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Check the appropriate box:
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¨
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Preliminary Proxy Statement
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þ
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Definitive 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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¨
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Definitive Additional Materials
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¨
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Soliciting Material Pursuant to §240.14a-12
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No fee required.
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o
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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 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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1
|
Elect two Class III directors named in the Proxy Statement to the board of directors of PROS Holdings, Inc. (Board of Directors or Board) each to serve a three-year term until our annual meeting of our stockholders to be held in the year 2022 (2022 Annual Meeting);
|
2
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Advisory vote on named executive officer compensation;
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3
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Approve proposed amendments to 2017 Equity Incentive Plan;
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4
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Ratification of appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2019; and
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5
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Transaction of other business that may properly come before the Annual Meeting.
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Page
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Executive Summary
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4
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Proxy Statement
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9
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Vote Required
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9
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Voting Instructions
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10
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Corporate Governance
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12
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Role of the Board of Directors
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12
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Board Committees
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12
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Independence
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13
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Risk Oversight
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13
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Director Nomination
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14
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Code of Business Conduct and Ethics
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14
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Communications with Our Board of Directors
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15
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Our Board of Directors
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16
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Director Compensation
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19
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Proposal One -
Election of Directors
|
20
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Executive Officers
|
21
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Compensation Discussion and Analysis
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22
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Proposal Two -
Non-Binding Advisory Vote on Executive Compensation
|
42
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Proposal Three -
Proposed Amendments to our 2017 Equity Incentive Plan
|
43
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Security Ownership
|
52
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Audit Matters
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54
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Proposal Four -
Ratification of Independent Registered Public Accounting Firm Appointment
|
56
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Proposal
|
Board Vote Recommendation
|
Page #
|
Elect two Class III directors
|
FOR
each director nominee
|
20
|
Advisory vote on executive compensation
|
FOR
|
42
|
Approve proposed amendments to 2017 Equity Incentive Plan
|
FOR
|
43
|
Ratification of appointment of PricewaterhouseCoopers LLP for fiscal year 2019
|
FOR
|
56
|
•
|
Continued
substantial growth
:
|
•
|
Subscription revenue
increased
57%
year-over-year,
Recurring Revenue
(Subscription + Maintenance Revenue) grew
23%
year-over-year,
Annual Recurring Revenue
(ARR)
(1)
grew
18%
year-over-year, and
total revenue grew 17%
year-over-year and surpassed pre-cloud transition total revenue in less than four years;
|
•
|
Cash flow provided by operating activities improved over $30.0 million year-over-year, and
Free Cash Flow
(2)
improved $29.0 million
year-over-year;
|
•
|
Total shareholder return grew 19%
during 2018, and
cumulatively grew
59%
from the end of 2017 through March 15, 2019.
|
•
|
Continued to innovate
to deliver our solutions faster and with higher gross margins, which in turn drove higher accessibility and faster sales cycles for new customers;
|
•
|
Successfully maintained
ISO27001, SOC2 and CSA security certifications
, underscoring our commitment to customers by achieving the industry’s most rigorous requirements for cloud security and data privacy, governance, and compliance;
|
•
|
Enhanced capital structure and strengthened our balance sheet
by completing a follow-on public offering of 4,370,000 primary shares of common stock generating $142 million in net proceeds; and
|
•
|
Further strengthened our executive team
to help us continue scaling our business.
|
(1)
|
Annual Recurring Revenue ("ARR") is used to assess the trajectory of our cloud business. ARR means, as of a specified date, the contracted recurring revenue, including contracts with a future start date, together with annualized overage fees incurred above contracted minimum transactions, and excluding perpetual and term license agreements recognized as license revenue in accordance with GAAP. ARR should be viewed independently of revenue and any other GAAP measure.
|
(2)
|
Free cash flow is a non-GAAP financial measure which is defined as net cash provided by (used in) operating activities, less capital expenditures (excluding expenditures for PROS new headquarters), purchases of other (non-acquisition-related) intangible assets and capitalized internal-use software development costs.
|
(1)
|
Annual Recurring Revenue ("ARR") is used to assess the trajectory of our cloud business. ARR means, as of a specified date, the contracted recurring revenue, including contracts with a future start date, together with annualized overage fees incurred above contracted minimum transactions, and excluding perpetual and term license agreements recognized as license revenue in accordance with GAAP. ARR should be viewed independently of revenue and any other GAAP measure.
|
•
|
The Compensation & Leadership Development (CLD) Committee is pleased with the Company’s performance and set target pay in line with competitive market practice of similar peer companies to ensure we retain and reward our CEO for continued strong performance going forward.
|
•
|
Growth in shareholder return has outpaced growth in our CEO’s target pay.
Our CEO’s 2018 base salary and target cash incentive remained unchanged from 2017 levels, which is the fourth year in a row with no CEO salary or target cash incentive increase. Our CEO’s total target compensation, including base salary, target cash incentive and target value of long-term equity compensation, was set near the median pay level of our peer CEOs that was expected for 2018, which proved true when reviewing peer CEO compensation levels later in 2018.
|
•
|
Our CEO’s pay continues to be >50% directly “performance-based” (including annual cash incentive and performance-based equity) and >90% at risk (including time-based RSUs).
|
•
|
We set
aggressive performance-based goals
, with higher target top line growth required to achieve target payout and significantly higher minimum top line growth required to achieve any payout when compared to our peers’ historical averages.
|
•
|
The 2018 annual cash incentive plan resulted in our CEO attaining 138.5% of his annual cash incentive target based strictly on formulaic results vs. predefined targets, with no discretion applied to the outcome.
|
Board Practices
|
|
Shareholder Matters
|
||
ü
|
All non-employee directors independent
|
|
ü
|
Active shareholder outreach program
|
ü
|
Independent non-executive chairman
|
|
ü
|
Engage with shareholders throughout each year, including at earnings conference calls, investor road shows, investor days, as well as at individual shareholder meetings. We also welcome shareholders to attend our annual OutPerform event for customers and prospects.
|
ü
|
Independent Audit, Compensation and Leadership Development, and Nominating and Corporate Governance Committees of the Board (Committees)
|
|
||
ü
|
Regular executive sessions of non-employee and independent directors. Our non-executive chairman of the Board presides at executive sessions.
|
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ü
|
Annual “Say-on-Pay” advisory vote
|
|
Other Best Practices
|
|||
ü
|
Annual Board and Committee evaluations
|
|
ü
|
Anti-hedging, anti-short and anti-pledging policies
|
ü
|
Regularly attend continuing education related to board governance best practices.
|
|
ü
|
Stock ownership guidelines for named executive officers (NEOs)
|
ü
|
25% women
|
|
ü
|
“Clawback” policy to recover, under applicable law, incentive bonuses awarded to any NEO as a result of that NEO’s fraud or intentional misconduct.
|
ü
|
50% under age 60
|
|
||
ü
|
Risk oversight by full Board and Committees
|
|
ü
|
Director resignation policy requires director nominees who do not receive at least 50% of the stockholder votes “for” re-election to tender their resignation.
|
|
|
|
Name
|
Age
|
Director Since
|
Class
|
Independent
|
Other Current Public Company Boards
|
Andres D. Reiner
|
48
|
2010
|
III
|
No
|
Paylocity Holding Corporation
|
Ronald F. Woestemeyer
|
73
|
1985
|
III
|
Yes
|
-
|
Name
|
Age
|
Director Since
|
Class
|
Independent
|
AC
|
CC
|
NC
|
Other Current Public Company Boards
|
Penelope Herscher
|
58
|
2018
|
II
|
Yes
|
|
M
|
M
|
Faurecia SA; Lumentum Holdings, Inc.; Verint Systems, Inc.
|
Greg B. Petersen
|
56
|
2007
|
I
|
Yes
|
M
|
C
|
|
-
|
Leslie Rechan
|
57
|
2015
|
II
|
Yes
|
M
|
|
M
|
MicroStrategy Incorporated; Solace Corp.
|
William Russell
|
67
|
2008
|
II
|
Yes
|
|
M
|
C
|
Accesso Technology Group PLC
|
Timothy V. Williams
|
69
|
2007
|
I
|
Yes
|
C
|
|
M
|
ChannelAdvisor Corporation
|
Mariette M. Woestemeyer
|
67
|
1985
|
I
|
Yes
|
|
|
|
-
|
1
|
To elect two Class III directors to the Board of Directors, each to serve for a three-year term until the 2022 Annual Meeting;
|
2
|
To conduct an advisory vote on executive compensation;
|
3
|
To approve proposed amendments to 2017 Equity Incentive Plan;
|
4
|
To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019; and
|
5
|
To transact such other business as may properly come before the Annual Meeting or any adjournment thereof.
|
•
|
Online.
You may vote online by visiting
www.proxyvote.com
, and entering the control number found in your proxy card. You can vote via the Internet up until 11:59 P.M. Eastern Time on May 6, 2019.
|
•
|
Telephone.
You may vote by calling the toll-free number provided on your proxy card, and following the instructions found on your proxy card. You can vote via the telephone up until 11:59 P.M. Eastern Time on May 6, 2019.
|
•
|
Mail.
