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18, 2022
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(415) 877-4012.
Zack Rinat
and Chairman of the Board of Directors
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| Risk Oversight |
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Stockholder Recommendations for Nominations to the Board of Directors |
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•the election of three Class IIIII directors to hold office until the 20212025 Annual Meeting of Stockholders and until their successors are elected and qualified, subject to earlier resignation or removal;
a proposal to amend our 2013 Equity Incentive Plan;
•a proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2018;2022;
•any other business that may properly come before the meeting.
•FOR the re-election of Baljit Dail, Melissa FisherJason Blessing, Kim DeCarlis and Alan Henricks,Dave Yarnold, our nominees for Class IIIII directors;
FOR •the amendment to our 2013 Equity Incentive Plan; and
FOR the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2018.2022; and
you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote in person at the Annual Meeting.
•by Internet at http://www.voteproxy.com, 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on February 15, 201817, 2022 (have your Notice or proxy card in hand when you visit the website);
•by toll-free telephone at 800-776-9437 (or 718-921-8500 for international callers) until 11:59 p.m. Eastern Time on February 15, 201817, 2022 (have your Notice or proxy card in hand when you call);
•by completing and mailing your proxy card so that it is received prior to the Annual Meeting; or
•by written ballotvoting online at the Annual Meeting.
•entering a new vote by Internet or by telephone (until 11:59 p.m. Eastern Time on February 15, 2018)17, 2022);
•returning a later-dated proxy card so that it is received prior to the Annual Meeting;
•notifying the Corporate Secretary of Model N, in writing, at the address listed on the front page; or
•completing a written ballot online at the Annual Meeting.
•Proposal No. 1: The election of directors requires a plurality vote of the shares of common stock voted at the meeting. “Plurality” means that the nominees who receive the largest number of votes cast “FOR” are elected as directors. As a result, any shares not voted “FOR” a particular nominee (whether as a result of stockholder withholding or a broker non-vote) will not be counted in such nominee’s favor.
Proposal No. 3: The ratification of the appointment of PricewaterhouseCoopers LLP must receive the affirmative vote of the holders of a majority of the votes cast byvoting power of the holdersshares of shares representedstock entitled to vote on such matter that are present in person or represented by proxy at the meeting and are voted for or against the matter.
What does it mean if multiple members of my household are stockholders but we only received one Notice or full set of proxy materials in the mail?
610-4800.
http:
| Class |
| Age |
| Position |
| Year Elected Director |
| Current Term Expires |
| Expiration of Term For Which Nominated | Nominees | Class | Age | Position | Year Elected Director | Current Term Expires | Expiration of Term For Which Nominated | ||||||||||||||||||||||||||||||||
| Jason Blessing | Jason Blessing | III | 50 | Chief Executive Officer and Director | 2018 | 2022 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Kim DeCarlis | Kim DeCarlis | III | 55 | Director | 2020 | 2022 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Dave Yarnold | Dave Yarnold | III | 61 | Director | 2018 | 2022 | 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Continuing Directors | Continuing Directors | |||||||||||||||||||||||||||||||||||||||||||||||||
| Tim Adams | Tim Adams | I | 62 | Director | 2016 | 2023 | — | |||||||||||||||||||||||||||||||||||||||||||
| Manisha Shetty Gulati | Manisha Shetty Gulati | I | 43 | Director | 2020 | 2023 | — | |||||||||||||||||||||||||||||||||||||||||||
| Scott Reese | Scott Reese | I | 49 | Director | 2019 | 2023 | — | |||||||||||||||||||||||||||||||||||||||||||
Baljit Dail |
| II |
| 50 |
| Director |
| 2017 |
| 2018 |
| 2021 | Baljit Dail | II | 54 | Director | 2017 | 2024 | — | |||||||||||||||||||||||||||||||
Melissa Fisher |
| II |
| 45 |
| Director |
| 2016 |
| 2018 |
| 2021 | Melissa Fisher | II | 49 | Director | 2016 | 2024 | — | |||||||||||||||||||||||||||||||
Alan Henricks |
| II |
| 67 |
| Director |
