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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Five9 Inc | NASDAQ:FIVN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-2.18 | -3.77% | 55.70 | 55.10 | 55.78 | 58.76 | 55.50 | 58.38 | 1,661,891 | 01:00:00 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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x
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Definitive Proxy Statement
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Definitive Additional Materials
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o
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Soliciting Material Pursuant to §240.14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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o
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 240.0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Sincerely,
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Barry Zwarenstein
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Interim Chief Executive Officer, Chief Financial Officer
and Secretary |
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San Ramon, California
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April 3, 2018
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2.
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To hold an advisory vote on executive compensation.
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3.
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To hold an advisory vote on the frequency of advisory votes on executive compensation.
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4.
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To ratify the appointment by the Audit Committee of the Board of Directors of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31,
2018
.
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5.
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To transact any other business properly brought before the meeting or any adjournment thereof.
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By Order of the Board of Directors
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Barry Zwarenstein
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Interim Chief Executive Officer, Chief Financial Officer
and Secretary |
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San Ramon, California
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April 3, 2018
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•
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Proposal No. 1.
Election of the
two
(
2
) members of the Board of Directors identified in Proposal No. 1 to serve as
Class I
directors until the Company’s
2021
Annual Meeting of Stockholders or until their successors are duly elected and qualified.
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•
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Proposal No. 2.
Advisory Vote on Executive Compensation. The Board of Directors is holding a non-binding, advisory vote on the compensation of our named executive officers, as described in the “Compensation Discussion and Analysis” section, executive compensation tables and accompanying narrative disclosures contained in this Proxy Statement. This vote is non-binding and advisory in nature, but the Compensation Committee and the Board of Directors will take into account the outcome of the vote when considering future executive compensation arrangements,
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•
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Proposal No. 3.
Advisory Vote on the Frequency of Advisory Votes on Executive Compensation. The Board of Directors is holding a non-binding, advisory vote regarding how frequently (“one year,” “two years,” or “three years”) to hold future advisory votes on the compensation of our named executive officers. This vote is non-binding and advisory in nature, but our Compensation Committee of the Board of Directors and the Board of Directors will take into account the outcome of the vote when considering the frequency of soliciting future advisory votes.
|
•
|
Proposal No. 4.
Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31,
2018
.
|
•
|
To vote using the proxy card, request a proxy card from us by email at ir@five9.com, and complete, date and sign the proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.
|
•
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To vote on the Internet, please follow the instructions provided on your proxy card or the Notice.
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•
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To vote by telephone, please follow the instructions provided on your proxy card or the Notice.
|
•
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To vote at the Annual Meeting, attend the Annual Meeting online and follow the instructions posted at
www.virtualshareholdermeeting.com/FIVN2018
.
|
•
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“For” the election of each of the
two
nominees for director,
|
•
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“For” the approval of the compensation of our named executive officers, as disclosed in this proxy statement,
|
•
|
For the selection of “
one year
” to be the frequency with which stockholders vote on executive compensation, and
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•
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“For” the ratification of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2018.
|
•
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You may submit another properly completed proxy card with a later date.
|
•
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You may vote again on a later date over the Internet or by telephone as set forth on the Notice.
|
•
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You may send a written notice that you are revoking your proxy to the Secretary of the Company at Five9, Inc., Bishop Ranch 8, 4000 Executive Parkway, Suite 400, San Ramon, CA 94583.
|
•
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You may attend the virtual Annual Meeting and vote online by following the instructions posted at
www.virtualshareholdermeeting.com/FIVN2018
. Simply logging into the Annual Meeting will not, by itself, revoke your proxy or prior vote.
|
•
|
You may submit new voting instructions to your broker, trustee or nominee.
|
•
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If you have obtained a legal proxy from the broker, trustee or nominee that holds your shares giving you the right to vote the shares, by attending the virtual Annual Meeting and following the instructions posted at
www.virtualshareholdermeeting.com/FIVN2018
.
|
•
|
Proposal No. 1.
“For” each of the nominees to the Board of Directors.
|
•
|
Proposal No. 2.
“For” the approval of the compensation of our named executive officers as disclosed in this proxy statement.
|
•
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Proposal No. 3.
For the selection of “
one year
” to be the frequency with which stockholders vote on executive compensation.
|
•
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Proposal No. 4.
“For” the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31,
2018
.
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Name
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Audit Committee
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Compensation Committee
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Nominating and Governance Committee
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Michael Burkland
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Jack Acosta
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chair
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Kimberly Alexy
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member
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member
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Michael Burdiek
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member
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member
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David DeWalt
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member
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David Welsh
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chair
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Robert Zollars
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chair
|
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member
|
•
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appointing, approving the compensation of and assessing the qualifications and independence of our independent registered public accounting firm;
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•
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pre-approving audit, review and attest services and fees and permissible non-audit services and fees from our independent registered public accounting firm;
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•
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reviewing annually a report by the independent registered public accounting firm regarding the independent registered public accounting firm’s internal quality control procedures and various issues relating thereto;
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•
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coordinating the oversight and reviewing the adequacy of our disclosure controls and procedures and internal control over financial reporting with both management and the independent registered public accounting firm;
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•
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reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly consolidated financial statements and related disclosures;
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•
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approving the appointment of the head of our internal audit function and overseeing and assessing the performance of the internal audit function;
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•
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periodically reviewing legal compliance matters, significant accounting and other financial risks or exposures to our company and reviewing and, if appropriate, approving all transactions between our company or its subsidiaries and any related party (as described in Item 404 of Regulation S-K); and
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•
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reviewing the audit committee report required by SEC rules to be included in our annual proxy statement.
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•
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reviewing and approving our executive and director compensation policies and programs;
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•
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reviewing and approving base salary, cash incentive compensation, equity incentive compensation and other compensation for our executive officers;
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•
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administering our cash and equity based incentive plans;
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•
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overseeing the management continuity and succession planning process (except as otherwise within the scope of our nominating and governance committee) with respect to our officers;
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•
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preparing any report on executive compensation required by the applicable rules and regulations of the SEC and other regulatory bodies; and
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•
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managing such other matters that are delegated to our Compensation Committee by applicable law or by the Board of Directors from time to time.
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•
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assessing, developing and communicating with our Board of Directors concerning the appropriate criteria for nominating and appointing directors, including the size and composition of the Board of Directors, corporate governance policies, applicable listing standards, laws, rules and regulations, our nominating policy and other factors considered appropriate by our Board of Directors;
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•
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identifying and recommending to our Board of Directors the director nominees for annual and special meetings of our stockholders, or to fill a vacancy on the Board of Directors, in each case in accordance with the nominating policy;
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•
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having sole authority to retain and terminate any search firm used to identify director candidates and approve the search firm’s fees and other retention terms;
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•
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if and when requested by our Board of Directors, assessing and recommending to the board the composition of each of its committees;
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•
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reviewing, as necessary, any executive officer’s request to accept a directorship position with another company;
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•
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developing, assessing and making recommendations to our Board of Directors concerning corporate governance matters, including appropriate revisions to our amended and restated certificate of incorporation, amended and restated bylaws, corporate governance policies, committee charters and nominating policy;
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•
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overseeing an annual evaluation of our Board of Directors, its committees and each director and management;
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•
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developing with management and monitoring the process of orienting new directors and continuing education for all directors; and
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•
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regularly reporting its activities and any recommendations to our Board of Directors.
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•
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Reputation for integrity, strong moral character and adherence to high ethical standards.
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•
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Holds or has held a generally recognized position of leadership in community and/or chosen field of endeavor, and has demonstrated high levels of accomplishment.
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•
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Demonstrated business acumen and experience, and ability to exercise sound business judgment and common sense in matters that relate to the current and long-term objectives of the Company.
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•
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Ability to read and understand basic financial statements and other financial information pertaining to the Company.
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•
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Commitment to understand the Company and its business, industry and strategic objectives.
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•
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Commitment and ability to regularly attend and participate in meetings of the Board of Directors, Board of Directors committees and stockholders, number of other company boards of directors on which the candidate serves and ability to generally fulfill all responsibilities as a director of the Company.
|
•
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Willingness to represent and act in the interests of all stockholders of the Company rather than the interests of a particular group.