If you received a printed copy of the proxy card, you may vote by filling out the card and returning it in the postage-paid envelope provided. Please promptly mail your proxy card to ensure that it is received prior to the closing of the polls at the Annual Meeting.
|
•
|
In Person
. You may vote in person at the Annual Meeting, and any previous votes that you submitted, whether by Internet, telephone or mail, will be superseded by the vote that you cast at the Annual Meeting.
|
•
|
Online
. Using the online voting method described above, in which case only your latest internet proxy submitted prior to the Annual Meeting will be counted.
|
•
|
By Phone
. Using the telephone voting method described above, in which case only your latest telephone proxy submitted prior to the Annual Meeting will be counted.
|
•
|
In Person
. By attending the Annual Meeting and voting in person. However, attendance at the Annual Meeting will not in and of itself revoke your proxy unless you properly vote at the Annual Meeting or specifically request that your prior proxy be revoked by delivering a written notice of revocation prior to the Annual Meeting to our Corporate Secretary at or before the taking of the vote at the Annual Meeting.
|
•
|
Mail
. By signing and returning a new proxy card dated as of a later date, in which case only your latest proxy card or voting instruction form received prior to the Annual Meeting will be counted.
|
•
|
our accounting and financial reporting processes and the audits of our financial statements:
|
•
|
our independent auditors, including their qualifications, engagement, performance and independence;
|
•
|
the results of the annual audit and the independent auditor’s review of our annual and quarterly financial statements and reports, including discussions with independent auditors without management present;
|
•
|
press releases regarding our financial results and any other financial information and earnings guidance provided;
|
•
|
matters that have a significant impact on our financial statements;
|
•
|
the scope, adequacy and effectiveness of our internal control over financial reporting;
|
•
|
procedures for complaints for employees to submit concerns anonymously about questionable accounting, internal control or auditing matters; and
|
•
|
all material related party transactions that require disclosure.
|
•
|
reviewing and approving the compensation arrangements for our executive officers and directors;
|
•
|
reviewing and approving corporate performance goals and objectives relevant to such compensation;
|
•
|
administering our equity incentive plans;
|
•
|
reviewing our compensation discussion and analysis and CLD Committee report required by the rules of the SEC;
|
•
|
engage with a third party independent advisor to assist in evaluating our executive compensation program.
|
•
|
providing oversight on the overall leadership development program throughout the Company; and
|
•
|
overseeing succession planning for executive officers jointly with the NCG Committee.
|
•
|
identifying qualified candidates to become directors and considering the nomination of our incumbent directors for reelection;
|
•
|
evaluating stockholder nominations of candidates for election to our Board;
|
•
|
reviewing our general policy relating to selection of director candidates and members of committees of our Board, including an assessment of the performance of our Board; and
|
•
|
reviewing and making recommendations to our Board regarding corporate governance principles and policies.
|
Name
|
Age
|
Position(s) with the Company
|
Director Since
|
Current Term Expires
|
Current Class of Director
|
Audit
|
Compensation and Leadership Development
|
Nominating and Corporate Governance
|
Penelope Herscher
|
58
|
Director
|
2018
|
2021
|
II
|
|
Member
1
|
Member
1
|
Ellen Keszler
2
|
56
|
Director
|
-
|
-
|
-
|
Member
2
|
|
Member
2
|
Greg B. Petersen
|
56
|
Director
|
2007
|
2020
|
I
|
Member
|
Chair
|
|
Leslie Rechan
|
57
|
Director
|
2015
|
2021
|
II
|
Member
3
|
Member
3
|
Member
|
Andres D. Reiner
|
48
|
President, CEO and Director
(Nominee)
|
2010
|
2019
|
III
|
|
|
|
William Russell
|
67
|
Non-Executive Chairman
|
2008
|
2018
|
II
|
|
Member
|
Chair
|
Timothy V. Williams
|
69
|
Director
|
2007
|
2020
|
I
|
Chair
|
|
Member
|
Mariette M. Woestemeyer
|
67
|
Director
|
1985
|
2020
|
I
|
|
|
|
Ronald F. Woestemeyer
|
73
|
Director
(Nominee)
|
1985
|
2019
|
III
|
|
|
|
Number of meetings in 2018
|
10
|
6
|
3
|
(1)
|
Ms. Herscher was appointed to the Compensation and Leadership Development and Nominating and Corporate Governance Committees in May 2018.
|
(2)
|
Ms. Keszler retired from our Board in May 2018.
|
(3)
|
Mr. Rechan was appointed to the Audit Committee and discontinued serving on the Compensation and Leadership Development Committee in May 2018.
|
|
Ms. Herscher is a seasoned technology public company board director, executive and entrepreneur, with more than 15 years of experience as a high-tech CEO in Silicon Valley and more than 10 years of experience serving on public company boards of directors. Ms. Herscher currently serves on the boards of Faurecia SA (EPA:EO), Verint (NASD:VRNT), and Lumentum Holdings, Inc. (NASD:LITE).
Ms. Herscher previously served as CEO for FirstRain, a privately held company in the unstructured data analytics space, from December 2004 to November 2015. Prior to leading FirstRain, she was CEO of Simplex Solutions and served in C-level and senior executive positions for a number of software and technology firms, including Cadence Design Systems, Inc.
Ms. Herscher has extensive business and leadership experience in software companies, including experience in software sales, marketing, strategy, governance, compensation planning and mergers and acquisitions.
|
Penelope Herscher
|
|
|
|
Mr. Petersen serves as the chairman of the Compensation and Leadership Development Committee of the Board. Mr. Petersen has served as president of Brookview Capital Advisors since 2016.
Mr. Petersen also served on the board of directors of Diligent Corporation (2013 to 2016), Piksel, Inc. (2012 to 2017), and Synthesio. Mr. Petersen served as the chairman of the audit committee at Diligent and Piksel, and as an advisory board member at Synthesio. From 2014 to 2015, he served as Executive Vice Chairman at Diligent Corporation. Mr. Petersen previously served as Chief Financial Officer for CBG Holdings, Lombardi Software, Inc. (which was sold to IBM in 2010), and Activant Solutions, Inc. Mr. Petersen previously served in executive roles with Trilogy Software and RailTex. Mr. Petersen began his career with American Airlines, Inc. (NASD:AAL), including serving as managing director of corporate development where he led a project to create Sabre Holdings, Inc. (NASD:SABR) and complete its IPO. Mr. Petersen holds a Bachelor of Arts in Economics from Boston College and a Master of Business Administration from the Fuqua School of Business at Duke University.
Mr. Petersen has business and leadership experience in software companies, merger and acquisition experience, and extensive financial planning, accounting, governance, compensation planning and risk management knowledge.
|
Greg B. Petersen
|
|
|
|
Mr. Reiner serves as our President and Chief Executive Officer, a position he has held since November 2010. Mr. Reiner has also served on the board of directors of Paylocity Holding Corporation (NASD:PCTY) since September 2014, and serves on the compensation and nominating and governance committees for Paylocity.
Mr. Reiner holds a Bachelor of Science in Computer Science with a minor in Mathematics from the University of Houston.
As a result of his 19+ years of experience with the Company, Mr. Reiner has familiarity with all of the Company’s key day to day operations, in-depth experience in and knowledge of the development of our products, services and the markets in which we compete, and has leadership, management and operating experience.
|
Andres D. Reiner
|
|
|
For more information on Mr. Reiner, see “Executive Officers” on page 23 of this Proxy Statement.
|
|
Mr. Russell serves as our non-executive chairman of the Board and as chairman of the Nominating and Corporate Governance Committee of the Board. Mr. Russell also serves on the board of directors at Accesso Technology Group PLC (OTCMKTS:LOQPF).
Mr. Russell previously served in a variety of roles in both public and private technology company boards and previously served on the boards of SABA Software, Inc. (from January 2010 to March 2015), webMethods and Cognos. Mr. Russell has held a number of senior-level roles in his more than 20 years at Hewlett-Packard, including Vice President and General Manager of the multi-billion-dollar Enterprise Systems Group. Mr. Russell holds a Bachelor of Science in Computer Science from Edinburgh University and has completed several executive development programs from institutions including Harvard Business School and INSEAD.
Mr. Russell is a National Association of Corporate Directors (NACD) Board Leadership Fellow, demonstrating his commitment to the highest standards of boardroom excellence. NACD Fellowship is a comprehensive and continuous program of study that empowers directors with the latest insights, intelligence, and leading boardroom practices. As a result of leading Hewlett-Packard’s substantial software business, Mr. Russell has broad knowledge of large-scale software operations, including sales, marketing, development, finance, strategic planning and leadership.
|
William Russell
|
|
|
|
Mr. Woestemeyer co-founded the Company in 1985 with his wife, Mariette Woestemeyer.
Mr. Woestemeyer previously served as our Executive Vice President, Strategic Business Planning from 1997 until his retirement in July 2015. From 1985 to 1997, Mr. Woestemeyer served as our Chief Executive Officer. Prior to founding the Company, Mr. Woestemeyer spent 14 years at Texas International Airlines in various management and executive positions with responsibility over sales and marketing. Mr. Woestemeyer holds a Bachelor of Business Administration degree from the University of Houston.