| 2015 |
| 2018 |
| 2021 | Alan Henricks | II | 71 | Director | 2015 | 2024 | — | |||||||||||||||||||||||||||||||
Continuing Directors |
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Tim Adams |
| I |
| 58 |
| Director |
| 2016 |
| 2020 |
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David Bonnette |
| I |
| 47 |
| Director |
| 2014 |
| 2020 |
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Zack Rinat |
| III |
| 59 |
| Chief Executive Officer and Chairman of the Board |
| 1999 |
| 2019 |
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Charles Robel |
| III |
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| Director |
| 2007 |
| 2019 |
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Baljit Dail
Melissa Fisher
Alan HenricksKim DeCarlis has served as a member of our board of directors since May 2015.January 2020. Since May 2009, Mr. HenricksApril 2019, Ms. DeCarlis has been a board member, advisor and consultant to a variety of private technology companies. He consulted as Chief Financial Officer for Livescribe Inc., Santur Corporation and AcademixDirect, Inc. From September 2006 to May 2009, Mr. Henricks served as Chief FinancialMarketing Officer of Pure Digital Technologies, Inc. PriorPerimeterX, a leading provider of application security solutions that keep digital businesses safe. From April 2017 to September 2006, Mr. Henricks2018, Ms. DeCarlis served as Chief FinancialMarketing Officer of several private and public companies including Traiana Inc., Informix Software, Inc., Documentum, Inc., Borland International, Inc., Cornish & Carey and Maxim Integrated Products, Inc. Since Marchat Gigamon, an industry leader in traffic visibility solutions. From October 2014 Mr. Henricks has alsoto November 2016, Ms. DeCarlis served as Chief Marketing Officer at Imperva, a memberprovider of data and application security solutions. Before that, Ms. DeCarlis led the board of directors of A10 Networks, Inc., and since May 2012 he hasworldwide marketing organization at BMC, served as a memberthe VP of the boardcorporate marketing at Citrix, and was SVP of directors and audit committee chairman of Roku, Inc., a consumer electronics company. From April 2010 to June 2015 he served as a member of the board of directors of Ellie Mae,product marketing at Information Resources, Inc., a provider of softwarebig data solutions to the mortgage industry. Mr. Henricks holdsCPG and retail industries. Ms. DeCarlis is a B.S.frequent speaker at industry events on cyber security, B2B marketing and C-level engagement. Ms. DeCarlis is a graduate of Stanford University with a bachelor’s degree in Engineering from the Massachusetts Institute of Technology and an MBA from Stanford University.industrial engineering. Our board of directors determined that Mr. HenricksMs. DeCarlis should serve as a director based on his extensiveher significant experience serving as a chief financial officer of both publicworking with SaaS companies and private companies.her significant marketing experience.
Continuing Directors
Tim Adams
David Bonnette
Zack Rinat is our founder and has served as the Chairman of our board of directors since our inception in December 1999. Mr. Rinat has also served as our Chief Executive Officer from DecemberNovember 1999 to February 2016, when he became our Executive Chairman. In November 2016,March 2003, Mr. Rinat resumed his role as our Chief Executive Officer. Previously, Mr. RinatReese served as Vice President and General Manager of Sun Microsystems, Inc.’s NetDynamics, Inc. business unit.Operations at VIA Development Corporation. In addition to his work at Autodesk, Mr. Rinat co-founded and served as President and Chief Executive Officer of NetDynamics, Inc., an application software company, until its acquisition by Sun Microsystems in 1998. From 2005 to 2012, Mr. Rinat also served on the board of directors of Conduit Ltd., a provider of cloud-based solutions for web publishers, including as the Chairman from 2005 to 2011. Previously, he held senior management positions in operations, marketing and engineering at Silicon Graphics, Inc., and at Advanced Technology Israel. Mr. Rinat holds an MBA from the Harvard Business School and a BA in computer science from the Technion (Israel Institute of Technology). Our board of directors determined that Mr. Rinat should serve as a director based on his position as Chief Executive Officer of our company, his long history with our company and his understanding of the software industry.
