserved for issuance under our 2016 plan increased by 3,000,841 shares pursuant to this provision. This increase is not reflected in the table above. |
Under 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 Date
We identified the median employee using our employee population on November 1, 20222023 (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, 2022.2023. 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, 2022,2023, and annualized the compensation values of individuals that joined our Company during 2022.2023. We did not exclude workers in non-U.S. countries and did not make any cost-of-living adjustments.
Methodology and Pay Ratio
After 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 $187,628.$174,313. Our ChiefCo-Chief Executive Officer’sOfficer, Therese Tucker’s, compensation as reported in the Summary Compensation Table was $21,871,907.$8,527,312. Therefore, ourher CEO Pay Ratio for 20222023 is approximately 11749 to 1. Our Co-Chief Executive Officer, Owen Ryan’s, compensation
as 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.
TABLE OF CONTENTS Pay Versus Performance
Under 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 companyCompany 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 2022,2023, compared to our total shareholder return (TSR)TSR from December 31, 2019 through the end of each such year, and our net income and revenue for each such year. 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 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 Index Total 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) | |
(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. |
(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 our PEO in each listed year. 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. |
Summary compensation table total | | | $21,871,907 | | | $6,046,686 | | | $8,437,695 | Subtract grant date fair value of option awards and stock awards granted in fiscal year | | | (20,955,837) | | | (5,010,486) | | | (7,668,886) | Add fair value at fiscal year-end of outstanding and unvested option awards and stock awards granted in fiscal year | | | 20,226,134 | | | 4,627,638 | | | 22,447,884 | Adjust for change in fair value of outstanding and unvested option awards and stock awards granted in prior fiscal years | | | (2,139,424) | | | (5,223,682) | | | 9,394,923 | Add fair value at vesting of option awards and stock awards granted in fiscal year that vested during fiscal year | | | — | | | — | | | — | 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 | | | (4,571,807) | | | (1,146,834) | | | 2,297,800 | 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 | | | — | | | — | | | — | Compensation actually paid | | | $14,430,973 | | | $(706,678) | | | $34,909,416 |
*
| 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 |
(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 | $ | 3,430,050 | | Subtract grant date fair value of option awards and stock awards granted in fiscal year | (2,873,555) | | Add fair value at fiscal year-end of outstanding and unvested option awards shownand stock awards granted in this table are different from those used to determine thefiscal year | 2,106,038 | | Adjust for change in fair values disclosed as of the grant date of such awards. The assumptions used for determining fair values shown in this table are: |
Expected life (in years) | | | 3.66 - 5.42 years | | | 3.73 - 5.52 years | | | 4.28 - 5.76 years | Volatility | | | 52.17 - 59.47% | | | 51.23 - 54.18% | | | 46.73 - 55.99% | Risk-free rate | | | 1.75 - 4.10% | | | 0.39 - 2.33% | | | 0.24 - 1.96% | Expected dividend yield | | | 0%
| | | 0%
| | | 0%
|
TABLE OF CONTENTS
(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. |
Therese Tucker | | | Therese Tucker | | | Marc Huffman | Mark Partin | | | Mark Partin | | | Mark Partin | Karole Morgan-Prager | | | Peter Hirsch | | | Karole Morgan-Prager | Mark Woodhams | | | Mark Woodhams | | | Peter Hirsch |
(5)
| This figure is the average of compensation actually paid for our NEOs other than our PEO in each listed year. 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. |
Summary compensation table total | | | $5,676,538 | | | $3,169,239 | | | $4,066,289 | Subtract grant date fair value of option awards and stock awards granted in fiscal year | | | (5,048,172) | | | (2,485,254) | | | (3,377,093) | Add fair value at fiscal year-end of outstanding and unvested option awards and stock awards granted in fiscal year | | | 4,717,965 | | | 2,314,313 | | | 9,885,146 | Adjust for change in fair value of outstanding and unvested option awards and stock awards granted in prior fiscal years | | | (1,995,550) | | | (3,522,839) | | | 8,020,865 | Add fair value at vesting of option awards and stock awards granted in fiscal year that vested during fiscal year | | | — | | | — | | | — | 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 | | | (2,279,160) | | | (2,040,122) | | | 1,870,812 | 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 | | | — | | | — | | | — | Compensation actually paid | | | $1,071,621 | | | $(2,564,663) | | | $20,466,019 |
*
| The assumptions used for determining the fair valuesvalue of outstanding and unvested option awards shownand stock awards granted in this table are different from those used to determine theprior fiscal years | (354,091) | | Add fair values disclosedvalue at vesting of option awards and stock awards granted in fiscal year that vested during fiscal year | — | | Adjust for change in fair value as of the grantvesting date of such awards. The assumptions usedoption awards and stock awards granted in prior fiscal years for determiningwhich applicable vesting conditions were satisfied during fiscal year | (412,944) | | Subtract fair values shownvalue as of prior fiscal year-end of option awards and stock awards granted in the table are: |
Expected life (in years) | | | 3.64 - 5.42 years | | | 3.77 - 5.52 years | | | 3.81 - 5.76 years | Volatility | | | 52.17 - 59.47% | | | 51.23 - 54.16% | | | 46.69 - 55.99% | Risk-free rate | | | 1.72 - 4.10% | | | 0.46 - 2.33% | | | 0.19 - 2.06% | Expected dividend yield | | | 0%
| | | 0%
| | | 0%
|
(6)
| Total shareholder return is calculated by assumingprior fiscal years that a $100 investment was made on the day priorfailed to the firstmeet applicable vesting conditions during 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. Total shareholder return 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 2022 to link compensationCompensation actually paid to performance. | $ | 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 Measures
The 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 2022,2023, to Company performance.