Mr. Woestemeyer brings continuity and direct relevant industry experience to the Board as well as his unique familiarity with the business, structure, culture, history and deep knowledge of our markets.
|
Ronald F. Woestemeyer
|
Board Experience, Expertise or Attribute
|
Penelope Herscher
|
Greg B. Petersen
|
Leslie Rechan
|
Andres D. Reiner
|
William Russell
|
Timothy V. Williams
|
Mariette M. Woestemeyer
|
Ronald F. Woestemeyer
|
|
|
|
|
(Nominee)
|
|
|
|
(Nominee)
|
Accounting
|
|
x
|
|
|
|
x
|
x
|
|
Business Operations
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
Finance
|
|
x
|
x
|
x
|
|
x
|
x
|
|
International
|
x
|
|
x
|
x
|
x
|
|
x
|
x
|
Leadership
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
M&A
|
x
|
x
|
x
|
x
|
x
|
x
|
|
|
Public Company/Governance
|
x
|
x
|
x
|
x
|
x
|
x
|
|
|
Risk Management
|
x
|
x
|
x
|
|
|
x
|
|
|
Sales & Marketing
|
x
|
|
x
|
x
|
x
|
|
|
x
|
Software Industry
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
x
|
Travel Industry
|
|
x
|
x
|
x
|
|
|
x
|
x
|
Cloud Software
|
x
|
x
|
x
|
x
|
x
|
x
|
|
|
Committee Role
|
|
Audit Committee
|
|
Compensation and Leadership Development Committee
|
|
Nominating and Corporate Governance Committee
|
||||||
Member
|
|
$
|
15,000
|
|
|
$
|
15,000
|
|
|
$
|
7,500
|
|
Chair
|
|
$
|
30,000
|
|
|
$
|
20,000
|
|
|
$
|
10,000
|
|
Name
|
|
Fees Earned
or Paid in Cash
($)
|
|
Restricted
Stock Units
($) (1)
|
|
Total
($)
|
||||||
Ellen Keszler
(2)
|
|
$
|
20,844
|
|
|
$
|
50,663
|
|
|
$
|
71,507
|
|
Penelope Herscher
|
|
$
|
57,500
|
|
|
$
|
151,150
|
|
|
$
|
208,650
|
|
Greg B. Petersen
|
|
$
|
70,000
|
|
|
$
|
151,150
|
|
|
$
|
221,150
|
|
Leslie Rechan
|
|
$
|
57,500
|
|
|
$
|
151,150
|
|
|
$
|
208,650
|
|
William Russell
|
|
$
|
110,000
|
|
|
$
|
151,150
|
|
|
$
|
261,150
|
|
Timothy V. Williams
|
|
$
|
72,500
|
|
|
$
|
151,150
|
|
|
$
|
223,650
|
|
Mariette M. Woestemeyer
|
|
$
|
35,000
|
|
|
$
|
151,150
|
|
|
$
|
186,150
|
|
Ronald F. Woestemeyer
|
|
$
|
35,000
|
|
|
$
|
151,150
|
|
|
$
|
186,150
|
|
(1)
|
Represents the aggregate grant date fair value of equity awards granted for services in 2018 calculated in accordance with GAAP. For additional information about valuation assumptions for equity awards, refer to Note 13 of our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2018. The January 8, 2018 grant of RSUs awarded to all non-employee directors vested in full on January 10, 2019 and had a grant date fair value of $27.02.
|
(2)
|
Ms. Keszler retired from our Board on May 11, 2018, the date of our 2018 annual meeting.
|
Name
|
|
Restricted Stock Units
(#) (1)
|
|
Penelope Herscher
|
|
—
|
|
Greg B. Petersen
|
|
5,594
|
|
Leslie Rechan
|
|
5,594
|
|
William Russell
|
|
5,594
|
|
Timothy V. Williams
|
|
5,594
|
|
Mariette M. Woestemeyer
|
|
5,594
|
|
Ronald F. Woestemeyer
|
|
5,594
|
|
(1)
|
Represents RSUs granted on January 8, 2018, which fully vested on January 10, 2019, under the 2018 director compensation policy, for all non-employee directors. Each RSU represents the contingent right to receive one share of Common Stock.
|
Name
|
|
Age
|
|
Position
|
Named Executive Officers
:
|
||||
Andres D. Reiner
|
|
48
|
|
Chief Executive Officer, President and Director
|
Stefan B. Schulz
|
|
52
|
|
Executive Vice President and Chief Financial Officer
|
Thomas F. Dziersk
|
|
56
|
|
Executive Vice President, Worldwide Sales
|
Other Significant Employees
:
|
||||
Celia Fleischaker
|
|
49
|
|
Chief Marketing Officer
|
Mike Jahoda
|
|
39
|
|
Senior Vice President, Professional Services
|
Damian Olthoff
|
|
44
|
|
General Counsel and Secretary
|
Rob Reiner
|
|
57
|
|
Chief Technology Officer
|
Jill Sawatsky
|
|
49
|
|
Vice President, Customer Success
|
Wagner Williams
|
|
40
|
|
Chief People Officer
|
Benson Yuen
|
|
58
|
|
President, Travel
|
Craig Zawada
|
|
48
|
|
Chief Innovation Officer
|
|
Mr. Reiner serves as a director and as our President and Chief Executive Officer.
Mr. Reiner joined the Company in 1999, prior to his appointment as President and Chief Executive Officer in November 2010, held a series of positions with successively increasing responsibility, including Senior Vice President of Product Development and Executive Vice President of Product and Marketing. Prior to becoming our President and Chief Executive Officer, he was responsible for global marketing and alliances, product management, science research, and development of our next generation software products. Mr. Reiner was also instrumental in our European growth, the expansion of the Company’s sales and marketing efforts worldwide, and our transition to a cloud business. Prior to joining PROS, Mr. Reiner held technical and management positions in technology companies including Platinum Technology, ADAC Healthcare Information Systems, and Kinesix.
Mr. Reiner holds a Bachelor of Science in Computer Science with a minor in Mathematics from the University of Houston.
|
Andres D. Reiner
|
|
|
Name
|
Title
|
Andres D. Reiner
|
Chief Executive Officer, President and Director
|
Stefan B. Schulz
|
Executive Vice President and Chief Financial Officer
|
Thomas F. Dziersk
|
Executive Vice President, Worldwide Sales
|
•
|
Continued to successfully execute on the multi-year strategy we set when announcing our cloud transition in 2015.
To date, the Company has met or exceeded our communicated cloud transition goals, including achieving numerous financial milestones faster than almost every other on-premise software company that has similarly transitioned to a recurring cloud business:
|
•
|
Delivered strong growth and rapid transformation of our business to the cloud
. Our results reflected further success in executing on our cloud transition, with year-over-year growth of 57% in subscription revenue, 18% in ARR, and 23% in Recurring Revenue, while also improving Recurring Revenue Gross Margin.
|
(1)
|
ARR is used to assess the trajectory of our cloud business. ARR means, as of a specified date, the contracted recurring revenue, including contracts with a future start date, together with annualized overage fees incurred above contracted minimum transactions, and excluding perpetual and term license agreements recognized as license revenue in accordance with GAAP. ARR should be viewed independently of revenue and any other GAAP measure.
|
•
|
In connection with our cloud transformation our stock price continued to increase in 2018.
Shareholders benefited from a 19% increase in our share price in 2018 and a cumulative
59%
increase from the end of 2017 through March 15, 2019.
|
•
|
CEO target pay was
set conservatively
, increasing 9% for 2018, and remains
near peer median pay levels
. This was despite the Company’s strong financial performance and 23% total shareholder return in 2017 levels.
Despite the Company's successful cloud transition and >20% shareholder return in 2017, for 2018 our CEO’s base salary and target cash incentive remained unchanged from 2017, and his target equity compensation
1
increased to $4.3 million in 2018 from $3.9 million in 2017 to increase target total compensation to the expected 2018 peer median and recognize our >20% shareholder return in 2017. Our CEO’s total target pay, including base salary and target cash incentive and the target value of long-term equity compensation, was set near the expected median of our 2018 peer group, and this expected median was later confirmed to be an accurate forecast.
|
(1)
|
Target equity compensation (a) for RSUs and MSUs represents total target equity compensation determined by the CLD Committee divided by the closing price of the Company's Common Stock reported by the NYSE on the grant date, and differs from the accounting grant date fair value included in the "
Grants of Plan Based Awards
" table on page 39 of this Proxy Statement; and (b) for 2016 Stock Price PRSUs represents the accounting grant date fair value.
|
•
|
Continued emphasis on pay-for-performance.
In 2018, our CLD Committee again sought to motivate our NEOs through predominantly
“
performance-based
”
cash and equity awards. The majority of our CEO’s 2018 target total compensation was directly performance-based, including annual cash incentives tied to pre-established performance targets and MSU equity awards which vary based on the relative performance of our stock compared to the Index over a three-year performance measurement period. Including RSU equity awards, which increase in value based on share price appreciation, >90% of our CEO’s 2018 total target compensation is considered at risk.
|
(1)
|
Target equity compensation for RSUs and MSUs represents total target equity compensation determined by the CLD Committee divided by the closing price of the Company's Common Stock reported by the NYSE on the grant date, and differs from the accounting grant date fair value included in the "
Grants of Plan Based Awards
" table on page 39 of this Proxy Statement.
|
•
|
We set aggressive, performance-based and formulaic 2018 goals based on predefined targets with no discretion.