Charles Robel has served as a member of our board of directors since January 2007. Mr. Robel also currentlyReese serves on the board of directorsThe National Action Council for Minorities in Engineering, Inc. (NACME). NACME’s goal is to increase representation and opportunities for those who are underrepresented in the engineering workforce. Mr. Reese holds an MBA and Bachelor's of The Go Daddy Group, Inc. From January 2011 to June 2017, Mr. Robel served on the board of directors of Jive Software,Science in Computer Information Systems from November 2005 to August 2015, Mr. Robel served on the board of directors of Informatica Corporation, from June 2011 to December 2014, Mr. Robel served as a member of the board of directors of Palo Alto Networks, Inc., from September 2007 to June 2013, Mr. Robel served as a member of the board of directors of Autodesk, Inc., from September 2006 to February 2012, Mr. Robel served as a member of the board of directors of DemandTec, Inc., from June 2006 to February 2011, Mr. Robel served as the Chairman of the board of directors of McAfee, Inc., and from June 2000 to December 2005, Mr. Robel served as Managing Member and Chief Operating Officer at Hummer Winblad Venture Partners. Mr. Robel began his career at PricewaterhouseCoopers LLP, from
which he retired as a partner in June 2000. Mr. Robel holds a BS in accounting from Arizona StateIndiana Wesleyan University. Our board of directors determined that Mr. RobelReese should serve as a director based on his significant experience investing inbuilding and serving on the boards of directors of other technology companies and his significant financial and accounting experience.
developing products.
APPROVAL OF AN AMENDMENT TO THE MODEL N, INC.
2013 EQUITY INCENTIVE PLAN
We are asking our stockholders to approve an amendment to the Model N. Inc. 2013 Equity Incentive Plan (“Plan”) to (i) increase the authorized number of shares of our common stock reserved for issuance under the Plan by 2,000,000 shares, (ii) limit the maximum number of shares that may be granted under the Plan to each of our non-employee directors each year and (iii) prohibit repricing of options or stock appreciation rights without prior stockholder approval (“Plan Amendment”). We believe the proposed Plan Amendment would enable us to continue to attract, retain and reward talented individuals who possess the skills necessary to expand our business and assist in the achievement of our strategic objectives.
We believe that our future success and our ability to remain competitive are dependent on our continuing efforts to attract, retain and motivate highly qualified personnel. Competition for these people in our industry is intense. Traditionally, a cornerstone of our method for attracting and retaining top caliber employees has been our equity-based compensation programs, including the grant of options, restricted stock units and other awards under the Plan. Allowing employees to participate in owning shares of our common stock helps align the objectives of our stockholders and our employees and is important in attracting, motivating and retaining the highly skilled personnel that are essential to our success.
We are asking our stockholders to approve an increase to the authorized number of shares of our common stock reserved for issuance under the Plan by 2,000,000 shares. We are also asking our stockholders to approve a limit on the maximum number of shares that may be granted to each of our non-employee directors each year and a prohibition on the repricing of options or stock appreciate rights without prior stockholder approval. Our Board of Directors approved the Plan Amendment on December 18, 2017, subject to approval by stockholders. If stockholders do not approve the Plan Amendment, no shares will be added to the number of shares reserved for issuance under the Plan the limit on grants to non-employee directors as well as the prohibition on repricing without prior stockholder approval will not take effect.