Performance Measure8:8: Revenue
•Revenue •Non-GAAP Net Income
•Annualized Recurring Revenue (ARR)
•Stock Price
8
| Please see Appendix A to this proxy statement for reconciliation of non-GAAP financial measures to GAAP financial measures. |
TABLE OF CONTENTS Description of Relationships Between Compensation Actually Paid and Performance
Compensation 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 and cumulative total shareholder return, were bothwas lower than Summary Compensation Table Total compensation in 2022 and 2021 relative to 2020. Our CEO CAP was higher2023, aligning with the decrease in 2022 than in 2021, while our cumulative TSR was lower in 2022 than in 2021, but this was largely due toover the year-end fair value of performance-based equity awards (including retention awards) granted to Mr. Huffman in 2022. As disclosed above under the Section titled “Compensation Discussion and Analysis – Individual Compensation Elements – Long-Term Equity Compensation,” because Mr. Huffman’s employment terminated effective March 6, 2023, he forfeited the majority of these awards (including all such retention awards).
Our averageperiod. Average NEO CAP was also lower in 2022 and 2021 relative to 2020, but, in contrast to our CEO CAP, our average NEO CAP saw a smaller increase from 2021 to 2022.reflected similar alignment, falling below Summary Compensation Table values. This smaller increasepattern is also largely due toseen in prior years, reflecting the alignment of CEO and NEO compensation with shareholder returns.
In 2023, our 2022 grants of retention awards. Our average NEO CAP figures also reflect thatTSR underperformed the NEOs included in each year, as determined under the relevant rules, are different in each of the disclosed years.
During the three-year period covered by this disclosure, our cumulative TSR measured for each disclosed year outperformed the cumulative TSR of the S&P 500 Software & Services Select Index measured onIndex.Over the same basis.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 2021 relative to 2020 and then increased in 2022 so that net income in 2022 was higher relative to eachprior years. This reflects a change from the directional alignment of 2021 and 2020. These changes are directionally aligned with changes in our CEO CAP and average NEO CAP over these years.with net income from 2020 - 2022.
Our revenue increased each year from 2020 to 2022.2023. These increases are not directionally aligned with overall decreases in our CEO CAP and average NEO CAP from 2020 to 2022,2023, 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.
SECURITY OWNERSHIP The 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 partnership
(“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.
RELATED PERSON TRANSACTIONS Related Person Transactions
The following is a summary of transactions since January 1, 20222023 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 “Compensation Discussion and Analysis.” Stockholders’ Agreement We are party to the Stockholders’ Agreement, which contains specific rights, obligations and agreements of our Stockholder Parties as owners of our common stock. In addition, the Stockholders’ Agreement contains provisions related to the composition of our Board, which are discussed under the section titled “Board of Directors and Corporate Governance-Composition of the Board.” Voting Agreement Under the Stockholders’ Agreement, our Stockholder 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 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, which are discussed under the section titled “Board of Directors and Corporate Governance-Composition of the Board.” Registration Rights Agreement We are party to an Amended and Restated Registration Rights Agreement with our Stockholder Parties, dated as of October 27, 2016 or the (“Registration Rights Agreement.Agreement”). Under the Registration Rights Agreement, Ms. Tucker is entitled to certain S-3 registration rights and we will be required to pay the registration expenses (other than underwriting discounts and commissions and stock transfer taxes) of the shares registered. The registration rights have terminated as to the other parties. We filed one 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 Stockholder 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 Ms. Tucker and her 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 Company and holders of a majority of Registrable Securities, any Registrable Securities held by a person will cease to be Registrable Securities if they can be sold without limitation under Rule 144 of the Securities Act. Indemnification of Officers and Directors Our 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. TABLE OF CONTENTS
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, except
that, 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. 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. We 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. Policies and Procedures for Related Party Transactions In connection with our initial public offering, our Audit Committee and our Board approved a Related Party Transactions Policy which provides that our Audit 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 (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 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, and are on terms no less favorable to us than those that we could obtain from unaffiliated third parties.