Performance goals that determine annual cash incentive attainment were set aggressively in 2018 with above median performance expectations compared to our peer group. For example, in 2018, our primary growth-oriented performance metric was ARR, and the ARR goal required 19% growth over 2017 to earn a target level award. This was higher than the approximately 17% average top line growth required to achieve target level incentive compensation by our peer CEOs for 2017. Additionally, the threshold for any incentive payment to be earned in 2018 required at least 14% growth over 2017, much higher than the peer average minimum threshold 5% growth required for our peer CEOs to earn any incentive in 2017. The 2018 annual results compared to the cash incentive plan goals resulted in our CEO earning 138.5% of his annual cash incentive target based on formulaic results vs. the original rigorous goals, with no discretion applied.
|
•
|
Say-on-Pay Vote.
Each year, our CLD Committee takes into account the result of the say-on-pay vote cast by our stockholders. At our 2018 Annual Meeting of Stockholders, our stockholders had the opportunity to provide an advisory vote on the compensation paid to our NEOs, or a “say-on-pay” vote. More than 85% of the total votes cast were voted in favor of our say-on-pay proposal. As a result, the CLD Committee believes that the results of our say-on-pay vote affirmed stockholder support of our updated approach to executive compensation, following 61% support in the 2017 stockholder vote. While say-on-pay is a key indicator of stockholder sentiment, we also keep an open dialogue with our institutional investors and stockholders throughout the year. We reach out to discuss business topics, seek feedback on our performance and address other matters of importance to our stockholders, such as executive compensation. During 2018, we have actively engaged with a significant majority of our shares outstanding. As a result of this ongoing outreach, the Committee further reevaluated our executive compensation program and made several changes to our pay program for 2019. The following table summarizes our shareholders’ feedback and the Committee’s resulting decisions:
|
What We Heard
|
|
What We Did
|
||
ü
|
Mixed level of concern on CEO pay levels.
|
|
ü
|
Updated our peer group
to ensure an accurate comparison of peer executive compensation practices and pay levels, with CEO 2018 target compensation near the median of the updated peer group.
|
|
|
|
ü
|
Set CEO 2019 target compensation near the expected median of our updated peer group.
|
|
|
|
ü
|
Continued to
set pay based on performance
through our bonus plan and equity grants tied to our operational performance.
|
|
|
|
ü
|
Continued to
set aggressive goals
for cash incentive attainment at the beginning of each year tied to our strategic plan. For example, in 2018, our primary growth-oriented performance metric was ARR, and this goal required 12% more growth to earn a target award than the approximate 17% median top line growth required for target level pay by our peers during 2017.
|
|
|
|
ü
|
Increased required CEO stock ownership
to 6 times annual salary.
|
ü
|
Strong support for linking performance-based equity to internal operating measures.
|
|
ü
|
Revised the structure of our 2019 performance-based equity grants from performance relative to the Russell 2000 Index, to
performance relative to preset internal operating measures
which reflect the success of our cloud transition, and aligns with shareholder interests.
|
ü
|
Desire for our performance-based goals to be tied to a successful cloud transition.
|
|
ü
|
Updated our annual cash incentive performance measures
from ARR
1
, total revenue, and Free Cash Flow
2
in 2018 to total revenue and Recurring Revenue Gross Margin in 2019 to ensure focus on the primary measures of top line growth and overall health of our cloud business.
|
|
|
|
ü
|
Changed our performance-based equity compensation
to incentivize growth in Recurring Revenue, our primary measure of growth for our cloud business.
|
What We Do
|
|
What We Do
Not
Do
|
||
ü
|
Emphasize pay-for-performance where compensation is contingent upon the performance of our business, our stock price and individual performance
|
|
ü
|
No hedging or pledging of Company stock, including short sales
|
ü
|
Utilize performance-based pay through equity and cash incentive awards that require achievement of pre-established goals with no discretion
|
|
ü
|
No excessive perquisites
|
ü
|
Maintain “double trigger” change in control agreements
|
|
ü
|
No pensions
|
ü
|
Maintain a clawback policy
|
|
ü
|
No discount from fair market value in setting exercise price of stock options and stock appreciation rights
|
ü
|
CLD Committee oversees risks associated with compensation policies and practices
|
|
ü
|
No repricing underwater stock options or stock appreciation rights without stockholder approval
|
ü
|
CLD Committee retains an independent compensation consultant
|
|
ü
|
No equity vesting within less than one year after grant, except for up to 5% of the authorized shares
|
ü
|
Expect our CEO to hold stock equal to six times his base salary
|
|
|
|
ü
|
Expect each other NEO to hold stock equal to two times their base salary
|
|
|
|
Objective
|
|
Rationale
|
Competitive pay
|
|
Enable the Company to attract and retain high-caliber talent by setting compensation competitive with that being offered to individuals holding comparable positions at other public companies with which we compete for business and talent. The Company does not target a specific percentile and reviews market data to check that compensation is generally in a market range and reflects the individual’s experience, performance, and contribution.
|
Pay for performance
|
|
Provide a compensation package that is weighted heavily towards performance-based pay to motivate high performance among our NEOs, with compensation levels reflecting the achievement of short- and long-term performance objectives
|
Align the interests of our executives with those of our stockholders
|
|
Directly link rewards to the achievement of measurable financial objectives that build long-term stockholder value
|
|
|
Cash Compensation
|
|
Target Equity
1
|
Total Target Compensation
|
|||||||||||||||||||
|
|
Base Salary
|
|
Incentive Target
|
|
Incentive
Earned
|
|
RSUs
|
|
MSUs/PRSUs
|
|
|||||||||||||
2018
|
|
$
|
525,000
|
|
|
$
|
577,500
|
|
|
$
|
799,838
|
|
|
$
|
2,150,012
|
|
|
$
|
2,150,012
|
|
|
$
|
5,402,524
|
|
(Decided Jan. 2018)
|
|
(+0% vs. 2017)
|
|
|
(+0% vs. 2017)
|
|
|
(138.5% of target)
(+91% vs. 2017)
|
|
|
(+11% vs.2017)
|
|
|
(+11% vs. 2017)
|
|
|
(9% vs. 2017)
(vs. 23% TSR in 2017)
|
|
||||||
2019
|
|
$
|
525,000
|
|
|
$
|
577,500
|
|
|
Not Yet Earned
|
|
$
|
2,325,001
|
|
|
$
|
2,325,001
|
|
|
$
|
5,752,502
|
|
||
(Decided Jan. 2019)
|
|
(+0% vs. 2018)
|
|
|
(+0% vs. 2018)
|
|
|
|
(+8% vs.2018)
|
|
|
(+8% vs.2018)
|
|
|
(+6% vs. 2018)
(vs. 19% TSR in 2018)
|
|
(1)
|
Target equity reflects target award value approved by the CLD Committee on the date of grant calculated and does not reflect the fair value as reported in the 2018 Summary Compensation Table below in this Proxy Statement.
|
|
|
Cash Compensation
|
|
Target Equity
1
|
Total Target Compensation
|
|||||||||||||||||||
|
|
Base Salary
|
|
Incentive Target
|
|
Incentive
Earned
|
|
RSUs
|
|
MSUs/PRSUs
|
|
|||||||||||||
2018
|
|
$
|
380,000
|
|
|
$
|
304,000
|
|
|
$
|
421,040
|
|
|
$
|
1,080,000
|
|
|
$
|
720,000
|
|
|
$
|
2,484,000
|
|
(Decided Jan. 2018)
|
|
(+4% vs. 2017)
|
|
|
(+4% vs. 2017)
|
|
|
(138.5% of target) (+98% vs. 2018)
|
|
|
(+20% vs. 2017)
|
|
|
(+20% vs. 2017)
|
|
|
(+15% vs. 2017)
(vs. 23% TSR in 2017)
|
|
||||||
2019
|
|
$
|
392,000
|
|
|
$
|
314,000
|
|
|
Not Yet Earned
|
|
$
|
1,200,000
|
|
|
$
|
800,000
|
|
|
$
|
2,706,000
|
|
||
(Decided Jan. 2019)
|
|
(+3% vs. 2018)
|
|
|
(+3% vs. 2018)
|
|
|
|
(+11% vs. 2018)
|
|
|
(+11% vs. 2018)
|
|
|
(+9% vs. 2018)
(vs. 19% TSR in 2018)
|
|
(1)
|
Target equity reflects target award value approved by the CLD Committee on the date of grant calculated and does not reflect the fair value as reported in the 2018 Summary Compensation Table below in this Proxy Statement.
|
|
|
Cash Compensation
|
|
Target Equity
1
|
Total Target Compensation
|
|||||||||||||||||||
|
|
Base Salary
|
|
Incentive Target
|
|
Incentive
Earned
|
|
RSUs
|
|
MSUs/PRSUs
|
|
|||||||||||||
2018
|
|
$
|
375,000
|
|
|
$
|
375,000
|
|
|
$
|
519,375
|
|
|
$
|
240,000
|
|
|
$
|
160,000
|
|
|
$
|
1,150,000
|
|
(Decided Jan. 2018)
|
|
(+0% vs. 2017 annualized)
|
|
|
(+0% vs. 2017 annualized)
|
|
|
(138.5% of target)
|
|
|
(Prorated given Oct 2017 grant)
|
|
|
(Prorated given Oct 2017 grant)
|
|
(Prorated given
Oct 2017 grant)
|
|
|||||||
2019
|
|
$
|
383,000
|
|
|
$
|
383,000
|
|
|
Not Yet Earned
|
|
$
|
960,000
|
|
|
$
|
640,000
|
|
|
$
|
2,366,000
|
|
||
(Decided Jan. 2019)
|
|
(+2% vs. 2018)
|
|
|
(+2% vs. 2018)
|
|
|
|
(+0% vs. annualized 2018)
|
|
|
(+0% vs. annualized 2018)
|
|
|
(+1% vs. annualized 2018)
(vs. 19% TSR in 2018)
|
|
(1)
|
Target equity compensation represents total target equity compensation approved by the CLD Committee on the date of grant and does not reflect the fair value as reported in the 2018 Summary Compensation Table below in this Proxy Statement.