In evaluating the proposed Plan Amendment, our Board of Directors considered a number of factors, including the costs of the Plan Amendment as well as an analysis of certain burn rate, dilution and overhang metrics as summarized below:
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The material terms of the Plan, as would be amended by the Plan Amendment, are summarized below. The summary is qualified in its entirety by reference to the full text of the Plan, which is attached as Appendix A to this Proxy Statement.
Background. The Plan was adopted by our Board of Directors in February 2013, and approved by our stockholders in March 2013 in connection with our initial public offering. At our Annual Meeting in January 2014, our stockholders re-approved the Plan to satisfy stockholder approval requirements of Section 162(m) of the Internal Revenue Code, as described below.
Purpose. The purpose of the Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to our success.
Eligibility. The individuals eligible to participate in the Plan include our officers and other employees, our non-employee directors and any consultants. However, only employees may receive incentive stock options under the Plan and consultants and directors must render bona fide services not in connection with the offer and sale of our securities in a capital-raising transaction. As of September 30, 2017, we had six executive officers, six non-employee directors and 858 other employees and consultants who were eligible to participate in the Plan.
Administration. The Plan is administered by our Compensation Committee, all of the members of which are non-employee directors under applicable federal securities laws and outside directors as defined under applicable federal tax laws. However, our Board of Directors will establish the terms for the grant of an award to non-employee directors. Subject to the terms of the Plan, the Compensation Committee has full power to implement and carry out the terms of the Plan, including to determine which individuals are eligible to receive awards under the Plan, the time or times when such awards are to be made, the number of shares subject to each such award, the status of any granted option as either an incentive stock option (ISO) or a non-statutory stock option (NSO) under U.S. federal tax laws, the vesting schedule applicable to an award, the maximum term for which any award is to remain outstanding, and the terms and conditions of the award agreements for use under the Plan. The Compensation Committee also determines the exercise price of stock options granted under the Plan, the purchase price for rights to purchase restricted stock, if applicable, and the exercise price for stock appreciation rights.
Share Reserve. As of the date the Plan Amendment is approved by Model N’s stockholders, the total number of shares reserved for issuance under the Plan will be 15,131,932 shares. No more than 8,000,000 shares may be issued pursuant to the exercise of incentive stock options. The shares may be authorized but unissued or reacquired shares.
In addition, the following shares are available for grant and issuance under our Plan:
shares subject to options or SARs granted under our Plan that cease to be subject to the option or SAR for any reason other than exercise of the option or SAR;
shares subject to awards granted under our Plan that are subsequently forfeited or repurchased by us at the original issue price;
shares subject to awards granted under our Plan that otherwise terminate without shares being issued;
shares surrendered, cancelled, or exchanged for cash or a different award (or combination thereof);
shares reserved but not issued or subject to outstanding grants under our 2010 Equity Incentive Plan;
shares issuable upon the exercise of awards under our 2010 Equity Incentive Plan that cease to be subject to such awards by forfeiture or otherwise;
shares issued under our 2010 Equity Incentive Plan that are forfeited or repurchased by us at the original issue price; and
shares subject to awards under our 2010 Equity Incentive Plan or our Plan that are used to pay the exercise price of an option or withheld to satisfy the tax withholding obligations related to any award.
Subject to the terms of the Plan, the reserve under the Plan, the maximum number of shares that may be issued as ISOs, the maximum number of shares that may be granted to non-employee directors, the awards outstanding, applicable exercise prices, and individual or other award limits would be proportionately adjusted if the number of our outstanding shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in our capital structure, in each case, without consideration.
Equity Awards. The Plan permits us to grant the following types of awards:
Stock options. The Plan provides for the grant of ISOs to employees, and NSOs to employees, directors and consultants. Options may be granted with terms determined by the Compensation Committee, provided that ISOs are subject to additional statutory limitations. The exercise price of stock options granted under the Plan must be at least equal to the fair market value of our common stock on the date of grant. ISOs granted to an individual who holds, directly or by attribution, more than ten percent of the total combined voting power of all classes of our capital stock must have an exercise price of at least 110% of the fair market value of our common stock on the date of grant.
