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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☑
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☑ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material Pursuant to §240.14a-12
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
☑ No fee required
☐ Fee paid previously with preliminary materials
☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
NOTICE OF
2024 ANNUAL MEETING OF STOCKHOLDERS
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Date and Time Thursday, September 12, 2024 8:00 AM, Eastern time |
Meeting Location 3655 Brookside Parkway, Suite 300 Alpharetta, Georgia |
Record Date Close of Business July 15, 2024 |
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Please join us for the Agilysys, Inc. 2024 Annual Meeting of Stockholders to be held on Thursday, September 12, 2024, at 8:00 a.m., Eastern time at the Company's offices at 3655 Brookside Parkway, Suite 300, Alpharetta, Georgia 30022.
The purposes of the Annual Meeting are:
Stockholders of record at the close of business on July 15, 2024, are entitled to vote at the Annual Meeting. It is important to vote your shares at the Annual Meeting, regardless of whether you plan to attend the meeting. In addition to voting by mail, you may vote by telephone or internet. Please refer to your enclosed proxy card and the Proxy Statement for information regarding how to vote by telephone or internet. If you choose to vote by mail, please sign, date, and promptly return your proxy card in the enclosed envelope.
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By Order of the Board of Directors,
Michael A. Kaufman Chairman of the Board of Directors
July 26, 2024 |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders
to be held on September 12, 2024. The Proxy Statement and our Annual Report on Form 10-K
for the fiscal year ended March 31, 2024, are available at www.agilysys.com.
TABLE OF
CONTENTS
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PROPOSAL 2: Approval of THE AGILYSYS, INC. 2024 EQUITY INCENTIVE PLAN |
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Selected Information Regarding Historical Share Usage under our Equity Compensation Programs |
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Federal Income Tax Consequences of Awards under the 2024 Plan |
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Analysis of the Information Presented in the Pay versus Performance Table |
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PROPOSAL 4: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
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A- 1 |
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Proxy Statement |
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PRO XY STATEMENT
20 24 ANNUAL MEETING OF STOCKHOLDERS
A nnual Meeting Information
General Information
This Proxy Statement and the enclosed proxy card are being provided in connection with the solicitation by the board of directors of Agilysys, Inc., a Delaware corporation (“Agilysys,” the “Company,” “we,” “our,” or “us”), to be used at the Annual Meeting of Stockholders to be held at 8:00 AM, Eastern time, on September 12, 2024, and any adjournments or postponements of the Annual Meeting. The Annual Meeting will be held at the Company's principal executive offices at 3655 Brookside Parkway, Suite 300, Alpharetta, Georgia 30022.
The purposes of the Annual Meeting are stated in the accompanying Notice. This Proxy Statement, the enclosed proxy card, and our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (“2024 Annual Report”), are first being mailed to stockholders and made available electronically on our website at www.agilysys.com beginning on or about July 26, 2024.
Record Date, Voting Shares, and Quorum
Stockholders of record of our common shares at the close of business on July 15, 2024, the “Record Date,” are entitled to notice of and to vote their shares at the Annual Meeting, or any adjournment or postponement of the Annual Meeting. On the Record Date, there were 27,881,686 common shares outstanding and entitled to vote. Each common share is entitled to one vote. The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the common shares outstanding at the close of business on the Record Date will constitute a quorum for the transaction of business at the Annual Meeting. We will include abstentions and broker non-votes in the number of common shares present at the Annual Meeting for purposes of determining a quorum. A broker non-vote occurs when a nominee holding shares for a beneficial owner has not received instructions from the beneficial owner and does not have discretionary authority to vote the shares. Our common shares are listed on the NASDAQ Global Select Market under the symbol AGYS. References within this Proxy Statement to our common shares refer to shares of our common stock, without par value, the only class of securities entitled to vote at the Annual Meeting.
How to Vote
If you are the record holder of common shares, you or your duly authorized agent may vote by completing and returning the enclosed proxy card in the envelope provided. You may also vote by telephone or internet. Telephone and internet voting information is provided on your proxy card. A control number, located on the proxy card, is designed to verify your identity, allow you to vote your shares, and confirm that your voting instructions have been properly recorded. Please note the deadlines for voting by telephone, internet, and proxy card as set forth on the proxy card. If you vote by telephone or internet, you need not return your proxy card. You may also attend the Annual Meeting and vote in person; however, we encourage you to vote your shares in advance of the Annual Meeting even if you plan on attending. If your common shares are held by a bank, broker or any other nominee, you must follow the voting instructions provided to you by the bank, broker, or nominee. Although most banks and brokers offer voting by mail, telephone, and internet, availability and specific procedures will depend on their voting arrangements.
Unless revoked, common shares represented by a properly signed and returned proxy card (or other valid form of proxy), or as instructed via telephone or internet, received in time for voting will be voted as instructed. If your proxy card is signed and returned with no instructions given, the persons designated as proxy holders on the proxy card will vote as follows:
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2024 Proxy Statement | 1 |
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Proxy Statement |
The Company knows of no other matters scheduled to come before the Annual Meeting. If any other business is properly brought before the Annual Meeting, your proxy gives discretionary authority to the proxy holders with respect to such business, and the proxy holders intend to vote the proxy as recommended by our board of directors with regard to any such business, or, if no such recommendation is given, the proxy holders will vote in their own discretion.
Revocability of Proxies
You may revoke or change your vote at any time before the final vote on the matter is taken at the Annual Meeting by submitting to our Secretary a notice of revocation or by timely delivery of a valid, later-dated, duly executed proxy by mail, telephone, or internet. You may also revoke or change your vote by attending the Annual Meeting and voting in person. If your shares are held by a bank, broker, or other nominee, you must contact the bank, broker, or nominee and follow their instructions for revoking or changing your vote.
Vote Required, Abstentions, and Broker Non-Votes
If a quorum is present at the Annual Meeting, the nominees named herein for election as directors in proposal 1 will be elected if they receive a greater number of votes “for” their election than votes “against” their election. Abstentions and broker non-votes will have no effect on the election of directors.
For each of proposal 2 (approval of the 2024 Equity Incentive Plan), proposal 3 (advisory vote on named executive officer compensation), and proposal 4 (ratification of independent registered public accounting firm), if a quorum is present at the Annual Meeting, the affirmative vote of the holders of shares representing a majority of the common shares present or represented by proxy and entitled to vote will be required to approve each proposal.
The effect of an abstention is the same as a vote against each of proposals 2, 3, and 4. If you hold your shares in street name and do not give your broker or nominee instruction as to how to vote your shares with respect to proposals 2 and 3, your broker or nominee will not have discretionary authority to vote your shares on proposals 2 or 3. These broker non-votes will have the same effect as a vote against each of proposals 2 and 3.
Proposal 4 is considered a “routine proposal” on which your broker or nominee will have discretionary authority to vote your shares if you do not give voting instructions, and accordingly we do not expect any broker non-votes to result from proposal 4.
No Cumulative Voting
Under our certificate of incorporation, our stockholders do not have cumulative voting rights in the election of directors.
Proxy Solicitation
The cost of solicitation of proxies, including the cost of preparing, assembling, and mailing the Notice, Proxy Statement, and proxy card, will be borne by the Company. In addition to solicitation by mail, arrangements may be made with brokerage houses and other custodians, nominees, and fiduciaries to send proxy materials to their principals, and we may reimburse them for their expenses in so doing. Our officers, directors, and employees may, without additional compensation, personally or by other appropriate means request the return of proxies.
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2 | 2024 Proxy Statement |
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Proxy Statement |
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Attending the Annual Meeting
All holders of our common shares at the close of business on the Record Date, or their duly appointed proxies, are authorized to attend the Annual Meeting. Cameras, recording devices, and other electronic devices will not be permitted at the Annual Meeting. If you hold your common shares through a bank, broker, or other nominee, you will need to bring a copy of the brokerage statement reflecting your share ownership as of the Record Date, or a legal proxy from your bank or broker, to attend the meeting.
Voting Results
Preliminary voting results will be announced at the Annual Meeting. Within four business days following the Annual Meeting, final results, or preliminary results if final results are unknown, will be announced on a Form 8-K filed with the Securities and Exchange Commission (“SEC”). If preliminary results are announced on a Form 8-K, final results will be announced on an amendment to the Form 8-K filed with the SEC within four business days after the final results are known.
Company Information
Our 2024 Annual Report is being mailed with this Proxy Statement. These documents also are available electronically on our website at www.agilysys.com, under Investor Relations. Our 2024 Annual Report and the other information available on or through our website is not incorporated into this Proxy Statement and is not to be considered proxy solicitation material. If you wish to have additional copies of our 2024 Annual Report, we will mail copies to you without charge. Requests may be sent to our corporate headquarters at: Agilysys, Inc., Attn: Investor Relations, 3655 Brookside Parkway, Suite 300, Alpharetta, Georgia 30022, or you may request copies through our website, under Investor Relations. These documents have been filed with the SEC and may be accessed from the SEC’s website at www.sec.gov. If you have any questions about the Annual Meeting or these proxy materials, please contact Investor Relations by telephone at 770-810-7941, or by email at investorrelations@agilysys.com, or through our website under Investor Relations.
Co rporate Governance
Corporate Governance Guidelines
The Corporate Governance Guidelines (the “Guidelines”) adopted by our board of directors are intended to provide a sound framework to assist the board of directors in fulfilling its responsibilities to stockholders. Under the Guidelines, the board of directors exercises its role in overseeing the Company by electing qualified and competent officers and by monitoring the performance of the Company. The Guidelines state that the board of directors and its committees exercise oversight of executive officer compensation and director compensation, succession planning, director nominations, corporate governance, financial accounting and reporting, internal controls, strategic and operational issues, and compliance with laws and regulations. The Guidelines also state the board of directors’ policy regarding eligibility for the board of directors, including director independence and qualifications for director candidates, events that require resignation from the board of directors, service on other public company boards of directors, and stock ownership guidelines. The Nominating and Corporate Governance Committee annually reviews the Guidelines and makes recommendations for changes to the board of directors. The Guidelines are available on our website at www.agilysys.com, under Investor Relations.
Code of Business Conduct
The Code of Business Conduct adopted by our board of directors applies to all directors, officers, and employees of the Company, as well as certain third parties, and incorporates additional ethics standards applicable to our Chief Executive Officer, Chief Financial Officer, and other senior financial officers of the Company, and any person performing a similar function. The Code of Business Conduct is reviewed annually by the Audit Committee, and recommendations for change are submitted to the board of directors for approval. The Code of Business Conduct is available on our website at www.agilysys.com, under Investor Relations. The Company has in place a reporting hotline and website available for use by all employees and third parties, as described in the Code of Business
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2024 Proxy Statement | 3 |
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Proxy Statement |
Conduct. Any employee or third-party can anonymously report potential violations of the Code of Business Conduct through the hotline or website, both of which are managed by an independent third party. Reported violations are promptly reported to and investigated by the Company. Reported violations are addressed by the Company and, if related to accounting, internal accounting controls, or auditing matters, the Audit Committee. In addition, we intend to post on our website all disclosures that are required by law or NASDAQ listing standards concerning any amendments to, or waivers from, any provision of the Code of Business Conduct.
Director Independence
NASDAQ listing standards provide that at least a majority of the members of the board of directors must be independent, meaning free of any relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Guidelines state that the board of directors should consist of a substantial majority of independent directors. A director is not independent if he or she fails to satisfy the standards for director independence under NASDAQ listing standards, the rules of the SEC, and any other applicable laws, rules, and regulations. During the board of directors’ annual review of director independence, the board of directors considers transactions, relationships, and arrangements, if any, between each director or a director’s immediate family members and the Company or its management. In May 2024, the board of directors performed its annual director independence review and, as a result, determined that each of Donald Colvin, Dana Jones, Jerry Jones, Michael A. Kaufman, Melvin Keating, and John Mutch qualify as independent directors. Ramesh Srinivasan is not independent because of his service as President and CEO of the Company.
Director Attendance
The board of directors held 5 meetings during fiscal year 2024, and no director attended less than 75% of the aggregate of the total number of board of director meetings and meetings held by committees of the board of directors on which the director served. Independent directors meet regularly in executive session at board of director and committee meetings, and executive sessions are chaired by the chairman of the board or by the appropriate committee chair. It is the board of directors’ policy that all its members attend the Annual Meeting of Stockholders absent exceptional cause. All the directors attended the 2023 Annual Meeting of Stockholders.
Stockholder Communication with Directors
Stockholders and others who wish to communicate with the board of directors as a whole, or with any individual director, may do so by sending a written communication to such director(s) in care of our Secretary at our Alpharetta, Georgia office address, and our Secretary will forward the communication to the specified director(s).
Committees of the Board
During fiscal year 2024, the board of directors had three standing committees: Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. The Audit Committee also had a standing Cybersecurity Risk Subcommittee. Mr. Srinivasan is not a member of any board committee or subcommittee. At the end of the fiscal year, the members and chairperson of each committee and subcommittee were as follows:
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Compensation |
Nominating and Corporate Governance |
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Donald Colvin* |
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Dana Jones* |
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Jerry Jones |
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Michael A. Kaufman |
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Melvin Keating |
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John Mutch* |
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*Qualifies as an Audit Committee Financial Expert.
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4 | 2024 Proxy Statement |
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Proxy Statement |
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As of July 15, 2024, the committee membership set forth above remained the same.
Committee Charters . The board of directors has adopted a charter for each committee, and each committee with a charter is responsible for the annual review of its respective charter. Charters for each committee are available on our website at www.agilysys.com, under Investor Relations.
Audit Committee . The Audit Committee held 8 meetings during fiscal year 2024. The Audit Committee reviews, with our independent registered public accounting firm, the proposed scope of our annual audits and audit results, as well as interim reviews of quarterly reports; reviews the adequacy of internal financial controls; reviews internal audit functions; is directly responsible for the appointment, determination of compensation, retention, and general oversight of our independent registered public accounting firm; reviews related person transactions; oversees the Company’s implementation of its Code of Business Conduct; and reviews any concerns identified by either the internal or external auditors. The board of directors determined that all Audit Committee members are financially literate and independent under NASDAQ listing standards and SEC rules for audit committee members. The board of directors also determined that each of Ms. Jones and Messrs. Colvin and Mutch qualify as an “audit committee financial expert” under SEC rules.
Cybersecurity Risk Subcommittee of the Audit Committee . In March of 2023, at the recommendation of the Audit and Nominating and Corporate Governance Committees, the board of directors formed the Cybersecurity Risk Subcommittee of the Audit Committee to assist the Audit Committee in its oversight of cybersecurity risks. The Cybersecurity Risk Subcommittee held 5 meetings during fiscal year 2024.