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•
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Good health, and ability to serve.
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•
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For prospective non-employee directors, independence under applicable SEC and stock exchange rules, and the absence of any conflict of interest (whether due to a business or personal relationship) or legal impediment to, or restriction on, the nominee serving as a director.
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•
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Willingness to accept the nomination to serve as a director of the Company.
|
•
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Whether the prospective nominee will foster a diversity of backgrounds, skills, perspectives and experiences.
|
•
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For potential audit committee members, whether the nominee possesses the requisite education, training and experience to qualify as “financially literate” or as an audit committee “financial expert” or equivalent requirement under applicable SEC and stock exchange rules.
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•
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For incumbent directors standing for re-election, the incumbent director’s performance during his or her term, including the number of meetings attended, level of participation, overall contribution to the Company, number of other company boards on which the director serves, and any changed circumstances affecting the individual director that may bear on his or her ability to continue to serve on the Board.
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•
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The composition of the Board of Directors and whether the prospective nominee will add to or complement the Board of Director’s existing strengths.
|
•
|
Annual Board Service Retainer:
|
◦
|
All Non-Employee Directors: $30,000
|
•
|
Annual Chair Service Fee (in addition to the Annual Board Service Retainer):
|
◦
|
Chairman/Lead Director of the Board: $15,000
|
◦
|
Chairman of the Audit Committee: $20,000
|
◦
|
Chairman of the Compensation Committee: $10,000
|
◦
|
Chairman of the Nominating and Governance Committee: $7,500
|
•
|
Annual Committee Member (non-Chair) Service Fee (in addition to the Annual Board Service Retainer):
|
◦
|
Audit Committee: $7,500
|
◦
|
Compensation Committee: $5,000
|
◦
|
Nominating and Governance Committee: $3,000
|
•
|
New Non-Employee Director RSU Grant
: Under our 2017 non-employee director compensation policy, any individual who first became a non-employee director (other than as a result of an employee director transitioning to become a non-employee director), was entitled to an RSU with an aggregate grant date fair value of $156,000, pro-rated for any partial year of service, vesting in full on the earliest to occur of (i) the first anniversary of the date of our last annual stockholders meeting immediately preceding the date of grant, (ii) immediately prior to the next succeeding annual stockholders meeting after the date of grant, and (iii) a change in control (as defined in our 2014 Plan), subject to the director’s continued service through such earliest date.
|
•
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Annual RSU Grant
: Under our 2017 non-employee director compensation policy, on the date of each annual stockholder meeting, each non-employee director was granted RSUs with an aggregate grant date fair value of $156,000 (based on the per share closing price of the Company’s common stock on the date of the annual stockholder meeting). The RSUs vest in full on the earliest to occur of (i) the first anniversary of the grant date, (ii) immediately prior to the next succeeding annual meeting of our stockholders after the date of grant, and (iii) a change in control, subject to the director’s continued service through such earliest date.
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Name
|
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Fees Earned or Paid in Cash (1)
($) |
|
Stock Awards (2)(3)
($) |
|
Total
($) |
||||||
Jack Acosta
|
|
$
|
50,000
|
|
|
$
|
155,979
|
|
|
$
|
205,979
|
|
Kimberly Alexy
|
|
42,500
|
|
|
155,979
|
|
|
198,479
|
|
|||
Michael Burdiek
|
|
40,646
|
|
|
155,979
|
|
|
196,625
|
|
|||
Jayendra Das
(4)
|
|
13,077
|
|
|
—
|
|
|
13,077
|
|
|||
David DeWalt
|
|
33,000
|
|
|
155,979
|
|
|
188,979
|
|
|||
David Welsh
|
|
52,500
|
|
|
155,979
|
|
|
208,479
|
|
|||
Robert Zollars
|
|
43,000
|
|
|
155,979
|
|
|
198,979
|
|
|||
Michael Burkland
(5)
|
|
—
|
|
|
—
|
|
|
—
|
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|
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(1)
|
Amounts represent the fees earned by or paid in cash to our non-employee directors in
2017
based on the non-employee director compensation policy set forth above.
|
(2)
|
The aggregate grant date fair values of equity awards in this column have been calculated in accordance with ASC Topic 718. See Note 7 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31,
2017
for a discussion of assumptions made in determining the grant date fair value of
|
(3)
|
As of December 31,
2017
, the number of outstanding stock options and unvested RSUs held by our non-employee directors were as follows:
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Name
|
|
Stock Options Outstanding
(#)
|
|
RSUs That Have Not Vested
(#)
|
||
Jack Acosta
|
|
—
|
|
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7,155
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Kimberly Alexy
|
|
87,500
|
|
|
7,155
|
|
Michael Burdiek
|
|
—
|
|
|
7,155
|
|
David DeWalt
|
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265,400
|
|
|
7,155
|
|
David Welsh
|
|
—
|
|
|
7,155
|
|
Robert Zollars
|
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87,500
|
|
|
7,155
|
|
Michael Burkland
(5)
|
|
—
|
|
|
—
|
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(4)
|
Mr. Das resigned from our Board of Directors in May 2017.
|
(5)
|
Effective December 2, 2017, Mr. Burkland resigned as the Company’s Chief Executive Officer and President and became the Executive Chairman. The
2017
compensation Mr. Burkland received as our former Chief Executive Officer and President and Executive Chairman is presented in the section below entitled “Executive Compensation - Summary Compensation Table.” Mr. Burkland did not receive compensation for his service on the Board prior to December 2, 2017.
|
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2017
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2016
|
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(In thousands)
|
||||||
Audit fees
(1)
|
|
$
|
1,618
|
|
|
$
|
1,068
|
|
Audit-related fees
(2)
|
|
33
|
|
|
18
|
|
||
Tax fees
(3)
|
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10
|
|
|
19
|
|
||
All other fees
|
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—
|
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—
|
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Total fees
|
|
$
|
1,661
|
|
|
$
|
1,105
|
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(1)
|
Represents fees for professional services rendered for the audit of our annual financial statements, audit of the adoption of the new revenue standard, review of our quarterly financial statements and international statutory audits.
|
(2)
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Represents expenses related to the performance of the audit and review of our financial statements.
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(3)
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Represents fees for tax compliance and consulting services performed.
|
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Jack Acosta (Chair)
|
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Kimberly Alexy
|
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Michael Burdiek
|
Name
|
|
Age
|
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Positions
|
Barry Zwarenstein
|
|
69
|
|
Interim Chief Executive Officer, Chief Financial Officer and Secretary
|
Daniel Burkland
|
|
53
|
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President
|
Gaurav Passi
|
|
44
|
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Executive Vice President, Product
|
Scott Welch
|
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53
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Executive Vice President of Cloud Operations and Platform Engineering
|
•
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each person known by us to be the beneficial owner of more than 5% of any class of our voting securities;
|
•
|
our named executive officers;
|
•
|
each of our directors; and
|
•
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all current executive officers and directors as a group.
|
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Beneficial Ownership
|
||||||||||||
Name of Beneficial Owner
|
|
Common Stock
|
|
Options Exercisable Within 60 Days
|
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RSUs Vesting Within 60 Days
|
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Total Number of Shares Beneficially Owned
|
|
Percent
|
||||
5% Stockholders:
|
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|
|
|
|
|
|
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|
||||
T. Rowe Price Associates, Inc.
|
|
4,789,386
|
|
|
—
|
|
|
—
|
|
|
4,789,386
|
|
(1)
|
8.3%
|
The Vanguard Group, Inc
|
|
4,097,629
|
|
|
—
|
|
|
—
|
|
|
4,097,629
|
|
(2)
|
7.1%
|
BlackRock, Inc.