Options may vest based on service or achievement of performance conditions. The maximum term of options granted under the Plan is ten years from the date of grant, except that the maximum permitted term of ISOs granted to an individual who holds, directly or by
attribution, more than ten percent of the total combined voting power of all classes of our capital stock is five years from the date of grant.
After an optionee’s employment or service terminates, he or she may exercise his or her vested option for the period of time stated in the stock option agreement to which such option relates. Generally, if termination is due to death or disability, the vested option will remain exercisable for 12 months. In all other cases, the vested option will generally remain exercisable for three months. Notwithstanding the foregoing, if an optionee is terminated for “cause” (as defined in the Plan), then the optionee’s options shall expire on the optionee’s termination date or at such later time and on such conditions as determined by the Compensation Committee. In no event may an option be exercised later than its expiration date.
Restricted Stock Units. RSUs represent the right to receive shares of our common stock at a specified date in the future, subject to forfeiture of such right due to termination of employment or failure to achieve specified performance conditions. If the RSU has not been forfeited, then on the date specified in the RSU agreement, we will deliver to the holder of the RSU, whole shares of our common stock, cash or a combination of our common stock and cash.
Restricted Stock. A restricted stock award is an offer by us to sell shares of our common stock subject to restrictions that the Compensation Committee may impose. These restrictions may be based on completion of a specified period of service with us or upon the completion of performance goals during a performance period. The price of a restricted stock award, if any, will be determined by the Compensation Committee. Unless otherwise determined by the Compensation Committee at the time of award, vesting ceases on the date the participant no longer provides services to us and unvested shares are forfeited to us or subject to repurchase by us.
Stock Appreciation Rights. Stock appreciation rights (SARs) provide for a payment, or payments, in cash or shares of common stock, to the holder based upon the difference between the fair market value of our common stock on the date of exercise and the stated exercise price. SARs may vest based on service or achievement of performance conditions.
Performance Shares. Performance shares are performance awards that cover a number of shares of our common stock that may be settled upon achievement of the pre-established performance conditions in cash or by issuance of the underlying shares. These awards are subject to forfeiture because of termination of employment or failure to achieve the performance conditions.
Stock Bonuses. Stock bonuses are granted as additional compensation for performance and therefore are not issued in exchange for cash.
Performance Criteria. Our Compensation Committee may establish performance goals under which performance-based awards may be made by selecting from one or more of the following performance criteria: profit before tax; billings; revenue; net revenue; earnings (which may include earnings before interest and taxes, earnings before taxes, and net earnings); operating income; operating margin; operating profit; controllable operating profit, or net operating profit; net profit; gross margin; operating expenses or operating expenses as a percentage of revenue; net income; earnings per share; total stockholder return; market share; return on assets or net assets; our stock price; growth in stockholder value relative to a pre-determined index; return on equity; return on invested capital; cash flow (including free cash flow or operating cash flows); cash conversion cycle; economic value added; individual confidential business objectives; contract awards or backlog; overhead or other expense reduction; credit rating; strategic plan development and implementation; succession plan development and implementation; improvement in workforce diversity; customer indicators; new product invention or innovation; attainment of research and development milestones; improvements in productivity; bookings; attainment of objective operating goals and employee metrics; and any other metric that is capable of measurement as determined by the Compensation Committee.