TABLE OF CONTENTS The following table sets forth the beneficial ownership of our capital stock as of March 1, 2023 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 60,335,407 shares of our common stock outstanding at March 1, 2023. 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, 2023, 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.
Greater than 5% Stockholders:
| | | | | | | Funds Affiliated with Clearlake(1) | | | 5,712,300 | | | 9.60% | Funds Affiliated with Vanguard(2) | | | 5,332,091 | | | 8.92% | Funds Affiliated with BlackRock(3) | | | 3,965,756 | | | 6.60% | Named Executive Officers and Directors:
| | | | | | | Marc Huffman(4) | | | 335,849 | | | * | Karole Morgan-Prager(5) | | | 227,648 | | | * | Mark Partin(6) | | | 436,379 | | | * | Brunilda Rios | | | — | | | * | Owen Ryan(7) | | | 13,185 | | | * | Kevin Thompson(8) | | | 13,108 | | | * | Therese Tucker(9) | | | 4,729,330 | | | 7.78% | Thomas Unterman(10) | | | 99,182 | | | * | Sophia Velastegui(11) | | | 5,576 | | | * | Barbara Whye(12) | | | 1,977 | | | * | Mark Woodhams(13) | | | 182,239 | | | * | Mika Yamamoto(14) | | | 8,308 | | | * | Amit Yoran | | | — | | | * | All current directors and executive officers as a group (14 people)(15) | | | 6,146,803 | | | 9.93% |
*
| Represents beneficial ownership of less than 1%. |
(1)
| Based on a Schedule 13G filed February 14, 2023, by Clearlake Capital Group, L.P., or Clearlake. 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 of 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 partnership (“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. |
(2)
| Based on a Schedule 13G filed February 9, 2023, by The Vanguard Group, or Vanguard, 100 Vanguard Blvd., Malvern, PA 19355, Vanguard may be deemed to be the beneficial owner of 5,332,091 shares of common stock, over which it has (i) sole dispositive power over 5,182,943 shares held by Vanguard, (ii) shared dispositive power over 149,148 shares and (iii) shared voting power over 94,442 shares. |
TABLE OF CONTENTS
(3)
| Based on a Schedule 13G filed February 1, 2023, by BlackRock, Inc., or BlackRock, 55 East 52nd Street, New York, NY 10055. BlackRock may be deemed to be the beneficial owner of 3,965,756 shares of common stock, over which it has (i) sole dispositive power over 3,965,756 shares held by BlackRock, (ii) shared dispositive power over 0 shares, (iii) sole voting power over 3,880,391 shares and (iv) shared voting power over 0 shares.
|
(4)
| Includes (i) 48,689 shares of common stock held by Mr. Huffman and (ii) 287,160 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 1, 2023. |
(5)
| Includes (i) 23,319 shares of common stock held by Ms. Morgan-Prager and (ii) 204,329 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 1, 2023. |
(6)
| Includes (i) 62,774 shares of common stock held by Mr. Partin and (ii) 373,605 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 1, 2023. |
(7)
| Includes (i) 10,311 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, 2023. |
(8)
| Includes (i) 8,712 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, 2023. |
(9)
| 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) 123,625 shares of common stock held by Therese Tucker, and (xi) 432,053 shares of common stock subject to options which are exercisable within 60 days of March 1, 2023. Ms. Tucker has shared voting and investment power over 1,409,193 shares. |
(10)
| Includes (i) 50,000 shares of common stock held by ETU Rustic Canyon Trust of which Mr. Unterman is the trustee and (ii) 49,182 shares of common stock held by Mr. Unterman. |
(11)
| Includes 5,576 shares of common stock held by Ms. Velastegui. |
(12)
| Includes 1,977 shares of common stock held by Ms. Whye. |
(13)
| Includes (i) 24,851 shares of common stock held by Mr. Woodhams and (ii) 157,388 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of March 1, 2023. |
(14)
| Includes (i) 7,542 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, 2023. |
(15)
| Includes 1,556,593 shares of common stock subject to options which are exercisable within 60 days of March 1, 2023. |
TABLE OF CONTENTS
Delinquent Section 16(a) Reports Section 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 Reporting 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 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. 2023 Annual Report
Our financial statements for our fiscal year ended December 31, 20222023 are included in our 20222023 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 20222023 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, 12th12th floor, Woodland Hills, CA 91367, Attention: Investor Relations. Company Website We 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 Bylaws A 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.