|
|
3,721,206
|
|
|
—
|
|
|
—
|
|
|
3,721,206
|
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(3)
|
6.5%
|
Named Executive Officers and Directors:
|
|
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|
|
|
|
|
|
|
|
||||
Barry Zwarenstein
|
|
340,290
|
|
(4)
|
204,741
|
|
|
—
|
|
|
545,031
|
|
|
*
|
Daniel Burkland
|
|
66,033
|
|
(5)
|
376,428
|
|
|
—
|
|
|
442,461
|
|
|
*
|
Gaurav Passi
|
|
—
|
|
|
12,219
|
|
|
—
|
|
|
12,219
|
|
|
*
|
Scott Welch
|
|
11,325
|
|
|
17,921
|
|
|
—
|
|
|
29,246
|
|
|
*
|
Michael Burkland
|
|
578,392
|
|
(6)
|
470,616
|
|
|
—
|
|
|
1,049,008
|
|
|
1.8%
|
Jack Acosta
|
|
229,673
|
|
(7)
|
—
|
|
|
7,155
|
|
|
236,828
|
|
|
*
|
Kimberly Alexy
|
|
32,173
|
|
(8)
|
87,500
|
|
|
7,155
|
|
|
126,828
|
|
|
*
|
Michael Burdiek
|
|
34,809
|
|
|
—
|
|
|
7,155
|
|
|
41,964
|
|
|
*
|
David DeWalt
|
|
67,173
|
|
(9)
|
265,400
|
|
|
7,155
|
|
|
339,728
|
|
|
*
|
David S. Welsh
|
|
19,294
|
|
|
—
|
|
|
7,155
|
|
|
26,449
|
|
|
*
|
Robert Zollars
|
|
77,173
|
|
(10)
|
87,500
|
|
|
7,155
|
|
|
171,828
|
|
|
*
|
All current directors and executive officers as a group (11 persons)
|
|
1,456,335
|
|
|
1,522,325
|
|
|
42,930
|
|
|
3,021,590
|
|
|
5.1%
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Represents beneficial ownership of less than one percent (1%).
|
||||||||||
(1)
|
Represents shares beneficially owned by T. Rowe Price Associates, Inc. or Price Associates, based on the Schedule 13G/A filed by Price Associates on February 14, 2018. According to the Schedule 13G/A, Price Associates has sole voting power with respect to 906,430 shares and sole dispositive power with respect to 4,789,386 shares. The address of Price Associates is 100 E. Pratt Street, Baltimore, Maryland 21202.
|
(2)
|
Represents shares beneficially owned by The Vanguard Group, Inc., or Vanguard, based on the Schedule 13G filed by Vanguard on February 8, 2018. According to the Schedule 13G, Vanguard has sole voting power with respect to 104,246 shares, shared voting power with respect to 3,500 shares, sole dispositive power with respect to 3,994,427 shares and shared dispositive power with respect to 103,202 shares. The address of Vanguard is 100 Vanguard Blvd., Malvern, PA 19355.
|
||||||||||
(3)
|
Represents shares beneficially owned by BlackRock, Inc., or BlackRock, based on the Schedule 13G filed by BlackRock on February 1, 2018. According to the Schedule 13G, BlackRock has sole voting power with respect to 3,602,979 shares and sole dispositive power with respect to 3,721,206 shares. The address of BlackRock is 55 East 52nd Street, New York, NY 10055.
|
||||||||||
(4)
|
Consists of 97,469 shares directly owned by Barry Zwarenstein and 242,821 shares directly owned by a trust.
|
||||||||||
(5)
|
Consists of 45,836 shares directly owned by Daniel Burkland and 20,197 shares held by a trust.
|
||||||||||
(6)
|
Consists of 23,923 shares directly owned by Michael Burkland and 554,469 shares directly owned by a trust.
|
||||||||||
(7)
|
Consists of 15,000 shares directly owned by Jack Acosta and 214,673 shares held by a trust.
|
||||||||||
(8)
|
Consists of 15,000 shares directly owned by Kimberly Alexy and 17,173 shares held by a trust.
|
||||||||||
(9)
|
Consists of 15,000 shares directly owned by David DeWalt and 52,173 shares held by a trust.
|
||||||||||
(10)
|
Consists of 67,173 shares directly owned by Robert Zollars and 10,000 shares held by ZoCo L.P., that is a family limited liability partnership pursuant to which Mr. Zollars and his wife are general partners and Mr. Zollars’ children are limited partners.
|
|
Robert Zollars (Chair)
|
|
Kimberly Alexy
|
|
Michael Burdiek
|
•
|
Barry Zwarenstein - Interim Chief Executive Officer, Chief Financial Officer and Secretary
|
•
|
Daniel Burkland - President
|
•
|
Gaurav Passi - Executive Vice President, Products
|
•
|
Scott Welch - Executive Vice President, Cloud Operations and Platform Engineering
|
•
|
Michael Burkland - Executive Chairman and Former Chief Executive Officer and President
|
•
|
total revenue for 2017 increased 24% to a record $200.2 million, compared to $162.1 million in 2016.
|
•
|
operating cash flow for 2017 was $11.1 million, compared to operating cash flow of $6.8 million in 2016.
|
•
|
net loss decreased 24% to $(9.0) million, or $(0.16) per basic and diluted share in 2017, compared to net loss of $(11.9) million, or $(0.23) per basic and diluted share, in 2016.
|
•
|
Base Salar
y During 2017, the Compensation Committee increased the base salaries of Mr. Daniel Burkland and Mr. Passi to reflect promotions to new positions and their respective increased responsibilities in those positions. No other NEOs received base salary increases in 2017.
|
•
|
Annual Cash Incentive Awards
In February 2017, the Compensation Committee approved performance targets for 2017 that were used to determine the amount of cash bonus awards that could be earned on a quarterly basis by our NEOs. Consistent with 2016, performance targets with respect to revenue and Adjusted EBITDA (and, in the case of Mr. Daniel Burkland, bookings) were established to focus our NEOs on key quarterly company financial goals contained in our annual operating plan, as well as individual performance objectives (other than Mr. Michael Burkland, whose bonus was determined solely based on our company financial goals). We exceeded the target levels established for our company financial goals in each quarter in 2017, and, after taking into account achievement of each NEO’s met individual performance objectives, the NEOs received an average payout of
111%
of each NEO’s target bonus opportunity.
|
•
|
Equity Awards
In 2017, the Compensation Committee continued its practice of providing annual equity awards in the form of stock options and service-based restricted stock units. Mr. Zwarenstein and Mr. Daniel Burkland also received promotional equity grants to reflect their promotions to new positions and their respective increased responsibilities in those positions.
|
•
|
Independent Compensation Committee
The Compensation Committee is comprised solely of independent directors
.
|
•
|
Independent Compensation Committee Advisor
The Compensation Committee engaged its own compensation consultant to assist with its 2017 compensation reviews and determinations. This consultant performed no consulting or other services for us.
|
•
|
Annual Executive Compensation Review
The Compensation Committee conducts an annual review and approval of our compensation strategy, including a review of our compensation peer group used for comparative purposes and a review of our compensation-related risk profile to ensure that our compensation-related risks are not reasonably likely to have a material adverse effect on us.
|
•
|
Executive Compensation Policies and Practices
Our compensation philosophy and related corporate governance policies and practices are complemented by several specific compensation practices that are designed to align our executive compensation with long-term stockholder interests, including the following:
|
•
|
Compensation At-Risk
Our executive compensation program is designed so that a significant portion of compensation is “at risk” based on corporate performance, as well as equity-based to align the interests of our executive officers and stockholders.
|
•
|
No Perquisites
We do not provide any perquisites or other personal benefits to our executive officers, other than standard relocation benefits.
|
•
|
No Tax Reimbursements
We do not provide any tax reimbursement payments (including “gross-ups”) on any perquisites or other personal benefits.
|
•
|
No Special Health or Welfare Benefits
Our NEOs participate in broad-based company-sponsored health and welfare benefits programs on the same basis as our other full-time, salaried employees.
|
•
|
No Post-Employment Tax Reimbursements
We do not provide any tax reimbursement payments (including “gross-ups”) on any severance or change-in-control payments or benefits.
|
•
|
“Double-Trigger” Change in Control Arrangements
All change in control payments and benefits for our current executive officers are based on a “double-trigger” arrangement (that is
,
they require both a change in control
plus
a qualifying termination of employment before payments and benefits are paid), other than certain change in control vesting rights for Mr. Daniel Burkland that he previously negotiated in connection with joining the Company in 2009.
|
•
|
Minimum Share Ownership
Our board members and executive officers, including our NEOs, are subject to stock ownership guidelines described in greater detail below.
