To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019 | |
1. | To elect the three Class III director nominees identified in this Proxy Statement to the Board of Directors (the “Board”), each to serve until the 2023 annual meeting of stockholders and until his successor is elected and qualified (the “Election of Directors”). |
| |
2. | To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020 (the “Auditor Ratification Proposal”). |
The Company will also transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
| |
Q: | How many shares must be represented to have a quorum and hold the Annual Meeting? |
| |
A: | The presence in person or by proxy of holders of outstanding shares representing a majority of the voting power as of the Record Date is needed for a quorum at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. |
| |
Q: | How can I attend and vote at the Annual Meeting? |
| |
A: | There will be no in-person component to the Annual Meeting, which will be held virtually over the Internet via live audio webcast on Wednesday, June 3, 2020, at 12:00 p.m., Pacific Time, unless postponed or adjourned to a later date. Only stockholders of record as of the Record Date will be entitled to attend the virtual-only Annual Meeting. Any stockholder wishing to attend the virtual-only Annual Meeting must register in advance. To register for the virtual-only Annual Meeting, please follow the instructions as applicable to the nature of your ownership of our common stock or our Series A 13% Redeemable Convertible Preferred Stock contained earlier in this Proxy Statement in the section titled “Registration and Access to the 2020 Virtual-Only Annual Meeting.” |
Stockholders participating in the Annual Meeting will be in a listen-only mode and will not be able to speak during the webcast. However, to maintain the interactive nature of the virtual meeting, virtual attendees will be able to:
Vote using the online meeting website; and
Submit written questions or comments to the Company’s directors and officers during the meeting via the virtual-only Annual Meeting webcast.
Stockholders may submit questions or comments during the meeting via the virtual-only Annual Meeting webcast by typing in the “Submit a question” box. You will not be able to vote or submit questions unless you register for and log into the virtual meeting website as described above.
| |
Q: | What if during the check-in time or during the virtual-only Annual Meeting I have technical difficulties or trouble accessing the virtual meeting website? |
| |
A: | The host of our virtual-only Annual Meeting platform, Continental Stock Transfer, will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the Continental Stock Transfer technical support at (917) 262-2373. |
| |
A: | If you are a stockholder of record on the Record Date, you may vote in person atonline during the virtual-only Annual Meeting or in advance of the Annual Meeting. You can vote in advance of the Annual Meeting by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed, postage-paid envelope, or, if you prefer, by following the instructions on your proxy card for internet voting. Please have your proxy card with you if you are going to vote through the internet. Ifinternet in advance of the Annual Meeting. During the virtual-only Annual Meeting, you attendmay vote using the online meeting website. However, you will not be able to vote during the Annual Meeting unless you register for and log into the virtual meeting website, as described above in person, you may request a ballot when you arrive.the section titled “Registration and Access to the 2020 Virtual-Only Annual Meeting.” |
If you hold your shares in street name through a broker, bank or other nominee rather than directly in your own name, you are considered the beneficial owner of those shares, and this Proxy Statement is being forwarded to you by your broker, bank or other nominee, together with a voting instruction card. To vote atduring the virtual-only Annual Meeting, beneficial owners will need
to contact the broker, bank or other nominee that holds their shares to obtain a “legal proxy” to bringand register for the virtual-only Annual Meeting using the procedures described above in the section titled “Registration and Access to the 2020 Virtual-Only Annual Meeting.”
If you hold shares in the name of a broker, bank or other nominee you may be able to vote those shares by internet or telephone depending on the voting procedures used by your broker, bank or other nominee, as explained below under the question “How do I vote if my shares are held in “street name” by a broker, bank or other nominee?”
| |
Q: | How do I vote if my shares are held in “street name” by a broker, bank or other nominee? |
| |
A: | If your shares are held by a broker, bank or other nominee (this is called “street name”), your broker, bank or other nominee (your “Financial Institution”) will send you instructions for voting those shares. Many (but not all) Financial Institutions participate in a program provided through Broadridge Investor Communication Solutions that offers internet and telephone voting options. |
| |
Q: | How do I change my vote? |
| |
A: | You may revoke your proxy and change your vote at any time before it is exercised at the Annual Meeting. You can revoke a proxy by (i) giving written notice to the Company’s secretary at the address listed on the first page of this Proxy Statement, (ii) delivering an executed, later-dated proxy or (iii) voting in person atduring the Annual Meeting. However, your attendance at thevirtual-only Annual Meeting through the meeting website. However, registering for and attending the virtual-only Annual Meeting via the meeting website will not automatically revoke your proxy unless you also vote atduring the meeting using the meeting website or specifically request in writing that your proxy be revoked. If your shares of common stock are held in street name and you wish to change or revoke your voting instructions, you should contact your Financial Institution for information on how to do so. |
| |
Q: | What is the voting standard for the Election of Directors? |
| |
A: | In regard to the Election of Directors, you may vote “FOR” all or some of the nominees or you may “WITHHOLD” your vote for any nominee you specify. |
Directors are elected by a plurality of votes cast at the Annual Meeting. As a result, the twothree directors receiving the highest number of “FOR” votes will be elected as directors.
| |
Q: | What is the voting standard for the Auditor Ratification Proposal? |
| |
A: | You may vote “FOR,” “AGAINST” or “ABSTAIN” on the Auditor Ratification Proposal. |
The approval of the Auditor Ratification Proposal requires the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote.
Abstentions will have the same effect as a vote cast “AGAINST” the Auditor Ratification Proposal.
| |
Q: | How does the Company’s Board of Directors recommend that I vote? |
| |
A: | The Board unanimously recommends that you vote: |
“FOR” the election of each of the Class IIIII director nominees to the Board identified in this Proxy Statement; and
“FOR” the Auditor Ratification Proposal.
| |
Q: | What are “broker votes” and “broker non-votes?” |
| |
A: | On certain “routine” matters, Financial Institutions have discretionary authority under applicable stock exchange rules to vote their customers’ shares if their customers do not provide voting instructions. When a Financial Institution votes its customers’ shares on a routine matter without receiving voting instructions (referred to as a “broker vote”), these shares are counted both for establishing a quorum to conduct business at the Annual Meeting and in determining the number of shares voted “FOR” or “AGAINST” the routine matter. For purposes of the Annual Meeting, the Auditor Ratification Proposal is considered a “routine” matter. |
Under New York Stock Exchange (“(“NYSE”) requirements generally applicable to Financial Institutions, the Electionelection of Directorsdirectors is considered a “non-routine” matter for which Financial Institutions do not have discretionary authority to vote their customers’ shares if their customers did not provide voting instructions. Therefore, for purposes of the Annual Meeting, if you hold your stock through an account at a Financial Institution, your Financial Institution may not vote your
shares on your behalf on this proposal without receiving instructions from you. When a Financial Institution does not have the authority to vote its customers’ shares or does not exercise its authority, these situations are referred to as “broker non-votes.” Broker non-votes are only counted for establishing a quorum and will have no effect on the outcome of the vote.
We encourage you to provide voting instructions to your Financial Institution so that your shares will be voted at the Annual Meeting on all matters up for consideration.
| |
Q: | What information is available on the internet? |
| |
A: | A copy of this Proxy Statement and our 20182019 Annual Report to Stockholders is available for download free of charge at https://www.cstproxy.com/riministreet/2019.2020. |
Our website address is www.riministreet.com. We use our website as a channel of distribution for important information about us. Important information, including press releases, investor presentations and financial information regarding Rimini Street, is routinely posted on and accessible on the “Investor Relations” subpage of our website.
In addition, we make available on the “Investor Relations” subpage of our website free of charge the reports we file with the SEC (e.g., our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A, and beneficial ownership reports on Forms 3, 4 and 5). Further, copies of our Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and our Amended and Restated Bylaws (the “Bylaws”), our Code of Business Conduct and Ethics, our Amended and Restated Corporate Governance Guidelines (the “Corporate Governance Guidelines”) and the charters for the Audit, Compensation and Nominating & Corporate Governance Committees of the Board are also available on the “Investor Relations” subpage of our website.
Information from our website is not incorporated by reference into this Proxy Statement.
| |
Q: | What if I return my proxy card (or complete the internet voting procedures) but do not provide voting instructions? |
| |
A: | The Board has named Seth A. Ravin, our Chief Executive Officer and Chairman of the Board, and Daniel B. Winslow, SeniorExecutive Vice President, General CounselChief Legal Officer and Secretary, as official proxy holders. They will vote all proxies, or record an abstention or withholding as applicable, in accordance with the instructions you provide. |
IF YOU ARE A REGISTERED HOLDER AND SIGN AND RETURN YOUR PROXY CARD BUT GIVE NO DIRECTION OR COMPLETE THE INTERNET VOTING PROCEDURES BUT DO NOT SPECIFY HOW YOU WANT TO VOTE YOUR SHARES, YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH THE BOARD’S RECOMMENDATIONS ON EACH PROPOSAL.
| |
Q: | Who is soliciting my vote? |
| |
A: | Our Board is soliciting your vote for matters being submitted for stockholder approval at the Annual Meeting. |
| |
Q: | Who will bear the cost for soliciting votes for the Annual Meeting? |
| |
A: | We will bear the cost of soliciting proxies. In addition to the use of mail, our directors, officers and non-officer employees may solicit proxies in person or by telephone or other means. These persons will not be compensated for the solicitation but may be reimbursed for out-of-pocket expenses. Morrow Sodali LLC has been retained by the Company to provide broker search and materials distribution services, as well as serve as the Company’s Administration Agent for the Annual Meeting, for a fee of $2,500$7,500 plus distribution costs and other expenses. We have also made arrangements with certain Financial Institutions and other custodians to forward this material to the beneficial owners of our common stock, and we will reimburse them for their reasonable out-of-pocket expenses. |
| |
Q: | Who will count the votes? |
| |
A: | We have hired our Transfer Agent, Continental Stock Transfer, & Trust Company, to tabulate the votes cast at the Annual Meeting and be responsible for determining whether or not a quorum is present. |
| |
Q: | Where can I find voting results of the Annual Meeting? |
| |
A: | We will announce preliminary voting results at the Annual Meeting and publish final results on a Current Report on Form 8-K that we expect to file with the SEC within four business days after the Annual Meeting (a copy of which will be available on the “Investors Relations” subpage of our website). |
| |
Q: | May I propose actions for consideration at the next Annual Meeting of Stockholders or nominate individuals to serve as directors? |
| |
A: | You may submit proposals for consideration at future stockholder meetings, including director nominations, if you satisfy the applicable requirements. Please see “Other Matters and Additional Information” for more details. |
| |
Q: | Whom should I contact with questions about the Annual Meeting? |
| |
A: | If you have any questions about this Proxy Statement or the Annual Meeting, please contact the Rimini Street Investor Relations Department by email at IR@riministreet.com or by calling (925) 523-7636. |
| |
Q: | What if I have more than one account? |
| |
A: | Please vote proxies for all accounts so that all your shares are voted. You may be able to consolidate multiple accounts through our Transfer Agent, Continental Stock Transfer, & Trust Company, online at www.continentalstock.com or by calling (212) 509-4000. |
| |
Q: | Will a list of stockholders entitled to vote at the Annual Meeting be available? |
| |
A: | In accordance with Delaware law, a list of stockholders entitled to vote at the Annual Meeting will be available for inspection by any stockholder for any purpose germane to the Annual Meeting for a period of 10 days prior to the Annual Meeting. If you want to inspect the stockholder list, call our Investor Relations department at our California Operations Center, where(925) 523-7636. In addition, the list of stockholders entitled to vote at the Annual Meeting will be located, on June 6, 2019, and will be accessibleavailable for ten days prior to the date ofexamination during the Annual Meeting betweenvia the hours of 9:00 a.m. and 5:00 p.m., Pacific Time, Monday through Friday, at both our principal executive offices in Nevada and our California Operations Center (see the first page of this Proxy Statement for address information).online meeting website. |
| |
Q: | Where and when is the Annual Meeting being held? |
| |
A: | We will hold the Annual Meeting at our California Operations Center located at 6601 Koll Center Parkway, Suite 300, Pleasanton, California 94566 on Thursday, June 6, 2019, at 12:00 p.m., Pacific Time, unless postponed or adjourned to a later date. |
| |
Q: | What are the implications of being an “Emerging Growth Company”? |
| |
A: | We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and currently mayexpect to remain an emerging growth company until the last day of the fiscal year ending December 31, 2020. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for an emerging growth company. For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include reduced disclosure obligations regarding executive compensation. In addition, as an emerging growth company, we are not required to conduct votes seeking approval, on an advisory basis, of the compensation of our named executive officers or the frequency with which such votes must be conducted. We may take advantage of some or all of these exemptions until such time as we are no longer an emerging growth company. We would cease to be an emerging growth company earlier than December 31, 2020 if we have more than $1$1.07 billion in annual revenue, we have more than $700 million in market value of our stock held by non-affiliates or we issue more than $1 billion of non-convertible debt over a three-year period. We have taken advantage of certain reduced reporting obligations in this Proxy Statement. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. |
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees
The Board has nominated each of the Class IIIII directors named below for election at the Annual Meeting. TheTwo of the nominees, Seth A. Ravin and Steve Capelli, currently serve as directors. Each person elected will serve until the 20222023 annual meeting of stockholders and until his successor has been elected and has qualified. Although the Board does not contemplate that any of the nominees will be unable to serve, if such a situation arises, the Board may designate a substitute nominee or reduce the size of the Board. If the Board designates a substitute nominee, proxies will be voted for such substitute nominee.