Our Compensation Committee may establish performance goals and relevant performance criteria on a company-wide basis; with respect to one or more business units, divisions, affiliates or business segments; and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless otherwise specified by our Compensation Committee (i) in the award agreement at the time the award is granted or (ii) in such other document setting forth the performance goals and relevant performance criteria at the time the performance goals and relevant performance criteria are established, our Compensation Committee will make adjustments, if it determines appropriate in its sole discretion, in the method of calculating the attainment of the performance goals as follows: to exclude restructuring and other nonrecurring charges; to exclude exchange rate effects; to exclude the effects of changes to generally accepted accounting principles, or GAAP; to exclude the effects of any statutory adjustments to corporate tax rates; to exclude the effects of any “extraordinary items” as determined under GAAP; to exclude the dilutive effects of acquisitions or joint ventures; to assume that any business divested by our company achieved performance objectives at targeted levels during the balance of a performance period following such divestiture; to exclude the effect of any change in the outstanding shares of our common stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change,
or any distributions to common stockholders other than regular cash dividends; to exclude the effects of stock-based compensation and the award of bonuses under our bonus plans; to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under GAAP; to exclude the goodwill and intangible asset impairment charges that are required to be recorded under GAAP; and to exclude the effect of any other unusual, non-recurring gain or loss or other extraordinary item.
Prohibition on Repricing. Other than in connection with certain changes to our capital structure, the Compensation Committee may not, without the approval of our stockholders, (i) lower the exercise price per share of any option or SAR after it is granted, (ii) cancel any option or SAR when the exercise price per share exceeds the fair market value of one share in exchange for cash or another award (other than in connection with a Corporate Transaction, as described below) or (iii) take any other action with respect to an option or SAR that would be treated as a repricing under the rules and regulations of the principal U.S. national securities exchange on which our shares are listed.
Award Limits. No participant may be granted stock awards covering more than 2,000,000 shares of our common stock under the Plan during any calendar year pursuant to stock options, stock appreciation rights and other stock awards, except that new employees or directors may receive up to a maximum of 4,000,000 shares in the calendar year in which they commence service. Additionally, no participant may be granted in a calendar year a performance stock award or a performance cash award having a maximum value in excess of $5 million under the Plan. The aggregate number of shares of our common stock that may be granted to each non-employee director in any calendar year shall not exceed 250,000.
Corporate Transactions. The Plan currently provides that in the event of a specified Corporate Transaction (as defined under the Plan) outstanding awards may, without the consent of any participant, be (i) continued by us, if we are the successor entity; (ii) assumed or substituted with a substantially equivalent award by the successor corporation; (iii) accelerated, such that the awards become fully vested and exercisable, as applicable, and any repurchase or forfeiture restrictions lapse; (iv) settled in cash, cash equivalents or the securities of the successor corporation; or (v) cancelled for no consideration. The treatment of outstanding awards upon a corporate transaction need not be identical.
However, in the event of a Corporate Transaction, the vesting of all awards granted to non-employee directors will accelerate and such awards will become exercisable, as applicable, in full prior to the consummation of the Corporate Transaction, at such times and on such conditions as the Compensation Committee determines.
The Plan generally defines a “Corporate Transaction” as the occurrence of any of the following events: (i) any person becoming the beneficial owner, directly or indirectly, of our securities representing more than 50% of total voting power represented by our then-outstanding voting securities; (ii) the consummation of a merger or consolidation of us with any other corporation, other than a merger or consolidation which would result in our voting securities outstanding immediately prior to the transaction continuing to represent at least 50% of the total voting power of our voting securities or surviving entity in such transaction; (iii) sale or disposition of at least 50% of our outstanding capital stock; (iv) a change in the effective control of us that occurs on the date that a majority of members of the Board of Directors is replaced during any 12 month period by members of the Board of Directors whose appointment or election is not endorsed by as majority of the members of the Board of Directors prior to the date of the appointment or election; or (v) any other transaction which qualifies as a “corporation transaction” under Section 424(a) of the Internal Revenue Code (Code).
Transferability of Awards. Generally, a participant may not transfer an award other than by will or the laws of descent and distribution unless, in the case of awards other than ISOs, the Compensation Committee permits the transfer of an award to certain authorized transferees, as set forth in the Plan.