|
•
|
Hedging and Pledging Prohibited
We prohibit our employees and directors, including our NEOs, from engaging in transactions that are of a speculative nature, including entering into any short sales, put option contracts, transaction in straddles or similar arrangements based on our securities. We also prohibit our employees, including our NEOs, from pledging our securities.
|
•
|
base salaries at levels that we believe allow us to attract and retain key executive officers;
|
•
|
quarterly cash incentive compensation opportunities tied to the achievement of pre-established quarterly performance goals related to important financial objectives set forth in our annual operating plan;
|
•
|
long-term incentive compensation using a mix of restricted stock unit and stock options, to align the interests of our executive officers with those of our stockholders and to promote our performance and retention objectives; and
|
•
|
limited post-employment compensation arrangements payable on an involuntary termination of employment.
|
•
|
reviewed and provided market data on executive officer and director cash and equity compensation for 2017 compensation planning;
|
•
|
reviewed and provided recommendations on the annual and long-term incentive compensation award design;
|
•
|
reviewed and provided recommendations regarding certain of our compensation-related policies, including our stock ownership guidelines;
|
•
|
reviewed and provided an analysis of annual share utilization and stockholder dilution levels resulting from our employee stock plans; and
|
•
|
reviewed and provided comments on the Compensation Discussion & Analysis section of our Proxy Statement for 2017.
|
•
|
similar revenue size - ~0.5x to ~2.0x our last four quarter revenue of approximately $150 million as of the second quarter of 2016 (approximately $75 million to approximately $300 million);
|
•
|
similar market capitalization - ~0.3x to ~3.0x our market capitalization of $593 million as of July 1, 2016 (approximately $195 million to approximately $1.8 billion);
|
•
|
Industry - SaaS companies;
|
•
|
executive positions similar in breadth, complexity, and/or scope of responsibility; and
|
•
|
competitors for executive talent.
|
2U
|
HubSpot
|
Qualys
|
8x8
|
inContact
|
RingCentral
|
AppFolio
|
Instructure
|
SPS Commerce
|
Benefitfocus
|
MINDBODY
|
Workiva
|
Castlight Health
|
Model N
|
Xactly
|
ChannelAdvisor
|
Q2 Holdings
|
Zendesk
|
NEO
|
|
2017 Base Salary
|
|
2016 Base Salary
|
|
% Change
|
|||||
Barry Zwarenstein
|
|
$
|
367,189
|
|
|
$
|
367,189
|
|
|
—
|
%
|
Daniel Burkland
(1)
|
|
331,164
|
|
|
318,891
|
|
|
4
|
%
|
||
Gaurav Passi
|
|
327,750
|
|
|
280,000
|
|
|
17
|
%
|
||
Scott Welch
|
|
327,750
|
|
|
327,750
|
|
|
—
|
%
|
||
Michael Burkland
(2)
|
|
502,935
|
|
|
530,400
|
|
|
(5
|
)%
|
||
|
|
|
|
|
|
|
(1)
|
Effective
December 2, 2017
, Mr. Daniel Burkland’s base salary was increased to $400,000 in connection with his promotion to President.
|
(2)
|
Effective
December 2, 2017
, Mr. Michael Burkland resigned from his positions as Chief Executive Officer and President and was appointed as Executive Chairman. Under his Executive Chairman independent contractor agreement, he receives annual cash compensation of $200,000 and continued healthcare benefits in consideration of his advice and consultation on strategic initiatives, investor relations, talent development, organizational and other matters. Mr. Michael Burkland’s 2017 base salary as our former Chief Executive Officer and President was
530,400
.
|
Name
|
|
Financial Performance
Target Weight
(1)
|
|
Individual Performance
Target Weight
(2)
|
Barry Zwarenstein
|
|
75%
|
|
25%
|
Dan Burkland
|
|
37.5%
|
|
62.5%
|
Scott Welch
|
|
75%
|
|
25%
|
Gaurav Passi
|
|
75%
|
|
25%
|
Mike Burkland
|
|
100%
|
|
—%
|
|
|
|
|
|
(1)
|
Financial performance was based upon our achievement of predetermined revenue and Adjusted EBITDA targets using a weighting of 80% for performance achieved against the revenue target and 20% for performance achieved against the Adjusted EBITDA target.
|
(2)
|
Individual performance was based on the achievement of individual objectives consistent with the key strategic goals established by the Board. Mr. Daniel Burkland’s individual objectives are based on a combination of bookings commissions (
50%
) and key individual strategic goals (
12.5%
).
|
|
|
Annual Target Bonus as of the end of 2017
|
|
Annual Target Bonus as of the end of 2016
|
|
% Change in Dollar Value of Annual Target Bonus
|
||||||||
NEO
|
|
% of Base Salary
|
|
Amount
|
|
% of Base Salary
|
|
Amount
|
|
|||||
Barry Zwarenstein
(1)
|
|
75%
|
|
$
|
275,000
|
|
|
40%
|
|
$
|
147,000
|
|
|
87%
|
Daniel Burkland
(2)
|
|
81%
|
|
325,000
|
|
|
78%
|
|
247,000
|
|
|
32%
|
||
Gaurav Passi
|
|
50%
|
|
164,000
|
|
|
50%
|
|
140,000
|
|
|
17%
|
||
Scott Welch
|
|
50%
|
|
164,000
|
|
|
50%
|
|
164,000
|
|
|
—%
|
||
Michael Burkland
(3)
|
|
65%
|
|
316,644
|
|
|
60%
|
|
320,000
|
|
|
(1)%
|
||
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Effective
December 2, 2017
, Mr. Zwarenstein’s annual target bonus increased to
$275,000
in connection with his promotion to Interim Chief Executive Officer. His fourth quarter bonus for 2017 was prorated based on a target bonus of
$165,235
for the period from October 1, 2017 through December 1, 2017 and a target bonus of
$275,000
for the period from December 2, 2017 to December 31, 2017. Therefore, his target bonus for the full year was approximately
$174,258
.
|
(2)
|
Effective
December 2, 2017
, Mr. Daniel Burkland’s base salary was increased to
$400,000
in connection with his promotion to President; however, his annual target bonus amount remained at $325,000.
|
(3)
|
Mr. Michael Burkland remained eligible to receive a bonus for the fourth quarter of 2017, prorated for the period from October 1, 2017 through December 1, 2017. His annual target bonus for 2017 was increased to $345,000 in the first quarter of 2017.
|
|
|
Revenue
|
|
Adjusted EBITDA
|
||||||||||||||||||
Quarter Ending
|
|
Target
|
|
Actual
|
|
Payout
|
|
Target
|
|
Actual
|
|
Payout
|
||||||||||
|
|
in million
|
|
in million
|
|
%
|
|
in million
|
|
in million
|
|
%
|
||||||||||
March 31, 2017
|
|
$
|
45.8
|
|
|
$
|
47.0
|
|
|
105.4
|
%
|
|
$
|
1.2
|
|
|
$
|
2.6
|
|
|
154.7
|
%
|
June 30, 2017
|
|
46.5
|
|
|
47.7
|
|
|
105.4
|
%
|
|
1.6
|
|
|
3.0
|
|
|
153.3
|
%
|
||||
September 30, 2017
|
|
49.5
|
|
|
50.1
|
|
|
102.2
|
%
|
|
2.7
|
|
|
5.2
|
|
|
180.0
|
%
|
||||
December 31, 2017
|
|
54.0
|
|
|
55.4
|
|
|
105.1
|
%
|
|
5.3
|
|
|
6.8
|
|
|
161.1
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
Q1 2017
|
|
Q2 2017
|
|
Q3 2017
|
|
Q4 2017
|
|
Total 2017
Payout |
|
% of
Target (1) |
|||||||||||
Barry Zwarenstein
|
|
$
|
45,843
|
|
|
$
|
45,852
|
|
|
$
|
46,492
|
|
|
$
|
56,026
|
|
|
$
|
194,213
|
|
|
111
|
%
|
Daniel Burkland
(2)
|
|
83,094
|
|
|
83,564
|
|
|
85,432
|
|
|
83,050
|
|
|
335,140
|
|
|
103
|
%
|
|||||
Gaurav Passi
|
|
45,500
|
|
|
44,996
|
|
|
46,247
|
|
|
45,906
|
|
|
182,649
|
|
|
111
|
%
|
|||||
Scott Welch
|
|
45,602
|
|
|
45,304
|
|
|
46,144
|
|
|
46,010
|
|
|
183,060
|
|
|
112
|
%
|
|||||
Michael Burkland
|
|
99,446
|
|
|
99,184
|
|
|
101,542
|
|
|
69,096
|
|
|
369,268
|
|
|
117
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The achievement percentages for Messrs. Zwarenstein and Michael Burkland are based on their prorated 2017 target bonus amounts of
$174,258
and
$316,644
, as described in further detail above.