The Nominating & Corporate Governance Committee of the Board (the “Nominating Committee”) is responsible for director recruitment and recommending to the Board all director nominees. Stockholders who wish to recommend a person for consideration as a director nominee should follow the procedures described below under the heading “Stockholder Recommendation of Nominees.” The Board selected the nominees for election at the Annual Meeting upon the unanimous recommendation of the members of the Nominating Committee.
Board Composition
The following table sets forth the names, ages and positions of the members of the Board as of April 30, 2019:29, 2020:
|
| | | | |
Name | | Age | | Position(s) with the Company |
| | | | |
Class I Directors (term continues through 2021) | | | | |
Margaret (Peggy) Taylor(1)(2) | | 6869 | | Lead Independent Director; Chair of Compensation Committee |
Thomas Ashburn(1)(3) | | 7576 | | Director; Chair of Nominating Committee |
Jack L. Acosta(2) | | 7172 | | Director; Chair of Audit Committee |
| | | | |
Class II Director Nominees (for termDirectors (term continues through 2022) | | | | |
Robin Murray(3) | | 54 | | Director |
Antonio Bonchristiano | | 5253 | | Director |
| | | | |
Class III Directors (term continuesDirector Nominees (for term through 2020)2023) | | | | |
Seth A. Ravin | | 5253 | | Chairman of the Board and Chief Executive Officer |
Steve Capelli(1)(2)(3) | | 6263 | | Director |
Jay Snyder | | 49 | | Class III Director Nominee at the 2020 Annual Meeting |
| | | | |
Class III Director (term continues through 2020 Annual Meeting) | | | | |
Andrew Fleiss(1)(2)(3) | | 4041 | | Director |
_____________________________
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
(3) Member of the Nominating Committee
Mr. Thomas C. Shay retired as a member of the Board effective as of January 31, 2019. The Board did not appoint2019, and served as a newClass II director inprior to his retirement. Mr. Shay’s placeShay was also the Company’s Senior Vice President, Global Operations, and reduced the size of the Board to eight members.Secretary.
Continuing Directors – Biographical Information
Class I Directors – Biographical Information
Margaret (Peggy) Taylor
Ms. Taylor has served as a member of the Board since October 2017, and previously served on the board of directors of RSI from January 2014 until October 2017. Ms. Taylor served as President of PeopleSoft Investments, Inc., an investment management and advisory services company and subsidiary of PeopleSoft, Inc., an enterprise software company (acquired by Oracle Corporation), from January 2000 until her retirement in January 2005, and as Senior Vice President of Corporate Operations of PeopleSoft, Inc. from January 1989 to December 1999. Since January 2005, she has served as a private investor/advisor. From January 2000 to December 2003, Ms. Taylor served as President of Nevada Pacific Development Corp., a consulting services firm. From December 1999 to December 2000, Ms. Taylor served as Chief Executive Officer of Venture Builders, LLC, a consulting company for start-up businesses. From May 1986 to October 1988, Ms. Taylor served as a Vice President of Trust and Investment Management at Hibernia Bank, a financial institution. From January
1983 to October 1985, Ms. Taylor served as Vice President of Organization, Planning, and Development at Bank of California, a financial institution. Ms. Taylor has also served on the Board of Directors of numerous publicly traded corporations, including Fair Isaac Corporation, a decision analytics company, from December 1999 to February 2012. In addition, Ms. Taylor has served and continues to serve as a member of the Board of Directors of various private companies. Ms. Taylor holds a Bachelor of Arts degree in Communications and Psychology from Lone Mountain College of California. Ms. Taylor has also completed the Corporate Governance Program at Stanford Business School and the Compensation Committees Program at Harvard Business School.
Director Qualifications. We believe Ms. Taylor is qualified to serve as a member of our Board because of her extensive experience in the enterprise software industry and serving on boards of directors of various technology companies.
Jack L. Acosta
Mr. Acosta has served as a member of the Board since October 2017, and previously served on the board of directors of RSI from October 2013 until October 2017. Mr. Acosta served as Chief Financial Officer and Vice President, Finance of Portal Software, a software company acquired by Oracle Corporation, from February 1999 until his retirement in September 2001. Since September 2001, he has served as a private investor/advisor. In addition, Mr. Acosta served as Secretary of Portal Software from February 1999 to April 1999. From July 1996 to January 1999, Mr. Acosta served as Executive Vice President and Chief Financial Officer of Sybase, Inc., a database company acquired by SAP AG. Mr. Acosta serves on the Board of Directors of Five9, Inc., a provider of cloud software for contact centers. From March 2004 to July 2009, Mr. Acosta served on the Board of Directors of SumTotal Systems, Inc., a provider of learning, performance and compensation management software and services. Mr. Acosta has served and continues to serve as a member of various private company boards of directors. Mr. Acosta holds a Bachelor of Science degree in Industrial Relations from California State University, East Bay, a Masters of Science degree in Management Sciences from California State University, East Bay and an Honorary Doctor of Humane Letters degree from California State University, East Bay.
Director Qualifications. We believe Mr. Acosta is qualified to serve as a member of our Board because of his extensive experience in the enterprise software industry and serving on the boards of directors of various technology companies.
Thomas Ashburn
Mr. Ashburn has served as a member of the Board since October 2017, and previously served on the board of directors of RSI from January 2014 until October 2017. Mr. Ashburn served in various management positions at BEA Systems, Inc., an enterprise infrastructure software company acquired by Oracle Corporation, from February 2002 until his retirement in 2007, including President, Worldwide Field Organization, from May 2006 to 2007, Executive Vice President, Worldwide Field Organization, from August 2004 to May 2006, and Executive Vice President, Worldwide Services, from February 2002 to August 2004. Mr. Ashburn served as an advisor to BEA Systems, Inc. for Worldwide Services from August 2001 to February 2002. Prior to his service with BEA Systems, Inc., Mr. Ashburn served in various management positions at Hewlett-Packard Company, a multinational information technology company, including most recently as Vice President and General Manager, Hewlett-Packard Services, from 1998 to February 2001. Since 2007, Mr. Ashburn has served as a private investor/advisor. Mr. Ashburn has also served and continues to serve as a member of various private company boards of directors. Mr. Ashburn holds a Bachelor of Science degree in Industrial Technology from California State University, Long Beach.
Director Qualifications. We believe Mr. Ashburn is qualified to serve as a member of our Board because of his extensive experience in the enterprise software industry and serving on boards of directors of various technology companies.
Jack L. Acosta
Mr. Acosta has served as a member of the Board since October 2017, and previously served on the board of directors of RSI from October 2013 until October 2017. Mr. Acosta served as Chief Financial Officer and Vice President, Finance of Portal Software, a software company acquired by Oracle Corporation, from February 1999 until his retirement in September 2001. Since September 2001, he has served as a private investor/advisor. In addition, Mr. Acosta served as Secretary of Portal Software from February 1999 to April 1999. From July 1996 to January 1999, Mr. Acosta served as Executive Vice President and Chief Financial Officer of Sybase, Inc., a database company acquired by SAP AG. Mr. Acosta serves on the Board of Directors of Five9, Inc. (Nasdaq: FIVN), a provider of cloud software for contact centers. From March 2004 to July 2009, Mr. Acosta served on the Board of Directors of SumTotal Systems, Inc., a provider of learning, performance and compensation management software and services. Mr. Acosta has served and continues to serve as a member of various private company boards of directors. Mr. Acosta holds a Bachelor of Science degree in Industrial Relations from California State University, East Bay, a Masters of Science degree in Management Sciences from California State University, East Bay and an Honorary Doctor of Humane Letters degree from California State University, East Bay.
Director Qualifications. We believe Mr. Acosta is qualified to serve as a member of our Board because of his extensive experience in the enterprise software industry, his expertise in finance matters and serving on the boards of directors of various technology companies.
Class II Director Nominees – Biographical InformationDirectors
Robin Murray
Mr. Murray has served as a member of the Board since October 2017, and previously served on the board of directors of RSI from June 2009 until October 2017. Mr. Murray is a partner at Adams Street Partners, LLC (“ASP”), a private market investments firm and affiliate of the Company, which he joined in 2008. From 2001 to 2008, Mr. Murray served as a partner at 3i Ventures Corporation, a private equity and venture capital firm, where he led the Menlo Park, California office. From 1997 to 2001, Mr. Murray served as Chief Financial Officer of both iPIN Corporation, an electronic payment technology company ultimately acquired by Intel Corporation, and Ubicoms Ltd, a company acquired by The Hackett Group. From 1988 to 1995, Mr. Murray served in various roles in the London offices of J Sainsbury plc and Ernst & Young. Mr. Murray qualified as a Chartered Accountant with the Institute of Chartered Accountants of England & Wales.
He holds a Bachelor of Science degree in Chemistry from Bristol University, England and a Masters of Business Administration from Stanford University Graduate School of Business.
Director Qualifications. We believe Mr. Murray is qualified to serve as a member of our Board because of his substantial corporate finance, business strategy and corporate development expertise gained from his significant experience in the venture capital industry analyzing, investing in and serving on the boards of directors of various private technology companies. We also value his perspective as a representative of our largest stockholder.