The Cybersecurity Risk Subcommittee is responsible for reviewing the Company’s policies and procedures with respect to privacy, network and data security, information technology systems, cybersecurity incident response and risk management, as well as assessing the implementation and effectiveness of such policies and procedures. In addition, the Cybersecurity Risk Subcommittee assesses the Company’s management of risks related to the Company’s information technology systems and processes; reviews the Company’s utilization of information technology and security resources, including staffing; and reviews information technology strategies or programs relating to new security technologies. As part of its responsibility, the Cybersecurity Risk Subcommittee reviews the periodic security assessments conducted by the Company and any audits of the Company’s information technology systems and processes, evaluating the risk of potential cyber threats and recommending risk mitigation measures.
In accordance with the Cybersecurity Risk Subcommittee Charter, the Cybersecurity Risk Subcommittee consists of two independent directors, Messrs. Jones and Mutch, each of whom have the requisite experience in information technology or cybersecurity and an understanding of cyber threats, risk mitigation and policy.
Compensation Committee . The Compensation Committee held 3 meetings during fiscal year 2024. The purpose of the Compensation Committee is to enhance stockholder value by ensuring that pay available to the board of directors, Chief Executive Officer, and other executive officers enables us to attract and retain high-quality leadership and is consistent with our executive pay philosophy. As part of its responsibility, the Compensation Committee oversees our pay plans and policies; annually reviews and determines all pay, including base salary, annual cash incentive, long-term equity incentive, and retirement and perquisite plans; administers our incentive programs, including establishing performance goals, determining the extent to which performance goals are achieved, and determining awards; administers our equity pay plans, including making grants to our executive officers; and regularly evaluates the effectiveness of the overall executive pay program and evaluates our incentive plans to determine if the plans’ measures or goals encourage inappropriate risk-taking by our executives. A more complete description of the Compensation Committee’s functions is found in the Compensation Committee Charter. The board of directors determined that all Compensation Committee members are independent under NASDAQ listing standards for compensation committee members. Our Finance, Legal and Human Resources Departments support the Compensation Committee in its work and, in some cases, as a result of delegation of authority by the Compensation Committee, fulfill various functions in administering our pay programs. In addition, the Compensation Committee has the authority to engage the services of outside consultants and advisers to assist it. The Committee engages compensation consultants to perform current market assessments when it believes that such an assessment would inform its decision making with respect to executive compensation. The
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2024 Proxy Statement | 5 |
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Proxy Statement |
Compensation Committee did not engage any compensation consultant to advise it in connection with setting compensation for the Named Executive Officers in fiscal year 2024.
Our Chief Executive Officer, Chief Financial Officer and General Counsel attend Compensation Committee meetings when executive compensation, Company performance, and individual performance are discussed and evaluated by Compensation Committee members, and they provide their thoughts and recommendations on executive pay issues during these meetings and provide updates on financial performance, industry status, and other factors that may impact executive compensation. Decisions regarding the Chief Executive Officer’s compensation were based solely on the Compensation Committee’s deliberations, while compensation decisions regarding other executive officers took into consideration recommendations from the Chief Executive Officer. Only Compensation Committee members make decisions on executive officer compensation and approve all outcomes.
Nominating and Corporate Governance Committee . The Nominating and Corporate Governance Committee (“Nominating Committee”) held 3 meetings during fiscal year 2024. The board of directors determined that all Nominating Committee members are independent under NASDAQ listing standards. The Nominating Committee assists the board of directors in finding and nominating qualified people for election to the board; reviewing stockholder-recommended nominees; assessing and evaluating the board of directors’ effectiveness; and establishing, implementing, and overseeing our governance programs and policies. The Nominating Committee is responsible for reviewing the qualifications of, and recommending to the board of directors, individuals to be nominated for membership on the board of directors. The board of directors has adopted Guidelines for Qualifications and Nomination of Director Candidates (“Nominating Guidelines”), and the Nominating Committee considers nominees using the criteria set forth in the Nominating Guidelines. At a minimum, a director nominee must:
The Nominating Committee considers the foregoing factors, among others, in identifying nominees; however, there is no policy requiring the Nominating Committee to consider the impact of any one factor by itself. Although the Nominating Committee does not have a specific diversity policy, diversity is one of several factors considered in our corporate governance guidelines. The Nominating Committee also will consider the board of directors’ current and anticipated needs in terms of number, specific qualities, expertise, skills, experience, and background. In addition, the Corporate Governance Guidelines state that the board of directors should have a balanced membership, with diverse representation of relevant areas of experience, expertise, and backgrounds. The Nominating Committee seeks nominees that collectively will build a capable, responsive, and effective board of directors, prepared to address strategic, oversight, and governance challenges. The Nominating Committee believes that the backgrounds and qualifications of the directors as a group should provide a significant mix of experience, knowledge, and abilities that will enable the board of directors to fulfill its responsibilities.
The Nominating Committee will consider stockholder-recommended nominees for membership on the board of directors. For a stockholder to properly nominate a candidate for election as a director at a meeting of the stockholders, the stockholder must be a stockholder of record at the time the notice of the nomination is given and at the time of the meeting, be entitled to vote at the meeting in the election of directors, and have given timely
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6 | 2024 Proxy Statement |
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Proxy Statement |
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written notice of the nomination to the Secretary. To be timely, notice must be received by the Secretary, in the case of an annual meeting, not less than 90 days nor more than 120 days prior to the anniversary of the previous year’s annual meeting; provided, however, that if the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, notice must be delivered not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th calendar day following the day on which public disclosure of the date of such annual meeting is first made. In the case of a special meeting, timely notice must be received by the Secretary not later than the close of business on the 10th day after the date of such meeting is first publicly disclosed. A stockholder’s notice must set forth, as to each candidate:
The Nominating Committee may request additional information from such nominee to assist in its evaluation. The Nominating Committee will evaluate any stockholder-recommended nominees in the same way it evaluates nominees recommended by other sources, as described above.
Board Leadership
The board of directors determined that having an independent director serve as chairman of the board is in the best interest of stockholders at this time. The structure ensures a greater role for our independent directors in the oversight of the Company and the active participation in setting agendas and establishing priorities and procedures for the board of directors. Pursuant to the board of directors’ Corporate Governance Guidelines, it is our policy that the positions of chairman of the board and chief executive officer be held by different individuals, except as otherwise determined by the board of directors. Mr. Kaufman has served as Chairman of the Board since 2015.
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2024 Proxy Statement | 7 |
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Proxy Statement |
Risk Oversight
Management is responsible for the day-to-day management of risks facing the Company. The board of directors, as a whole and through its committees, particularly the Audit Committee, is actively involved in the oversight of such risks. The board of directors’ role in risk oversight includes regular reports at board of director and Audit Committee meetings from members of senior management on areas of material risk to the Company, including strategic, financial, operational, and legal and regulatory compliance risks. Management regularly identifies and updates, among other items, the population of possible risks for the Company, assigns risk ratings, prioritizes the risks, assesses likelihood of risk occurrence, develops risk mitigation plans for prioritized risks, and assigns roles and responsibilities to implement mitigation plans. Risks are ranked by evaluating each risk’s likelihood of occurrence and magnitude.
The board of directors’ Compensation Committee, in consultation with management, evaluates our incentive plans to determine if the plans’ measures or goals encourage inappropriate risk-taking by our employees. As part of its evaluation, the Compensation Committee determined that the performance measures and goals were tied to our business, financial, and strategic objectives. As such, the incentive plans are believed not to encourage risk-taking outside of the range of risks contemplated by the Company’s business plan.
Given the nature of our business, management is highly focused on identifying and managing a broad range of cybersecurity risks. These risks include those relating to our internal systems, as well as to our products and services for customers. The full board of directors has primary responsibility for oversight of the Company’s cybersecurity risks. The Audit Committee is also responsible for reviewing the Company’s information and cybersecurity risks and the steps that management has taken to protect against threats to the Company’s information systems and security, including results of periodic security assessments performed in conjunction with ongoing monitoring. The Audit Committee has formed a Cybersecurity Risk Subcommittee to assist the Audit Committee in its oversight of cybersecurity risks. By its charter, all members of the Cybersecurity Risk Subcommittee must have a background or experience in information technology or cybersecurity and an understanding of cyber threats, risk mitigation and policy.
To more effectively prevent, detect and respond to information security threats, the Company maintains a cybersecurity risk management program, which is supervised by a dedicated Chief Information Security Officer whose team is responsible for leading enterprise-wide cybersecurity strategy, policies, standards, architecture and processes. Both the board of directors and the Cybersecurity Risk Subcommittee receive regular reports from the Chief Information Security Officer on, among other things, the Company’s cybersecurity risks and threats, the status of projects to strengthen the Company’s information security systems, assessments of the Company’s security programs, mitigation strategies, areas of emerging risks, incidents and industry trends. The Cybersecurity Risk Subcommittee reports directly to the Audit Committee regarding cybersecurity risks, including with respect to all information provided by the Chief Information Security Officer.
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee during fiscal year 2024 (Ms. Jones and Messrs. Jones, Kaufman, and Keating) is or has been an officer or employee of the Company or has had any relationship with the Company required to be disclosed as a related person transaction, and none of our executive officers served on the compensation committee (or other committee serving an equivalent function) or board of any company that employed any member of our Compensation Committee or our board of directors during fiscal year 2024.
Policy on Hedging of Shares
We do not have any practices or policies regarding hedging or offsetting any decrease in the market value of the Company’s equity securities held by employees or directors of the Company.
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8 | 2024 Proxy Statement |
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Proxy Statement |
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Dir ector Compensation
During fiscal year 2024, the board of directors approved compensation for non-employee directors consisting of the following:
We also reimburse our directors for reasonable out-of-pocket expenses incurred for attendance at board of directors and committee meetings.
The fiscal year 2024 equity award for each director consisted of 1,435 restricted shares, based on the closing price of the Company’s common stock of $69.65 on the date the grant was approved by the board of directors, and was granted under the 2020 Equity Incentive Plan. The restricted shares vested on March 31, 2024, and provided for pro-rata vesting upon retirement prior to March 31, 2024.
Our directors are subject to share ownership guidelines that require ownership of common stock with a market value of six times the director’s respective annual cash retainer within five years of service. We pay no additional fees for board of director or committee meeting attendance.
Director Compensation for Fiscal Year 2024
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Director (1) |
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Donald Colvin |
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65,000 |
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100,000 |
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165,000 |
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Dana Jones |
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72,500 |
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100,000 |
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172,500 |
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Jerry Jones |
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70,000 |
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100,000 |
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170,000 |
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Michael A. Kaufman |
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102,500 |
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100,000 |
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202,500 |
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Melvin Keating |
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60,000 |
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100,000 |
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160,000 |
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John Mutch |
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70,000 |
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100,000 |
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170,000 |
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2024 Proxy Statement | 9 |
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ProPOSAL 1 |
PR OPOSAL 1
ELECTION OF DIRECTORS
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Our board of directors currently consists of seven members whose term expires at this Annual Meeting. In each case, subject to their earlier death, resignation, removal or retirement, the directors remain in office until their respective successors are duly elected and qualified, notwithstanding the expiration of the otherwise applicable term.
Nom inees for Director
Upon the recommendation of the Nominating and Corporate Governance Committee, comprised of independent directors, the board of directors has nominated each of Donald Colvin, Dana Jones, Jerry Jones, Michael A. Kaufman, Melvin Keating, John Mutch and Ramesh Srinivasan for election to the board of directors for a term of one year, to serve until the annual meeting of stockholders in 2025 and until their successors have been duly elected and qualified, subject to their earlier death, resignation, retirement or removal. Information concerning the nominees for election at this Annual Meeting is set forth below.
Unless the stockholder specifies otherwise as to any of these nominees, the shares represented by a validly executed proxy will be voted “FOR” the election of each of Ms. Jones and Messrs. Colvin, Jones, Kaufman, Keating, Mutch and Srinivasan for a one-year term. Each nominee has indicated his or her willingness to serve as a director, if elected.
A biography for each director nominee follows and, if applicable, arrangements under which a director was appointed to the board of directors or information regarding any involvement in certain legal or administrative proceedings is provided. Additional information about the experiences, qualifications, attributes, or skills of each director and director nominee in support of his or her service on the board of directors is also provided.
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10 | 2024 Proxy Statement |
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ProPOsal 1 |
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Director Nominees
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PROPOSAL 1: Recommendation of the Board of Directors The board of directors recommends a vote “for” the election of each of the nominees. Proxy cards received by the company will be voted "FOR" the election of each of the nominees unless the stockholder specifies otherwise on the proxy card. |
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DONALD COLVIN Independent Director Age 71 | Director since 2015 Committee Memberships:
•
Audit (Chair)
Other Public Board Directorships:
•
Viavi Solutions Inc.