Amendment and Termination. The term of the Plan is ten years from February 2013, the date the Plan was approved by the Board of Directors. The Board of Directors may amend or terminate the Plan or any form of award agreement at any time, subject to stockholder approval where required. In addition, no amendment that is detrimental to a participant in the Plan may be made to an outstanding award without the consent of the affected participant.
Federal Income Tax Consequences. The following is a general summary under current law of certain U.S. federal income tax consequences to participants who are citizens or individual residents of the United States relating to the types of equity awards that may be granted under the Plan. This summary deals with the general tax principles and is provided only for general information. Certain kinds of taxes, such as foreign taxes, state and local income taxes, payroll taxes and the alternative minimum tax, are not discussed.
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Incentive Stock Options. Neither the grant nor the exercise of an incentive stock option will generally result in any taxable income to the recipient, except that the alternative minimum tax may apply at the time of exercise. The recipient will recognize a capital gain or loss on a later sale or other disposition of such shares provided the he or she does not dispose of such shares within two years from the date the option was granted or within one year after the shares were transferred to the recipient. If the shares are not held for holding period described above, the recipient will recognize ordinary income equal to the lesser of (i) the difference between the fair market value of the shares on the date of exercise and the exercise price, or (ii) the difference between the sales price and the exercise price. Any gain or loss recognized on a subsequent disposition of the shares of common stock generally will be short‐term or long‐term capital gain or loss, depending on the length of time the recipient holds the shares.
Restricted Stock Units. A holder of RSUs does not recognize taxable income when the RSU is granted. The recipient of the award generally will recognize ordinary income in each year in which the units vest in an amount equal to the fair market value of the shares of common stock received. Any gain or loss recognized on a subsequent disposition of the shares of common stock generally will be short‐term or long‐term capital gain or loss, depending on the length of time the recipient holds the shares.
Other Awards. The grant of Restricted Stock Awards, Stock Bonus Awards and Performance Shares generally will generally not be a taxable event. Generally, the recipient will recognize ordinary income equal to the excess of the fair market value over the price paid, if any, in the first taxable year in which his or her interest in the shares underlying the award becomes either (i) freely transferable or (ii) no longer subject to substantial risk of forfeiture (unless, with respect to an award of restricted stock, the recipient elects to accelerate recognition as of the date of grant).
In each of the foregoing cases, we will generally have a corresponding deduction at the time the participant recognizes ordinary income, subject to Section 162(m) of the Code and the relevant income tax regulations. Section 162(m) places a limit of $1 million on the amount of compensation that we may deduct as a business expense in any year with respect to certain of our most highly paid executive officers unless, among other things, such compensation is performance‐based and has been approved by stockholders. Generally, as discussed above, we design our executive compensation program to permit our Compensation Committee to be able to grant compensation intended to be eligible for deductibility to the extent permitted by Section 162(m) of the Code. We may from time to time, however, pay compensation to our executives that may not be deductible if the Compensation Committee believes that doing so is in the best interests of our stockholders.
ERISA Information. The Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended.
New Plan Benefits Table. We cannot currently determine the benefits or number of shares subject to awards that may be granted in the future to executive officers and employees under the Plan, as amended by the Plan Amendment, because our equity award grants are discretionary in nature. As of the date hereof, we have not granted any awards that are contingent upon the approval of the Plan Amendment.
The following table sets forth, for each of the individuals and groups indicated, the total number of shares of our common stock subject to awards that have been granted (even if not currently outstanding) under the Plan, for the period from March 18, 2013 (the date the plan became effective) through September 30, 2017. The options outstanding as of September 30, 2017 had a weighted-average exercise price of $7.71 per share. The closing price per share of our common stock as reported by the New York Stock Exchange on September 29, 2017, was $14.95.