Antonio Bonchristiano
Mr. Bonchristiano has served as a member of the Board since October 2017, and previously served on the board of directors of GPIA from March 2015 until October 2017. He served as the Chief Executive Officer and Chief Financial Officer of GPIA from March 2015 until October 2017. He is a member of the Board and Chief Executive Officer of GP Investments, Ltd., a global private equity firm and affiliate of the Company, which he joined in 1993. He has served as a Managing Director of GP Investments since 1995. Prior to joining GP Investments, Mr. Bonchristiano was a Partner at Johnston Associates Inc., a finance consultancy based in London, and worked for Salomon Brothers Inc., an investment bank, in London and New York. Currently, he serves as a member of the Board of Directors of AMBEV GP Advisors,S.A. and SPICE.FoodFirst Global Restaurants. Mr. Bonchristiano is also on the boards of several non-profit organizations, including: Fundação Bienal and Fundação Estudar in São Paulo, Brazil and John Carter Brown Library in Providence, Rhode Island.Island - USA and Bodleian Library, University of Oxford. Previously, he served as a member of the boards of directors of several companies including BHG, Estácio, BR Properties,Allis Participações S.A., LBR Lácteos Brasil S.A., Kuala S.A., LAHotels S.A., Sé Supermercados, ABC Supermercados S.A., ALL - América Latina Logística S.A., Companhia Energética do Maranhão - CEMAR, Gafisa,Hopi Hari S.A., Submarino S.A., Geodex Commumication S.A., Equatorial Energia S.A., Trio Assessoria, BR Malls Participações S.A., Tempo andParticipações S.A., Gafisa S.A, Magnesita Refratários.rios S.A., Spice Private Equity (Zug), Ltd. and Playcenter S.A. He was also previously the Chief Financial Officer of SuperMar Supermercados and Founder and Chief Executive Officer of Submarino. Mr. Bonchristiano holds a Bachelor of Arts degree in Politics, Philosophy, and Economics from the University of Oxford.
Mr. Bonchristiano, together with several individuals, is a named defendant in a criminal proceeding in the Criminal Court of Brazil alleging failure of a portfolio company, LBR Lácteos Brasil, S.A. (“LBR”), of an investment fund of GP Capital Partners IV, L.P., with which Mr. Bonchristiano is affiliated, to pay certain taxes on operations and circulation of goods required under the Brazilian tax code. Mr. Bonchristiano was serving as a Board member of Monticiano Participações, a shareholder of LBR, when the alleged infractions occurred, and the Company understands Mr. Bonchristiano had no day-to-day control over LBR’s financial operations. He has pled “not guilty” to all charges. The Company has been advised that no discovery has been conducted by the prosecutor and there have been no findings of fact by the presiding criminal judge.
Director Qualifications. We believe Mr. Bonchristiano is qualified to serve as a member of our Board due to his extensive experience in private equity, numerous directorship roles and financial expertise. We also value his perspective as a representative of one of our largest stockholders.
Class III Directors – Biographical InformationDirector Nominees
Seth A. Ravin
Mr. Ravin founded Rimini Street and has served as our (and prior to October 2017, RSI’s) Chief Executive Officer, Chairman of the Board and a director since September 2005 and also served as President from September 2005 to January 2011. Prior to joining us, Mr. Ravin served in various executive roles at TomorrowNow, Inc. from May 2002 to April 2005, most recently as President and a board director. TomorrowNow, Inc. was a supplier of software maintenance and support services for Oracle’s PeopleSoft and J.D. Edwards applications, and was acquired in January 2005 as a wholly-owned subsidiary of SAP America, Inc. From April 2000 to March 2001, Mr. Ravin served as Vice President of Inside Sales for Saba Software, Inc., a provider of e-Learning and human resource management software. From April 1996 to April 2000, Mr. Ravin served in various management roles at PeopleSoft, Inc., an enterprise software company acquired by Oracle, most recently as a Vice President of the Customer Sales Division. Mr. Ravin holds a Bachelor of Science degree in Business Administration from the University of Southern California.
Director Qualifications. We believe Mr. Ravin is qualified to serve as a member of our Board because of the perspective and experience he brings as Rimini Street’s Chief Executive Officer. We also value his deep understanding of Rimini Street’s business as it has evolved over time and his extensive senior management expertise in the software maintenance and support services industry.
Steve Capelli
Mr. Capelli has served as a member of the Board since October 2017, and previously served on the board of directors of RSI from January 2014 until October 2017. Mr. Capelli is the Chief FinancialRevenue Officer of Blackberry Limited, an enterprise software and services company, a position he has held since October 2019. From October 2016 anduntil October 2019, Mr. Capelli served as Blackberry Limited’s Chief Financial Officer. He also served as Blackberry Limited’s Chief Operating Officer from March 2018 until February 2019. Previously, Mr. Capelli served in various management positions at Sybase, Inc., an enterprise software and services company acquired by SAP, from December 1997 to April 2012, most recently as President, Worldwide Field Operations, from August 2006 to April 2012. Mr. Capelli served as a private investor/advisor from April 2012 until joining Blackberry Limited in October 2016. From August 1992 to December 1997, Mr. Capelli served in various management positions at Siemens-Pyramid, a subsidiary of Siemens Nixdorf, a computer and electronics company, including as Chief Financial Officer, Vice President of InterContinental Sales, and Director of Field Operations. From January 2005 to November 2005, Mr. Capelli served on the Board of Directors of Apropos Technology,
Inc., a publicly traded business communication software firm. In addition, Mr. Capelli serveshas served and continues to serve as a member of the Board of Directors of various private companies. Mr. Capelli holds a Bachelor of Science degree in Accounting from The College of New Jersey and a Masters of Business Administration from Rutgers University.
Director Qualifications. We believe Mr. Capelli is qualified to serve as a member of our Board because of his extensive experience in the enterprise software industry and serving on boards of directors of various technology companies.
Andrew FleissJay Snyder
Mr. FleissSnyder is the Senior Vice President, Global Alliances, Service Providers and Industries of Dell Technologies, a digital technology solutions, products and services company, a position he has held since May 2015. Previously, he served in various management positions at Dell Technologies, including Senior Vice President, Americas Global Services (January 2014 to June 2015), Chief Operating Officer, Americas Sales and Customer Operations (January 2013 to December 2014) and Area Vice President Sales, Northern California (February 2008 to December 2012). He also served in various management positions at Dell Technologies’ predecessor entity, Dell EMC, including GM/Americas Sales Lead, EMC Consulting (2002-2008) and Director West Division; Channels, Alliances and Business Development (1999-2002), as a member of the Board since October 2017. He was a Managingwell as at PeopleSoft, Inc., an enterprise software company (acquired by Oracle Corporation), including Director, of GP Investments, Ltd., a global private equity firmTechnology Alliances and affiliate of the company, from 2015 until 2019,Business Development (January 1999 to December 1999) and has 20 years of experience in principal investments and investment banking. PriorManager, Strategic Services (February 1998 to the Mergers, he primarily focused on identifying a suitable investment opportunity for GPIA and led the team structuring a transaction with and performing due diligence on the Company. Prior to joining GP Investments,December 1998). Mr. Fleiss worked as a Principal at Liberty Partners, a private equity firm focused on control investments in manufacturing, services, healthcare and education companies, from 2003 to 2015. Prior to joining Liberty Partners, Mr. Fleiss worked from 2000 to 2003 as an Associate in the investment banking division of UBS Warburg focused on equity and debt financings, and mergers and acquisitions, for healthcare companies. Mr. FleissSnyder holds a Bachelor of Science, degree in PsychologyEconomics and Finance from Amherst College.Bentley University.
Director QualificationsQualifications.. We believe Mr. FleissSnyder is qualified to serve as a member of our Board because of his extensive software operational experience as well as industry experience in private equity and investment banking and his lead role in structuring the transaction between the Company and GPIA.customer service-oriented technology companies.
Director Nomination Process
Criteria and Diversity
Per our Corporate Governance Guidelines and the Charter for the Nominating Committee, the Nominating Committee determines, as appropriate, the desired qualifications, qualities, skills and other expertise required to be a director and recommends to the full Board criteria to be considered in selecting director nominees, including character, judgment, diversity, age, expertise, corporate experience, length of service and other commitments.
The Nominating Committee reviews on an annual basis, in the context of recommending a slate of directors for stockholder approval, the composition of the Board. In determining whether to recommend a director for re-election, the Nominating Committee considers the director’s character and integrity, past attendance at meetings, participation in and contributions to the activities of the Board and the Company, and ability to contribute to the diversity of experience and perspectives on the Board. The Nominating Committee assesses its effectiveness in this regard as part of its annual review of Board composition.
Stockholder Recommendations of Nominees
Per our Corporate Governance Guidelines, it is the policy of the Board that the Nominating Committee consider recommendations for candidates to the Board from stockholders. Stockholders may recommend director nominees for consideration by the Nominating Committee by writing to the Secretary of the Company at the address listed on the first page of this Proxy Statement and providing the information required in our Bylaws. Following verification of the stockholder status of the person submitting the recommendation, all properly submitted recommendations will be promptly brought to the attention of the Nominating Committee. The Nominating Committee does not formally distinguish between candidates recommended by stockholders and candidates recommended by other directors, management and others (including third-party search firms, which the Nominating Committee may retain from time to time). Stockholders who desire to nominate persons directly for election to the Board at the Company’s annual meeting of stockholders must meet the deadlines and other requirements set forth in our Bylaws.
Board of Directors Recommendation
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE CLASS IIIII DIRECTOR NOMINEES IDENTIFIED ABOVE.
Vote Required
Directors are elected by a plurality of the votes cast at the Annual Meeting.
CORPORATE GOVERNANCE MATTERS
Board Structure
Our business affairs are managed under the direction of the Board. Our Board consists of eight members, six of whom qualify as independent within the meaning of the independent director guidelines of the Nasdaq Global Market.Market (the “Nasdaq Global Market” or “Nasdaq”). Messrs. Ravin and Bonchristiano are not, and while henot. Mr. Shay, who served onas a member of the Board Mr. Shayuntil January 31, 2019, was not considered independent.an independent director. For additional information, please see the disclosure under the heading “Board Determination of Independence”Independence,” below.
Per our Certificate of Incorporation, the Board is divided into three staggered classes of directors. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the same class whose term is then expiring, as follows:
the Class I directors are Margaret (Peggy) Taylor, Thomas Ashburn and Jack L. Acosta, and their terms will expire at the 2021 annual meeting of stockholders;
the Class II directors (who are nominated for reelection at the Annual Meeting) are Robin Murray and Antonio Bonchristiano, and their current terms will expire at the Annual Meeting if they are not reelected;2022 annual meeting of stockholders; and
the Class III directors are Seth A. Ravin, Steve Capelli and Andrew Fleiss,Fleiss. The terms for Messrs. Ravin and their termsCapelli, who are nominated for re-election at the Annual Meeting, will expire at the 2020 annual meeting of stockholders.Annual Meeting, subject to their re-election at the Annual Meeting for a new term. Mr. Fleiss’ term will expire at the Annual Meeting, and he is not standing as a candidate for re-election.
Our Certificate of Incorporation and Bylaws provide that the number of directors, which is currently fixed at eight members, may be increased or decreased from time to time by a resolution of the Board. Each director’s term continues until the election and qualification of his or her successor, or his or her earlier death, resignation, or removal. Any increase or decrease in the number of directors generally will be distributed among the three classes so that, as nearly as possible, each class will consist of approximately one-third of the total number of directors. This classification of the Board may have the effect of delaying or preventing changes in control of the Company.
There are no family relationships among any of our directors, director nominees or executive officers.