•
Maxeon Solar
Education: Mr. Colvin earned his B.A. in Economics, with honors, and an M.B.A. from the University of Strathclyde in Scotland. |
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Biographical Information Mr. Colvin is a director of Viavi Solutions Inc. (Nasdaq: VIAV), a global provider of network test, monitoring and assurance solutions, and a director and chairman of the board of Maxeon Solar (Nasdaq: MAXN). He was formerly a director of UTAC Holdings, Ltd., a private Singapore technology company, and a director of Applied Micro Circuits Corporation from 2007 to 2011. Mr. Colvin previously served as Chief Financial Officer of Caesars Entertainment Corporation from November 2012 to January 2015. Caesars Entertainment Group filed for bankruptcy protection in January 2015. Before that, he was Executive Vice President and Chief Financial Officer of ON Semiconductor Corp. from April 2003 to October 2012. Prior to joining ON Semiconductor, he held a number of financial leadership positions, including Vice President of Finance and Chief Financial Officer of Atmel Corporation, Chief Financial Officer of European Silicon Structures as well as several financial roles at Motorola Inc. Value Mr. Colvin Brings to our Board Mr. Colvin’s qualifications and extensive experience include financial management, capital structure, financial strategy, significant public company leadership and board experience, and experience in the hospitality industry which the Company serves. |
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2024 Proxy Statement | 11 |
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ProPOSAL 1 |
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DANA JONES Independent Director Age 49 | Director since 2019 Committee Memberships:
•
Compensation (Chair)
•
Audit
Education: Ms. Jones graduated Summa Cum Laude and holds a BSE in industrial and operations engineering from the University of Michigan. |
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Biographical Information Dana Jones has served as Chief Executive Officer and President of RealPage, Inc. since August 2021. She also serves as a current member of RealPage’s Board of Directors and has over two decades of experience leading and growing global enterprise software businesses. Prior to RealPage, Ms. Jones was the Chief Executive Officer of Sparta Systems, the market leader in digital enterprise quality management software for the life sciences space, from March 2018 until March 2021 when Sparta was acquired by Honeywell. She also served as a director of RealPage, Inc. (formerly Nasdaq: RP), from October 2019 to April 2021 when the company was acquired by Thoma Bravo. Prior to joining Sparta Systems in April 2018, Dana served as Chief Executive Officer of Active Network, the leader in activity and event management software, during 2016 and 2017. Before joining Active Network, Ms. Jones was Chief Marketing Officer and Senior Vice President of Products for Sabre Airline Solutions, a global provider of software to the airline industry, from 2012 to 2017. Prior to Sabre, Ms. Jones co-founded Noesis Energy and served as Executive Vice President of Product, Sales, Marketing, and Operations. Ms. Jones also serves on the board of directors of Zapata Computing, a leading enterprise software company for NISQ-based quantum applications. Value Ms. Jones Brings to our Board Ms. Jones is an accomplished software executive with decades of experience leading and growing cloud-based global enterprise software businesses. |
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JERRY JONES Independent Director Age 68 | Director since 2012 Committee Memberships:
•
Compensation
•
Nominating and Corporate Governance
Education: Mr. Jones is a 1980 graduate of the University of Arkansas School of Law and holds a bachelor’s degree in public administration from the University of Arkansas. |
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Biographical Information Mr. Jones is the Executive Vice President, Chief Ethics and Legal Officer of LiveRamp Holdings, Inc. (NYSE: RAMP), a software-as-a-service (SaaS) company that provides the identity platform for powering exceptional experiences. His responsibilities include oversight of its legal, privacy and security teams and various strategic initiatives, including the strategy and execution of mergers and alliances, as well as serving as a director of most wholly owned subsidiary companies. Prior to joining LiveRamp, which is the successor entity to Acxiom Corp., in September 2018, Mr. Jones was the Chief Ethics and Legal Officer at Acxiom since 1999, where he oversaw all legal and data ethics matters. Prior to joining Acxiom, Mr. Jones was a partner with the Rose Law Firm in Little Rock, Arkansas, where he specialized in problem solving and bu siness litigation for 19 years, representing a broad range of business interests. Value Mr. Jones Brings to our Board As the Chief Ethics and Legal Officer of a SaaS company, Mr. Jones has extensive experience with legal, privacy, and cybersecurity matters. He has also led the strategy and execution of mergers and alliances and international expansion efforts. |
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12 | 2024 Proxy Statement |
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ProPOsal 1 |
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MICHAEL A. KAUFMAN Chairman and Independent Director Age 52 | Director since 2014 Committee Memberships:
•
Compensation
•
Nominating and Corporate Governance (Chair)
Other Public Board Directorships:
•
Skyline Champion
•
Yatra Online, Inc.
Education: Mr. Kaufman holds a B.A. in Economics from the University of Chicago, where he also received his M.B.A. He also earned a law degree from Yale University. |
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Biographical Information Mr. Kaufman has served as the Chief Executive Officer of MAK Capital, an investment advisory firm based in New York, New York, since he founded the firm in 2002. He also serves as a director for Skyline Champion, Corp. (NYSE: SKY), Yatra Online, Inc. (Nasdaq: YTRA), Trailhead Biosystems, Inc. and Noveome Biotherapeutics, Inc. Value Mr. Kaufman Brings to our Board As Chief Executive Officer of MAK Capital, a significant stockholder of the Company, Mr. Kaufman is especially qualified to represent the interests of the Company’s stockholders as a director and chairman of the board. Additionally, Mr. Kaufman’s qualifications and experience include capital markets, investment strategy, and financial management. |
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MELVIN KEATING Independent Director Age 77 | Director since 2015 Committee Memberships:
•
Compensation
•
Nominating and Corporate Governance
Other Public Board Directorships:
•
MagnaChip Semiconductor Corporation
Education: Mr. Keating holds a B.A. from Rutgers University as well as both an M.S. in Accounting and an M.B.A. in Finance from The Wharton School of the University of Pennsylvania. |
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Biographical Information Mr. Keating has been a consultant, providing investment advice and other services to private and public companies and private equity firms since 2008. Mr. Keating also serves as a director of MagnaChip Semiconductor Corporation (NYSE: MX), a specialist in OLED panel technology and a designer/manufacturer of analog and mixed signal semiconductor platform solutions (since August 2016). Previously he was a director of Vitamin Shoppe Inc., a retailer of nutritional supplements, from April 2018 until it was taken private in December 2019, and Red Lion Hotels Corporation from July 2010 until June 2017, serving as Chairman of the Board from May 2013 to 2015. During the past five years, Mr. Keating also served on the boards of directors of the following public companies: SPS Commerce, Inc., a provider of cloud-based supply chain management solutions (from March 2018 to May 2019), and Harte Hanks Inc. a global marketing services firm (2017 until July 2020). Value Mr. Keating Brings to our Board Mr. Keating has substantial experience leading public companies in the technology and hospitality industries and is qualified in global operations, financial management and strategy, and capital markets. |
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2024 Proxy Statement | 13 |
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ProPOSAL 1 |
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JOHN MUTCH Independent Director Age 67 | Director since 2009 Committee Memberships:
•
Audit
•
Nominating and Corporate Governance
Other Public Board Directorships:
•
Aviat Networks, Inc.
Education: Mr. Mutch holds a B.S. in Economics from Cornell University and an M.B.A. from the University of Chicago. |
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Biographical Information Mr. Mutch has served as managing partner of MV Advisors LLC (“MV Advisors”), a strategic block investment firm that provides focused investment and strategic guidance to small and mid-cap technology companies, since founding the firm in December 2005. From December 2008 to January 2014, Mr. Mutch served as President, CEO and Chairman of the Board of Directors of BeyondTrust Software, a privately-held security software company. Mr. Mutch has served as Chairman of the board of directors of Aviat Networks, Inc. (Nasdaq: AVNW), a global provider of microwave networking solutions, since February 2015, and has served on the board of directors since January 2015. Previously, Mr. Mutch served on the board of directors of Maxwell Technologies, Inc. (formerly Nasdaq: MXWL), a manufacturer of energy storage and power delivery solutions for automotive, heavy transportation, renewable energy, backup power, wireless communications and industrial and consumer electronics applications, from April 2017 to May 2019, YuMe, Inc. (NYSE: YUME), a provider of digital video brand advertising solutions, from July 2017 to February 2018, at which time the company was acquired by RhythmOne PLC (LON: RTHM), a technology-enabled digital media company, and Mr. Mutch continued serving as a director on the RhythmOne PLC board of directors until January 2019. Value Ms. Mutch Brings to our Board As a former chief executive officer and board member of many technology companies, Mr. Mutch has extensive experience in the technology industry, restructuring, financial management and strategy, capital markets, sales management, and marketing. |
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RAMESH SRINIVASAN President and Chief Executive Officer, Director Age 64 | Director since 2017 Committee Memberships:
•
None
Education: Mr. Srinivasan holds a Post-Graduate Diploma in Management (MBA equivalent) from the Indian Institute of Management, Bangalore, India, and a degree in Engineering from the Indian Institute of Technology (Banaras Hindu University), Varanasi, India. |
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Biographical Information Mr. Srinivasan has been President and Chief Executive Officer of the Company since January 3, 2017. He previously served as CEO of Ooyala, a Silicon Valley based provider of a suite of technology offerings in the online video space, from January 2016 to November 2016. From March 2015 to November 2015, he was President and CEO of Innotrac Corp., an ecommerce fulfillment provider which merged with eBay Enterprise to form Radial Inc. in 2015. Prior to that, Mr. Srinivasan served as President and CEO of Bally Technologies Inc. (NYSE: BYI) from December 2012 to May 2014, and President and COO from April 2011 to December 2012; he started as Executive Vice President of Bally Systems in March 2005. Mr. Srinivasan was with Manhattan Associates from 1998 to 2005, where his last position was Executive Vice-President of Warehouse Management Systems. Value Mr. Srinivasan Brings to our Board Mr. Srinivasan has nearly three decades of hands-on enterprise software development, execution and senior technology management leadership and strategy expertise and accomplishments, including experience and expertise in driving performance at high growth technology companies and helping them scale their business profitably. |
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14 | 2024 Proxy Statement |
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ProPOsal 1 |
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Bo ard Diversity Matrix
The NASDAQ diversity matrix is set forth below as required under the listing requirements of NASDAQ.
To see our Board Diversity Matrix as of June 12, 2023, please see the proxy statement filed with the SEC on July 13, 2023.
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Board Diversity Matrix (As of July 15, 2024) |
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Total Number of Directors |
7 |
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Female |
Male |
Non-Binary |
Did Not Disclose Gender |
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Directors |
1 |
5 |
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1 |
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Number of Directors who identify in Any of the Categories Below: |
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African American or Black |
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Alaskan Native or Native American |
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Asian |
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1 |
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Hispanic or Latin |
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Native Hawaiian or Pacific Islander |
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White |
1 |
4 |
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Two or More Races or Ethnicities |
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LGBTQ+ |
— |
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Did Not Disclose Demographic Background |
1 |
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One of our directors also identifies as being of U.K. origin.
Vot e Required
Each of the nominees for election as directors will be elected if the number of votes cast “for” such nominee’s election exceeds the number of votes cast “against” such nominee’s election. Abstentions and broker non-votes will have no effect on the election of directors.
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2024 Proxy Statement | 15 |
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ProPOSAL 2 |
PRO POSAL 2
Approval of THE AGILYSYS, INC. 2024 EQUITY INCENTIVE PLAN
We are asking our shareholders to approve the Agilysys, Inc. 2024 Equity Incentive Plan (the “2024 Plan”) which is a comprehensive equity incentive compensation plan that provides for various types of equity‑based compensation, including incentive and nonqualified stock options, stock-settled appreciation rights (“SSARs”), restricted stock awards, restricted stock units (“RSUs”), performance share awards, cash awards and other equity-based awards. The purpose of the 2024 Plan is to enable us to attract and retain the types of employees, consultants and directors who will contribute to our long-range success; provide incentives that align the interests of our employees, consultants and directors with those of our shareholders; and promote the success of our business.
Upon the recommendation of the Compensation Committee, our Board of Directors unanimously approved the 2024 Plan on July 25, 2024 (the “Effective Date”), subject to shareholder approval. The full text of the 2024 Plan is attached as Appendix A to this proxy statement. NASDAQ listing standards require that we submit the 2024 Plan to our shareholders for approval. In addition, the Internal Revenue Code of 1986, as amended (the “Code”), requires that we obtain shareholder approval of the 2024 Plan in order to be able to issue incentive stock options under the 2024 Plan.
If the 2024 Plan is approved, the aggregate number of shares of common stock that may be issued pursuant to awards granted under the 2024 Plan will not exceed 3,000,000 shares, plus all remaining shares that were reserved under the Agilysys, Inc. 2020 Equity Incentive Plan, as amended and restated (the “2020 Plan”), and not subject to outstanding awards on the effective date of the 2024 Plan, which was 266,675 shares as of March 31, 2024 (for an aggregate of 3,266,675 shares that would be issuable under the 2024 Plan as of March 31, 2024).
If our shareholders do not approve the 2024 Plan, then the 2024 Plan will not become effective. If our shareholders approve the 2024 Plan, then the 2020 Plan will terminate as of the date of the Annual Meeting, and no awards will be granted under the 2020 Plan on or after the date of the Annual Meeting. All shares that were reserved under the 2020 Plan but not subject to outstanding awards on the effective date of the 2024 Plan will be rolled over into, and available for issuance under, the 2024 Plan. Whether the 2024 Plan is approved by our shareholders or not, each award granted under the 2020 Plan will continue to be subject to the terms and provisions applicable to such award under the applicable award agreement and the 2020 Plan.
Re asons to Vote for Proposal 2
We believe that our success depends, in large part, on our ability to maintain a competitive position by attracting, retaining and motivating key employees, consultants and directors with experience and ability. Our equity-based compensation programs play a critical role in attracting, retaining and motivating those key employees, consultants and directors and effectively aligning their compensation with shareholder interests. Each year, the Compensation Committee and our management review our overall compensation strategy and determine the allocations of cash and equity compensation in light of our pay for performance philosophy. As discussed more fully below, we are also committed to effectively managing our share reserves for equity compensation while minimizing shareholder dilution.
If our shareholders do not approve the 2024 Plan and we are unable to grant equity compensation in the future, we may need to consider other compensation alternatives, such as increasing cash compensation, which may not necessarily align employee and director compensation interests with the investment interests of our shareholders. Replacing equity awards with cash would also increase cash compensation expense and use cash that could be better utilized. We would be at a severe competitive disadvantage if we could not use equity-based awards covering a meaningful number of shares to recruit and retain key talent in this competitive market for human capital.
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16 | 2024 Proxy Statement |
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ProPOsal 2 |
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Re sponsible Features of the 2024 Plan
The 2024 Plan includes a number of provisions that are designed to protect our shareholders’ interests and to reflect corporate governance best practices, including:
Se lected Information Regarding Historical Share Usage under our Equity Compensation Programs
In developing our share request for the 2024 Plan and analyzing the impact of utilizing equity as a means of compensation on our shareholders, we considered both our “overhang” and our “burn rate”.
Overhang is a measure of potential dilution which we define as (A) the sum of (i) the total number of shares underlying SSARs awards, (ii) the total number of shares underlying unvested awards of restricted shares and performance shares, (iii) the total number of shares underlying unvested awards of restricted stock units (“RSUs”) and (iv) the total number of shares available for future award grants, (B) divided by the number of shares of common stock outstanding plus the amounts described in clause (A). As of March 31, 2024, under the 2020 Plan, there were 1,297,339 shares underlying SSARs awards, 436,177 shares of unvested restricted stock (including unvested restricted stock subject to performance-based vesting), 56,547 shares underlying unvested RSUs and 266,675 shares available for future awards. As of March 31, 2024, there were 27,376,862 shares of common stock outstanding. Accordingly, our overhang at March 31, 2024 was 7.5%. For purposes of this calculation, we counted the shares subject to our performance-based awards using the target number of shares of common stock issuable under such awards. If the 3,000,000 shares proposed to be authorized for grant under the 2024 Plan are included in the calculation, our overhang on March 31, 2024 would have been 18.5%.
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2024 Proxy Statement | 17 |
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ProPOSAL 2 |
Burn rate is a measure of the potential dilutive impact of our equity award program which we calculate by dividing the number of shares subject to equity awards granted during the fiscal year by the basic weighted average number of shares outstanding. Set forth below is a table that reflects our gross burn rate for the 2024, 2023 and 2022 fiscal years.