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Approval of the Plan Amendment. If the Plan Amendment is approved by the stockholders, it will become effective on the date of the Annual Meeting. Our Board of Directors intends to cause the additional shares of common stock that would become available for issuance to be registered on a Form S-8 Registration Statement to be filed with the SEC at our expense. If stockholders do not approve this proposal, the Plan Amendment will not become effective and the Plan will continue in its current form.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL
OF THE AMENDMENT TO THE MODEL N, INC. 2013 EQUITY INCENTIVE PLAN
RATIFICATION OF APPOINTMENT OF
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Audit Fees(1) |
| $ | 1,146,000 |
|
| $ | 900,000 |
|
Audit-Related Fees(2) |
|
| 117,285 |
|
|
| 709,200 |
|
Tax Fees |
|
| — |
|
|
| — |
|
All Other Fees(3) |
|
| 1,800 |
|
|
| 1,800 |
|
Total |
| $ | 1,265,085 |
|
| $ | 1,611,000 |
|
|
|
|
|
| 2021 | 2020 | ||||||||||
| Audit Fees (1) | $ | 1,827,000 | $ | 1,650,765 | |||||||
| Audit-Related Fees | — | — | |||||||||
| Tax Fees | — | — | |||||||||
| All Other Fees (2) | $ | 2,900 | $ | 2,700 | |||||||
| Total | $ | 1,829,900 | $ | 1,653,465 | |||||||
|
|
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP.
Our Board of Directors has established corporate governance guidelines which state that when the chairperson of the Board and chief executive officer positions are held by the same person, a lead independent director may be designated. Becausetwo different individuals. Mr. Rinat isBlessing serves as our Chief Executive Officer, and Mr. Dail serves as our Chairman. This structure allows our Chief Executive Officer to focus on our day-to-day business while our Chairman leads our Board in its fundamental role of Directors appointed Mr. Charles Robelproviding advice to serveand independent oversight of management. Our Board believes such separation is appropriate, as our lead independent director. As lead independent director, among other responsibilities, Mr. Robel presides over regularly scheduled meetings at which only our independent directors are present, serves as a liaison betweenit enhances the accountability of the Chief Executive Officer to the Board and strengthens the independent directors and performs such additional duties as ourindependence of the Board of Directors may otherwise determine and delegate.
Tim Adams •evaluates the qualifications, independence and performance of our independent registered public accounting firm; •determines the engagement of our independent registered public accounting firm and reviews and approves the scope of the annual audit and the fees paid to our independent registered public accounting firm; •discusses with management and our independent registered public accounting firm the results of the annual audit and the review of our financial statements; •approves the retention of our independent registered public accounting firm; •reviews our critical accounting policies and estimates and internal control over financial reporting; and •reviews the Audit Committee charter and its performance.BoardBoard of Directorstwenty-threeten times during fiscal year 2017.2021. No director attended fewer than 75% of the total number of meetings of the Board and of any Board committees of which he or she was a member during fiscal year 2017.2021. It is our policy that directors are invited and encouraged to attend our annual meetings of stockholders. FiveNine of our directors attended the 20172021 Annual Meeting of Stockholders.20172021 for each of our Board committees:NameAuditCommitteeCompensationCommitteeNominating andCorporate GovernanceCommitteeZack Rinat*Audit
CommitteeCompensation
CommitteeNominating and
Corporate
Governance
CommitteeCharles Robel**
M 
C M David BonnetteM 
Baljit DailM C Melissa Fisher
Alan Henricks
C Kim DeCarlis M ChairmanNon-executive Chair of the Board ** Lead Independent Director C = 
Chairperson Chair M = Member
RobelAdams and Henricks, and Ms. Fisher are each an Audit Committee financial expert, as that term is defined under SEC rules, and possess financial sophistication as defined under the rules of the New York Stock Exchange. The designation does not impose on any of them any duties, obligations or liabilities that are greater than those generally imposed on members of our Audit Committee and our Board of Directors. The Audit Committee met foursix times during fiscal year 2017.2021. Among other matters, the Audit Committee:http:https://investor.modeln.com/govdocsgovernance/governance-documents/.