|
(2)
|
Mr. Daniel Burkland’s quarterly bonuses are funded
62.5%
based on individual performance, with
50%
based on bookings commissions and
12.5%
based on key individual strategic goals established by the Committee.
|
NEO
|
|
RSUs Granted
(#) |
|
Stock Options Granted
(#) |
|
Aggregate Grant Date Fair Value of RSUs and Stock Options
($) |
|
||||
Barry Zwarenstein
|
|
37,086
|
|
|
79,697
|
|
|
$
|
1,383,622
|
|
(1)
|
Daniel Burkland
|
|
64,401
|
|
|
136,832
|
|
|
2,732,715
|
|
(2)
|
|
Gaurav Passi
|
|
33,230
|
|
|
68,549
|
|
|
1,079,912
|
|
|
|
Scott Welch
|
|
24,000
|
|
|
49,507
|
|
|
779,940
|
|
|
|
Michael Burkland
|
|
87,753
|
|
|
181,020
|
|
|
2,851,785
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes approximately
$0.5 million
in promotional stock options and RSUs granted in connection with Mr. Zwarenstein’s appointment as Interim Chief Executive Officer effective December 2, 2017, which vest over one year from the vesting commencement date.
|
(2)
|
Includes approximately
$1.9 million
in promotional stock options and RSUs granted in connection with Mr. Daniel Burkland’s appointment as President effective December 2, 2017.
|
Position
|
|
Guidelines
|
Directors
|
|
Lesser of 300% of annual retainer or 9,000 shares
|
CEO
|
|
Lesser of 300% of annual base salary or 160,000 shares
|
Other Executive Officers
|
|
Lesser of 100% of annual base salary or 30,000 shares
|
•
|
the compensation program includes a reasonable mix of cash, short-term incentive and equity compensation, with the vesting of equity compensation tied to multi-year time periods;
|
•
|
the performance goals for the 2017 Bonus Program are based on a mix of corporate goals and individual performance, with payouts capped if the corporate goals are achieved below a certain threshold; and
|
•
|
we have formal policies in place for equity administration, insider trading, hedging and pledging and we annually review succession plans for key executives.
|
Name and Principal Position
|
|
Year
(1)
|
|
Salary
|
|
Stock Awards
(2)
|
|
Option Awards
(2)
|
|
Non-Equity Incentive
Plan Compensation
(3)
|
|
All Other
Compensation
(4)
|
|
Total
Compensation
|
||||||||||||
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
||||||||||||
Barry Zwarenstein
|
|
2017
|
|
$
|
367,189
|
|
|
$
|
689,571
|
|
|
$
|
694,051
|
|
|
$
|
194,213
|
|
|
$
|
530
|
|
|
$
|
1,945,554
|
|
Interim Chief Executive Officer and Chief Financial Officer
|
|
2016
|
|
367,189
|
|
|
381,297
|
|
|
372,707
|
|
|
169,004
|
|
|
530
|
|
|
1,290,727
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Daniel Burkland
|
|
2017
|
|
330,966
|
|
|
1,359,458
|
|
|
1,373,257
|
|
|
335,140
|
|
|
320
|
|
|
3,399,141
|
|
||||||
President
|
|
2016
|
|
318,891
|
|
|
905,399
|
|
|
926,135
|
|
|
281,383
|
|
|
320
|
|
|
2,432,128
|
|
||||||
|
2015
|
|
317,669
|
|
|
—
|
|
|
—
|
|
|
247,424
|
|
|
187
|
|
|
565,280
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gaurav Passi
|
|
2017
|
|
327,750
|
|
|
539,988
|
|
|
539,924
|
|
|
182,649
|
|
|
—
|
|
|
1,590,311
|
|
||||||
Executive Vice President, Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Scott Welch
|
|
2017
|
|
327,750
|
|
|
390,000
|
|
|
389,940
|
|
|
183,060
|
|
|
530
|
|
|
1,291,280
|
|
||||||
Executive Vice President, Cloud Operations and Platform Engineering
|
|
2016
|
|
327,750
|
|
|
264,225
|
|
|
258,321
|
|
|
188,506
|
|
|
530
|
|
|
1,039,332
|
|
||||||
|
2015
|
|
327,750
|
|
|
552,000
|
|
|
—
|
|
|
105,735
|
|
|
309
|
|
|
985,794
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Michael Burkland
|
|
2017
|
|
504,648
|
|
(5)
|
1,425,986
|
|
|
1,425,799
|
|
|
369,268
|
|
|
3,183
|
|
|
3,728,884
|
|
||||||
Executive Chairman, Former Chief Executive Officer and President
|
|
2016
|
|
530,401
|
|
|
1,016,250
|
|
|
995,156
|
|
|
385,465
|
|
|
530
|
|
|
2,927,802
|
|
||||||
|
2015
|
|
530,401
|
|
|
—
|
|
|
—
|
|
|
391,510
|
|
|
309
|
|
|
922,220
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Mr. Zwarenstein first became a named executive officer in 2016 and Mr. Passi first became a named executive officer in 2017.
|
(2)
|
The aggregate grant date fair value of equity awards in this column has been calculated in accordance with FASB ASC Topic 718. See
Note 7
of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31,
2017
for a discussion of assumptions made in determining the grant date fair value of equity awards. These amounts do not correspond to the actual value that our NEOs will recognize. Our NEOs will only realize compensation from these awards to the extent they meet the vesting requirements under the awards. In addition, Mr. Michael Burkland’s resignation as Chief Executive Officer and President on December 2, 2017 resulted in an accounting modification in respect of his RSUs and options that were unvested and outstanding on his resignation date, due to his change in status from an employee and director to solely a director. The incremental stock-based compensation expense associated with such change in status was
$2,916,306
and
$4,315,527
in respect of such RSUs and options, respectively, which amounts are not reported in the table above because Mr. Burkland’s continued vesting for his service as a director following his resignation was included in the terms of his original awards.
|
(3)
|
Amounts in this column represent amounts earned under our 2017, 2016 and 2015 Bonus Programs based on the achievement of company and individual performance goals and other factors deemed relevant by our compensation committee. As discussed in the section above entitled “Compensation Discussion and Analysis - Key Elements of Our 2017 Executive Compensation Program,” the annual target bonus opportunities for Messrs. Zwarenstein, Daniel Burkland, Passi, Welch and Michael Burkland, as of the end of
2017
were
75%
,
81%
,
50%
,
50%
and
65%
|
(4)
|
The 2017 amounts represent life insurance paid by us for the named executive officers. The 2017 amount for Mr. Michael Burkland also includes health insurance premium of $2,698 paid by us as part of his compensation under his Executive Chairman independent consultant agreement effective December 2, 2017.
|
(5)
|
Amount includes consulting fees of $16,438 earned by Mr. Michael Burkland as part of Mr. Burkland’s compensation under his Executive Chairman independent contractor agreement effective December 2, 2017.