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Fiscal Year |
Awards Granted (A) |
Basic Weighted Average Number of Common Shares Outstanding |
Gross Burn Rate (B) |
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2024 |
199,138 |
25,668,455 |
0.78% |
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2023 |
410,617 |
24,694,045 |
1.66% |
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2022 |
123,543 |
24,356,645 |
0.51% |
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Three-Year Average |
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0.98% |
The following table includes information regarding the outstanding awards and shares available for future issuance under the 2020 Plan as of March 31, 2024 (as if the 2024 Plan is not approved under this proposal):
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2020 Plan (1) |
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Total shares underlying SSARs awards (including SSARs awards subject to performance-based vesting) |
1,297,339 |
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Total unearned shares underlying SSARs awards subject to performance vesting outstanding |
— |
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Total earned shares underlying SSARs awards subject to performance vesting outstanding |
286,909 |
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Weighted average exercise price of outstanding SSARs awards |
27.63 |
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Weighted average remaining contractual life of outstanding SSARs awards |
2.0 |
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Total shares of unvested restricted stock (including unvested restricted stock subject to performance-based vesting) |
436,177 |
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Total shares of unearned restricted stock subject to performance-based vesting outstanding |
— |
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Total shares of earned restricted stock subject to performance-based vesting outstanding |
35,598 |
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Total shares underlying unvested restricted stock units |
56,547 |
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Total shares currently available for grant (2) |
266,675 |
From March 31, 2024 and through the date of the Annual Meeting, the Company may have granted or may grant certain additional equity awards under the 2020 Plan; however, the number of authorized shares under the new 2024 Plan will be proportionately reduced for any awards granted under the 2020 Plan between March 31, 2024 through the date of the Annual Meeting at which the 2024 Plan is approved by shareholders. If the 2024 Plan is not approved by our shareholders, equity awards will continue to be available for issuance under the 2020 Plan until the 2020 Plan’s termination date, June 2, 2030.
In determining the number of shares to request for approval under the 2024 Plan, the Compensation Committee directed its compensation consultant to review current market practices in the use of equity compensation. The Compensation Committee also considered other material factors, including our recent share usage, anticipated hiring needs in the next three fiscal years, the potential dilution of the 2024 Plan (as noted in the figures above), our current stock price, recent experiences with respect to the value of equity awards expected by new hire candidates, and general guidance from the major proxy advisory firms that our shareholders might consider in evaluating the 2024 Plan. After reviewing this information, the Compensation Committee decided to request that our shareholders approve an initial share reserve of 3,000,000 shares for issuance under the 2024 Plan. We currently anticipate that the 2024 Plan share reserve will provide for grants in the ordinary course of business for up to 5 years. However, the proposed share reserve could last for a shorter or longer period of time, such as might be the case if we experience unexpected opportunities to grow the business beyond our current annual operating
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18 | 2024 Proxy Statement |
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ProPOsal 2 |
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plan, if equity compensation practices within our compensation peer group change and require us to alter our current grant practices to remain competitive, or if our stock price changes materially.
Su mmary of the 2024 Plan
The description of the 2024 Plan set forth below is qualified in its entirety by reference to the applicable provisions of the plan document, which is attached as Appendix A to this proxy statement.
If the 2024 Plan is approved, the aggregate number of shares of common stock that may be issued pursuant to awards granted under the 2024 Plan will not exceed 3,000,000 shares, plus all remaining shares that were reserved under the 2020 Plan but not subject to outstanding awards on the effective date of the 2024 Plan, which was 266,675 shares as of March 31, 2024 (for an aggregate of 3,266,675 shares that would be issuable under the 2024 Plan as of March 31, 2024). The number of shares of common stock that may be issued pursuant to incentive stock options under the 2024 Plan, if approved, will be limited to 3,000,000 shares. Shares of common stock available for distribution under the 2024 Plan may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares reacquired by the Company in any manner. The closing price of our common stock on NASDAQ on July 15, 2024 was $107.77.
Any shares of common stock subject to an award that expires or is canceled, forfeited, or terminated without issuance of the full number of shares of common stock to which the award related will again be available for issuance under the 2024 Plan. Shares of common stock subject to an award shall not again be made available for issuance or delivery under the 2024 Plan if such shares are (a) shares that are tendered or withheld to satisfy tax withholding obligations with respect to an award or to pay the exercise price of an option; (b) shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right on exercise thereof; or (iii) shares purchased on the open market with cash proceeds from the exercise of options.
Eli gibility
Participation in the 2024 Plan is limited to employees, directors and consultants of the Company and its affiliated entities or those individuals that are reasonably expected to become employees, directors and consultants of the Company and its affiliated entities following the date of grant of an Award. As of July 15, 2024, there were six non-employee directors, approximately 2,000 employees, and approximately 2 consultants of the Company that would be eligible for grants under the 2024 Plan. As a result, our executive officers and directors have an interest in this proposal because they are eligible to participate in the 2024 Plan.
Substi tute Awards
Awards may, in the sole discretion of the plan administrator, be granted under the 2024 Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or with which the Company combines (“Substitute Awards”). Substitute Awards shall not be counted against the share reserve, provided that Substitute Awards issued in connection with the assumption of, or in substitution for, outstanding options intended to qualify as incentive stock options shall be counted against the number of shares that can be issued as incentive stock options. Subject to applicable stock exchange requirements, available shares under a shareholder-approved plan of an entity directly or indirectly acquired by the Company or with which the Company combines (as appropriately adjusted to reflect such acquisition or transaction) may be used for awards under the 2024 Plan and shall not count toward the total share reserve.
Mi nimum Vesting Requirements
In general, no award under the 2024 Plan may vest, in the ordinary course, prior to the first anniversary of the date of grant of the award, subject to certain limited exceptions. The one-year minimum vesting requirement does not apply to the substitute awards described in the immediately preceding section. The minimum vesting requirements
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2024 Proxy Statement | 19 |
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ProPOSAL 2 |
do not limit the Company’s ability to grant awards that provide for accelerated vesting in the event of termination of employment or service with the Company and affiliated entities.
Admi nistration
The Board has delegated authority to administer the 2024 Plan to the Compensation Committee. Subject to the terms of the 2024 Plan, the Compensation Committee, as plan administrator, has full authority to determine participants and the type, terms and conditions and number of shares subject to awards and to construe and interpret the 2024 Plan and awards. The Compensation Committee may delegate administration of the 2024 Plan to a committee or committees of one or more members of the Board; provided that if the Board intends to comply with the exemption requirements of Rule 16b-3 with respect to awards granted to any insider subject to Section 16 of the Exchange Act, then administration of the Plan with respect to such awards may only be delegated to two or more Non-Employee Directors.
Under the 2024 Plan, there is no repricing of options or SSARs and no cash buyout of underwater options and SSARs without stockholder approval, except for equitable adjustments in connection with a change in control.
Typ es of Awards Available for Grant under the 2024 Plan
The plan administrator has the authority to grant the following types of awards under the 2024 Plan. All awards shall be evidenced by an award agreement and shall be subject to such conditions not inconsistent with the 2024 Plan as may be reflected in the award agreement.
The plan administrator may permit an option exercise price to be paid in cash or any form of legal consideration specified by the plan administrator, including by the delivery of previously-owned shares of common stock, through a cashless exercise executed through a broker or by having a number of shares of common stock otherwise issuable at the time of exercise withheld. The maximum term of any option is ten years.
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20 | 2024 Proxy Statement |
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ProPOsal 2 |
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No shares of common stock shall be issued at the time an RSU is granted, and the Company will not be required to set aside funds for the payment of any such award. The plan administrator may also grant RSUs with a deferral feature (“Deferred Stock Units”), whereby settlement of the RSUs is deferred beyond the vesting date until the occurrence of a future payment date or event set forth in an award agreement. At the discretion of the plan administrator, each RSU or Deferred Stock Unit (representing one share of common stock) may be credited with dividend equivalents in an amount equal to the cash and stock dividends paid by the Company in respect of one share of common stock. Dividend equivalents shall be withheld by the Company and credited to the participant’s account, and interest may be credited on the amount of cash dividend equivalents credited to the participant’s account at a rate and subject to such terms as determined by the plan administrator. Dividend equivalents credited to a participant’s account and attributable to any particular RSU or Deferred Stock Unit (and earnings thereon, if applicable) shall be distributed in cash or, at the discretion of the plan administrator, in shares of common stock having a fair market value (as determined under the 2024 Plan) equal to the amount of such dividend equivalents and earnings, if applicable, to the participant upon settlement of such RSU or Deferred Stock Unit and, if such RSU or Deferred Stock Unit is forfeited, the participant shall have no right to such dividend equivalents.
Defe rrals
The plan administrator may establish one or more programs under the 2024 Plan to permit selected participants the opportunity to elect to defer receipt of consideration upon exercise of an award, satisfaction of performance criteria, or other event that absent the election would entitle the participant to payment or receipt of shares of common stock or other consideration under an award. The plan administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the plan administrator deems advisable for the administration of any such deferral program.
Recapit alizations and Reorganizations
The number of shares of common stock reserved for issuance in connection with the grant or settlement of awards or to which an award is subject, performance goals and the exercise price of each option and stock appreciation right are subject to, adjustment in the event of any recapitalization of the Company, changes in the capitalization of the Company or similar event effected without receipt of consideration by the Company.
Cha nge in Control
The 2024 Plan provides that, except to the extent an award agreement provides for a different treatment (in which case the award agreement shall govern), all then-outstanding awards held by a participant and not previously vested shall become 100% vested in the event of a change in control of the Company (as defined in the 2024 Plan);
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2024 Proxy Statement | 21 |
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ProPOSAL 2 |
provided that if the achievement of the performance goals applicable to an award have not been measured, then such performance goals shall be deemed satisfied as if target performance was achieved.
Tran sferability
Awards are not generally transferable or assignable, unless the plan administrator or applicable award agreement provides otherwise.
Forf eiture and Clawbacks
Awards will be subject to forfeiture, cancellation, reimbursement or recoupment to the extent provided in the Agilysys, Inc. Incentive Compensation Recovery Policy or any other applicable clawback policy adopted by the Company or to the extent otherwise required pursuant to applicable law.
Ame ndment or Termination
The 2024 Plan may be amended by the Board of Directors, but shareholder approval for any amendment shall be required to the extent shareholder approval is necessary to satisfy applicable law or stock exchange rules. The plan administrator may amend outstanding awards subject to the terms of the 2024 Plan but in general may not take away a participant’s rights without the participant’s consent. The 2024 Plan will terminate automatically on July 25, 2034, the tenth anniversary of the Effective Date.
Federal Inc ome Tax Consequences of Awards under the 2024 Plan
The following discussion outlines generally the federal income tax consequences of awards that may be granted under the 2024 Plan. Individual circumstances may vary and each participant should rely on his or her own tax counsel for advice regarding federal income tax treatment under the plan. To the extent that a participant recognizes ordinary income in the circumstances described below, the Company will generally be entitled to a corresponding tax deduction. If a participant is our employee or an employee of one of our affiliates, any income recognized will be subject to employment and withholding taxes.
Non-Qualified Options. A participant will generally not recognize income upon the grant of an option or at any time prior to the exercise of the option or a portion thereof. At the time the participant exercises a non-qualified option or portion thereof, he or she will recognize compensation taxable as ordinary income in an amount equal to the excess of the fair market value of the common stock on the date the option is exercised over the price paid for the common stock. Depending upon the period the shares of common stock are held after exercise, the sale or other taxable disposition of shares acquired through the exercise of a non-qualified option generally will result in a short- or long- term capital gain or loss equal to the difference between the amount realized on such disposition and the fair market value of such shares when the non-qualified option was exercised.
Incentive Stock Options. A participant who exercises an incentive stock option will generally not be taxed upon the grant of the option or at the time he or she exercises the option or a portion thereof. Instead, he or she will be taxed at the time he or she sells the common stock purchased pursuant to the option on the difference between the price he or she paid for the stock and the amount for which he or she sells the stock. If the participant does not sell the stock prior to two years from the date of grant of the option and one year from the date the stock is transferred to him or her, the participant will be entitled to long-term capital gain or loss treatment based upon the difference between the amount realized on the disposition and the aggregate exercise price and the Company will not get a corresponding deduction. If the participant sells the stock at a gain prior to that time, the difference between the amount the participant paid for the stock and the lesser of the fair market value on the date of exercise or the amount for which the stock is sold, will be taxed as ordinary income; if the stock is sold for an amount in excess of the fair market value on the date of exercise, the excess amount is taxed as capital gain. If the participant sells the stock for less than the amount he or she paid for the stock prior to the one- or two-year periods indicated, no amount will be taxed as ordinary income and the loss will be taxed as a capital loss. Exercise of an incentive option may subject a participant to, or increase a participant’s liability for, the alternative minimum tax.
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22 | 2024 Proxy Statement |
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ProPOsal 2 |
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Restricted Stock. A participant will generally not be taxed upon the grant of a restricted stock award if such award is not transferable by the participant or is subject to a “substantial risk of forfeiture,” as defined in the Code. However, when the shares of common stock that are subject to the stock award are transferable by the participant or are no longer subject to a substantial risk of forfeiture, the participant will recognize compensation taxable as ordinary income in an amount equal to the fair market value of the stock subject to the stock award on such date, less any amount paid for such stock, and the Company will then be entitled to a corresponding deduction. However, if a participant so elects at the time of receipt of a stock award in accordance with Section 83(b) of the Code, he or she may include the fair market value of the stock subject to the stock award, less any amount paid for such stock, in income at that time. The value of any dividends, if any, to which a participant may become entitled upon the lapse of the substantial risk or forfeiture or transferability of the corresponding share of restricted stock will be taxed as ordinary compensation income equal at that time.
Restricted Stock Units. A participant will generally not be taxed upon the grant of an award of RSUs. The participant generally will be subject to tax at ordinary income rates on the fair market value of unrestricted common shares on the date that such shares vest and are transferred to the participant under the RSUs (reduced by any amount paid by the participant for such RSUs), and the capital gains/loss holding period for such shares will also commence on such date. The value of any dividend equivalents, if any, paid upon the settlement of RSUs will be taxed as ordinary compensation income equal at the time of settlement.
Other Stock-Based Awards. A participant will generally not recognize income upon the grant of any other stock-based award. Generally, at the time a participant receives payment under any other stock-based award, he or she will recognize compensation taxable as ordinary income in an amount equal to the cash or the fair market value of the common stock received.