|
•
|
solicited recommendations from an independent executive compensation consultant to evaluate our executive compensation practices and assisted in developing and implementing the executive compensation programs;
|
•
|
established a practice, in accordance with the rules of the NYSE, of reviewing the performance and determining the compensation earned, paid or awarded to our Chief Executive Officer;
|
•
|
established a policy, in accordance with the rules of the NYSE, to review on an annual basis the performance of our other executive officers with assistance from our Chief Executive Officer and determined what we believe to be appropriate total compensation for these executive officers; and
|
•
|
our CLD Committee members attended continuing education related to compensation best practices provided by NYSE, NACD, and Equilar, among others.
|
2017 Peer Group (Count = 17)
|
|
2018 Peer Group (Count = 16)
|
|
2019 Peer Group (Count = 18)
|
—
|
|
8x8
|
|
8x8
|
Aspen Tech
|
|
Aspen Tech
|
|
Aspen Tech
|
Bazaarvoice
|
|
—
|
|
—
|
—
|
|
Benefitfocus
|
|
Benefitfocus
|
Bottomline Tech
|
|
Bottomline Tech
|
|
Bottomline Tech
|
Callidus Software
|
|
Callidus Software
|
|
Callidus Software
|
Cornerstone
|
|
Cornerstone
|
|
Cornerstone
|
|
|
|
|
Coupa Software
|
|
|
|
|
Ellie Mae
|
|
|
|
|
Five9
|
HubSpot
|
|
—
|
|
—
|
Imperva
|
|
Imperva
|
|
Imperva
|
LivePerson
|
|
—
|
|
—
|
LogMeIn (revenue above range)
|
|
—
|
|
—
|
Model N
|
|
Model N
|
|
Model N
|
|
|
|
|
Monotype Imaging
|
Paylocity
|
|
Paylocity
|
|
Paylocity
|
—
|
|
—
|
|
—
|
—
|
|
Q2 Holdings
|
|
Q2 Holdings
|
|
|
|
|
Quotient Tech
|
—
|
|
RingCentral
|
|
RingCentral
|
SPS Commerce
|
|
SPS Commerce
|
|
SPS Commerce
|
Varonis Systems
|
|
—
|
|
—
|
VASCO Data
|
|
—
|
|
—
|
—
|
|
Workiva
|
|
Workiva
|
Removed for 2018 due to acquisition:
|
|
Removed for 2019 due to acquisition:
|
|
|
Apigee
|
|
Bazaarvoice
|
|
|
Jive Software
|
|
Broadsoft
|
|
|
TubeMogul
|
|
|
|
|
Component
|
|
Weighting
|
ARR
1
|
|
50%
|
Free Cash Flow
2
|
|
25%
|
Total Revenue
|
|
25%
|
Total Incentive Opportunity
|
100%
|
(1)
|
ARR is used to assess the trajectory of our cloud business. ARR means, as of a specified date, the contracted recurring revenue, including contracts with a future start date, together with annualized overage fees incurred above contracted minimum transactions, and excluding perpetual and term license agreements recognized as license revenue in accordance with GAAP. ARR should be viewed independently of revenue and any other GAAP measure.
|
(2)
|
Free Cash Flow is a non-GAAP financial measure which is defined as net cash provided by (used in) operating activities, less additions to property, plant and equipment, purchases of other (non-acquisition-related) intangible assets and capitalized internal-use software development costs.
|
|
Goals ($M)
|
|
Performance Achieved
|
||||
Component
|
Threshold
|
|
Target
|
|
Maximum
|
|
|
ARR
1
|
180.0
|
|
190.4
|
|
195.7
|
|
190.5
|
Free Cash Flow
|
(6.0)
|
|
(2.0)
|
|
1.0
|
|
(0.5)
|
Total Revenue
1
|
185.0
|
|
192.0
|
|
197.0
|
|
198.5
|
(1)
|
Performance achievement shown on a constant currency basis.
|
Named Executive Officer
|
|
At Target
Threshold
|
|
At
Target
|
|
At Target
Maximum
|
Andres D. Reiner
|
|
55%
|
|
110%
|
|
220%
|
Stefan B. Schulz
|
|
40%
|
|
80%
|
|
160%
|
Thomas F. Dziersk
|
|
50%
|
|
100%
|
|
200%
|
Named Executive Officer
|
|
Actual Payout
|
||
|
As a % of Base
|
|
As a % of Target
|
|
Andres D. Reiner
|
|
152.35%
|
|
138.5%
|
Stefan B. Schulz
|
|
110.8%
|
|
138.5%
|
Thomas F. Dziersk
|
|
138.5%
|
|
138.5%
|
Component
|
Threshold
|
|
Target
|
|
Maximum
|
Total Revenue
|
30%
|
|
60%
|
|
120%
|
Non-GAAP Recurring Revenue Gross Margin
1
|
20%
|
|
40%
|
|
80%
|
Total Incentive Opportunity
|
50.0%
|
|
100.0%
|
|
200.0%
|
(1)
|
Non-GAAP Recurring Revenue Gross Margin is used to measure the efficiency of our business, and is defined as (a) total recurring revenue (comprised of subscription and maintenance & support revenue), less recurring cost of revenue excluding share-based compensation, amortization of acquisition-related
|
Named Executive Officer
|
Stock Price PRSUs per Price Hurdle
|
||||
Earned in 2017
|
|
Earned in 2018
|
|
Outstanding as of 12/31/2018
|
|
$27/share
|
|
$33/share
|
|
$41/share
|
|
Andres D. Reiner
|
50,000
|
|
50,000
|
|
100,000
|
Stefan B. Schulz
|
15,000
|
|
15,000
|
|
30,000
|
Thomas F. Dziersk
|
—
|
|
—
|
|
—
|
•
|
Change in Control
: As part of our normal course of business, we may engage in discussions with other companies about possible collaborations and/or other ways in which the companies may work together to further our respective long-term objectives. In certain scenarios, the potential for merger or being acquired may be in the best interests of our stockholders. We provide a component of severance compensation if a NEO is terminated as a result of a change of control transaction to promote the ability of our NEOs to act in the best interests of our stockholders even though they could be terminated as a result of the transaction.
|
•
|
Termination Without Cause or For Good Reason
: If we terminate the employment of one of our NEOs “without cause” or one of our NEOs resigns for “good reason,” each as defined in the applicable agreement, we are obligated to make certain payments based on the NEO's then-effective base salary. We believe this is appropriate because the terminated NEO is bound by confidentiality and non-competition provisions continuing after termination. We also believe it is beneficial to have a mutually-agreed severance package in place prior to any termination event, to avoid disruptive conflicts and provide us with more flexibility to make a change in management if such a change is in our and our stockholders’ best interests.
|
Name and
Principal Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Stock
Awards
(1)
|
|
Non-Equity
Incentive Plan Compensation
|
|
All Other
Compensation (2)
|
|
Total
|
||||||||||||
Andres D. Reiner
|
|
2018
|
|
$
|
525,000
|
|
|
$
|
—
|
|
|
$
|
5,408,210
|
|
(3)
|
$
|
799,838
|
|
|
$
|
1,785
|
|
|
$
|
6,734,832
|
|
President and Chief Executive Officer
|
|
2017
|
|
$
|
525,000
|
|
|
$
|
—
|
|
|
$
|
4,032,840
|
|
(4)
|
$
|
419,843
|
|
|
$
|
18,584
|
|
|
$
|
4,996,267
|
|
|
|
2016
|
|
$
|
525,000
|
|
|
$
|
—
|
|
|
$
|
4,696,100
|
|
(5)
|
$
|
887,618
|
|
|
$
|
20,837
|
|
|
$
|
6,129,555
|
|
Stefan B. Schulz
|
|
2018
|
|
$
|
380,000
|
|
|
$
|
—
|
|
|
$
|
2,186,406
|
|
(6)
|
$
|
421,040
|
|
|
$
|
5,660
|
|
|
$
|
2,993,106
|
|
Executive Vice President
|
|
2017
|
|
$
|
365,000
|
|
|
$
|
—
|
|
|
$
|
1,528,423
|
|
(7)
|
$
|
212,284
|
|
|
$
|
20,981
|
|
|
$
|
2,126,688
|
|
and Chief Financial Officer
|
|
2016
|
|
$
|
365,000
|
|
|
$
|
—
|
|
|
$
|
2,320,825
|
|
(8)
|
$
|
448,804
|
|
|
$
|
19,721
|
|
|
$
|
3,154,350
|
|
Thomas F. Dziersk
|
|
2018
|
|
$
|
375,000
|
|
|
$
|
—
|
|
|
$
|
485,863
|
|
(11)
|
$
|
519,375
|
|
|
$
|
—
|
|
|
$
|
1,380,238
|
|
Executive Vice President,
|
|
2017
|
|
$
|
85,336
|
|
(9)
|
$
|
100,000
|
|
(10)
|
$
|
2,697,901
|
|
(12)
|
$
|
76,377
|
|
|
$
|
5,418
|
|
|
$
|
2,965,032
|
|
Worldwide Sales
|
|
2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Represents the aggregate grant date fair value of equity awards granted in the specified fiscal year as calculated in accordance with GAAP. For additional information about equity award valuation assumptions, refer to Note 13 of our financial statements in our Form 10-K for the year ended December 31, 2018.