Certain Understandings Regarding the Appointment of Messrs. Bonchristiano and Fleiss to the Board of Directors
Upon consummation of the Mergers, RSI appointed seven of the then nine members of the Board, and in accordance with the terms of the Merger Agreement, Messrs. Fleiss and Bonchristiano (the “GPIA Designated Directors”) were appointed as members of the Board by GPIC Ltd., a Bermuda company and an affiliate (the “GP Sponsor”) of GPIA’s ultimate parent entity, GP Investments, Ltd. Also, in accordance with the terms of the Merger Agreement, Mr. Bonchristiano was designated a Class II director, and Mr. Fleiss was designated a Class III director. The Merger Agreement also provides that if any GPIA Designated Director ceases to be a member of the Board for any reason prior to the expiration of such GPIA Designated Director’s initial term, as described above, then the GP Sponsor shall designate a replacement, and the Board shall appoint such designee, to serve as a GPIA Designated Director (or a successor of the GPIA Designated Director as described above) for the remainder of such initial term. The Merger Agreement also provides that, until the 2020 annual meeting of stockholders, at least one GPIA Designated Director will serve on each committee of the Board. Mr. Fleiss has served, and is expected to continue to serve, on all standing Board committees until the Annual Meeting, and the Company anticipates no designation of a replacement by the GP Sponsor after completion of Mr. Fleiss’ term as a Class III Director at the Annual Meeting.
Corporate Governance Guidelines
Our Board has adopted Corporate Governance Guidelines outlining the corporate governance policies pursuant to which the Board oversees the business and strategy of the Company, addressing items such as the qualifications and responsibilities of our directors and director candidates and the specific oversight responsibilities of the Board. As part of an overall review of the Company’s corporate governance and compliance policies that occurred in the Fall of 2019, the Board, upon the recommendation of the Nominating and Corporate Governance Committee, amended and restated the Corporate Governance Guidelines effective November 2019. You can find a copy of our Corporate Governance Guidelines on the “Investor Relations” subpage of our website.
Code of Business Conduct and Ethics
Our Board has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief FinancialAccounting Officer and other executive and senior financial officers. The purpose of the Code of Business Conduct and Ethics is to promote ethical conduct and deter wrongdoing. The policies outlined in the Code of Business Conduct and Ethics are designed to ensure that our employees, including our executive officers and members of the Board, act in accordance with not only the letter but also the spirit of the laws and regulations that apply to our business.
In late 2019, the Company enhanced its ethics and compliance programs, including by appointing a Chief Ethics & Compliance Officer and updating several corporate governance and compliance policies maintained by the Company, including its Code of Business Conduct and Ethics, its Policy Regarding Reporting of Accounting, Auditing and Other Matters (pertaining to its Whistleblower Hotlines) and other programs designed to clarify corporate expectations and the reporting process.
You can find a copy of our Code of Business Conduct and Ethics, as well as other Company corporate governance and compliance policies, on the “Investor Relations” subpage of our website.
We will post amendments to or waivers from our Code of Business Conduct and Ethics with respect to directors and executive officers on the sameour website within four business days of such amendment or waiver.
Board Leadership Structure
Our Corporate Governance Guidelines provide that at any time when the Chairman of the Board is not an independent director, the Board shall elect a “Lead Independent Director” in order to facilitate communications between Company management and non-employee directors. Because the Chairman of the Board, Mr. Ravin, also serves as our Chief Executive Officer, the Board has appointed Margaret (Peggy)Ms. Taylor to serve as its Lead Independent Director. As Lead Independent Director, Ms. Taylor communicates with our Chief Executive Officer and Chairman of the Board regarding feedback from executive sessions of the non-employee and/or independent directors, for which she is responsible for scheduling, preparing the agendas and chairing. She also serves as a liaison between members of our executive management and our non-employee and/or independent directors, disseminating information to the rest of the Board in a timely manner and raising issues with management on behalf of the non-employee and/or independent directors when appropriate.
As Chairman of the Board, Mr. Ravin is directly responsible for Board management, in particular by chairing Board meetings, providing input on the agendas for Board and Board committee meetings, evaluating the membership and chairs for Board committees and the effectiveness of the committees, and encouraging the Company’s non-employee and/or independent directors to meet regularly without management present.
The Board believes that this structure is currently is appropriate for the Company as it permits our Chief Executive Officer to speak for and lead the Company and Board while also providing for effective oversight and independent leadership by an independent director.
Board Determination of Independence
Our Board has reviewed and analyzed the independence of each director, including each of the twothree Class IIIII director nominees. The purpose of the review was to consider whether any particular relationships or transactions involving directors or their affiliates or immediate family members (i) were inconsistent with a determination that a particular director is independent for purposes of serving on the Board and its committees or (ii) could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. During this review, the Board examined whether there were any transactions and/or relationships between directors or their affiliates or immediate family members and the Company and the substance of any such transactions or relationships. They also specifically considered each of the transactions identified under the heading “Related Person Transactions” below.
The Company’s common stock is listed on the Nasdaq Global Market. Under Nasdaq listing standards, independent directors must comprise a majority of a listed company’s board of directors. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s Audit, Compensation and Nominating Committees be independent. Under Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of the Board, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Audit Committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934 (the “Exchange Act”). Compensation Committee members must also satisfy the independence criteria set forth in Rule 10C-1 under the Exchange Act.
In order to be considered independent for purposes of Rule 10A-3 and Rule 10C-1, a member of an Audit Committee or Compensation Committee of a listed company generally may not, other than in his or her capacity as a member of the committee, the Board, or any other Board committee: (1) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries.
Following its most recent independence review, which was conducted in connection with the preparation of this Proxy Statement, the Board determined that Messrs. Acosta, Ashburn, Capelli, Fleiss and Murray and Ms. Taylor, representing six of the Company’s eight directors and all of the members of the Audit, Compensation and Nominating Committees, are “independent directors” as defined under the applicable rules and regulations of the SEC and the listing standards of the Nasdaq Global Market. The Board also determined that Mr. Snyder would, if elected at the Annual Meeting, qualify as an “independent director” as defined under the applicable rules and regulations of the SEC and the listing standards of the Nasdaq Global Market.
Board of Director Meetings and Attendance; Annual Meeting Attendance
The Board holds regularly scheduled, in-person board meetings quarterly, and typically each Board committee meets separately in connection with these meetings. The Board and each committee hold telephonic meetings in between in-person meetings as needed. In 2018,2019, the Board held 14 meetings;10 meetings (one jointly with each of the Board committees and one jointly with the Compensation Committee); the Audit Committee held nine meetings;eight meetings (one jointly held with the full Board and each of the Board committees); the Compensation Committee held four meetings;six meetings (one jointly held with the full Board and each of the Board committees and one jointly held with the full Board); and the Nominating Committee held four meetings.five meetings (one jointly held with the full Board and each of the Board committees). Each director attended at least 75% of the total number of Board meetings and meetings of the committees on which he or she served during 2018.2019.
Information about director attendance at annual stockholders’ meetings can be found on the “Investor Relations” subpage of our website.
Stockholder Communications
While the Board believes that management speaks for the Company, the Board acknowledges that individual Board members may, from time to time, communicate with various constituencies that are involved with the Company, but it is expected that Board members would do this with the knowledge of management and, in most cases, only at the request of management. Stockholders who wish to communicate directly with our non-management directors can follow the procedures outlined in our “Policies and Procedures for Stockholder Communications to Independent Directors” (our “Stockholder Communications Policy”), a copy of which appears on the “Investor Relations” subpage of our website (see the first page of this Proxy Statement).website.
In accordance with our Stockholder Communications Policy, our General CounselChief Legal Officer (or another member of the Legal Department designated by the General Counsel)Chief Legal Officer) reviews all incoming stockholder communications and, if appropriate (i.e., the communication is not part of a mass mailing, a product complaint or inquiry, job inquiry or business solicitation and is not
patently offensive or otherwise inappropriate material), routes such communications to the appropriate member(s) of the Board or, if none is specified, to the Chairman of the Board. The Legal Department reviewer may decide in the exercise of his or her judgment whether a response to any stockholder communication is necessary. The General CounselChief Legal Officer provides a report to the Nominating Committee on a quarterly basis of any stockholder communications received to which a member of the Legal Department has responded.
Our Stockholder Communications Policy is administered by the Nominating Committee. This procedure does not apply to (a) communications to non-management directors from officers or directors of the Company who are also stockholders, or (b) stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act.
Committees of the Board of Directors
Under our Bylaws, the Board has the authority to appoint committees, and, accordingly, has appointed the Audit Committee, the Compensation Committee, and the Nominating Committee, each of which has the composition and responsibilities described below. Members serve on these committees until their resignation or until otherwise determined by the Board.
Audit Committee
The Audit Committee is currently comprised of Messrs. Acosta (Chair), Capelli and Fleiss and Ms. Taylor. Our Board has determined that each of the members of the Audit Committee satisfies the requirements for independence and financial literacy under the rules of the Nasdaq Global Market and the SEC and has further determined that Mr. Acosta qualifies as an “Audit Committee“audit committee financial expert” as defined by applicable SEC rulemaking and satisfies the financial sophistication requirements of the Nasdaq Global Market. The Audit Committee is responsible for, among other things:
selecting and hiring our independent registered public accounting firm;
supervising and evaluating the performance and independence of our independent registered public accounting firm;
approving the audit and audit fees and pre-approving any non-audit services to be performed by our independent registered public accounting firm;
reviewing our financial statements and related disclosures and reviewing our critical accounting policies and practices;
reviewing and discussing with management and the independent registered public accounting firm the results of our annual audit, the quarterly reviews of our financial statements, and our publicly filed reports;
preparing the Audit Committee Report that the SEC requires in our annual proxy statement;
reviewing the adequacy and effectiveness of our internal control policies and procedures and our disclosure controls and procedures;
reviewing and discussing with management and the independent registered public accounting firm, the overall adequacy and effectiveness of our legal, regulatory and ethical compliance programs;programs and on matters related to the conduct of the audit;
overseeing the internal audit function;
reviewing and discussing with management reports regarding compliance with applicable laws, regulations and internal compliance programs;
overseeing procedures for the treatment of complaints on accounting, internal accounting controls or audit matters, including the confidential, anonymous submission (and the appropriate treatment) of concerns submitted by Company employees (e.g., via the Company’s Whistleblower Hotlines) regarding accounting or auditing matters that they believe to be questionable or to be violations of the Company’s Code of Business Conduct and Ethics, the U.S. federal securities laws (or similar state and federal laws) or the Company’s Anti-Corruption Policy (including the Foreign Corrupt Practices Act and similar laws); and
reviewing and overseeing any related person transactions.
The Audit Committee also oversees the Company’s implementation of new accounting standards. You can find a copy of the Audit Committee’s Charter on the “Investor Relations” subpage of our website.
Compensation Committee
The Compensation Committee is currently comprised of Ms. Taylor (Chair) and Messrs. Ashburn, Capelli and Fleiss. Our Board has determined that each member of the Compensation Committee meets the requirements for independence under the rules of the Nasdaq Global Market and applicable SEC rules and regulations. The Compensation Committee is responsible for, among other things:
reviewing and approving our Chief Executive Officer’s and, in consultation with our Chief Executive Officer, other executive officers’ annual base salaries, incentive compensation plans, including the specific goals and amounts, equity compensation, employment agreements, severance arrangements, change in control agreements, and any other benefits, compensation or arrangements;
administering our equity compensation plans;
overseeing our overall compensation philosophy, compensation plans and benefits programs;
reviewing and evaluating director compensation; and
overseeing the succession planning of our executive officers and management team.
Subject to compliance with applicable laws and regulations, the Compensation Committee may delegate its authority to one or more subcommittees.
The Compensation Committee has the authority to engage advisors, such as compensation consultants, to assist it in carrying out its responsibilities. In connection with any such engagement, the Compensation Committee assesses the advisor’s independence in accordance with SEC and Nasdaq rules. In 2018,2019, the Compensation Committee engaged Willis Towers Watson to provide advice on the design and amount of executive andcompensation. As part of its advisory services, Willis Towers Watson also provided information regarding trends in public company director compensation.