Section 280G. Sections 280G and 4999 of the Code provide that executive officers and directors, shareholders who hold significant equity interests, and certain other service providers may be subject to significant additional taxes if they receive payments or benefits that exceed certain prescribed limits in connection with a change of control of a company, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax.
Section 409A. Section 409A of the Code imposes excise taxes and may result in early income inclusion for certain types of deferred compensation that do not comply with Section 409A. The Company attempts in good faith to structure awards under the 2024 Plan so that such awards either conform with the requirements of, or qualify for an exemption under, Section 409A. However, neither the Company nor the plan administrator has any obligation to take any action to prevent the assessment of any additional tax or penalty on any participant under Section 409A of the Code and neither the Company nor the plan administrator will have any liability to any participant for such tax or penalty.
New Plan Benefits under the 2024 Plan
As of the date of this Proxy Statement, no awards have been granted under the 2024 Plan. Awards under the 2024 Plan may be made at the discretion of the Compensation Committee, and any awards that may be made and any benefits and amounts that may be received or allocated under the 2024 Plan in the future are not determinable at this time. As such, the future plan benefits, as well as information regarding the number of awards that may be received under the 2024 Plan in the future, have been omitted.
Eq uity Compensation Plan Information
For additional information regarding our equity plans, please see “Equity Compensation Plan Information” on page 46 .
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PROPOSAL 2: Recommendation of the Board of Directors The board recommends that stockholders vote “for” the approval of the Agilysys, Inc. 2024 Equity Incentive Plan. Proxy cards received by the company will be voted "FOR" proposal 2 unless the stockholder specifies otherwise on the proxy card. |
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2024 Proxy Statement | 23 |
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ProPOSAL 2 |
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24 | 2024 Proxy Statement |
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BENEFICIAL OWNERSHIP OF COMMON SHARES |
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The following table shows the number of common shares beneficially owned as of July 15, 2024, by (i) each current director; (ii) our Named Executive Officers; (iii) all directors and executive officers as a group; and (iv) each person who is known by us to beneficially own more than 5% of our common shares. Percent of common shares are calculated based on 27,881,686 shares of common stock outstanding on July 15, 2024. Except as otherwise specified, the address for each below named beneficial owner is: c/o Agilysys, Inc., 3655 Brookside Parkway, Suite 300, Alpharetta, Georgia 30022.
|
Name |
Common
|
Common
|
Restricted
|
Total
|
Percent
|
||||||||||
|
Directors and Nominees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald Colvin |
|
29,624 |
|
|
— |
|
|
968 |
|
|
30,592 |
|
|
* |
|
|
Dana Jones |
|
15,698 |
|
|
— |
|
|
968 |
|
|
16,666 |
|
|
* |
|
|
Jerry Jones |
|
40,982 |
|
|
— |
|
|
968 |
|
|
41,950 |
|
|
* |
|
|
Michael A. Kaufman |
|
1,202,310 |
(3) |
|
— |
|
|
968 |
|
|
1,203,278 |
|
|
4.3 |
|
|
Melvin Keating |
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44,039 |
|
|
— |
|
|
968 |
|
|
45,007 |
|
|
* |
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|
John Mutch |
|
36,358 |
|
|
— |
|
|
968 |
|
|
37,326 |
|
|
* |
|
|
Named Executive Officers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ramesh Srinivasan |
|
848,367 |
(4) |
|
— |
|
|
56,547 |
|
|
904,914 |
|
|
3.2 |
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|
William David ("Dave") Wood |
|
38,126 |
|
|
2,528 |
|
|
11,942 |
|
|
52,596 |
|
|
* |
|
|
Don DeMarinis |
|
5,038 |
|
|
— |
|
|
3,600 |
|
|
8,638 |
|
|
* |
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Sridhar Laveti |
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40,560 |
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|
83,675 |
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|
3,852 |
|
|
128,087 |
|
|
* |
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Sethuram Shivashankar |
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18,161 |
|
|
— |
|
|
8,214 |
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26,375 |
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|
* |
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All current directors and executive officers (18 persons) |
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5,038,746 |
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221,687 |
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115,382 |
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5,375,815 |
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19.3 |
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Other Beneficial Owners |
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|
|
|
|
|
|
|
|
|
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|
|
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BlackRock, Inc. 55 East 52nd Street New York, New York 10055 |
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3,237,416 |
(5) |
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|
|
|
|
|
|
|
|
|
11.6 |
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|
The Vanguard Group, Inc.
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|
1,759,378 |
(6) |
|
|
|
|
|
|
|
|
|
|
6.3 |
|
* Less than 1%.
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2024 Proxy Statement | 25 |
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BENEFICIAL OWNERSHIP OF COMMON SHARES |
SEC TION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires the Company’s directors and certain of its executive officers and persons who beneficially own more than 10% of the Company’s common shares to file reports of and changes in ownership with the SEC. Based solely on the Company’s review of copies of SEC filings it has received or filed, the Company believes that each of its directors, executive officers, and beneficial owners of more than 10% of the shares satisfied the Section 16(a) filing requirements during fiscal year 2024, except for the late reporting of one transaction on a Form 4 by Michael Kaufman and affiliated entities.
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26 | 2024 Proxy Statement |
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COMPENSATION DISCUSSION AND ANALYSIS |
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COMPENS ATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (the “CDA”) describes our executive compensation philosophy and programs for our Named Executive Officers during fiscal year 2024, being the year beginning April 1, 2023, and continuing through March 31, 2024. Compensation arrangements with our Named Executive Officers are governed by the Compensation Committee of our board of directors.
Our Named Executive Officers in fiscal year 2024, which consists of our Chief Executive Officer (CEO), our Chief Financial Officer (CFO), and our three other most highly compensated officers, are listed below:
* Mr. DeMarinis will retire effective as of August 30, 2024. Before such date, he will continue to serve in his current role until his successor commences employment with the Company, at which point he will remain in a transitional role with the Company until his retirement date.
Comp ensation Focus for Fiscal Year 2024
In determining compensation for our Named Executive Officers in fiscal year 2024, the Committee was primarily focused on:
The compensation arrangements with our Named Executive Officers for fiscal year 2024 were similar to the compensation arrangements for Named Executive Officers in prior years. Our CEO’s compensation includes base salary and an annual incentive based on company financial performance that is settled in shares of common stock. The compensation for our other Named Executive Officers includes base salary, annual cash incentives based on company financial performance, and long-term equity incentives.
At the 2023 Annual Meeting, approximately 99% of the votes cast approved the Company’s executive compensation program for its Named Executive Officers. The Compensation Committee believes our current program adequately and effectively addresses shareholder concerns, promotes the Company’s business strategy and aligns pay with performance and shareholder value. Consequently, the Compensation Committee continued to link executive pay to performance and maintained annual incentive opportunities for the Named Executive Officers at similar levels as fiscal year 2023. Annual incentive performance targets for fiscal year 2024 were focused on improvements over fiscal year 2023 results. The annual incentive for our CEO, while based on the same company financial measures as the annual incentives for the other Named Executive Officers, was settled in shares of common stock to further align the CEO with stockholder interests and to emphasize long term value creation.
Long-term equity incentives for the Named Executive Officers other than the CEO in fiscal year 2024 consisted of grants of shares of restricted stock that vest over three years.
Compe nsation Philosophy, Objectives, and Structure
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2024 Proxy Statement | 27 |
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COMPENSATION DISCUSSION AND ANALYSIS |
Our Compensation Committee adopted its pay philosophy, objectives, and structure for Named Executive Officers to achieve financial and business goals and create long-term stockholder value.
Compensation Philosophy and Objectives . For fiscal year 2024, our Compensation Committee’s pay philosophy was to emphasize performance-based compensation tied to annual goals in the form of annual cash incentives and long-term performance-based compensation in the form of long-term equity incentives. The Compensation Committee’s objective was to establish an overall compensation package to:
Compensation Structure . Our compensation structure is comprised of:
Base Salary — Base salary provides fixed pay levels aimed to attract and retain executive talent. Variations in salary levels among Named Executive Officers are based on each executive’s roles and responsibilities, experience, functional expertise, relation to benchmark pay levels, individual performance, and changes in salaries in the overall general market and for all employees of the Company. Salaries are reviewed annually by our Compensation Committee, and changes in salary are based on these factors and input from our CEO, other than for himself. None of the factors are weighted according to any specific formula. Salaries for new executive officers are generally based on the Compensation Committee’s discretion and judgment but may be based on any of the above-mentioned relevant factors.
Annual Incentives — Annual incentives provide variable pay for achievement of the Company’s financial goals, with target incentives set as a percentage of salary, and are designed to reward achievement of goals with an annual cash payment. At the end of each fiscal year, the Compensation Committee considers the aggregate compensation of each Named Executive Officer and may adjust the annual incentive payment otherwise earned if the aggregate compensation is deemed deficient or excessive in the opinion and discretion of the Compensation Committee. Annual incentives are paid in cash except for our CEO, and his annual incentives are settled in shares of common stock.
Long-Term Incentives — Long-term incentives are variable, equity incentives designed to drive improvements in performance that build wealth and create long-term stockholder value by tying the value of earned incentives to the long-term performance of our common shares. For Named Executive Officers other than the CEO, target long-term incentives are also set as a percentage of salary.
Compens ation Key Considerations
Annual Goal Setting . Annual goals for our Named Executive Officers may be tied to our financial, strategic, and operational goals and may include business specific financial targets relating to our goals. For fiscal year 2024, the Compensation Committee continued to link annual incentive goals to financial targets emphasizing both growth and profitability. Annual incentives were based on revenue growth, but payment was conditioned upon the achievement of a minimum adjusted EBITDA as a percentage of revenue.
Variable Pay at Risk . Our compensation philosophy drives the provision of greater at-risk pay to our Named Executive Officers, and variable pay at risk comprised between 50% and 64% of target annual compensation for the Named Executive Officers. Our Named Executive Officers have significant opportunities for long-term, equity-based incentive compensation, as our philosophy is to tie a significant portion of compensation to the long-term performance of our common shares. Thus, emphasis is placed on long-term stockholder value creation, thereby we believe minimizing excessive risk taking by our executives.
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28 | 2024 Proxy Statement |
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COMPENSATION DISCUSSION AND ANALYSIS |
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Compensation Consultants and Competitive Market Assessments . The Compensation Committee did not engage a compensation consultant and did not rely on any market assessment of compensation in setting compensation for fiscal year 2024.
Fisc al Year 2024 Compensation
Base Salary.
For fiscal year 2024, base salary comprised between 36% and 50% of total target compensation for the Named Executive Officers. Prior to fiscal year 2024, the base salaries of the Named Executive Officers had remained relatively unchanged since fiscal year 2018 or the later date of their becoming an executive officer.
When considering base salaries for the Named Executive Officers for fiscal year 2024, the Compensation Committee reviewed market compensation surveys and considered other material factors, including their recent experiences hiring and retaining employees, our financial and operating performance, and our share price performance and the recommendations of Mr. Srinivasan with respect to the Named Executive Officers other than himself. Based on their review, the Committee believed that increases in the base salaries of most of our executive officers, including all the Named Executive Officers other than Mr. Srinivasan, were appropriate to remain aligned with the Committee’s philosophies and goals. Accordingly, the Committee approved increases in base salaries of between 10% and 24% for each of the Named Executive Officers other than Mr. Srinivasan. Mr. Srinivasan received no increase to base salary for fiscal year 2024.
|
Officer |
FY23 Base Salary |
Increase |
FY24 Base Salary |
|
Ramesh Srinivasan |
600,000 |
0% |
600,000 |
|
Dave Wood |
275,000 |
13% |
310,000 |
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Don DeMarinis |
250,000 |
10% |
275,000 |
|
Sridhar Laveti |
260,000 |
15% |
300,000 |
|
Sethuram Shivashankar |
250,000 |
24% |
310,000 |
Annual Incentives.
Annual Incentive Targets . The Compensation Committee set fiscal year 2024 annual incentive goals at the beginning of the fiscal year. As previously discussed, the Committee linked the annual incentive goals of the Named Executive Officers to revenue and Adjusted EBITDA. All the Named Executive Officers were subject to the same annual incentive structure:
|
|
|
|
|
Threshold |
|
Target |
|
Maximum |
||||||
|
Component |
|
Weighting
|
|
Amount |
|
Payout (% of base salary) |
|
Amount |
|
Payout (% of base salary) |
|
Amount |
|
Payout (% of base salary) |
|
Revenue |
|
100 |
|
$225M |
|
20-50% (1) |
|
$235M |
|
50-100% (2) |
|
$250M |
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65-150% (3) |
Under the annual incentive plan, payouts are scaled for achievement of the revenue goal that falls between the threshold level and the target level and between the target level and the maximum level. If the Adjusted EBITDA condition was not achieved, then the annual incentives would not be earned.
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2024 Proxy Statement | 29 |
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COMPENSATION DISCUSSION AND ANALYSIS |
For fiscal year 2024, the Committee continued to believe that revenue growth was the measure most accretive to stockholder value. The Committee imposed the Adjusted EBITDA condition in order to encourage disciplined management of Company expenses and profitable growth.
The annual net revenue target represented a 19% increase over actual fiscal year 2023 net revenue, which the Compensation Committee believed required performance that was reasonably difficult and demonstrated sufficient goal rigor.
Annual Incentive Results . Total net revenue increased 19.9% to a record $237.5 million in fiscal 2024, compared to total net revenue of $198.1 million in fiscal year 2023. Adjusted EBITDA was a record $37.1 million, or 15.6% of net revenue, in fiscal year 2024, compared to $30.3 million, or 15.3% of net revenue, in fiscal year 2023. As a result, the Adjusted EBITDA condition was attained, and the net revenue target was exceeded by 5%. Accordingly, the Compensation Committee certified 105% achievement of annual incentive targets.
|
Component |
|
Result |
Target |
|
Revenue |
|
$237.5M |
$235.0M |
|
Adjusted EBITDA |
|
15.6% |
14.0% |
CEO Annual Incentive . Mr. Srinivasan was eligible for an annual incentive for fiscal year 2024 based on the Company financial performance metrics described above, with any such earned incentive to be settled in shares of common stock. Pursuant to both his prior employment agreement and his amended employment agreement, Mr. Srinivasan’s target annual incentive for fiscal year 2024 was set at 100% of his base salary, or $600,000, with a maximum potential incentive of $900,000 (150% of his base salary) and a threshold potential incentive of $300,000 (50% of his base salary).
Based on the fiscal year 2024 results discussed above, Mr. Srinivasan was awarded 105%, or $630,000, of his annual incentive target. Accordingly, the Compensation Committee granted Mr. Srinivasan 6,098 shares of common stock, being the number of shares having an approximate value of $630,000 based on the closing price of the Company’s common stock on May 21, 2024, the date that the Committee made its determination.