|
(2)
|
Represents executive physicals for Messrs. Reiner and Schulz, and for 2016 and 2017 also represents matching contributions for 401(k) Plan contributions, life and health insurance.
|
(3)
|
Represents 82,948 RSUs awarded to Mr. Reiner on January 8, 2018 and 82,948 MSUs awarded on January 12, 2018. The 2018 RSUs vest annually in one fourth installments on January 10th of each year and have a grant date fair value of $27.02. The 2018 MSUs will vest on January 10, 2021, and have a grant date fair value of $38.18. For additional information regarding the 2018 MSUs and RSUs, see "2018 Grants of Plan-Based Awards" below.
|
(4)
|
Represents 84,000 RSUs and 84,000 MSUs awarded to Mr. Reiner on January 20, 2017. The RSUs vest annually in one fourth installments on January 1st of each year and have a grant date fair value of $21.02. The 2017 MSUs will vest on March 1, 2020, and have a grant date fair value of $26.99.
|
(5)
|
Represents 90,000 RSUs and 90,000 MSUs awarded to Mr. Reiner on March 24, 2016 and 200,000 PRSUs awarded on September 9, 2016. The RSUs vest annually in one fourth installments on March 1st of each year and have a grant date fair value of $11.40. The 2016 MSUs vest on March 1, 2019, and have a grant date fair value of $14.29. The Stock Price PRSUs will vest based on stock price performance criteria, and have a grant date fair value of $11.92.
|
(6)
|
Represents 41,667 RSUs awarded to Mr. Schulz on January 8, 2018 and 27,778 MSUs awarded on January 12, 2018. The 2018 RSUs vest annually in one fourth installments on January 10th of each year and have a grant date fair value of $27.02. The 2018 MSUs will vest on January 10, 2021, and have a grant date fair value of $38.18. For additional information regarding the 2018 MSUs and RSUs, see "2018 Grants of Plan-Based Awards" below.
|
(7)
|
Represents 39,200 RSUs and 26,100 MSUs awarded to Mr. Schulz on January 20, 2017. The RSUs vest annually in one fourth installments on January 1st of each year and have a grant date fair value of $21.02. The 2017 MSUs will vest on March 1, 2020, and have a grant date fair value of $26.99.
|
(8)
|
Represents 62,500 RSUs and 62,500 MSUs awarded to Mr. Schulz on March 24, 2016 and 60,000 PRSUs awarded on September 9, 2016. The RSUs vest annually in one fourth installments on March 1st of each year and have a grant date fair value of $11.40. The 2016 MSUs vest on March 1, 2019, and have a grant date fair value of $14.29. The Stock Price PRSUs vest based on stock price performance, and have a grant date fair value of $11.92.
|
(9)
|
Mr. Dziersk commenced his employment with us in October 2017.
|
(10)
|
Represents a one-time cash inducement award following commencement of employment.
|
(11)
|
Represents 9,259 RSUs awarded to Mr. Dziersk on January 8, 2018 and 6,173 MSUs awarded on January 12, 2018. The 2018 RSUs vest annually in one fourth installments on January 10th of each year and have a grant date fair value of $27.02. The 2018 MSUs will vest on January 10, 2021, and have a grant date fair value of $38.18. For additional information regarding the 2018 MSUs and RSUs, see "2018 Grants of Plan-Based Awards" below.
|
(12)
|
Represents 59,504 RSUs and 39,699 MSUs awarded to Mr. Dziersk on October 9, 2017. The 2017 RSUs vest annually in one fourth installments on October 9th of each year and have a grant date fair value of $24.48. The 2017 MSUs will vest on October 9, 2020, and have a grant date fair value of $31.29.
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive Plan Awards
|
Estimated Future Payouts Under Equity Incentive Awards
|
All Other Stock Awards:
Number of Shares of Stock or Units (#)
|
Exercise or Base Price of Option Awards
($/Sh)
|
Grant Date Fair value of Options and Awards
($)
|
||||||||||||||||
Name
|
|
Type of Award
|
Grant Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Target
(#)
|
Maximum
(#)
|
||||||||||||||||
Andres D. Reiner
|
|
RSU
|
1/8/2018
|
|
|
|
|
|
82,948
|
|
$
|
27.02
|
|
$
|
2,241,255
|
|
||||||||
|
|
MSU
(1)
|
1/12/2018
|
|
|
|
82,948
|
|
165,896
|
|
|
$
|
38.18
|
|
$
|
3,166,955
|
|
|||||||
|
|
Cash incentive
|
|
$
|
288,750
|
|
$
|
577,500
|
|
$
|
1,155,000
|
|
|
|
|
|
|
|||||||
Stefan B. Schulz
|
|
RSU
|
1/8/2018
|
|
|
|
|
|
41,667
|
|
$
|
27.02
|
|
$
|
1,125,842
|
|
||||||||
|
|
MSU
(1)
|
1/12/2018
|
|
|
|
27,778
|
|
55,556
|
|
|
$
|
38.18
|
|
$
|
1,060,564
|
|
|||||||
|
|
Cash incentive
|
|
$
|
152,000
|
|
$
|
304,000
|
|
$
|
608,000
|
|
|
|
|
|
|
|||||||
Thomas F. Dziersk
|
|
RSU
|
1/8/2018
|
|
|
|
|
|
9,259
|
|
$
|
27.02
|
|
$
|
250,178
|
|
||||||||
|
|
MSU
(1)
|
1/12/2018
|
|
|
|
6,173
|
|
12,346
|
|
|
$
|
38.18
|
|
$
|
235,685
|
|
|||||||
|
|
Cash incentive
|
|
$
|
187,500
|
|
$
|
375,000
|
|
$
|
75,000
|
|
|
|
|
|
|
(1)
|
The January 2018 MSUs are performance-vested units under which the number of shares of Common Stock received following vesting is based on the Company's TSR in relation to the Index over a three year period ending December 31, 2020 (January 2018 MSU Performance Period). The January 2018 MSUs vest on January 10, 2021, and the maximum number of shares issuable upon vesting is 200% of the January 2018 MSUs initially granted based on the average price of our Common Stock relative to the Index during the January 2018 MSU Performance Period. Includes the target number of shares issuable at the grant date fair value per share of $38.18 for the January 2018 MSUs.
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||||
Name
|
|
Number of
securities
underlying
unexercised
options/SARs
(#) Exercisable
|
|
Number of
securities
underlying
unexercised
options/SARs
(#) Unexercisable
|
|
Option/SARs
exercise
price
($)
|
|
Option/SARs
expiration
date
|
|
Equity incentive
plan awards:
number of
unearned shares,
units or other
rights that have
not vested
(#)
|
|
Equity incentive
plan awards:
market or payout
value of unearned shares,
units or other
rights that have
not vested ($)
|
|||||||||
Andres D. Reiner
|
|
20,000
|
|
|
|
—
|
|
|
|
8.68
|
|
|
3/9/2020
|
|
|
|
|
|
|||
|
|
180,000
|
|
|
|
—
|
|
|
|
11.33
|
|
|
12/14/2020
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
14,300
|
|
(1)
|
|
$
|
449,020
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
45,000
|
|
(2)
|
|
$
|
1,413,000
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
90,000
|
|
(3)
|
|
$
|
2,826,000
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
(4)
|
|
$
|
3,140,000
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
63,000
|
|
(5)
|
|
$
|
1,978,200
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
84,000
|
|
(6)
|
|
$
|
2,637,600
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
82,948
|
|
(7)
|
|
$
|
2,604,567
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
82,498
|
|
(8)
|
|
$
|
2,604,567
|
|
|||
Stefan B. Schulz
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
20,625
|
|
(9)
|
|
$
|
647,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,250
|
|
(2)
|
|
$
|
981,250
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
62,500
|
|
(3)
|
|
$
|
1,962,500
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
(4)
|
|
$
|
942,000
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
29,400
|
|
(5)
|
|
$
|
923,160
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
26,100
|
|
(6)
|
|
$
|
819,540
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
41,667
|
|
(7)
|
|
$
|
1,308,344
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
27,778
|
|
(8)
|
|
$
|
872,229
|
|
|||
Thomas F. Dziersk
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
44,628
|
|
(10)
|
|
$
|
1,401,319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,669
|
|
(11)
|
|
$
|
1,245,607
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
9,259
|
|
(7)
|
|
$
|
290,733
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
6,173
|
|
(8)
|
|
$
|
193,832
|
|
(1)
|
Represents the unvested portion of the 57,200 RSUs awarded to Mr. Reiner on January 23, 2015. The RSUs vest annually in one fourth installments on January 1st of each year and have a grant date fair value of $27.11.
|
(2)
|
Represents 2016 RSUs awarded to Messrs. Reiner and Schulz on March 24, 2016. These RSUs vest annually in one fourth installments on March 1st of each year and have a grant date fair value of $11.40.