|
Name
|
|
Grant
Date |
|
Grant Approval Date
|
|
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards Target (1)
$ |
|
All Other Stock Awards: Number of Shares of Stock or Units
# |
|
All Other Option Awards: Number of Securities Underlying Options
# |
|
Exercise or Base Price of Option Awards
($/sh) |
|
Grant Date Fair Value of Stock and Option Awards
(2)
$ |
|
||||||||
Barry Zwarenstein
|
|
|
|
|
|
$
|
174,258
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
2/23/2017
|
|
2/9/2017
|
|
|
|
26,676
|
|
|
|
|
|
|
$
|
433,485
|
|
|
|||||
|
|
2/23/2017
|
|
2/9/2017
|
|
|
|
|
|
55,029
|
|
|
$
|
16.25
|
|
|
433,434
|
|
|
||||
|
|
12/18/2017
|
(3)
|
11/6/2017
|
|
|
|
10,410
|
|
|
|
|
|
|
256,086
|
|
|
||||||
|
|
12/18/2017
|
(3)
|
11/6/2017
|
|
|
|
|
|
24,668
|
|
|
24.60
|
|
|
260,617
|
|
|
|||||
Daniel Burkland
|
|
|
|
|
|
325,000
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2/23/2017
|
|
2/9/2017
|
|
|
|
26,923
|
|
|
|
|
|
|
437,499
|
|
|
||||||
|
|
2/23/2017
|
|
2/9/2017
|
|
|
|
|
|
55,537
|
|
|
16.25
|
|
|
437,436
|
|
|
|||||
|
|
12/18/2017
|
(3)
|
11/6/2017
|
|
|
|
37,478
|
|
|
|
|
|
|
921,959
|
|
|
||||||
|
|
12/18/2017
|
(3)
|
11/6/2017
|
|
|
|
|
|
81,295
|
|
|
24.60
|
|
|
935,821
|
|
|
|||||
Gaurav Passi
|
|
|
|
|
|
164,000
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2/23/2017
|
|
2/9/2017
|
|
|
|
33,230
|
|
|
|
|
|
|
539,988
|
|
|
||||||
|
|
2/23/2017
|
|
2/9/2017
|
|
|
|
|
|
68,549
|
|
|
16.25
|
|
|
539,924
|
|
|
|||||
Scott Welch
|
|
|
|
|
|
164,000
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2/23/2017
|
|
2/9/2017
|
|
|
|
24,000
|
|
|
|
|
|
|
390,000
|
|
|
||||||
|
|
2/23/2017
|
|
2/9/2017
|
|
|
|
|
|
49,507
|
|
|
16.25
|
|
|
389,940
|
|
|
|||||
Michael Burkland
|
|
|
|
|
|
316,644
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2/23/2017
|
|
2/9/2017
|
|
|
|
87,753
|
|
|
|
|
|
|
1,425,986
|
|
(4)
|
||||||
|
|
2/23/2017
|
|
2/9/2017
|
|
|
|
|
|
181,020
|
|
|
16.25
|
|
|
1,425,799
|
|
(4)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This column sets forth the target annual bonus amount under our 2017 Bonus Program for each NEO. We do not establish thresholds or maximum annual bonus amounts for each individual NEO. Refer to “Key Elements of Our 2017 Executive Compensation Program” section above for more detail. Effective December 2, 2017, Mr. Zwarenstein’s annual target bonus increased to
$275,000
in connection with his promotion to Interim Chief Executive Officer. His fourth quarter bonus for 2017 was prorated based on a target bonus of
$165,235
for the period from October 1, 2017 through December 1, 2017 and a target bonus of
$275,000
for the period from December 2, 2017 to December 31, 2017. Therefore, his target bonus amount for the full year was approximately
$174,258
.
|
(2)
|
Amounts reflect the grant date fair value of equity awards granted in 2017 in accordance with FASB ASC Topic 718. For information regarding assumptions underlying the value of equity awards, see
Note 7
of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31,
2017
for a discussion of assumptions made in determining the grant date fair value of equity awards. These amounts do not correspond to the actual value that the NEOs will recognize.
|
(3)
|
The Compensation Committee approved grants of RSUs and stock options to Mr. Zwarenstein and Mr. Daniel Burkland in connection with their promotions to Interim Chief Executive Officer and President, respectively, effective December 2, 2017.
|
(4)
|
Mr. Michael Burkland’s resignation as Chief Executive Officer and President on December 2, 2017 resulted in an accounting modification in respect to his RSUs and options that were unvested and outstanding on his resignation date, due to his change in status from an employee and director to solely a director. The incremental stock-based compensation expense associated with such change in status is not reported in the table above because Mr. Burkland’s continued vesting for his service as a director following his resignation was included in the terms of his original awards. Refer to footnote (2) to the “Summary Compensation Table” for additional information.
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||
Name
|
|
Grant Date
|
|
Number of Securities Underlying Unexercised Options
(#)
Exercisable
|
|
Number of Securities Underlying Unexercised Options
(#)
Unexercisable
|
|
Option
Exercise
Price
($)
|
|
Option Expiration Date
|
|
Number of
Shares or
Units of
Stock that
have not
Vested
(#)
|
|
Market Value
of Shares or
Units of
Stock that
have not
Vested (1)
($)
|
|||||||
Barry Zwarenstein
|
|
11/22/2013
|
|
88,860
|
|
|
—
|
|
|
$
|
9.48
|
|
|
11/22/2023
|
|
|
|
|
|||
|
11/5/2014
|
|
41,500
|
|
|
23,605
|
|
(2)
|
4.25
|
|
|
11/5/2024
|
|
|
|
|
|||||
|
|
3/9/2016
|
|
44,802
|
|
|
52,948
|
|
(2)
|
8.13
|
|
|
3/9/2026
|
|
|
|
|
||||
|
|
2/23/2017
|
|
11,464
|
|
|
43,565
|
|
(2)
|
16.25
|
|
|
2/23/2027
|
|
|
|
|
||||
|
|
12/18/2017
|
|
—
|
|
|
24,668
|
|
(4)
|
24.60
|
|
|
12/18/2027
|
|
|
|
|
||||
|
|
11/5/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
13,750
|
|
(3)
|
$
|
342,100
|
|
|
|
|
3/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
26,382
|
|
(3)
|
656,384
|
|
||
|
|
2/23/2017
|
|
|
|
|
|
|
|
|
|
21,675
|
|
(3)
|
539,274
|
|
|||||
|
|
12/18/2017
|
|
|
|
|
|
|
|
|
|
10,410
|
|
(5)
|
259,001
|
|
|||||
Daniel Burkland
|
|
12/15/2009
|
|
59,401
|
|
|
—
|
|
|
0.28
|
|
|
12/15/2019
|
|
|
|
|
||||
|
|
1/25/2013
|
|
46,327
|
|
|
—
|
|
|
4.84
|
|
|
1/25/2023
|
|
|
|
|
||||
|
|
11/22/2013
|
|
80,250
|
|
|
—
|
|
|
9.48
|
|
|
11/22/2023
|
|
|
|
|
||||
|
|
11/5/2014
|
|
100,979
|
|
|
30,021
|
|
(2)
|
4.25
|
|
|
11/5/2024
|
|
|
|
|
||||
|
|
3/9/2016
|
|
38,820
|
|
|
45,880
|
|
(2)
|
8.13
|
|
|
3/9/2026
|
|
|
|
|
||||
|
|
11/14/2016
|
|
23,099
|
|
|
62,193
|
|
(2)
|
14.39
|
|
|
11/14/2026
|
|
|
|
|
||||
|
|
2/23/2017
|
|
11,570
|
|
|
43,967
|
|
(2)
|
16.25
|
|
|
2/23/2027
|
|
|
|
|
||||
|
|
12/18/2017
|
|
—
|
|
|
81,295
|
|
(6)
|
24.60
|
|
|
12/18/2027
|
|
|
|
|
||||
|
|
11/5/2014
|
|
|
|
|
|
|
|
|
|
17,500
|
|
(3)
|
435,400
|
|
|||||
|
|
3/9/2016
|
|
|
|
|
|
|
|
|
|
22,860
|
|
(3)
|
568,757
|
|
|||||
|
|
11/14/2016
|
|
|
|
|
|
|
|
|
|
29,969
|
|
(3)
|
745,629
|
|
|||||
|
|
2/23/2017
|
|
|
|
|
|
|
|
|
|
21,875
|
|
(3)
|
544,250
|
|
|||||
|
|
12/18/2017
|
|
|
|
|
|
|
|
|
|
37,478
|
|
(7)
|
932,453
|
|
|||||
Gaurav Passi
|
|
12/18/2013
|
|
105
|
|
|
—