Annual Incentives for the Other Named Executive Officers . Fiscal year 2024 target annual incentives for the other Named Executive Officers other than Mr. DeMarinis, were set as 50% of the executive’s base salary. Mr. DeMarinis’ annual incentive was set at approximately 55% of his base salary, and he was also eligible for an additional annual sales-related incentives of $150,000 at target due to his role as head of our Americas and EMEA Sales teams.
Annual incentives comprised 18% to 39% of total fiscal year 2024 target compensation for these Named Executive Officers.
|
Officer |
|
Target Annual
|
|
Target Annual
|
|
Aggregate Target
|
|
Target Annual
|
|
Dave Wood |
|
50% |
|
— |
|
155,000 |
|
18% |
|
Don DeMarinis |
|
55% |
|
55% |
|
300,000 |
|
39% |
|
Sridhar Laveti |
|
50% |
|
— |
|
150,000 |
|
23% |
|
Sethuram Shivashankar |
|
50% |
|
— |
|
155,000 |
|
22% |
Additional detail about target and maximum incentives are disclosed in the Grants of Plan-Based Awards for Fiscal Year 2024 table below.
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30 | 2024 Proxy Statement |
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COMPENSATION DISCUSSION AND ANALYSIS |
|
Based on the fiscal year 2024 results discussed above, each of the Named Executive Officers were awarded 105% of their target annual incentives subject to the annual incentive plan described above. Mr. DeMarinis earned an additional $141,103 of his target $150,000 sales incentives (94.1%) based on the net gross profit of eligible sales.
|
Officer |
|
Annual Incentive
|
|
Achievement
|
|
Annual Incentive
|
|
Annual Sales
|
|
Achievement of
|
|
Annual Sales
|
|
Total Annual
|
|
Dave Wood |
|
155,000 |
|
105% |
|
162,800 |
|
— |
|
— |
|
— |
|
162,800 |
|
Don DeMarinis |
|
150,000 |
|
105% |
|
157,500 |
|
150,000 |
|
94% |
|
141,103 |
|
298,603 |
|
Sridhar Laveti |
|
150,000 |
|
105% |
|
157,500 |
|
— |
|
— |
|
— |
|
157,500 |
|
Sethuram Shivashankar |
|
155,000 |
|
105% |
|
162,800 |
|
— |
|
— |
|
— |
|
162,800 |
Long-Term Incentives.
Pursuant to his amended employment agreement, Mr. Srinivasan received grants in March 2023 of time-vesting and performance vesting restricted stock units (RSUs) with vesting and performance periods of three years. Consistent with its prior practices for Mr. Srinivasan, the Committee intended and in fiscal year 2024 continued to believe that these awards meet its goals of retention and alignment with stockholder interests for Mr. Srinivasan, and the Committee did not provide any additional long-term incentive to Mr. Srinivasan in fiscal year 2024.
With respect to the other Named Executive Officers, for fiscal year 2024, the Committee provided long-term equity awards to each of these Named Executive Officers in amounts that it believed further the goals of retention and alignment with stockholder interests.
In setting the long-term incentive awards for these Named Executive Officers, the Committee received input and recommendations from Mr. Srinivasan. The Committee granted long-term equity awards to the Named Executive Officers and other key employees of the Company in November 2023. The Committee determined the level of awards for each Named Executive Officer based on a determination, with the advice and recommendations of Mr. Srinivasan, of the amount that furthered its goals of retention and alignment with stockholder interests with respect to each Named Executive Officer. The long-term equity incentive awards to these Named Executive Officers comprised between 25% and 45% of each executive’s total fiscal year 2024 target compensation. Each of the awards were comprised of restricted shares that vest in equal annual amounts over three years beginning on the first anniversary of the date of grant.
|
Officer |
|
LTI Value
|
|
Shares Subject
|
|
Dave Wood |
|
387,475 |
|
4,265 |
|
Don DeMarinis |
|
192,511 |
|
2,119 |
|
Sridhar Laveti |
|
210,045 |
|
2,312 |
|
Sethuram Shivashankar |
|
248,021 |
|
2,730 |
* The awards were based on the closing price of our common stock on November 15, 2023, the date the Committee granted the awards, which was $90.85 per share.
The Committee’s focus with long-term incentive awards has been to link compensation directly to stockholder gains. In addition, the Committee believed the vesting schedule for the awards bolsters retention over the three-year vesting period.
Additional Compensation – Executive Benefits . We provide executive benefits to our Named Executive Officers including additional life and long-term disability insurance plans. Executive benefits are further described in the Summary Compensation Table. We believe these benefits enhance the competitiveness of our overall executive compensation package. We have, however, limited executive benefits offered to reduce compensation costs.
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|
2024 Proxy Statement | 31 |
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|
COMPENSATION DISCUSSION AND ANALYSIS |
Additionally, welfare benefits offered to our Named Executive Officers are the same level of benefits offered to all Company employees.
Emplo yment Agreements and Change of Control
The material termination and change of control provisions of various agreements are summarized below for each Named Executive Officer and are covered in more detail in the Termination and Change of Control table and accompanying discussion.
Employment Agreements . The Company has entered into employment agreements with each of the Named Executive Officers.
In accordance with his amended employment agreement, Mr. Srinivasan will serve as CEO and President for an additional three-year initial term beginning on March 10, 2024. The term of employment will automatically extend for successive periods of one year unless either the Company or Mr. Srinivasan provides written notice of non-renewal at least 90 days before the end of the then-current employment term. If the employment agreement is terminated by the Company without cause or by Mr. Srinivasan for good reason, then subject to his execution of a release of claims, Mr. Srinivasan will be entitled to receive severance equal to two years’ then-current base salary and two times the value of his target annual bonus performance shares, which will be paid during regular pay intervals over the course of two years. In addition, he will also receive (a) a lump sum payment in cash, on the 60th day after the termination date, equal to the total after-tax premiums required to pay for 24 months of COBRA continuation coverage under the Company’s medical, dental and vision insurance plans; (b) a lump sum payment in cash of his pro-rated bonus for the year of termination based on actual performance with no negative discretion by the Board; and (c) twelve (12) months of accelerated vesting of all equity compensation awards that are subject to time or service-based vesting and were unvested and outstanding on the termination date. If such termination occurs within three months before or 24 months after a change in control, Mr. Srinivasan will receive two times the sum of his then-current base salary and target annual bonus, 48 months of COBRA continuation coverage under the Company’s medical, dental and vision insurance plans and 100% release of any post-closing restrictions related to equity awards that were deemed vested as a result of the change of control. In addition, upon any termination of employment, Mr. Srinivasan will receive accrued but unpaid base salary and payment for any unused vacation and unreimbursed expenses.
The Company has entered into employment agreements with each of the other Named Executive Officers. Under the employment agreements for these Named Executive Officers, upon termination without cause, we must pay severance equal to 12 months’ salary and reimbursement of the executive’s total premium for 12 months of COBRA continuation coverage under the Company’s health benefit plans. If the executive’s compensation is reduced by more than 10%, other than a general reduction that affects all similarly situated executives, or if at any time prior to a change in control the executive no longer reports to the CEO, the executive may terminate his employment if the Company fails to materially cure such condition within 30 days following notice of such condition by the executive, and the termination will be deemed to be a termination without cause and the executive is entitled to his or her severance benefits. In the event that any of these Named Executive Officers are terminated without cause or by the executive for good reason in the 24 months following a change of control of the Company, the executive is entitled to severance pay equal to 12 months’ salary and a pro rata portion of target annual incentive and reimbursement of the executive’s total premium for 12 months of COBRA continuation coverage under the Company’s health benefit. None of the Named Executive Officers is entitled to excise tax gross-up payments.
In consideration of the severance benefits, Mr. Srinivasan is subject to 24-month post-termination confidentiality and non-disclosure requirements, as well as non-competition and non-solicitation obligations, except that if the term of his employment agreement expires at the end of the initial three-year term, the non-competition provisions will only apply for 12 months following termination. Each other employment agreement contains a 12-month post-termination non-solicitation provision, an indefinite confidentiality provision, and a 12-month post-termination non-compete provision.
Our Compensation Committee believes that the terms of these employment agreements enhance our ability to retain our executives and contain severance costs by providing reasonable severance benefits competitive with
|
32 | 2024 Proxy Statement |
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
|
market practice. Severance costs are contained by limiting pay to one year in the absence of a change of control, limiting personal benefits, not providing accelerated vesting for awards under the agreements, and narrowly defining a voluntary termination for good reason that triggers severance benefits. Severance payments in the event of a change of control are subject to a double trigger such that severance benefits are provided only upon a combination of a change of control and a qualified termination. Additionally, the Company benefits greatly from the non-competition, non-disclosure, and non-solicitation clauses contained in the employment agreements.
Accelerated Vesting . Except as described above for our CEO, none of the employment agreements provide for accelerated vesting of equity. Under our 2020 Equity Incentive Plan and 2016 Stock Incentive Plans and the 2024 Plan (if approved), vesting is accelerated upon the actual occurrence of a change of control for all SSARs and restricted shares (including performance shares). The Compensation Committee believed that during a change of control situation, a stable business environment is in the stockholders’ best interests, and accelerated vesting provisions provide stability. Additionally, under outstanding restricted share award agreements, all restricted shares (including performance shares) vest upon death or disability. The accelerated vesting provisions are applicable to all employees who receive equity awards, not just executive management.
The equity incentive awards granted to the Named Executive Officers are subject to a holding period of one year following a change of control. Under this provision, all unvested SSARs and restricted shares accelerate upon the actual occurrence of a change of control but remain subject to restrictions on exercise and transfer until the earlier of one year after the change of control or the executive’s qualified termination. The Committee believed that this further restriction during a change of control situation further promotes a stable business environment and is in the stockholders’ best interests.
CEO P ay Ratio Disclosure
The following is a reasonable estimate, prepared under applicable SEC rules, of the ratio of the annual total compensation of our CEO to the median of the annual total compensation of our other employees. We determined our median employee at the end of fiscal year 2023 based on total compensation (annualized in the case of full- and part-time employees who joined the company during fiscal year 2023) of each of our employees (excluding the CEO) as of March 31, 2023. For fiscal 2024, we determined that there had been no material change in our employee population or employee compensation arrangements as compared to fiscal year 2023 that would result in a significant change to our pay ratio disclosure. As such, we determined to use the same median employee as 2023. The annual total compensation of our median employee for 2024 was $38,212. As disclosed in the Summary Compensation Table appearing on page 37 , our CEO’s annual total compensation for fiscal year 2024 was $1,249,289. Based on the foregoing, our estimate of the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was 33 to 1. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.
Clawback – Recoupment of Bonuses, Incentives, and Gains . Under the Company’s “clawback” policy, which is intended to comply with NASDAQ rules implementing Exchange Act Rule 10D-1, if our financial statements are restated due to the material noncompliance with financial reporting requirements under the U.S. federal securities laws, then our Compensation Committee will have the sole and absolute authority to seek recoupment of any excess cash- or equity-based incentive compensation received by executive officers and certain other employees within the three fiscal years prior to the restatement where the receipt of the incentive compensation was predicated upon the achievement of certain financial results that were subsequently the subject of such a restatement. The Compensation Committee has broad discretion under the policy to determine the appropriate means to recover any such erroneously received incentive compensation, including seeking cash repayment, offsetting compensation by the amount subject to retroactive adjustment or cancelling outstanding awards, provided recoveries cannot extend back more than three years.
Insider Trading Policy. The Company’s insider trading policy, which is reasonably designed to promote compliance with insider trading laws and applicable rules and regulations, including those imposed by the SEC and NASDAQ, governs any and all trades or other transactions involving the Company’s securities by directors, officers,
|
|
|
2024 Proxy Statement | 33 |
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
employees and consultants. The insider trading policy prohibits purchases, sales and other dispositions of the Company’s securities while in possession of material non-public information regarding the Company and from disclosing such information to others. It also imposes additional restrictions on directors, officers and certain other employees who regularly have access to such material non-public information, including blackout periods and pre-clearance requirements. A copy of the insider trading policy was filed as Exhibit 19 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2024. Because the Company has not historically engaged in stock buybacks and grants awards during open windows, the Company has not adopted formal policies and procedures with respect to the Company’s transactions in its own securities.
Timing of Equity Grants. During fiscal year 2024, the Compensation Committee did not grant any stock options or similar awards as part of the Company’s equity compensation programs. If stock options or similar awards are granted in the future, our practice is to not grant any such awards at a time when we are in possession of material nonpublic information, such as the release of earnings or news regarding a significant transaction. In addition, we generally do not grant stock options or similar awards (i) during trading blackout periods established under our insider trading policy or (ii) at any time during the four business days prior to or the one business day following the filing of our periodic reports or the filing or furnishing of a Form 8-K that discloses material nonpublic information. Our executive officers are not permitted to choose the grant date for their individual stock option or similar award grants.
Stock Ownership Guidelines . To underscore the importance of strong alignment between the interests of management and stockholders, the board of directors approved stock ownership guidelines for directors and executives, with our CEO and directors having the highest ownership requirements. Director and executive compensation are designed to provide a significant opportunity to tie individual rewards to long-term Company performance. The objective of our stock ownership guidelines is to support this overall philosophy of alignment and to send a positive message to our stockholders, customers, suppliers, and employees of our commitment to stockholder value. Each director and executive officer is expected to maintain minimum share ownership of shares with a value based on a multiple of base salary or director annual retainer listed below:
|
|
Multiple of Director
|
|
Within 5 Years |
|
|
Directors |
6x |
|
CEO |
6x |
|
Other Executive Officers |
3x |
Stock ownership that is included toward attainment of the guidelines includes (i) shares owned directly (including through open market purchases, through the Company’s Employee Stock Purchase Plan or acquired and held upon vesting of Company equity awards); (ii) shares owned either jointly with, or separately by, his or her immediate family members residing in the same household; (iii) shares held in trust for the benefit of the individual, or his or her immediate family members; and (iv) unvested restricted shares and restricted stock units.
Directors and executives are expected to attain the specified target ownership levels within five years from becoming a director or an executive and remain at or above that level until retirement. The Compensation Committee of the board of directors regularly reviews progress toward achieving these ownership levels, and at its meeting in May 2024, the Compensation Committee determined that all of the directors and executives met the prescribed ownership levels.