After reviewing information provided by Willis Towers Watson regarding its independence and considering the relevant independence factors pursuant to applicable SEC rules, the Compensation Committee determined that no conflicts of interest existed in connection with the services Willis Towers Watson performed for the Compensation Committee in 2019. You can find a copy of the Compensation Committee’s Charter on the “Investor Relations” subpage of our website.
Nominating & Corporate Governance Committee
The Nominating Committee is currently comprised of Messrs. Ashburn (Chair), Capelli, Fleiss and Murray. Our Board has determined that each member of the Nominating Committee meets the requirements for independence under the rules of the Nasdaq Global Market. The Nominating Committee is responsible for, among other things:
evaluating and making recommendations regarding the composition, organization, and governance of the Board and its committees;
evaluating and making recommendations regarding the creation of additional committees, a change in mandate of our committees and dissolution of our committees;
reviewing and making recommendations with regard to our Corporate Governance Guidelines; and
reviewing and approving conflicts of interest of our directors and corporate officers, other than related person transactions reviewed by the Audit Committee.
You can find a copy of the Nominating Committee’s Charter on the “Investor Relations” subpage of our website.
The Board’s Role in Risk Oversight
Risk management is primarily the responsibility of our Company’s senior management team, while the Board is responsible for the overall supervision and oversight of our Company’s risk management activities.
The Board’s oversight of the material risks faced by the Company occurs at both the full Board level and at the committee level. For example, the Audit Committee has oversight responsibility not only for financial reporting with respect to the Company’s major financial exposures and the steps management has taken to monitor and control such exposures, but also for the effectiveness of management’s enterprise risk management process that monitors key business risks (including cybersecurity) facing the Company. Specifically, as stated in the Audit Committee’s Charter, one of the responsibilities of the Audit Committee is to “review and discuss with management and the independent auditor the Company’s major financial risk exposures and the steps management has taken to monitor and control those exposures, including the Company’s guidelines and policies with respect to risk assessment and risk management pertaining to financial, accounting, investment and tax matters.” In connection with its risk oversight role, at each of its quarterly, in-person meetings, the Audit Committee also meets privately in separate executive sessions with representatives from the Company’s independent registered public accounting firm (without any members of Company management present) and, as well as with the Company’s Senior Director of Internal Audit and Compliance FrameworksGlobal Management Systems Security (without other members of Company management present). Per its Charter,charter, the mission of the Internal Audit Department is to assist the Company in accomplishing its objectives by bringing a “systematic and disciplined approach to evaluate and improve the effectiveness of the organization’s risk management, control, and governance processes.” Finally, the Audit Committee also receives quarterly reports regarding the Company’s testing and controls implemented in compliance with the requirements of the Sarbanes-Oxley Act of 2002 and quarterly updates from the Company’s General CounselChief Legal Officer and Chief Ethics and Compliance Officer on legal matters that may have a material impact on the Company’s financial statements or compliance procedures that pertain to financial, accounting or tax matters of the Company.
In addition, as stated in its Charter,charter, one of the responsibilities of the Compensation Committee is to review and discuss with management the risks arising from the Company’s compensation policies and practices for all employees that are reasonably likely to have a material adverse effect on the Company.
Further, the Company’s General Counsel reportsChief Legal Officer and Chief Ethics & Compliance Officer report in person to the full Board on at least a quarterly basis to keep the directors informed concerning legal risks, ongoing litigation and other legal matters involving the Company and the Company’s legal risk mitigation efforts. Finally, our Chief Executive Officer periodically meets with the other directors in executive session to address operational and strategic matters, including areas of risk and opportunity that require Board attention. Further, on no less than an annual basis, the full Board reviews in detail the Company’s short- and long-term strategies, including consideration of risks facing the Company.Company and risk mitigation strategies.
By its nature, risk oversight is an evolving process requiring the Company to continually look for opportunities to further embed systematic enterprise risk management into ongoing business processes across the organization. The Board actively encourages management to continue to review and improve its methods of assessing and mitigating risk.
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee is or has been an officer or employee of the Company. None of our executive officers currently serves, or in the past year has served, as a member of the Compensation Committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire Board) or as a director of any entity that has one or more executive officers serving on the Board or the Compensation Committee.
Policies and Procedures for Related Person Transactions
The Company has adopted a formal written policy providing that our executive officers, directors, nominees for election as directors, beneficial owners of more than 5% of any class of our capital stock, any member of the immediate family of any of the foregoing persons, and any firm, corporation or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest, are not permitted to enter into a related party transaction with us without the approval of the Audit Committee, subject to the exceptions described below. In approving or rejecting any such proposal, the Audit Committee will consider the relevant facts and circumstances available and deemed relevant to the Audit Committee, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the transaction. The Audit Committee has determined that certain transactions will not require Audit Committee approval, including certain employment arrangements of executive officers, director compensation, transactions with another company at which a related party’s only relationship is as a director, non-executive employee or beneficial owner of less than 10% of that company’s outstanding capital stock, transactions where a related party’s interest arises solely from the ownership of our common stock and all holders of our common stock received the same benefit on a pro rata basis, and transactions available to all employees generally.
Related Person Transactions
We havePrior to June 28, 2019, we had an outstanding loan payable to the GP Sponsor in the amount of approximately $3.0 million, which we assumed upon consummation of the Mergers, payable in installments through June 28, 2019. A current affiliate (Antonio(Mr. Bonchristiano) and a former affiliate (Andrew(Mr. Fleiss) of the GP Sponsor are currently members of our Board. During 2018,Previously, the largest outstanding principal balance on the loan was $3.0 million. The Company made principal and interest ratepayments on the loan is 13.0%. Sincetotaling $2.7 million during the year ended December 2018, we have made principal payments plus accrued interest of approximately $1.3 million. 31, 2019. The note was paid off on June 28, 2019.
As of December 31, 2018, we paid approximately $0.4 million in principal and approximately $0.2 million in interest since the beginning of the loan.
As of December 31, 2018,2019, entities affiliated with Adams Street Partners LLPASP and its affiliates (“ASP”) owned 36.9%approximately 35.1% of our issued and outstanding shares of common stock (excluding the preferred stock which is convertible into common stock). RobinMr. Murray is a partner with ASP and a member of our Board. As of December 31, 2018,2019, ASP had voting control of approximately 32.7%30.9% of our issued and outstanding shares of common stock, including voting rights associated with 19,32419,900 shares of our issued and outstanding Preferred Stock. Prior to the termination of our former credit facility on July 19, 2018, ASP owned a $10.0 million indirect interest in the credit facility. For the year ended December 31, 2018,2019, we recognized revenue for software support services to certain ASP investees for software support services for an aggregate of $1.9$1.2 million.
EXECUTIVE COMPENSATION
Our named executive officers (our “Named Executive Officers”) for 2018,2019, which consist of the person who served as our principal executive officer during 20182019 and the next two most highly compensated executive officers who were serving as executive officers as of December 31, 2018,2019, are as follows:
Seth A. Ravin, our Chief Executive Officer and Chairman of the Board;
David Rowe,Daniel B. Winslow, our SeniorExecutive Vice President, Chief Legal Officer and Secretary; and
Julie Murphy, our Executive Vice President and Chief Marketing Officer; and
| |
• | Gregory Symon, our former Senior Vice President, Worldwide Field Operations.(1)People Officer.
|
_____________________________
(1) Mr. Symon resigned from the Company effective February 4, 2019.
Summary Compensation Table
The following table presents summary information regarding the total compensation for services rendered in all capacities that was awarded to, earned by, and paid to our Named Executive Officers.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Position | Year | | Salary | | Stock Awards | | Option Awards(1) | | Non-Equity Incentive Plan Compensation(2) | | All Other Compensation | | Total |
|
|
| Seth Ravin, Chief Executive Officer and Chairman of the Board | 2018 | | $ | 300,000 |
| | $ | 10,000 |
| (4) | $ | 278,973 |
| (6) | $ | 236,295 |
| | $ | 42,241 |
| (9) | $ | 867,509 |
|
| 2017 | | 300,000 |
| | — |
| | — |
| | 186,600 |
| | 49,351 |
| | 535,951 |
|
| | | | | | | | | | | | | | |
| David Rowe, Senior Vice President and Chief Marketing Officer | 2018 | | $ | 250,000 |
| | $ | 10,000 |
| (5) | $ | 702,925 |
| (7) | $ | 118,148 |
| | $ | 12,334 |
| (10) | $ | 1,093,407 |
|
| 2017 | | 250,000 |
| | — |
| | 586,418 |
| | 93,300 |
| | 10,468 |
| | 940,186 |
|
| | | | | | | | | | | | | | |
| Gregory Symon, Former Senior Vice President, Worldwide Field Operations(3) | 2018 | | $ | 343,493 |
| | $ | — |
| | $ | 756,025 |
| (8) | $ | 269,614 |
| | $ | 2,822 |
| (11) | $ | 1,371,954 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | Year | | Salary | | Bonus | | Stock Awards(1) | | Option Awards(2) | | Non-Equity Incentive Plan Compensation(3) | | All Other Compensation | | Total |
|
|
| Seth A. Ravin, Chief Executive Officer and Chairman of the Board | 2019 | | $ | 300,000 |
| | — |
| | $ | 129,250 |
| (6) | $ | — |
| | $ | 245,100 |
| | $ | 55,602 |
| (10) | $ | 729,952 |
|
| 2018 | | 300,000 |
| | — |
| | — |
| | 288,973 |
| | 236,295 |
| | 42,241 |
| | 867,509 |
|
| | | | | | | | | | | | | | | | |
| Daniel B. Winslow, Executive Vice President, Chief Legal Officer and Secretary | 2019 | | $ | 325,000 |
| | $ | 300,000 |
| (5) | $ | 1,161,250 |
| (7) | $ | — |
| | $ | 148,806 |
| | $ | 16,043 |
| (11) | $ | 1,951,099 |
|
| 2018 | | 300,000 |
| | — |
| | | | 75,603 |
| | 118,148 |
| | 15,843 |
| | 509,594 |
|
| | | | | | | | | | | | | | | | |
| Julie Murphy, Executive Vice President and Chief People Officer(4) | 2019 | | $ | 273,864 |
| | — |
| | $ | 247,000 |
| (8) | $ | 285,438 |
| (9) | $ | 125,653 |
| | $ | 2,835 |
| | $ | 934,790 |
|
_____________________________
| |
(1) | The aggregate grant date fair value for awards of restricted stock option awardsunits was computed in accordance with Accounting Standards Codification (“ASC”) Topic 718, Compensation - Stock Compensation, of the Financial Accounting Standards Board (“FASB”). A discussion of all assumptions made in the valuation of the awards is in Note 8,9, Stock-Based Compensation and Warrants, to our consolidated financial statements for the year ended December 31, 2018,2019, included in our Annual Report on Form 10-K filed with the SEC on March 14, 2019.16, 2020. For purposes of this table, the entire fair value of awards are reflected in the year of grant, without regards to estimated forfeitures, whereas under FASB ASC 718, the fair value of awards is recognized in our consolidated financial statements over the vesting period. |
| |
(2) | The aggregate grant date fair value for stock option awards was computed in accordance with FASB ASC 718. A discussion of all assumptions made in the valuation of the awards is in Note 9, Stock-Based Compensation and Warrants, to our consolidated financial statements for the year ended December 31, 2019, included in our Annual Report on Form 10-K filed with the SEC on March 16, 2020. For purposes of this table, the entire fair value of awards are reflected in the year of grant, without regards to estimated forfeitures, whereas under FASB ASC 718, the fair value of awards is recognized in our consolidated financial statements over the vesting period. |
| |
(3) | Represents amounts earned under our Bonus Programbonus program as discussed below under “Non-Equity Incentive Plan Compensation.” |
| |
(3)(4)
| Mr. Symon CommencedMs. Murphy commenced employment with the Company in January 2018 and terminated employment in February 2019. |
| |
(4)
| In May 2018, we granted to Mr. Ravin 1,250 restricted stock units that will vest 100% on May 8, 2019, provided that Mr. Ravin remains employed by the Company through the vesting date. The restricted stock units were granted as part of our sabbatical benefit plan (our “Sabbatical Plan”). Our Sabbatical Plan provides full-time employees who achieve 10 years of service with a one-month paid sabbatical leave and an award of restricted stock units with a fair market value on the date of grant of $10,000, though Mr. Ravin has not taken a sabbatical leave. The restricted stock units vest 100% on the first anniversary of the date of grant. Our stock price was $8.00 as of the May 8, 2018 grant date.