|
(3)
|
Represents 2016 MSUs awarded to Messrs. Reiner and Schulz on March 24, 2016. These 2016 MSUs vest on March 1, 2019. The amounts shown above reflect the number and market value, as of December 31, 2018, of 2016 MSUs that would be earned if the performance goals related to these awards were met at the target level at the end of the 2016 MSU Performance Period. If the minimum performance threshold is not met, there will be no payout. The number of shares actually earned will depend on our TSR from March 1, 2016 and March 1, 2019 as compared to the Index.
|
(4)
|
Represents Stock Price PRSUs awarded to Messrs. Reiner and Schulz on September 9, 2016. These Stock Price PRSUs vest if the average trailing closing price of our Common Stock is $41 for at least 105 calendar days prior to September 9, 2020.
|
(5)
|
Represents 2017 RSUs awarded to Messrs. Reiner and Schulz on January 20, 2017. These RSUs vest annually in one fourth installments on January 1st of each year and have a grant date fair value of $21.02.
|
(6)
|
Represents 2017 MSUs awarded to Messrs. Reiner and Schulz on January 20, 2017. These 2017 MSUs vest on March 1, 2020. The amounts shown above reflect the number and market value, as of December 31, 2018, of 2017 MSUs that would be earned if the performance goals were met at the target level at the end of the 2017 MSU Performance Period. If the minimum performance threshold is not met, there will be no payout. The number of shares actually earned will depend on our TSR from February 28, 2017 and February 28, 2020 as compared to the Index.
|
(7)
|
Represents 2018 RSUs awarded to Messrs. Reiner, Schulz, and Dziersk on January 8, 2018. These RSUs vest annually in one fourth installments on January 10th of each year and have a grant date fair value of $27.02.
|
(8)
|
Represents 2018 MSUs awarded to Messrs. Reiner, Schulz, and Dziersk on January 12, 2018. These 2018 MSUs vest on January 10, 2021. The amounts shown above reflect the number and market value, as of December 31, 2018, of 2018 MSUs that would be earned if performance goals were met at the target level at the end of the 2018 MSU Performance Period. If the minimum performance threshold is not met, there will be no payout. The number of shares that will actually be earned will depend on our TSR for the period from January 1, 2018 and December 31, 2020 as compared to the Index.
|
(9)
|
Represents the unvested portion of the RSUs awarded to Mr. Schulz on March 3, 2015. Mr. Schulz was awarded 82,500 RSUs. The RSUs vest annually in one fourth installments on March 3rd of each year and have a grant date fair value of $24.32.
|
(10)
|
Represents the unvested portion of the RSUs awarded to Mr. Dziersk on October 9, 2017. Mr. Dziersk was awarded 59,504 RSUs. The RSUs vest annually in one fourth installments on October 9th of each year and have a grant date fair value of $24.48.
|
(11)
|
Represents October 2017 MSUs awarded on October 9, 2017 to Mr. Dziersk. These October 2017 MSUs vest on October 9, 2020. The amounts shown above reflect the number and market value, as of December 31, 2018, of October 2017 MSUs that would be earned if the performance goals were met at the target level at the end of the October 2017 MSU Performance Period. If the minimum performance threshold is not met, there will be no payout. The number of shares that will actually be earned depend on our TSR from October 9, 2017 and October 9, 2020 as compared to the Index.
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||
Name
|
|
Number of shares acquired on exercise
(1)
(#)
|
|
Value realized on exercise
($)
(2)
|
|
Number of shares acquired on RSU vesting
(3)
(#)
|
|
Number of shares acquired on PRSU and MSU vesting
(4)
(#)
|
|
Value realized on vesting
(5)
($)
|
|||||||
Andres D. Reiner
|
|
50,000
|
|
|
$
|
979,467
|
|
|
67,025
|
|
|
50,000
|
|
|
$
|
3,672,811
|
|
Stefan B. Schulz
|
|
—
|
|
|
—
|
|
|
46,050
|
|
|
23,650
|
|
|
$
|
2,237,444
|
|
|
Thomas F. Dziersk
|
|
—
|
|
|
—
|
|
|
14,876
|
|
|
—
|
|
|
481,239
|
|
(1)
|
Represents the exercise of options
|
(2)
|
Represents the value realized upon exercise of options
|
(3)
|
Represents the vesting of RSUs
|
(4)
|
Represents the vesting of PRSUs and MSUs
|
(5)
|
Represents the value realized upon vesting of RSUs and PRSUs
|
|
Potential Payment on
|
||||||||||||||||
Name
|
Voluntary Termination or Termination for Cause ($)
|
|
Involuntary Termination (Without Cause) or Termination by NEO for Good Reason ($)
|
|
Involuntary Termination (Without Cause) or Termination by NEO for Good Reason on Change of Control ($)
|
||||||||||||
Andres D. Reiner
|
|
|
|
|
|
||||||||||||
Severance
(1)
|
$
|
—
|
|
|
$
|
1,102,500
|
|
|
$
|
1,653,750
|
|
||||||
Bonus
(2)
|
$
|
—
|
|
|
$
|
577,500
|
|
|
$
|
577,500
|
|
||||||
Health Benefits
(3)
|
$
|
—
|
|
|
$
|
20,659
|
|
|
$
|
30,989
|
|
||||||
Accelerated Equity
(4)
|
$
|
—
|
|
|
$
|
21,456,203
|
|
|
$
|
14,512,954
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
23,156,862
|
|
|
$
|
16,775,193
|
|
||||||
Stefan B. Schulz
|
|
|
|
|
|
||||||||||||
Severance
(1)
|
$
|
—
|
|
|
$
|
684,000
|
|
|
$
|
1,026,000
|
|
||||||
Bonus
(2)
|
$
|
—
|
|
|
$
|
304,000
|
|
|
$
|
304,000
|
|
||||||
Health Benefits
(3)
|
$
|
—
|
|
|
$
|
18,547
|
|
|
$
|
27,821
|
|
||||||
Accelerated Equity
|
$
|
—
|
|
|
$
|
5,698,032
|
|
|
$
|
7,514,648
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
6,704,579
|
|
|
$
|
8,872,469
|
|
||||||
Thomas F. Dziersk
|
|
|
|
|
|
||||||||||||
Severance
(1)
|
$
|
—
|
|
|
$
|
375,000
|
|
|
$
|
562,500
|
|
||||||
Bonus
(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
375,000
|
|
||||||
Health Benefits
(3)
|
$
|
—
|
|
|
$
|
18,547
|
|
|
$
|
27,821
|
|
||||||
Accelerated Equity
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,131,491
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
393,547
|
|
|
$
|
4,096,812
|
|
(1)
|
Reflects then current base monthly salary for 12 months for termination without cause, and 18 months for termination without cause upon change of control, and in each case, payable on normal payroll cycles. For Messrs. Reiner and Schulz, also reflects the payment of a bonus at 100% of performance targets, including the discretionary components, within the bonus plan in effect as if employed by the Company for 12 months for termination without cause, and for 18 months for termination without cause on change of control.
|
(2)
|
Reflects 2018 earned but unpaid bonus, assuming target level performance on a completed bonus period.
|
(3)
|
Reflects health benefits as made generally available to employees for 12 months for termination without cause, and for 18 months for termination without cause on change of control.
|
(4)
|
Includes the acceleration of vesting of all market stock awards (a) for involuntary termination based on 2016 MSUs vesting at 200% of the target number granted due to our stock price performance relative to the Index, and (b) for involuntary termination associated with a change of control based on 2016 MSUs vesting at the target number granted.
|
|
|
|
As of
|
Potential Dilution
|
|
|
December 31, 2018
|
Stock-Settled SARs outstanding
|
|
287,000
|
|
RSUs outstanding
|
|
1,969,000
|
|
Target Performance-Based awards outstanding
(1)
|
|
634,000
|
|
Total shares available for grant under the 2017 Plan
|
|
1,347,240
|
|
Total potential dilution
(2)
|
|
10.2%
|
|
|
|
|
|
(1)
Sum of 419,000 target MSUs outstanding and 215,000 Market-Based RSUs outstanding.
|
|||
(2)
We define total potential dilution as the sum of Stock-Settled SARs outstanding, RSUs outstanding,Target Performance-Based awards outstanding, and total shares available for grant under the 2017 Plan, which together are referred to as the "Total Outstanding and Available Shares," divided by the sum of Total Outstanding and Available Shares and 37,155,906 common shares outstanding as of 12/31/2018.
|
•
|
No more than 1,250,000 shares under stock-based awards.
|
•
|
No more than $2,000,000 for each full fiscal year contained in the performance period under cash-based awards.
|
Principal Shareholders
|
|
Shares Beneficially Owned
|
|
Percentage
|
||
Brown Capital Management, LLC
(1)
|
|
5,580,504
|
|
|
14.7
|
%
|
Ronald F. and Mariette M. Woestemeyer
(2)
|
|
3,887,403
|
|
|
10.2
|
%
|
PRIMECAP Management Company
(3)
|
|
2,815,900
|
|
|
7.4
|
%
|
Conestoga Capital Advisors, LLC
(4)
|
|
2,634,109
|
|
|
6.9
|
%
|
BlackRock, Inc.