Until a director or executive has satisfied the stock ownership guidelines, such director or executive is required to retain fifty percent (50%) of the net shares of common stock received from the Company as compensation after deducting any shares withheld by the Company or sold by the director or executive, if any, for the purpose of satisfying the exercise price and tax liabilities and related fees related to the settlement event. Once an individual achieves his or her stock ownership goal, these retention restrictions no longer will apply unless a disposition would cause the individual’s stock ownership to fall below his or her goal.
Impact of Tax Considerations . Section 162(m) of the Internal Revenue Code, through December 31, 2017, limited the tax deduction of public companies for compensation in excess of $1.0 million paid to their CEO and the three
|
34 | 2024 Proxy Statement |
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
|
most highly compensated executive officers (other than the CFO) at the end of any fiscal year unless the compensation qualified as “performance-based compensation” Under applicable IRS regulations. For tax years after December 31, 2017, the Tax Cuts and Jobs Act of 2017 amended Section 162(m) to expand the $1.0 million deduction limitation described above to a larger group of employees and to eliminate the “performance-based” exception. The employees (referred to as “covered employees”) to whom the deduction limitation applies include the CEO and CFO (in each case, whether or not serving as executive officers as of the end of the fiscal year) and the three other most highly compensated executive officers. In addition, once considered a “covered employee” for a given year, the individual will be treated as a “covered employee” for all subsequent years.
The Compensation Committee has considered the effect of Section 162(m) on the Company’s executive compensation program. The Compensation Committee exercises discretion in setting base salaries, structuring incentive and long-term compensation awards and in determining payments in relation to levels of achievement of performance goals. The Compensation Committee believes that the total compensation program for Named Executive Officers should be managed in accordance with the objectives outlined in the Committee’s compensation philosophy and in the best overall interests of the Company’s stockholders. Accordingly, compensation paid by the Company may not be deductible because such compensation exceeds the limitations for deductibility under Section 162(m).
|
|
|
2024 Proxy Statement | 35 |
|
|
COMPENSATION COMMITTEE REPORT |
COM PENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with the Company’s management. Based on that review and discussion, the Compensation Committee recommended to the board of directors that the Compensation Discussion and Analysis be incorporated in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024, and included in the Company’s Proxy Statement for its 2024 Annual Meeting of Stockholders.
The Compensation Committee of the Board of Directors
Melvin Keating, Chairman
Michael A. Kaufman
Jerry Jones
John Mutch
|
36 | 2024 Proxy Statement |
|
|
|
EXECUTIVE COMPENSATION |
|
EXECU TIVE COMPENSATION
The following table and related notes provide information regarding fiscal year 2024 compensation for our Named Executive Officers, including our CEO and CFOs, and the other three most highly compensated executive officers for fiscal year 2024.
Summary Compensation Table for Fiscal Year 202 4
|
Name and Principal Position |
|
Year |
|
Salary
|
|
Bonus
|
Stock
|
|
Non-Equity
|
|
All Other
|
Total
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ramesh Srinivasan |
|
FY24 |
|
600,000 |
|
— |
|
630,000 |
|
— |
|
|
19,366 |
|
1,249,366 |
|
|
President and Chief Executive |
|
FY23 |
|
600,000 |
|
— |
|
5,219,824 |
|
— |
|
|
16,464 |
|
5,836,288 |
|
|
Officer |
|
FY22 |
|
600,000 |
|
— |
|
204,000 |
|
— |
|
|
18,789 |
|
822,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dave Wood |
|
FY24 |
|
310,000 |
|
— |
|
387,475 |
|
162,800 |
|
|
19,581 |
|
879,856 |
|
|
Vice President and Chief |
|
FY23 |
|
275,000 |
|
82,500 |
|
247,490 |
|
— |
|
|
29,325 |
|
634,316 |
|
|
Financial Officer |
|
FY22 |
|
251,173 |
|
42,783 |
|
275,000 |
|
— |
|
|
9,735 |
|
578,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Don DeMarinis |
|
FY24 |
|
275,000 |
|
— |
|
192,511 |
|
298,603 |
|
|
13,917 |
|
780,031 |
|
|
Senior Vice President Sales, |
|
FY23 |
|
250,000 |
|
226,176 |
|
175,027 |
|
— |
|
|
20,222 |
|
671,424 |
|
|
Americas |
|
FY22 |
|
250,000 |
|
32,205 |
|
— |
|
— |
|
|
12,776 |
|
294,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sridhar Laveti (5) |
|
FY24 |
|
300,000 |
|
— |
|
210,045 |
|
157,500 |
|
|
21,019 |
|
688,564 |
|
|
Senior Vice President, Product |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering Customer Support |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sethuram Shivashankar (5) |
|
FY24 |
|
310,000 |
|
— |
|
248,021 |
|
162,800 |
|
|
17,945 |
|
738,766 |
|
|
Senior Vice President, Chief |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Officer Chief |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 Proxy Statement | 37 |
|
|
EXECUTIVE COMPENSATION |
All Other Compensation for Fiscal Year 2024
|
Name |
|
401(k)
|
|
Executive
|
|
All Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Srinivasan |
|
|
11,550 |
|
|
|
— |
|
|
|
7,816 |
|
|
|
19,366 |
|
|
D. Wood |
|
|
8,289 |
|
|
|
543 |
|
|
|
10,749 |
|
|
|
19,581 |
|
|
D. DeMarinis |
|
|
5,201 |
|
|
|
— |
|
|
|
8,716 |
|
|
|
13,917 |
|
|
S. Laveti |
|
|
11,873 |
|
|
|
3,233 |
|
|
|
5,913 |
|
|
|
21,019 |
|
|
S. Shivashankar |
|
|
12,035 |
|
|
|
— |
|
|
|
5,910 |
|
|
|
17,945 |
|
Grants of Plan-Based Awards
The following table and related notes summarize grants of equity and non-equity incentive compensation awards to our Named Executive Officers for fiscal year 2024. All equity awards were made under the Company’s 2020 Equity Incentive Plan.
Grants of Plan-Based Awards for Fiscal Year 2024
|
|
|
|
|
Estimated Possible Payouts Under
|
Estimated Possible Payouts Under
|
|
Stock Awards:
|
|
Grant Date Fair
|
||||||||||
|
Name |
|
Grant Date |
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Shares of Stock
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ramesh Srinivasan |
|
4/13/2023 |
|
|
|
|
|
|
|
|
300,000 |
|
600,000 |
|
900,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dave Wood |
|
11/15/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,265 |
|
387,475 |
|
|
|
4/13/2023 |
|
|
62,000 |
|
155,000 |
|
201,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Don DeMarinis |
|
11/15/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,119 |
|
192,511 |
|
|
|
4/13/2023 |
(1) |
|
60,000 |
|
150,000 |
|
195,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
4/13/2023 |
(4) |
|
|
|
150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sridhar Laveti |
|
11/15/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,312 |
|
210,045 |
|
|
|
4/13/2023 |
|
|
60,000 |
|
150,000 |
|
195,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sethuram Shivashankar |
|
11/15/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,730 |
|
248,021 |
|
|
|
4/13/2023 |
|
|
62,000 |
|
155,000 |
|
201,500 |
|
|
|
|
|
|
|
|
|
|
|
38 | 2024 Proxy Statement |
|
|
|
EXECUTIVE COMPENSATION |
|
Outsta nding Equity Awards
The following table and related notes summarize the outstanding equity awards held by the Named Executive Officers as of March 31, 2024.
Outstanding Equity Awards at 2024 Fiscal Year-End
|
|
|
|
|
|
Option or SSAR Awards |
|
Stock Awards |
|
||||||||||||||||||||||||||
|
|
|
|
|
|
Number of Securities Underlying
|
|
|
|
|
|
|
|
Number
|
|
Market
|
|
||||||||||||||||||
|
Name |
Grant Date |
|
Exercisable |
|
Unexercisable |
|
Option
|
|
Option
|
|
of Stock
|
|
Stock That
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Ramesh Srinivasan |
|
2/10/2020 |
|
|
|
|
600,000 |
|
|
|
|
|
|
|
|
|
36.60 |
|
|
|
|
8/10/2024 |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
3/10/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,619 |
|
|
|
|
|
1,905,877 |
|
||
|
|
|
3/10/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,035 |
|
|
|
|
|
1,772,409 |
|
||
|
|
|
3/10/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,893 |
|
|
|
|
|
1,086,364 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Dave Wood |
|
11/19/2020 |
|
|
|
|
2,528 |
|
|
|
|
|
|
|
|
|
20.02 |
|
|
|
|
6/2/2027 |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
12/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,484 |
|
(a) |
|
|
|
462,082 |
|
||
|
|
|
6/8/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,129 |
|
(a) |
|
|
|
179,390 |
|
||
|
|
|
11/12/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,128 |
|
(a) |
|
|
|
95,045 |
|
||
|
|
|
11/15/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,265 |
|
(a) |
|
|
|
359,369 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Don DeMarinis |
|
6/20/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,936 |
|
(b) |
|
|
|
163,127 |
|
||
|
|
|
11/19/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
513 |
|
(b) |
|
|
|
43,225 |
|
||
|
|
|
11/12/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,119 |
|
(b) |
|
|
|
178,547 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Sridhar Laveti |
|
5/31/2018 |
|
|
|
|
13,800 |
|
|
|
|
|
|
|
|
|
14.22 |
|
|
|
|
5/31/2025 |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
6/20/2019 |
|
|
|
|
9,272 |
|
|
|
|
|
|
|
|
|
22.41 |
|
|
|
|
6/20/2026 |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
11/19/2020 |
|
|
|
|
60,603 |
|
|
|
|
|
|
|
|
|
20.02 |
|
|
|
|
6/2/2027 |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
6/8/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,013 |
|
(c) |
|
|
|
169,615 |
|
||
|
|
|
11/12/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
533 |
|
(c) |
|
|
|
44,911 |
|
||
|
|
|
11/15/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,312 |
|
(c) |
|
|
|
194,809 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Sethuram |
|
12/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,521 |
|
(d) |
|
|
|
380,939 |
|
||
|
Shivashankar |
|
6/8/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
388 |
|
(d) |
|
|
|
32,693 |
|
||
|
|
|
11/12/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
769 |
|
(d) |
|
|
|
64,796 |
|
||
|
|
|
11/15/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,730 |
|
(d) |
|
|
|
230,030 |
|
||
|
|
|
2024 Proxy Statement | 39 |
|
|
EXECUTIVE COMPENSATION |
Opt ion Exercises and Stock Vested
The following table and related notes summarize the exercise of stock options and/or SSARs and the vesting of other stock awards by the Named Executive Officers while they were serving as Named Executive Officers during fiscal year 2024.
Option Exercises and Stock Vested for Fiscal Year 2024
|
|
Option Awards |
|
Stock Awards |
||||||||||||||||||||
|
Name |
Number of
|
|
Value Realized
|
|
Number of
|
|
Value Realized
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Ramesh Srinivasan |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
11,309 |
|
|
|
|
|
865,478 |
|
|
|
Dave Wood |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
4,091 |
|
|
|
|
|
335,112 |
|
|
|
Don DeMarinis |
|
|
2,634 |
|
|
|
|
|
141,699 |
|
|
|
|
|
1,223 |
|
|
|
|
|
88,337 |
|
|
|
Sridhar Laveti |
|
|
15,000 |
|
|
|
|
|
1,057,050 |
|
|
|
|
|
1,272 |
|
|
|
|
|
91,872 |
|
|
|
Sethuram Shivashankar |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
3,049 |
|
|
|
|
|
260,507 |
|
|
Termin ation and Change of Control
The following table and discussion summarize certain information related to the total potential payments which would have been made to the Named Executive Officers in the event of termination of their employment with the Company, including in the event of a change of control, effective March 31, 2024, the last business day of fiscal year 2024, assuming that the current employment agreements with each of our Named Executive Officers had been in effect at such time.
Employment Agreements. The Named Executive Officers are each a party to an employment agreement with the Company.
If Mr. Srinivasan’s amended employment agreement is terminated by the Company without cause or by Mr. Srinivasan for good reason, then subject to his execution of a release of claims, Mr. Srinivasan will be entitled to receive severance equal to two years’ then-current base salary and two times the value of his target annual bonus performance shares, which will be paid during regular pay intervals over the course of two years. In addition, he will also receive (a) a lump sum payment in cash, on the 60th day after the termination date, equal to the total after-tax premiums required to pay for 24 months of COBRA continuation coverage under the Company’s medical, dental and vision insurance plans; (b) a lump sum payment in cash of his pro-rated bonus for the year of termination based on actual performance with no negative discretion by the Board; and (c) twelve (12) months of accelerated vesting of all equity compensation awards that are subject to time or service-based vesting and were unvested and outstanding on the termination date. If such termination occurs within three months before or 24 months after a change in control, Mr. Srinivasan will receive two times the sum of his then-current base salary and target annual bonus, 48 months of COBRA continuation coverage under the Company’s medical, dental and vision insurance plans, and 100% release of any post-closing restrictions related to equity awards that were deemed vested as a
|
40 | 2024 Proxy Statement |
|
|
|
EXECUTIVE COMPENSATION |
|
result of the change of control. In addition, upon any termination of employment, Mr. Srinivasan will receive accrued but unpaid base salary and payment for any unreimbursed expenses.
For Mr. Srinivasan, good reason means (i) a reduction in his base salary or target bonus opportunity, (ii) a material diminution in his authority, duties or responsibilities (including, without limitation, his no longer being the CEO of a publicly-traded company or the requirement that he report to anyone other than the Company’s board of directors or following a change in control he is not made the chief executive officer of the ultimate parent of the resulting entity), (iii) his removal as a member of the board of directors (other than by his voluntary resignation) or his failure to be appointed to the board of directors of the ultimate parent of any resulting entity following a change in control, (iv) any other action that constitutes a willful and material breach by the Company of a material provision of his employment agreement, (v) a material reduction in the benefits provided to him that is not part of a broader reduction of benefits applicable to substantially all other officers of the Company, (vi) ) a change of more than 50 miles in the geographic location at which you are required to provide services to the Company, or (vii) a material breach of the agreement by the Company (including a failure to pay current compensation or benefits when due), and the Company fails to materially cure such condition within 30 days of notice of the breach. For the other Named Executive Officers, good reason is limited to where the Company changes the Named Executive Officer’s position such that his compensation or responsibilities are substantially lessened or at any time prior to a change in control of the Company, the Named Executive Officer no longer reports to the CEO, and in each case the Company fails to cure such situation within 30 days after notice.