|
|
|
10.12
|
|
|
12/18/2023
|
|
|
|
|
||||
|
|
11/5/2014
|
|
979
|
|
|
10,771
|
|
(2)
|
4.25
|
|
|
11/5/2024
|
|
|
|
|
||||
|
|
3/9/2016
|
|
1,547
|
|
|
40,219
|
|
(2)
|
8.13
|
|
|
3/9/2026
|
|
|
|
|
||||
|
|
2/23/2017
|
|
4,508
|
|
|
54,268
|
|
(2)
|
16.25
|
|
|
2/23/2027
|
|
|
|
|
||||
|
|
8/12/2014
|
|
|
|
|
|
|
|
|
|
608
|
|
(3)
|
15,127
|
|
|||||
|
|
11/5/2014
|
|
|
|
|
|
|
|
|
|
6,250
|
|
(3)
|
155,500
|
|
|||||
|
|
11/11/2015
|
|
|
|
|
|
|
|
|
|
35,000
|
|
(7)
|
870,800
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||
Name
|
|
Grant Date
|
|
Number of Securities Underlying Unexercised Options
(#)
Exercisable
|
|
Number of Securities Underlying Unexercised Options
(#)
Unexercisable
|
|
Option
Exercise
Price
($)
|
|
Option Expiration Date
|
|
Number of
Shares or
Units of
Stock that
have not
Vested
(#)
|
|
Market Value
of Shares or
Units of
Stock that
have not
Vested (1)
($)
|
|||||||
|
|
3/9/2016
|
|
|
|
|
|
|
|
|
|
20,040
|
|
(3)
|
498,595
|
|
|||||
|
|
2/23/2017
|
|
|
|
|
|
|
|
|
|
27,000
|
|
(3)
|
671,760
|
|
|||||
Scott Welch
|
|
3/6/2014
|
|
85,792
|
|
|
11,719
|
|
(6)
|
12.24
|
|
|
3/6/2024
|
|
|
|
|
||||
|
|
11/5/2014
|
|
12,250
|
|
|
19,250
|
|
(2)
|
4.25
|
|
|
11/5/2024
|
|
|
|
|
||||
|
|
3/9/2016
|
|
9,881
|
|
|
36,698
|
|
(2)
|
8.13
|
|
|
3/9/2026
|
|
|
|
|
||||
|
|
2/23/2017
|
|
10,313
|
|
|
39,194
|
|
(2)
|
16.25
|
|
|
2/23/2027
|
|
|
|
|
||||
|
|
4/15/2014
|
|
|
|
|
|
|
|
|
|
3,903
|
|
(7)
|
97,107
|
|
|||||
|
|
11/5/2014
|
|
|
|
|
|
|
|
|
|
11,250
|
|
(3)
|
279,900
|
|
|||||
|
|
11/11/2015
|
|
|
|
|
|
|
|
|
|
43,750
|
|
(7)
|
1,088,500
|
|
|||||
|
|
3/9/2016
|
|
|
|
|
|
|
|
|
|
18,282
|
|
(3)
|
454,856
|
|
|||||
|
|
2/23/2017
|
|
|
|
|
|
|
|
|
|
19,500
|
|
(3)
|
485,160
|
|
|||||
Michael Burkland
|
|
5/20/2008
|
|
96,496
|
|
|
—
|
|
|
0.12
|
|
|
5/20/2018
|
|
|
|
|
||||
|
|
1/25/2013
|
|
49,464
|
|
|
—
|
|
|
4.84
|
|
|
1/25/2023
|
|
|
|
|
||||
|
|
11/22/2013
|
|
242,922
|
|
|
—
|
|
|
9.48
|
|
|
11/22/2023
|
|
|
|
|
||||
|
|
11/5/2014
|
|
245,895
|
|
|
73,105
|
|
(2)
|
4.25
|
|
|
11/5/2024
|
|
|
|
|
||||
|
|
3/9/2016
|
|
119,625
|
|
|
141,375
|
|
(2)
|
8.13
|
|
|
3/9/2026
|
|
|
|
|
||||
|
|
2/23/2017
|
|
37,712
|
|
|
143,308
|
|
(2)
|
16.25
|
|
|
2/23/2017
|
|
|
|
|
||||
|
|
11/5/2014
|
|
|
|
|
|
|
|
|
|
42,500
|
|
(3)
|
1,057,400
|
|
|||||
|
|
3/9/2016
|
|
|
|
|
|
|
|
|
|
70,313
|
|
(3)
|
1,749,387
|
|
|||||
|
|
2/23/2017
|
|
|
|
|
|
|
|
|
|
71,300
|
|
(3)
|
1,773,944
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The amounts listed in this column represent the product of the closing market price of our common stock as of December 29, 2017, the last trading day of 2017, of $24.88 per share and the number of shares of stock or units subject to the award.
|
(2)
|
Award is subject to a four-year vesting schedule and the NEO’s continued service with the Company on each vesting date, with 1/48th of the options vest on each monthly anniversary following the applicable vesting commencement date, until all options are vested.
|
(3)
|
Award is subject to a four-year vesting schedule and the NEO’s continued service with the Company on each vesting date, with 1/16th of the total number of RSUs vest every three months after the vesting commencement date, until all RSUs are vested.
|
(4)
|
Award is subject to an one-year vesting schedule and the NEO’s continued service with the Company on each vesting date, with 1/12th of the total number of options vest monthly following the applicable vesting commencement date, until all options are vested.
|
(5)
|
Award is subject to an one-year vesting schedule and the NEO’s continued service with the Company on each vesting date, with 25% of the total number of RSUs vest every three months after the vesting commencement date, until all RSUs are vested.
|
(6)
|
Award is subject to a four-year vesting schedule and the NEO’s continued service with the Company on each vesting date, with 25% of the total number of options vest one year after the vesting commencement date, and 1/48th of the total number of options vest monthly thereafter until all options are vested.
|
(7)
|
Award is subject to a four-year vesting schedule and the NEO’s continued service with the Company on each vesting date, with 25% of the total number of RSUs vest on the first anniversary of the vesting commencement date, and 1/16th of the total number of RSUs vest every three months thereafter until all RSUs are vested.
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||||
Name
|
|
Number of Shares
Acquired on Exercise |
|
Value Realized
on Exercise (1) |
|
Number of Shares
Acquired on Vesting |
|
Value Realized
on Vesting (2) |
||||||
Barry Zwarenstein
|
|
10,000
|
|
|
$
|
202,200
|
|
|
30,476
|
|
|
$
|
637,087
|
|
Daniel Burkland
|
|
162,500
|
|
|
3,138,534
|
|
|
42,697
|
|
|
889,794
|
|
||
Gaurav Passi
|
|
119,610
|
|
|
1,674,527
|
|
|
42,601
|
|
|
919,942
|
|
||
Scott Welch
|
|
135,660
|
|
|
1,828,530
|
|
|
64,484
|
|
|
1,383,844
|
|
||
Michael Burkland
|
|
1,048,081
|
|
|
19,203,031
|
|
|
90,203
|
|
|
1,887,984
|
|
||
|
|
|
|
|
|
|
|
|
(1)
|
Amount represents the excess of the fair market value of the shares at the time of the exercise over the exercise price of the stock options.
|
(2)
|
Amount is determined based on the closing market price of our common stock on the vesting date of such shares.
|
•
|
a lump sum cash payment equal to 9 months (in the case of Mr. Zwarenstein), or 6 months (in the case of Messrs. Daniel Burkland, Gaurav Passi and Scott Welch) of his then-current base salary, and
|
•
|
either payment of the premiums for his continued post-termination health insurance coverage, or continued coverage under our health insurance plans for up to 9 months (in the case of Mr. Zwarenstein), or 6 months (in the case of Messrs. Daniel Burkland, Gaurav Passi and Scott Welch).
|
•
|
a lump sum cash payment equal to 15 months (in the case of Mr. Barry Zwarenstein), or 12 months (in the case of Messrs. Daniel Burkland, Gaurav Passi and Scott Welch) of his then-current base salary and his target annual bonus opportunity,
|
•
|
either payment of the premiums for his continued post-termination health insurance coverage for up to 15 months (in the case of Mr. Zwarenstein), or 12 months (in the case of Messrs. Daniel Burkland, Gaurav Passi and Scott Welch), and
|
•
|
full accelerated vesting of his then-outstanding and unvested equity awards.