STOCKHOLDER PROPOSAL DEADLINES FOR 20242025 ANNUAL MEETING Stockholder Proposals for Inclusion in Proxy Statement Stockholders 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 29, 2023.2024. 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-sponsored proxy materials. Proposals should be addressed to: BlackLine, Inc.
Attn: Corporate Secretary
21300 Victory Boulevard, 12th12th Floor
Woodland Hills, California 91367 Stockholder Proposals and Director Nominations Not for Inclusion in Proxy Statement Our 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 20242025 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 20242025 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 12, 2024,11, 2025, and •not later than the close of business on February 12, 2024.10, 2025. In addition, stockholders who intend to solicit proxies in support of director nominees other than the Company's nominees must also comply with the additional requirements of Rule 14a-19(b). If we hold our 20242025 annual meeting of stockholders more than 30 days before or more than 60 days after the one-year anniversary date of the 20232024 annual meeting, then such written notice must be received no earlier than the close of business on the 120th120th day before the 20242025 annual meeting and no later than the close of business on the later of the following two dates: • | the 90th day prior to our 2024•the 90th day prior to our 2025 annual meeting of stockholders, or •the 10th day following the day on which public announcement of the date of our 2025 annual meeting of stockholders is first made. |
• | the 10th day following the day on which public announcement of the date of our 2024 annual meeting of stockholders is first made.
|
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: BlackLine, Inc.
Attn: Corporate Secretary
21300 Victory Boulevard, 12th12th Floor
Woodland Hills, California 91367 For information on how to access our bylaws, please see the section entitled “Availability of Bylaws,” and for additional information regarding stockholder recommendations for director candidates, please see the section entitled “Board of Directors and Corporate Governance—Stockholder Recommendations for Nominations to our Board.”
TABLE OF CONTENTS ********* We know of no other matters to be submitted at the 20232024 annual meeting. If any other matters properly come before the 20232024 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. It is important that your shares be represented at the 20232024 annual meeting, regardless of the number of shares that you hold. You are, therefore, urged to vote as promptly as possible to ensure your vote is recorded. THE BOARD OF DIRECTORS Woodland Hills, California March 28, 202327, 2024
Unaudited Reconciliation of Non-GAAP Financial Measures
(in thousands, except percentages) Non-GAAP Net Income (Loss) Attributable to BlackLine, Inc.:
| | | | | | | Net loss attributable to BlackLine, Inc. | | | $(29,391) | | | $(115,161) | Benefit from income taxes related to acquisitions | | | (13,634) | | | (961) | Amortization of intangible assets | | | 19,731 | | | 10,479 | Stock-based compensation | | | 75,576 | | | 65,723 | Amortization of debt discount and issuance costs | | | 5,511 | | | 55,538 | Change in fair value of contingent consideration | | | (35,130) | | | (2,758) | Transaction-related costs | | | 16,831 | | | 1,586 | Legal settlement costs | | | 1,709 | | | — | Impairment of cloud computing implementation costs | | | 5,330 | | | — | Restructuring costs | | | 3,841 | | | — | Adjustment to redeemable non-controlling interest | | | (4,131) | | | 15,077 | Loss on extinguishment of convertible senior notes | | | — | | | 7,012 | Total non-GAAP net income attributable to BlackLine, Inc. | | | $46,243 | | | $36,535 |
Free Cash Flow:
| | | | | | | Net cash provided by operating activities | | | $56,013 | | | $80,093 | Adjustments:
| | | | | | | Capitalized software development costs | | | (19,208) | | | (14,536) | Purchases of property and equipment | | | (10,974) | | | (8,729) | Financed purchases of property and equipment | | | (84) | | | (549) | Free cash flow | | | $25,747 | | | $56,279 |
| | | | | | | | | | | | | 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 | |
(1) Beginning in 2023, includes amortization related to stock-based compensation that was capitalized in capitalized software development costs in previous periods and totaled $2.1 million for the year ended December 31, 2023. | | | | | | | | | | | | | 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 | |
TABLE OF CONTENTS Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLYTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. V35578-P01864 ! ! ! For All Withhold All For All Except For Against Abstain ! !! ! !! BLACKLINE, INC. To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(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 2023 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 3. 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 electronic voting instruction form. During The Meeting - Go to www.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
TABLE OF CONTENTS
V35579-P01864 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. BLACKLINE, INC. Annual Meeting of Shareholders May 9, 2024 9:00 a.m. PT This proxy is solicited by the Board of Directors The shareholder(s) hereby appoint(s) Mark Partin, Chief Financial Officer, and Karole Morgan-Prager, Chief Legal and Administrative Officer and Secretary, or either of them, as proxies, each with the power to appoint his or her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of BLACKLINE, INC. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 9:00 a.m. PT on May 9, 2024, at www.virtualshareholdermeeting.com/BL2024, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Continued and to be signed on reverse side |
|