(5)
|
|
2,321,872
|
|
|
6.1
|
%
|
Riverbridge Partners, LLC
(6)
|
|
2,218,402
|
|
|
5.8
|
%
|
(1)
|
Information regarding Brown Capital Management, LLC (Brown) is based solely upon a Schedule 13G/A filed by Brown Capital with the SEC on February 14, 2019, which indicates that Brown Capital beneficially owned 5,580,504 shares of our Common Stock as of December 31, 2018, with sole voting power with respect to 3,082,517 shares of our Common Stock and sole dispositive power with respect to 5,580,504 shares of our Common Stock. The address of Brown Capital is 1201 N. Calvert Street, Baltimore, MD 21202.
|
(2)
|
Includes 3,887,403 shares held by various trusts for the benefit of certain family members. The address for Mr. & Mrs. Woestemeyer is c/o PROS Holdings, Inc., 3100 Main Street, Suite 900, Houston, Texas 77002.
|
(3)
|
Information regarding PRIMECAP Management Company (PRIMECAP) is based solely upon a Schedule 13G/A filed by PRIMECAP with the SEC on February 8, 2019, which indicates that PRIMECAP beneficially owned 2,815,900 shares of our Common Stock as of December 31, 2018, with sole voting power with respect to 2,641,500 shares of our Common Stock and sole dispositive power with respect to 2,641,500 shares of our Common Stock. The address of PRIMECAP is 177 E. Colorado Blvd., 11th Floor, Pasadena, CA 91105.
|
(4)
|
Information regarding Conestoga Capital Advisors, LLC (Conestoga) is based solely upon a Schedule 13G/A filed by Conestoga with the SEC on January 8, 2019, which indicates that Conestoga beneficially owned 2,634,109 shares of our Common Stock as of December 31, 2018, with sole voting power with respect to 2,354,386 shares of our Common Stock and sole dispositive power with respect to 2,634,109 shares of our Common Stock. The address of Conestoga is 550 E. Swedesford Road, Suite 120, Wayne, PA 19087.
|
(5)
|
Information regarding BlackRock, Inc. (BlackRock) is based solely upon a Schedule 13G/A filed by BlackRock with the SEC on February 6, 2019, which indicates that BlackRock beneficially owned 2,321,872 shares of our Common Stock as of December 31, 2018, with sole voting power with respect to 2,096,161 shares of our Common Stock and sole dispositive power with respect to 2,321,872 shares of our Common Stock. The address of BlackRock is 55 East 52nd Street, New York, NY 10055.
|
(6)
|
Information regarding Riverbridge Partners LLC (Riverbridge) is based solely upon a Schedule 13G/A filed by Riverbridge with the SEC on January 25, 2019, which indicates that Riverbridge beneficially owned 2,218,402 shares of our Common Stock as of December 31, 2018, with sole voting power with respect to 1,536,516 shares of our Common Stock and sole dispositive power with respect to 2,218,402 shares of our Common Stock. The address of Riverbridge is 80 South Eighth St., Suite 1200, Minneapolis, MN 55402.
|
Name of Beneficial Owner
|
|
Shares Beneficially Owned
1
|
|
Percentage
|
||
Named Executive Officers
|
|
|
|
|
||
Andres D. Reiner
(2)
|
|
767,252
|
|
|
2.0
|
%
|
Stefan B. Schulz
|
|
193,949
|
|
|
*
|
|
Thomas F. Dziersk
|
|
8,357
|
|
|
*
|
|
Non-Employee Directors and Director Nominees
|
|
|
|
|
||
Penelope Herscher
|
|
3,189
|
|
|
*
|
|
Greg B. Petersen
|
|
103,119
|
|
|
*
|
|
Leslie Rechan
|
|
30,704
|
|
|
*
|
|
William Russell
|
|
126,571
|
|
|
*
|
|
Timothy V. Williams
|
|
108,071
|
|
|
*
|
|
Mariette M. Woestemeyer
(3)
|
|
3,887,403
|
|
|
10.2
|
%
|
Ronald F. Woestemeyer
(3)
|
|
3,877,403
|
|
|
10.2
|
%
|
All NEOs, directors and director nominees as a group
|
|
5,228,615
|
|
|
13.7
|
%
|
(1)
|
Includes shares held and stock options, RSUs, PRSUs, MSUs and stock appreciation rights (SARs) vesting and exercisable within 60 days of the Record Date. MSUs are displayed at 100% of the target number granted.
|
(2)
|
Includes 200,000 shares issuable pursuant to SARs that are immediately exercisable or exercisable within 60 days of the Record Date.
|
(3)
|
Mr. and Mrs. Woestemeyer jointly beneficially own an aggregate of 3,887,403 shares, which include shares held by various trusts for the benefit of certain family members.
|
|
|
2018
|
|
2017
|
||||
Audit fees
|
|
$
|
1,845,680
|
|
|
$
|
2,058,773
|
|
Audit-related fees
|
|
—
|
|
|
—
|
|
||
Tax fees
|
|
41,992
|
|
|
31,000
|
|
||
All other fees
|
|
1,919
|
|
|
1,919
|
|
||
Total fees
|
|
$
|
1,889,591
|
|
|
$
|
2,091,692
|
|
TABLE OF CONTENTS
|
||||||
Section
|
Page
|
|
||||
1.
|
Establishment, Purpose and Term of Plan
|
1
|
|
|||
|
1.1
|
|
Establishment
|
|
1
|
|
|
1.2
|
|
Purpose
|
|
1
|
|
|
1.3
|
|
Term of Plan
|
|
1
|
|
2.
|
Definitions and Construction
|
|
||||
|
2.1
|
|
Definitions
|
|
1
|
|
|
2.2
|
|
Construction
|
|
8
|
|
3.
|
Administration
|
8
|
|
|||
|
3.1
|
|
Administration by the Committee
|
8
|
|
|
|
3.2
|
|
Authority of Officers
|
9
|
|
|
|
3.3
|
|
Administration with Respect to Insiders
|
9
|
|
|
|
3.4
|
|
Powers of the Committee
|
9
|
|
|
|
3.5
|
|
Option or SAR Repricing
|
10
|
|
|
|
3.6
|
|
Indemnification
|
10
|
|
|
4.
|
Shares Subject to Plan
|
10
|
|
|||
|
4.1
|
|
Maximum Number of Shares Issuable
|
11
|
|
|
|
4.2
|
|
Share Counting
|
11
|
|
|
|
4.3
|
|
Adjustments for Changes in Capital Structure
|
11
|
|
|
|
4.4
|
|
Assumption or Substitution of Awards
|
12
|
|
|
5.
|
Eligibility, Participation and Award Limitations
|
12
|
|
|||
|
5.1
|
|
Persons Eligible for Awards
|
12
|
|
|
|
5.2
|
|
Participation in the Plan
|
12
|
|
|
|
5.3
|
|
Incentive Stock Option Limitations
|
12
|
|
|
|
5.4
|
|
Award Limits
|
13
|
|
|
|
5.5
|
|
Nonemployee Director Award Limit
|
13
|
|
|
|
5.6
|
|
Minimum Vesting
|
13
|
|
|
6.
|
Stock Options
|
13
|
|
|||
|
6.1
|
|
Exercise Price
|
13
|
|
|
|
6.2
|
|
Exercisability and Term of Options
|
14
|
|
|
|
6.3
|
|
Payment of Exercise Price
|
14
|
|
|
|
6.4
|
|
Effect of Termination of Service
|
15
|
|
|
|
6.5
|
|
Transferability of Options
|
16
|
|
|
7.
|
Stock Appreciation Rights
|
16
|
|
|||
|
7.1
|
|
Types of SARs Authorized
|
16
|
|
|
|
7.2
|
|
Exercise Price
|
17
|
|
|
|
7.3
|
|
Exercisability and Term of SARs
|
17
|
|
|
|
7.4
|
|
Exercise of SARs
|
17
|
|
|
|
7.5
|
|
Deemed Exercise of SARs
|
18
|
|
|
|
7.6
|
|
Effect of Termination of Service
|
18
|
|
|
|
7.7
|
|
Transferability of SARs
|
18
|
|
|
8.
|
Restricted Stock Awards
|
18
|
|
|||
|
8.1
|
|
Types of Restricted Stock Awards Authorized
|
18
|
|
|
|
8.2
|
|
Purchase Price
|
18
|
|
|
16.2
|
|
Withholding in or Directed Sale of Shares
|
36
|
|
|
17.
|
Amendment, Suspension or Termination of Plan
|
36
|
|
|||
18.
|
Miscellaneous Provisions
|
37
|
|
|||
|
18.1
|
|
Repurchase Rights
|
37
|
|
|
|
18.2
|
|
Forfeiture Events
|
37
|
|
|
|
18.3
|
|
Provision of Information
|
37
|
|
|
|
18.4
|
|
Rights as Employee, Consultant or Director
|
37
|
|
|
|
18.5
|
|
Rights as a Stockholder
|
38
|
|
|
|
18.6
|
|
Delivery of Title to Shares
|
38
|
|
|
|
18.7
|
|
Franctional Shares
|
38
|
|
|
|
18.8
|
|
Retirement and Welfare Plans
|
38
|
|
|
|
18.9
|
|
Beneficiary Designation
|
38
|
|
|
|
18.10
|
|
Severability
|
38
|
|
|
|
18.11
|
|
No Constraint on Corporate Action
|
39
|
|
|
|
18.12
|
|
Unfunded Obligation
|
39
|
|
|
|
18.13
|
|
Choice of Law
|
39
|
|
|
|
|
Damian Olthoff, Secretary
|