|
Name
|
|
Type of Benefit
|
|
Involuntary Termination Without Cause Not In Connection With a Change in Control
|
|
Involuntary Termination Without Cause or Termination Due to a Constructive Termination, each in connection with a Change in Control
|
||||
|
|
|
|
|
|
|
||||
Barry Zwarenstein
|
|
Cash severance - base salary
|
|
$
|
275,392
|
|
|
$
|
458,986
|
|
|
|
Cash severance - bonus
|
|
—
|
|
|
343,750
|
|
||
|
|
Value of accelerated vesting of equity awards
(1)
|
|
—
|
|
|
3,553,482
|
|
||
|
|
Company-paid health care premiums
|
|
17,061
|
|
|
28,435
|
|
||
|
|
Total
|
|
$
|
292,453
|
|
|
$
|
4,384,653
|
|
|
|
|
|
|
|
|
||||
Daniel Burkland
|
|
Cash severance - base salary
|
|
$
|
200,000
|
|
|
$
|
400,000
|
|
|
|
Cash severance - bonus
|
|
—
|
|
|
325,000
|
|
||
|
|
Value of accelerated vesting of equity awards
(1)
|
|
—
|
|
|
5,668,914
|
|
||
|
|
Company-paid health care premiums
|
|
16,239
|
|
|
32,478
|
|
||
|
|
Total
|
|
$
|
216,239
|
|
|
$
|
6,426,392
|
|
|
|
|
|
|
|
|
||||
Gaurav Passi
|
|
Cash severance - base salary
|
|
$
|
163,875
|
|
|
$
|
327,750
|
|
|
|
Cash severance - bonus
|
|
—
|
|
|
164,000
|
|
||
|
|
Value of accelerated vesting of equity awards
(1)
|
|
—
|
|
|
3,575,989
|
|
||
|
|
Company-paid health care premiums
|
|
15,948
|
|
|
31,895
|
|
||
|
|
Total
|
|
$
|
179,823
|
|
|
$
|
4,099,634
|
|
|
|
|
|
|
|
|
||||
Scott Welch
|
|
Cash severance - base salary
|
|
$
|
163,875
|
|
|
$
|
327,750
|
|
|
|
Cash severance - bonus
|
|
—
|
|
|
164,000
|
|
||
|
|
Value of accelerated vesting of equity awards
(1)
|
|
—
|
|
|
3,903,714
|
|
||
|
|
Company-paid health care premiums
|
|
16,239
|
|
|
32,478
|
|
||
|
|
Total
|
|
$
|
180,114
|
|
|
$
|
4,427,942
|
|
|
|
|
|
|
|
|
(1)
|
Amount represents the aggregate intrinsic value of the equity awards to vest upon either an involuntary termination without cause or a termination due to a constructive termination, each in connection with a change in control, which was calculated based on the closing market price of
$24.88 per share
of our common stock at
December 29, 2017
, the last trading day of 2017. In addition, if a successor entity refused to assume or replace each NEO’s outstanding equity awards at the time of the change in control, all such outstanding awards would
|
|
|
Number of Securities to be Issued Upon Exercise of Outstanding Options and Warrants and Vesting of Restricted Stock Units
|
|
Weighted-average Exercise Price of Outstanding Options and Warrants
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
(Excluding Securities Reflected in Column (a)
|
|
||||
|
|
(a)
|
|
(b)
|
|
(c)
|
|
||||
Equity compensation plans approved by stockholders
|
|
6,086,340
|
|
(1)
|
$
|
8.04
|
|
(2)
|
8,664,557
|
|
(3)
|
Equity compensation plans not approved by stockholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
|
6,086,340
|
|
|
|
|
8,664,557
|
|
|
||
|
|
|
|
|
|
|
|
(1)
|
Includes
4,053,523
shares underlying stock options and
2,032,817
shares underlying RSUs.
|
(2)
|
The weighted-average exercise price does not take into account shares issuable upon the vesting of outstanding RSUs, which have no exercise price.
|
(3)
|
Includes
7,293,875
shares of Common Stock reserved for issuance under the 2014 Plan and
1,370,682
shares of Common Stock reserved for issuance under the ESPP. The 2014 Plan provides for an annual automatic increase to the shares reserved for issuance in an amount equal to 5% of the total number of shares outstanding on December 31st of the preceding calendar year or a lesser number as determined by our Board of Directors continuing through 2024. Pursuant to the automatic annual increase,
2,831,582
additional shares were reserved under the 2014 Plan on January 1,
2018
. The ESPP also provides for an automatic increase to the shares reserved for issuance, continuing through January 1, 2024, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year; (ii) 1,000,000 shares of common stock (subject to adjustment to reflect any split or combination of our common stock); or (iii) such lesser number as determined by our Board of Directors. Pursuant to the automatic annual increase,
566,316
additional shares were reserved under the ESPP on January 1,
2018
.
|
•
|
we have been or are to be a participant;
|
•
|
the amount involved exceeds $120,000; and
|
•
|
any of our directors, executive officers or holders of more than 5% of our common stock, or any immediate family member of or person sharing the household with any of these individuals (other than tenants or employees), had or will have a direct or indirect material interest.
|
|
|
By Order of the Board of Directors
|
|
|
|
|
|
Barry Zwarenstein
|
|
|
Interim Chief Executive Officer, Chief Financial Officer
and Secretary |
|
|
|
San Ramon, California
|
|
|
April 3, 2018
|
|
|
|
|
FIVE9, INC.
Bishop Ranch 8
4000 Executive Parkway
Suite 400
San Ramon, CA 94583
|
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or Annual Meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During the Annual Meeting –
www.virtualshareholdermeeting.com/FIVN2018
You may attend the Annual Meeting via the Internet and vote during the Annual Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE -1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or Annual Meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
|||
|
|
E42400-P02331
|
KEEP THIS PORTION FOR YOUR RECORDS
|
– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
|
|||
|
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
|
DETACH AND RETURN THIS PORTION ONLY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIVE9, INC.
The Board of Directors recommends you vote FOR all the listed nominees:
1. Election of the two (2) members of the Board of Directors identified in Proposal No. 1 to serve as Class I directors until the Company’s 2021 Annual Meeting of Stockholders or until their successors are duly elected and qualified.
Nominees:
01) Michael Burdiek
02) David DeWalt
|
For
All |
Withhold
All |
For All
Except |
To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
|
|
|
|
|
||||||
|
o
|
o
|
o
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
|
The Board of Directors recommends you vote FOR proposals 2 and 4 and recommends you vote for ONE YEAR for proposal 3:
|
|
For
|
Against
|
Abstain
|
||||||||||
|
|
|
|
||||||||||||
|
2. To approve, on a non-binding advisory basis, the compensation of the named executive officers as disclosed in the proxy statement.
|
|
o
|
o
|
o
|
||||||||||
|
|
One Year
|
Two Years
|
|
Three
Years
|
Abstain
|
|||||||||
|
3. To recommend, on a non-binding advisory basis, the frequency of votes on executive compensation.
|
o
|
o
|
o
|
o
|
||||||||||
|
|
|
For
|
Against
|
Abstain
|
||||||||||
|
4. Ratification of the appointment of KPMG LLP as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2018.
|
|
o
|
o
|
o
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
|
NOTE:
The proxies are authorized to vote on such other business as may properly come before the Annual Meeting or any adjournment thereof.
|
|
|||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Signature [PLEASE SIGN WITHIN BOX]
|
Date
|
|
|
|
Signature (Joint Owners)
|
|
Date
|
|
|
|||||
|
|
|
|
|
|
|
|
– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
|
|||
|
|
E42401-P02331
|
|
|
|
|
|
|
|
|
|
|
FIVE9, INC.
|
|
|
Annual Meeting of Stockholders
|
|
|
May 18, 2018 8:00 AM PDT
|
|
|
This proxy is solicited by the Board of Directors
|
|
|
|
|
|
The stockholder(s) hereby appoint(s) Barry Zwarenstein and Daniel Burkland, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of FIVE9, Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 8:00 AM, PDT on May 18, 2018, virtually via the Internet at www.virtualshareholdermeeting.com/FIVN2018, and any adjournment or postponement thereof.
|
|
|
|
|
|
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continued and to be signed on reverse side
|
|
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|
|
|
1 Year Five9 Chart |
1 Month Five9 Chart |
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