|
| |
(5) | In May 2018, we grantedThis amount represents a one-time discretionary cash bonus awarded to Mr. Rowe 1,250 restricted stock units that will vest 100% on May 8,Winslow in June 2019 provided that Mr. Rowe remains employed byin recognition of his individual contributions in negotiating the Company through the vesting date. The restricted stock units were grantedsettlement of a commercial dispute with a vendor, as part described further in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Sabbatical Plan, though Mr. Rowe has not taken a sabbatical leave. Our stock price was $8.00Form 10-Q for the quarter ended June 30, 2019, as offiled with the MaySEC on August 8, 2018 grant date.2019. |
| |
(6) | In February 2018,May 2019, we granted to Mr. Ravin a25,000 restricted stock option for 100,000 shares of common stockunits vesting in one-third increments on each of February 6, 2019,May 7, 2020, 2021 and 2021,2022, provided that Mr. Ravin remains employed by the Companyus through the applicable vesting dates. As determined in accordance with ASC 718, thedate. The aggregate grant date fair value ($129,250) of the award is approximately $2.80restricted stock units awarded to Mr. Ravin was determined using the closing price of our common stock on the May 7, 2019 grant date of $5.17 per share. |
| |
(7) | In February 2018,May 2019, we granted to Mr. Rowe aWinslow 25,000 restricted stock option for 250,000 shares of common stockunits vesting in one-third increments on each of February 6, 2019,May 7, 2020, 2021 and 2021,2022, provided that Mr. RoweWinslow remains employed by the Companyus through the applicable vesting dates. As determined in accordance with ASC 718, thedate. The aggregate grant date fair value ($129,250) of the award is approximately $2.80restricted stock units awarded to Mr. Winslow in May 2019 was determined using the closing price of our common stock on the May 7, 2019 grant date of $5.17 per share. In June 2019, we granted to Mr. Winslow 200,000 restricted stock units vesting in one-third increments on each of June 18, 2020, 2021 and 2022, provided that Mr. Winslow remains employed by us through the applicable vesting date. The aggregate grant date fair value ($1,032,000) of the restricted stock units awarded to Mr. Winslow in June 2019 was determined using the closing price of our common stock on the June 18, 2019 grant date of $5.16 per share. |
| |
(8) | In February 2018,May 2019, we granted to Mr. SymonMs. Murphy 25,000 restricted stock units vesting in one-third increments on each of May 7, 2020, 2021 and 2022, provided that Ms. Murphy remains employed by us through the applicable vesting date. The aggregate grant date fair value ($129,250) of the restricted stock units awarded to Ms. Murphy in May 2019 was determined using the closing price of our common stock on the May 7, 2019 grant date of $5.17 per share. In August 2019, we granted to Ms. Murphy 25,000 restricted stock units vesting in one-third increments on each of August 6, 2020, 2021 and 2022, provided that Ms. Murphy remains employed by us through the applicable vesting date. The aggregate grant date fair value ($117,750) of the restricted stock units awarded to Ms. Murphy in August 2019 was determined using the closing price of our common stock on the August 6, 2019 grant date of $4.71 per share. |
| |
(9) | In February 2019, we granted to Ms. Murphy a stock option award for 250,000125,000 shares of common stock vesting in one-third increments on each of January 8, 2019,February 13, 2020, 2021 and 2021,2022, provided that Mr. Symon remainedMs. Murphy remains employed by the Company through the applicable vesting dates.date. As determined in accordance with FASB ASC 718, the grant date fair value of the award is approximately $3.00$2.28 per share. |
| |
(9)(10)
| For 2018,2019, All Other Compensation for Mr. Ravin is primarily comprised of rental payments of $39,052approximately $41,480 for an apartment near our California Operations Center in Pleasanton, California, as well as certain health expenses incurred on business trips and trial-related expenses.California. Mr. Ravin maintains his primary residence near our corporate headquarters in Las Vegas, Nevada. |
| |
(10)
| All Other Compensation for Mr. Rowe is primarily comprised of a $10,000 401(k) plan contribution in 2018. |
| |
(11) | All Other Compensation for Mr. SymonWinslow is primarily comprised of a $2,032 insurance premium paid on his behalf$11,200 401(k) plan contribution in 2018.2019. |
Non-Equity Incentive Plan Compensation
Our Named Executive Officers are eligible for quarterly incentive compensation payments under our performance-based Company Bonus Programbonus program that are based upon both (x) the Company’s achievement (expressed as a percentage) of pre-determined financial or operational goals for the quarter, subject to adjustment (upward or downward) based upon the achievement (also expressed as a percentage) of pre-determined Company-wide client satisfaction goals for that quarter (the “quarterly Company performance factors”) and (y) the individual employee’s achievement of pre-determined individual goals and objectives for the quarter as well as their overall contributions to the Company’s success (expressed as a percentage), generally determined at the discretion of their managerthe Chief Executive Officer (the “quarterly individual performance factor”).
The quarterly performance bonus is calculated following the end of each fiscal quarter by multiplying the individual’s quarterly target incentive amount by (i) the percentage achievement of the quarterly Company performance factors and (ii) the percentage achievement of the quarterly individual performance factor. Seventy-five percent (75%) of this amount is paid by the end of the following fiscal quarter and, for retention purposes, the remaining 25% is deferred and paid out following the end of the fiscal year, subject to the employee’s continuous employment with the Company through year-end.
In 2018,2019, the quarterly Company performance factors and relative weighting were: (i) aggregate client invoicing (80%), (ii) aggregate expenses (20%), and (iii) client satisfaction compared to plan (acted as an approximate +/- 1% modifier).
As noted above, the quarterly individual performance factor is generally tied to an employee’s achievement of individual goals and objectives for the quarter and the individual’s overall contribution to our success. In 2018,2019, because their individual performance is so integrally tied to Company-level performance, the quarterly individual performance factors for each of our Named Executive Officers were tied to the Company’s overall performance, subject to additional adjustment in the discretion of the Compensation Committee (taking into account the recommendations of the Chief Executive Officer)Officer, except with respect to his own performance). As identifiedThe amounts in the table above under the column heading “Non-Equity Incentive Plan Compensation,”Compensation” represented the total quarterly bonus payments earned by Messrs. Ravin Rowe and SymonWinslow and Ms. Murphy in 20182019
and represented 78%approximately 82%, 99% and 84% of their respective total targeted quarterlyannual bonus incentive compensation for fiscal year 2018.2019. Without taking into account the fact that Ms. Murphy’s first quarter 2019 bonus payment was prorated by 60% due to her February 2019 date of hire, the total quarterly bonus payments earned by Ms. Murphy in 2019 would have represented approximately 89% of her total target annual bonus incentive compensation for fiscal year 2019.
Employment Agreements and Potential Payments upon Termination or Change in Control
Executive Employment Agreements
Seth A. Ravin
We entered into an amended and restated employment agreement with Seth A.Mr. Ravin, our Chief Executive Officer, on January 6, 2017. The employment agreement has no specific term and provides for at-will employment. Under the employment agreement, Mr. Ravin is entitled to receive an annual base salary of $300,000, subject to adjustment, and he is eligible for annual target bonus equal to the greater of $300,000 or his then-current annual base salary, with 75% of such target bonus, if any, earned and paid on a quarterly basis and 25% of such target bonus earned and paid on an annual basis, in each case, subject to achievement of performance metrics.
If Mr. Ravin’s employment is terminated either by us other than for “cause” (as defined below), death, or disability or by him for “good reason” (as defined below), then, in each case, he receives: (i) 100% acceleration of all outstanding unvested equity awards issued under any equity incentive plan approved by the Board; (ii) continued payments of his then-current annual base salary and target bonus for 24 months; and (iii) COBRA reimbursements for him and his covered dependents for up to 24 months.
If Mr. Ravin’s employment is terminated within 24 months following a “change of control” (as defined below) either by us other than for “cause” or by him for “good reason,” then, in each case, he receives: (i) 100% acceleration of all outstanding unvested equity awards issued under any equity incentive plan approved by the Board; (ii) a lump sum payment of two times his then-current annual base salary and annual target bonus; and (iii) COBRA premiums for him and his covered dependents for up to 24 months.
Severance benefits in all cases are subject to Mr. Ravin executing and not revoking a release of claims and to his resignation from all of his employment with us.
For purposes of the employment agreement with Mr. Ravin, “cause” means generally:
his failure to perform the duties and responsibilities of his position after he has been provided a written demand for performance from the Board and a cure period of 30 days;
any act of gross negligence or willful misconduct taken by him in connection with his employment, and in the case of gross negligence such act had a material adverse effect on our business or reputation;
any act of dishonesty or moral turpitude constituting fraud or embezzlement or otherwise adversely affecting our business or reputation;
his conviction of, or plea of nolo contendere to, a felony (other than minor traffic-related offenses);
his indictment or conviction for a criminal violation of state or federal securities law; or
any breach by him of any covenants set forth in the employment agreement which is not cured within 15 days of receipt of a written notice of breach.
For purposes of the employment agreement with Mr. Ravin, “good reason” means generally a resignation within 90 days following the expiration of the cure period (described below) following the occurrence of any of the following without his express written consent:
a material reduction of his duties, authority or responsibilities;
a material reduction in his base compensation other than pursuant to a reduction that also is applied to substantially all of our other executives;
a material change in geographic location at which he must perform services (in other words, a change in geographic location of more than 50 miles); or
any material breach by us of the employment agreement.
Mr. Ravin must provide us with notice of the facts constituting the grounds for good reason within 90 days of the event he believes constitutes “good reason” and allow for a reasonable cure period of not less than 30 days.
For purposes of the employment agreement with Mr. Ravin, “change of control” means generally:
a change in our ownership, which is deemed to occur on the date that any one person, or more than one person acting as a group, acquires ownership of our stock that, together with the stock held by such person, constitutes more than 50% of our total voting power, except for a financing transaction approved by our Board;
a change in our effective control, which is deemed to occur on the date that a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election was not endorsed by a majority of the members of the Board prior to the date of appointment or election; or
a change in the ownership of a substantial portion of our assets, which is deemed to occur on the date that any person, or more than one person acting as a group, acquires assets from us that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of our assets immediately prior to such acquisition or acquisitions.
Gregory SymonDaniel B. Winslow
We entered into an offer letter agreement on December 27, 2017,September 13, 2013, with Mr. Symon,Winslow, our former SeniorExecutive Vice President, Worldwide Field Operations.Chief Legal Officer and Secretary. The offer letter agreement hadhas no specific term and providedprovides for at-will employment. Per the terms of his offer letter agreement, Mr Symon’s initialMr. Winslow’s current annual base salary wasis $350,000, and he wasis eligible for annual total target incentive payments of up to $350,000,$175,000, payable in accordance with the terms of the Company’s Bonus Program,bonus program, as described under the heading “Non-Equity Incentive Plan Compensation,” above. Mr. Winslow’s offer letter agreement provided for severance benefits upon termination following a “change of control” that have expired such that no such contractual severance is mandated in the agreement.
Julie Murphy
We entered into an offer letter agreement on January 2, 2019, with Ms. Murphy, our Executive Vice President and Chief People Officer. The offer letter agreement has no specific term and provides for at-will employment. Per the terms of her offer letter agreement, Ms. Murphy’s initial base salary was $300,000, and she is eligible for annual total target incentive payments of up to $100,000, payable in accordance with the terms of the Company’s bonus program, as described under the heading “Non-Equity Incentive Plan Compensation,” above. Also pursuant to the terms of theher offer letter agreement and the Company’s 2013 Equity Incentive Plan, contingent upon Board approval, Mr. Symon wouldMs. Murphy was eligible to receive aan onboarding stock option award exercisable for 250,000125,000 shares of the Company’s common stock, which grant would vest in equal one-third amounts on the first, second and third anniversaries of his January 8, 2018 initialthe grant date of employment,(as approved, February 13, 2019), provided that he remainedshe remains employed by the Company through each suchthe applicable vesting date. Mr. Symon terminated employment with the Company in February 2019.
401(k) Retirement Plan
We maintain a tax-qualified 401(k) retirement plan that provides eligible employees with an opportunity to save for retirement on a tax-advantaged basis. All participants’ interests in their deferrals are 100% vested when contributed. Pre-tax contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. Our 401(k) plan is a “safe harbor” plan under the tax rules, which means that we make a matching contribution to all employees equal to 100% of all elective deferrals that do not exceed 4% of an employee’s compensation. The safe-harbor matching contribution is 100% vested. The 401(k) plan is intended to qualify under Sections 401(a) and 501(a) of the Internal Revenue Code. As a tax-qualified retirement plan, contributions to the 401(k) plan and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan, and all matching contributions are deductible by us when made.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 20182019
|
| | | | | | | | | | | | |
| | Stock Option Awards(1) |
| | Number of Securities Underlying Unexercised Options | | Option Exercise Price | | Option Expiration Date |
Name | | Exercisable | | Unexercisable | | |
Seth A. Ravin | | 287,295 |
| | — |
| | $ | 4.68 |
| | 1/21/2025 |
Seth A. Ravin | | — |
| | 34,881 |
| (2) | 9.46 |
| | 2/6/2023 |
Seth A. Ravin | | — |
| | 65,119 |
| (3) | 8.60 |
| | 2/6/2028 |
Total for Mr. Ravin | | 287,295 |
| | 100,000 |
| | $ | 5.57 |
| (6) | |
David Rowe | | 6,668 |
| | — |
| | 1.17 |
| | 3/31/2019 |
David Rowe | | 6,798 |
| | — |
| | 0.97 |
| | 8/28/2019 |
David Rowe | | 216,246 |
| | — |
| | 1.05 |
| | 5/31/2020 |
David Rowe | | 142,027 |
| | — |
| | 1.05 |
| | 5/31/2020 |
David Rowe | | 59,853 |
| | — |
| | 1.19 |
| | 5/7/2022 |
David Rowe | | 119,706 |
| | — |
| | 1.19 |
| | 5/7/2022 |
David Rowe | | 37,803 |
| | — |
| | 4.85 |
| | 10/24/2024 |
David Rowe | | 10,078 |
| | — |
| | 4.85 |
| | 10/24/2024 |
David Rowe | | 239,412 |
| | — |
| | 7.52 |
| | 6/29/2027 |
David Rowe | | — |
| | 11,627 |
| | 8.60 |
| | 2/6/2028 |
David Rowe | | — |
| | 238,373 |
| | 8.60 |
| | 2/6/2028 |
Total for Mr. Rowe | | 838,591 |
| | 250,000 |
| (4) | $ | 4.40 |
| (6) | |
Gregory Symon | | — |
| | 34,881 |
| | $ | 8.60 |
| | 1/8/2028 |
Gregory Symon | | — |
| | 215,119 |
| | 8.60 |
| | 1/8/2028 |
Total for Mr. Symon | | — |
| | 250,000 |
| (5) | $ | 8.60 |
| (6) | |
|
| | | | | | | | | | | | |
| | Option Awards(1) |
| | Number of Securities Underlying Unexercised Options | | Option Exercise Price | | Option Expiration Date |
Name | | Exercisable | | Unexercisable | | |
Seth A. Ravin | | 287,295 |
| | — |
| | $ | 4.68 |
| | 1/21/2025 |
| | 11,627 |
| | 23,254 |
| (2) | 9.46 |
| | 2/6/2023 |
| | 21,706 |
| | 43,413 |
| (3) | 8.60 |
| | 2/6/2028 |
| | | | | | | | |
Daniel B. Winslow | | 61,687 |
| | — |
| | $ | 4.59 |
| | 10/7/2023 |
| | 54,412 |
| | — |
| | 4.59 |
| | 10/7/2023 |
| | 15,960 |
| | — |
| | 4.85 |
| | 10/14/2024 |
| | 31,921 |
| | — |
| | 4.85 |
| | 10/14/2024 |
| | 31,921 |
| | 15,961 |
| (4) | 7.52 |
| | 6/29/2027 |
| | 8,333 |
| | 16,667 |
| (5) | 8.60 |
| | 2/6/2028 |
| |
|
| | | | | | |
Julie Murphy | | — |
| | 125,000 |
| (6) | $ | 5.91 |
| | 2/13/2029 |
_____________________________
| |
(1) | All stock option awards have been granted under equity incentive plans approved by our stockholders. |
| |
(2) | One-thirdOne-half of the unexercisable portion of Mr. Ravin’s stock option award fortotaling 34,881 shares of common stock vested in February 2019.2020. The remaining two-thirdsone-half will vest ratably on February 6, 2020 and 2021, respectively, subject to his continued service as an employee of the Company. |
| |
(3) | One-thirdOne-half of the unexercisable portion of Mr. Ravin’s stock option award fortotaling 65,119 shares of common stock vested in February 2019.2020. The remaining two-thirdsone-half will vest ratably on February 6, 2020 and 2021, respectively, subject to his continued service as an employee of the Company. |
| |
(4) | One-third100% of the unexercisable portion of Mr. Rowe’sWinslow’s stock option award for an aggregate 250,00047,882 shares of common stock vested in February 2019. The remaining two-thirdswill vest ratably on February 6,June 29, 2020, and 2021, respectively, subject to his continued service as an employee of the Company. |
| |
(5) | One-thirdOne-half of the unexercisable portion of Mr. Symon’sWinslow’s stock option award for an aggregate 250,00025,000 shares of common stock vested in January 2019.February 2020. The remaining unexercisable portionone-half will vest on February 6, 2021, subject to his continued service as an employee of his stock option award was forfeited when he resigned from the Company in February 2019. The vested portion of his stock option award expired unexercised 30 days following his resignation.Company. |
| |
(6) | RepresentsOne-third of the weighted average exercise priceunexercisable portion of Ms. Murphy’s stock option award for all unexercised options held by each125,000 shares of Mr. Ravin, Mr. Rowecommon stock vested in February 2020. The remaining two-thirds vest ratably on February 13, 2021 and Mr. Symon2022, respectively, subject to her continued service as an employee of December 31, 2018.the Company. |
| | | Restricted Stock Unit (“RSU”) Awards(1) | Restricted Stock Unit (“RSU”) Awards(1) |
Name | | Number of RSUs that Have Not Vested(2) | | Market Value of RSUs that Have Not Vested | | RSU Vested Date | | Number of RSUs that Have Not Vested | | Market Value of RSUs that Have Not Vested(2) |
Seth A. Ravin | | 1,250 |
| | $ | 3,479.45 |
| | 5/8/2019 | | 25,000 |
| (3) | $ | 97,000 |
|
| | | | | | | | | |
David Rowe | | 1,250 |
| | $ | 3,479.45 |
| | 5/8/2019 | |
Daniel B. Winslow | | | 25,000 |
| (4) | $ | 97,000 |
|
| | | | | | | 200,000 |
| (5) | $ | 776,000 |
|
Gregory Symon | | — |
| | $ | — |
| | N/A | |
| | | | | |
Julie Murphy | | | 25,000 |
| (6) | $ | 97,000 |
|
| | | 25,000 |
| (7) | $ | 97,000 |
|
_____________________________
| |
(1) | All RSU awards have been granted under equity incentive plans approved by our stockholders. |
| |
(2) | 100%Based on the closing price of the Company’s common stock on the Nasdaq Global Market on December 31, 2019 ($3.88). |
| |
(3) | The 25,000 RSUs awarded to Mr. Ravin and Mr. Rowe willin May 2019 vest ratably on May 8, 2019.7, 2020, 2021 and 2022, respectively, subject to his continued service as an employee of the Company. |
| |
(4) | The 25,000 RSUs awarded to Mr. Winslow in May 2019 vest ratably on May 7, 2020, 2021 and 2022, respectively, subject to his continued service as an employee of the Company. |
| |
(5) | The 200,000 RSUs awarded to Mr. Winslow in June 2019 vest ratably on June 18, 2020, 2021 and 2022, respectively, subject to his continued service as an employee of the Company. |
| |
(6) | The 25,000 RSUs awarded to Ms. Murphy in May 2019 vest ratably on May 7, 2020, 2021 and 2022, respectively, subject to her continued service as an employee of the Company. |
| |
(7) | The 25,000 RSUs awarded to Ms. Murphy in August 2019 vest ratably on August 6, 2020, 2021 and 2022, respectively, subject to her continued service as an employee of the Company. |
DIRECTOR COMPENSATION
We generally use a combination of cash and share-based incentive compensation to attract and retain qualified candidates to serve on the Board. Additionally, our directors are reimbursed for reasonable travel expenses incurred in attending meetings. In setting director compensation, we consider the significant amount of time that directors expend fulfilling their duties to us as well as the skill level required of such directors. For the year ended December 31, 2018,2019, non-employee director compensation was paid through cash compensation and the issuance of restricted stock units as discussed below:
| | | | Director Fees Paid in Cash | | Stock Awards | | Total Compensation | | Number of Securities Underlying Unexercised Options | | Director Fees Paid in Cash | | Stock Awards(10) | | Option Awards(12) | | Total Compensation |
Director Name(1) | | Director | | Committee(s) | | Total | | | | Exercisable | | Unexercisable | | Director | | Committee(s) | | Total | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Jack L. Acosta | | $ | 40,000 |
| (2) | $ | 20,000 |
| (4) | $ | 60,000 |
| | $ | 99,992 |
| (10) | $ | 159,992 |
| | 256,067 |
| | — |
| | $ | 40,000 |
| (2) | $ | 20,000 |
| (4) | $ | 60,000 |
| | $ | 149,998 |
| (11) | — |
| | $ | 209,998 |
|
Thomas Ashburn | | 40,000 |
| (2) | 17,500 |
| (5) | 57,500 |
| | 99,992 |
| (10) | 157,492 |
| | 177,263 |
| | — |
| | 40,000 |
| (2) | 17,500 |
| (5) | 57,500 |
| | 149,998 |
| (11) | — |
| | 207,498 |
|
Antonio Bonchristiano | | 40,000 |
| (2) | — |
| | 40,000 |
| | 199,993 |
| (11) | 239,993 |
| | 4,209 |
| | — |
| | 40,000 |
| (2) | — |
| | 40,000 |
| | 149,998 |
| (11) | — |
| | 189,998 |
|
Steve Capelli | | 40,000 |
| (2) | 22,500 |
| (6) | 62,500 |
| | 99,992 |
| (10) | 162,492 |
| | 137,361 |
| | — |
| | 40,000 |
| (2) | 22,500 |
| (6) | 62,500 |
| | 149,998 |
| (11) | — |
| | 212,498 |
|
Andrew Fleiss | | 40,000 |
| (2) | 22,500 |
| (7) | 62,500 |
| | 199,993 |
| (11) | 262,493 |
| | 4,209 |
| | — |
| | 40,000 |
| (2) | 22,500 |
| (7) | 62,500 |
| | 149,998 |
| (11) | — |
| | 212,498 |
|
Robin Murray | | 40,000 |
| (2) | 5,000 |
| (8) | 45,000 |
| | 99,992 |
| (10) | 144,992 |
| | 137,361 |
| | — |
| | 40,000 |
| (2) | 5,000 |
| (8) | 45,000 |
| | 149,998 |
| (11) | — |
| | 194,998 |
|
Margaret (Peggy) Taylor | | 52,500 |
| (2)(3) | 25,000 |
| (9) | 77,500 |
| | 99,992 |
| (10) | 177,492 |
| | 257,067 |
| | — |
| | 52,500 |
| (2)(3) | 25,000 |
| (9) | 77,500 |
| | 149,998 |
| (11) | — |
| | 227,498 |
|
_____________________________
| |
(1) | During 2018,2019, Seth A. Ravin and Thomas Shay werewas an executive officersofficer who also served as membersa member of the Board.Board and Thomas C. Shay was an executive officer who also served as a member of the Board until January 31, 2019. Messrs. Ravin and Shay have been omitted from this table since theyeach received compensation for theirhis respective services as an executive officersofficer but did not receive additional compensation for serving as directorsa director of the Company. Mr. Ravin’s compensation is described above in the “Summary Compensation Table.” |
| |
(2) | During 2018,2019, each of our non-employee directors who served for the entire calendar year received an annual retainer of $40,000. Board members who serve on committees/as committee chairpersons receive additional compensation shown in the “Committee” column. All Board and Committee retainers are payable in cash on a quarterly basis. |
| |
(3) | Ms. Taylor serves as Lead Independent Director for which an annual retainer of $12,500 is paid in addition to the $40,000 retainer that all non-employee Board members receive. |
| |
(4) | Mr. Acosta serves as Chair of the Audit Committee for which an additional annual retainer of $20,000 is paid. |
| |
(5) | Mr. Ashburn serves as Chair of the Nominating Committee for which an additional annual retainer of $10,000 is paid. Mr. Ashburn also serves as a member of the Compensation Committee for which an additional annual retainer of $7,500 is paid. |
| |
(6) | Mr. Capelli serves as a member of the Audit Committee, the Compensation Committee and the Nominating Committee for which additional annual retainers are paid in the amounts of $10,000, $7,500 and $5,000, respectively. |
| |
(7) | Mr. Fleiss serves as a member of the Audit Committee, the Compensation Committee and the Nominating Committee for which additional annual retainers are paid in the amounts of $10,000, $7,500 and $5,000, respectively. |
| |
(8) | Mr. Murray serves as a member of the Nominating Committee for which an additional annual retainer of $5,000 is paid. |
| |
(9) | Ms. Taylor serves as Chair of the Compensation Committee for which an additional annual retainer of $15,000 is paid. Ms. Taylor is also a member of the Audit Committee for which an additional annual retainer of $10,000 is paid. |
| |
(10) | In February 2018,The aggregate number of Stock Awards held by each of the non-employee Board members as of December 31, 2019, was as follows: Mr. Acosta,Acosta: 27,829, Mr. Ashburn, Mr Capelli,Ashburn: 27,829, Mr. MurrayBonchristiano: 39,457, Mr. Capelli: 27,829, Mr. Fleiss: 39,457, Mr. Murray: 27,829 and Ms. Taylor were granted 11,627 restricted stock units that vested 100% on February 6, 2019.Taylor: 27,829. |
| |
(11) | In February 2018,January 2019, each of Mr. Bonchristiano and Mr. Fleissthe non-employee Board members were granted 23,25527,829 restricted stock units 50%that vested 100% on January 2, 2020. The aggregate grant date fair value for awards of which vested on February 6,restricted stock units was computed in |
accordance with FASB ASC 718. A discussion of all assumptions made in the valuation of the awards is in Note 9, Stock-Based Compensation and Warrants, to our consolidated financial statements for the year ended December 31, 2019, included in our Annual Report on Form 10-K filed with the SEC on March 16, 2020. For purposes of this table, the entire fair value of awards are reflected in the year of grant, without regards to estimated forfeitures, whereas under FASB ASC 718, the fair value of awards is recognized in our consolidated financial statements over the vesting period.
| |
(12) | No Option Awards were granted during 2019 andto the remaining 50%non-employee Board members. The aggregate number of which will vest on February 6, 2020, contingent upon continued service as a memberOption Awards held by each of the non-employee Board through such date.members as of December 31, 2019, was as follows: Mr. Acosta: 256,067, Mr. Ashburn: 177,263, Mr. Bonchristiano: 4,209, Mr. Capelli: 137,361, Mr. Fleiss: 4,209, Mr. Murray: 137,361 and Ms. Taylor: 257,067. |
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
Presented below is information about each of our Equity Incentive Plans as of December 31, 2018:2019:
| | | Number of Securities to be Issued Upon Exercise of Outstanding Options,Warrants and Rights | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | | Number of Securities Remaining Available for Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | | Number of Securities to be Issued Upon Exercise of Outstanding Options,Warrants and Rights | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | | Number of Securities Remaining Available for Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |
| (a) | | (b) | | (c) | | (a) | | (b) | | (c) | |
Equity Compensation Plans Approved by Stockholders: | |
| | |
| | |
| | |
| | |
| | |
| |
2007 Stock Plan | 6,031,520 |
| (1) | $ | 1.41 |
| | — |
| | 3,266,765 |
| (1) | $ | 1.62 |
| | — |
| |
2013 Equity Incentive Plan | 6,071,608 |
| (2) | 6.66 |
| | 2,757,405 |
| (3) | 8,319,248 |
| (2) | 6.33 |
| | 2,883,730 |
| (3) |
2018 Employee Stock Purchase Plan | — |
| (4) | — |
| | 5,000,000 |
| | — |
| (4) | — |
| | 5,000,000 |
| |
Equity Compensation Plans Not Approved by Stockholders | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| |
Total | 12,103,128 |
| | $ | 4.05 |
| | 7,757,405 |
| | 11,586,013 |
| | $ | 4.55 |
| | 7,883,730 |
| |
_____________________________
| |
(1) | The 2007 Stock Plan (the “2007 Plan”) reserved up to approximately 14,254,000 shares of common stock for the grant of stock options and stock purchase rights to our employees and directors. The 2007 Plan was terminated in November 2013, however, the terms of the 2007 Plan continue to govern any outstanding awards thereunder. Grants under the 2007 Plan consist solely of stock options. As of December 31, 2019, the Company had 3.3 million stock options outstanding under the 2007 Plan. |
| |
(2) | In October 2013, we established the 2013 Equity Incentive Plan (the “2013 Plan”), which provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares. The authorized shares of common stock under the 2013 Plan are increased for outstanding options under the 2007 Plan that are subsequently forfeited or expire unexercised. Accordingly, options that expire or are forfeited under the 2007 Plan become available for re-grant under the 2013 Plan. Through December 31, 2018,2019, grants under the 2013 Plan consist solely of stock options and restricted stock units. The 2013 Plan will expire in July 2027. As of December 31, 2019, the Company had 5.4 million stock options outstanding and 2.9 million restricted stock units outstanding under the 2013 Plan. |
| |
(3) | On the first day of each fiscal year beginning in 2018, the 2013 Plan provides that the number of authorized shares available for issuance will increase in an amount equal to the lesser of (i) approximately 4.8 million shares, (ii) 4% of the outstanding shares of all classes of our common stock as of the last day of the immediately preceding fiscal year; or (iii) such other amount as the Board may determine. On February 13, 2019,25, 2020, the Board approved an increase in the authorized shares for 2,567,000 million2,700,116 shares, which is excluded from this amount. |
| |
(4) | In June 2018, our stockholders approved the Rimini Street, Inc. 2018 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides for the purchase by employees of up to an aggregate of 5,000,000 shares of Common Stock. The purchase price per share at which shares are sold in an offering period under the ESPP will be equal to the lesser of 85% of the fair market value of the shares (i) on the first trading day of the offering period, or (ii) on the purchase date (i.e., the last trading day of the offering period). Offering periods will consist of two six-month periods generally commencing twice each calendar year. The purpose of the ESPP is to provide an opportunity for eligible employees to purchase shares of our common stock at a discount through voluntary contributions from such employees’ eligible pay, thereby attracting, retaining and rewarding such persons and strengthening the mutuality of interest between such employees and our stockholders. Through December 31, 2018,2019, no offering period under the ESPP had commenced and no shares of Common Stockcommon stock have been issued under the ESPP. |
PROPOSAL NO. 2
PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 20192020
Background
The Audit Committee of the Board has appointed KPMG LLP (“KPMG”) as the independent registered public accounting firm to audit our Company’s consolidated financial statements for the fiscal year ending December 31, 2019.2020. The submission of this matter for ratification by stockholders is not legally required; however, the Board believes that such submission is consistent with best practices in corporate governance and is an opportunity for stockholders to provide direct feedback to the Audit Committee and the Board on an important issue of corporate governance. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm as our Company’s external auditor. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm to be our Company’s external auditor at any time during the year if it determines that such a change would be in the best interests of our Company and our stockholders.
Board of Directors Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2019.2020.
Vote Required
Approval of this proposal requires the affirmative vote of a majority of the voting power of the shares represented at the Annual Meeting and entitled to vote.
KPMG Representative – Attendance at the Annual Meeting
A representative of KPMG is expected to be present at the Annual Meeting, will have the opportunity to make a statement and will be available to respond to appropriate questions by stockholders.
FEES PAID TO AUDITORS
KPMG charged the following fees related to our 20182019 and 20172018 financial statements, all of which were approved by the Audit CommitteeCommittee: | | | 2018 | | 2017 | | | | | | | | | | | |
Amount | | Percent | | Amount | | Percent | 2019 | | 2018 |
| | | | | | | | Amount | | Percent | | Amount | | Percent |
Audit fees | $ | 1,945,124 |
| (1) | 98 | % | | $ | 2,217,467 |
| (2) | 98 | % | $ | 1,760,741 |
| (1) | 98 | % | | $ | 1,945,124 |
| (2) | 98 | % |
Audit-related fees | 32,200 |
| (3) | 2 | % | | 31,200 |
| (4) | 2 | % | 32,000 |
| (3) | 2 | % | | 32,200 |
| (4) | 2 | % |
Tax fees | — |
| | 0 | % | | — |
| | 0 | % | — |
| | 0 | % | | — |
| | 0 | % |
All other fees | — |
| | 0 | % | | — |
| | 0 | % | 5,000 |
| (5) | 0 | % | | — |
| | 0 | % |
| | | | | | | | |
Total | $ | 1,977,324 |
| | 100 | % | | $ | 2,248,667 |
| | 100 | % | $ | 1,797,741 |
| | 100 | % | | $ | 1,977,324 |
| | 100 | % |