If the Company terminates the employment of any of the other Named Executive Officers without cause, we must pay severance equal to 12 months’ salary and reimbursement of the executive’s total premium for 12 months of COBRA continuation coverage under the Company’s health benefit plans. If the executive’s compensation is reduced by more than 10%, other than a general reduction that affects all similarly situated executives, or if at any time prior to a change in control the executive no longer reports to the CEO, the executive may terminate his employment if the Company fails to materially cure such condition within 30 days following notice of such condition by the executive, and the termination will be deemed to be a termination without cause and the executive is entitled to his or her severance benefits. In the event that any of these Named Executive Officers are terminated without cause or by the executive for good reason in the 24 months following a change of control of the Company, the executive is entitled to severance pay equal to 12 months’ salary and a pro rata portion of target annual incentive and reimbursement of the executive’s total premium for 12 months’ of COBRA continuation coverage under the Company’s health benefit.
During the term of his employment and for 24 months thereafter, Mr. Srinivasan is subject to the Company’s standard confidentiality and non-disclosure requirements, as well as non-competition and non-solicitation obligations, except that if the term of the employment agreement expires at the end of the initial three-year term, the non-competition provisions will only apply for 12 months following termination. Following a termination of employment of any other Named Executive Officer for any reason, such Named Executive Officer is prohibited for a 12-month period following termination from being employed by, owning, operating, controlling, or being connected with certain businesses that compete with the Company. The employment agreement for each of the other Named Executive Officer also contains an indefinite non-disclosure provision for the protection of the Company’s confidential information and a 12-month non-solicitation of Company employees.
|
|
|
2024 Proxy Statement | 41 |
|
|
EXECUTIVE COMPENSATION |
Termination and Change of Control
|
|
Ramesh
|
Dave Wood |
Don DeMarinis |
Sridhar Laveti |
Sethuram Shivashankar |
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Voluntary Termination ($)(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Base Salary and Incentive |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
Health Insurance |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
Accelerated Vesting |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
Termination without Cause or by Employee for Good Reason ($)(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Base Salary and Incentive |
|
|
2,400,000 |
|
|
|
|
310,000 |
|
|
|
|
275,000 |
|
|
|
|
300,000 |
|
|
|
310,000 |
|
|
|
Health Insurance (3) |
|
|
53,372 |
|
|
|
|
34,185 |
|
|
|
|
22,635 |
|
|
|
|
34,446 |
|
|
|
41,342 |
|
|
|
Accelerated Vesting/RSUs |
|
|
952,896 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
Total |
|
|
3,406,268 |
|
|
|
|
344,185 |
|
|
|
|
297,635 |
|
|
|
|
334,446 |
|
|
|
351,342 |
|
|
|
Change of Control ($)(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Base Salary and Incentive |
|
|
2,400,000 |
|
|
|
|
465,000 |
|
|
|
|
425,000 |
|
|
|
|
450,000 |
|
|
|
460,000 |
|
|
|
Health Insurance (3) |
|
|
106,744 |
|
|
|
|
34,185 |
|
|
|
|
22,635 |
|
|
|
|
34,446 |
|
|
|
41,342 |
|
|
|
Accelerated Vesting/Stock and RSUs |
|
|
952,896 |
|
|
|
|
1,095,886 |
|
|
|
|
384,900 |
|
|
|
|
409,335 |
|
|
|
708,458 |
|
|
|
Total |
|
|
3,459,640 |
|
|
|
|
1,595,071 |
|
|
|
|
832,535 |
|
|
|
|
893,781 |
|
|
|
1,209,800 |
|
|
|
Death or Disability ($)(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Base Salary and Incentive |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
Health Insurance |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
Accelerated Vesting/Stock and RSUs |
|
|
2,858,773 |
|
|
|
|
1,095,886 |
|
|
|
|
384,900 |
|
|
|
|
409,335 |
|
|
|
708,458 |
|
|
|
Total |
|
|
2,858,773 |
|
|
|
|
1,095,886 |
|
|
|
|
384,900 |
|
|
|
|
409,335 |
|
|
|
708,458 |
|
|
|
42 | 2024 Proxy Statement |
|
|
|
EXECUTIVE COMPENSATION |
|
Pay Ve rsus Performance
The following table shows the total compensation for our named executive officers (“NEOs”) for the past four fiscal years as set forth in the Summary Compensation table, the “compensation actually paid” (or “CAP”) to our principal executive officer (“PEO”), and on an average basis, to our other NEOs (in each case, as determined under SEC rules), our Total Stockholder Return (“TSR”), the TSR of companies listed in the SIC Code 7373 - Computer Integrated Systems Design (our peer group for this purpose), our GAAP net income (loss), and our Company Selected Metric results (GAAP net revenue).
|
Fiscal
|
Summary
|
|
Compensation
|
|
Average
|
|
Average
|
|
Total
|
|
Peer group
|
|
Net income
|
|
Net revenue
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
Fiscal
|
Executives |
SCT Total
|
|
Grant
|
|
Year-end
|
|
Change in
|
|
Change in
|
|
Value of
|
|
Value of
|
|
Total
|
CAP
|
|||||||||||||
|
2024 |
PEO |
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
PEO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
PEO |
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
(
|
) |
|
|
|
|
|
|
|
(
|
) |
|
|
(
|
) |
|
|
|
Other NEOs |
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
PEO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other NEOs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
2024 Proxy Statement | 43 |
|
|
EXECUTIVE COMPENSATION |
|
Year ended March 31, |
Non-PEO NEOs |
|
2024 |
Dave Wood, Don DeMarinis, Sridhar Laveti, Sethuram Shivashankar |
|
2023 |
Dave Wood, Kyle Badger, Prabuddha Biswas, Don DeMarinis |
|
2022 |
Dave Wood, Kyle Badger, Don DeMarinis, Chris Robertson |
|
2021 |
Dave Wood, Kyle Badger, Prabuddha Biswas, Don DeMarinis, Tony Pritchett |
Analysis of th e Information Presented in the Pay versus Performance Table
As described in more detail in the section “Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. Therefore, we do not specifically align our performance measures with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular fiscal year and the Compensation Committee did not consider this information in making its executive compensation decisions. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table.
Compensation Actually Paid and Cumulative TSR of the Company
For fiscal years 2021, 2022, 2023 and 2024, the Company’s TSR (based on a $100 investment at the beginning of fiscal year 2021) increased by 87.2%, decreased by 25.8%, increased by 183.9% and increased by 2.6%, respectively. During each of fiscal years 2022, 2023 and 2024, CAP to our PEO decreased from $10.3 million to $(0.2) million; increased from $(0.2) million to $9.3 million; and decreased from $9.3 million to $1.0 million, respectively. During each of fiscal years 2022, 2023 and 2024, average CAP to our non-PEO NEOs decreased from $3.1 million to $0.4 million; increased from $0.4 million to $1.8 million; and decreased from $1.8 million to $0.8 million, respectively.
Compensation Actually Paid and Net Income (Loss)
For fiscal years 2021, 2022, 2023 and 2024, the Company’s Net Income (Loss) increased by 38.4%, 130.8%, 125.1% and 491.1%, respectively. As noted above, CAP to our PEO and to our non-PEO NEOs decreased during fiscal year 2022, increased during fiscal year 2023 and decreased during fiscal year 2024.
Compensation Actually Paid and Revenue
For fiscal years 2021, 2022, 2023 and 2024, the Company’s Revenue (computed in accordance with GAAP) decreased by 14.7%, increased by 18.6%, increased by 21.8% and increased by 19.9%, respectively. As noted above, CAP to our PEO and to our non-PEO NEOs decreased during fiscal year 2022, increased during fiscal year 2023 and decreased during fiscal year 2024.
Cumulative TSR of the Company and Cumulative TSR of the Peer Group
Company TSR significantly outpaced Peer Group TSR (computed using the companies listed in the SIC Code 7373 - Computer Integrated Systems Design) for fiscal years 2021, 2022, 2023, and 2024.
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44 | 2024 Proxy Statement |
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EXECUTIVE COMPENSATION |
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Financial Performance Measures
As described in greater detail in the section entitled “Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our long-term and short-term incentive awards are selected based on the objective of incentivizing our NEOs to increase the value of our enterprise for our stockholders.
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2024 Proxy Statement | 45 |
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EQUITY COMPENSATION PLAN INFORMATION |
EQUITY COMPENSATION PLAN INFORMATION
The following table provides certain information with respect to all of the Company’s equity compensation plans in effect as of March 31, 2024.
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Number of Securities
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Weighted-Average
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Number of Securities
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Equity compensation plans approved by stockholders (2011 and 2016 Stock Incentive Plans and 2020 Equity Incentive Plan) |
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1,297,339 |
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27.63 |
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266,675 |
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Equity compensation plans not approved by stockholders |
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— |
|
|
— |
|
|
— |
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|
Total |
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1,297,339 |
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|
27.63 |
|
|
266,675 |
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46 | 2024 Proxy Statement |
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PROPOSAL 3 |
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PROP OSAL 3
ADVISORY VOTE REGARDING EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and SEC rules require us to allow our stockholders to vote on a non-binding, advisory basis, on whether to approve the compensation of our Named Executive Officers as disclosed in this Proxy Statement, in accordance with the SEC’s compensation disclosure rules. As described more fully in our CDA section of this Proxy Statement, our compensation programs applicable to our Named Executive Officers are designed to retain executives who can significantly contribute to our success, reward the achievement of specific annual and long-term goals and strategic objectives, and tie a significant portion of compensation to the long-term performance of our shares to align executive pay and stockholders’ interests. The Compensation Committee continually reviews the compensation programs for our Named Executive Officers to ensure the alignment of our executive compensation structure with our stockholders’ interests and market practices. As a result of this review, the Compensation Committee:
We are asking stockholders to approve, on an advisory basis, our Named Executive Officers’ compensation as described in this Proxy Statement. Currently, we ask stockholders to vote on such compensation annually. This vote is not intended to address any specific item of compensation, but rather the overall compensation, and the philosophy, objectives, and structure applicable to such compensation. This advisory vote is not binding on the Company, the Compensation Committee, or our board of directors; however, we value the opinions of our stockholders and to the extent there is any significant vote against this proposal, we will consider our stockholders’ concerns and evaluate whether any actions are necessary to address those concerns. Accordingly, we are asking our stockholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed in the Company’s Proxy Statement for the 2024 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis and the discussion under Executive Compensation, including the 2024 compensation tables and the related disclosure and narratives to those tables.”
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PROPOSAL 3 Recommendation of the Board of Directors The board recommends that stockholders vote “for” proposal 3. Proxy cards received by the company will be voted “for” proposal 3 unless the stockholder specifies otherwise on the proxy card. |
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Vo te Required
The affirmative vote of the holders of shares representing a majority of the shares present or represented by proxy and entitled to vote will be required for the advisory approval of this proposal. Abstentions and broker non-votes will have the effect of a vote against this proposal.
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2024 Proxy Statement | 47 |
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AUDIT COMMITTEE REPORT |
AU DIT COMMITTEE REPORT
The Audit Committee oversees the Company’s financial reporting process on behalf of the board of directors. The Audit Committee’s activities are governed by a written charter adopted by the board of directors, the Amended and Restated Audit Committee Charter, which is available at the Company’s website www.agilysys.com. The Audit Committee currently consists of three directors, all of whom are independent in accordance with the rules of the NASDAQ Stock Market, Section 10A(m) of the Securities Exchange Act of 1934, and the rules and regulations of the SEC. The Board has determined that Directors Donald Colvin, Dana Jones and John Mutch each qualify as an “audit committee financial expert” as defined by the SEC.
Management has the primary responsibility for the Company’s financial statements and the reporting process, including the system of internal controls over financial reporting. Grant Thornton LLP, the Company’s independent registered public accounting firm, audits the annual financial statements prepared by management and expresses an opinion on whether those financial statements conform with United States generally accepted accounting principles, and also audits the internal controls over financial reporting and management’s assessment of those controls. The Audit Committee hires the Company’s independent registered public accounting firm and monitors these processes.
In carrying out its responsibilities, the Audit Committee has reviewed and has discussed with the Company’s management the Company’s 2024 audited financial statements. Management represented to the Audit Committee that the Company’s financial statements were prepared in accordance with United States generally accepted accounting principles. In addition, the Audit Committee discussed with the Company’s financial management and independent registered public accounting firm the overall scope and plans for the audit. The Audit Committee also met with the independent registered public accounting firm, with and without management present, to discuss the results of the audit, their evaluation of the Company’s internal controls over financial reporting, including both the design and usefulness of such internal controls, and the overall quality of the Company’s financial reporting.
The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC.
The Audit Committee has also received annual written disclosures from Grant Thornton regarding their independence from the Company and its management as required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, has discussed with the independent registered public accounting firm their independence, and has considered the compatibility of non-audit services with the registered public accounting firm’s independence.
Based on the review and discussions referred to above, the Audit Committee recommended to the board of directors that the Company’s 2024 audited financial statements be included in the Company’s 2024 Annual Report on Form 10-K for the fiscal year ended March 31, 2024.
Submitted by the Audit Committee of the Board of Directors
Donald Colvin, Chairman
Dana Jones
John Mutch
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48 | 2024 Proxy Statement |
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PROPOSAL 4 |
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PR OPOSAL 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
By NASDAQ and SEC rules, appointment of the Company’s independent registered public accounting firm (“Independent Accountant”) is the direct responsibility of the Audit Committee, and the Audit Committee has appointed Grant Thornton LLP as our Independent Accountant for the fiscal year ending March 31, 2025.
Stockholder ratification of the selection of Grant Thornton as our Independent Accountant is not required by our Bylaws or otherwise; however, the board of directors has determined to seek stockholder ratification of that selection to provide stockholders an avenue to express their views on this important matter. If our stockholders fail to ratify the selection, the Audit Committee will seek to understand the reasons for the vote against ratification and will take those views into account in this and future appointments. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different Independent Accountant at any time during the year if it is determined that such a change would be in the best interests of the Company and our stockholders.
The Audit Committee reviewed the fees of Grant Thornton LLP, our Independent Accountant for fiscal year 2024. Fees for services rendered by Grant Thornton for fiscal years 2024 and 2023 were:
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2024 |
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2023 |
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Audit fees ($) |
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979,524 |
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755,915 |
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Audit-related fees ($) |
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10,700 |
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— |
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Tax fees ($) |
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58,098 |
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— |
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Total fees ($) |
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1,048,322 |
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755,915 |
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“Audit Fees” consist of fees billed for professional services related to our annual audits under PCAOB auditing standards, quarterly reviews of our condensed consolidated financial statements, reviews of certain SEC filings, comfort letter issuance, and statutory audits. “Audit-related fees” include fees for assurance and related services other than those included in Audit fees. “Tax Fees” include tax compliance, tax planning and tax consulting services.
Representatives of Grant Thornton are expected to be present virtually at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
The Audit Committee adopted an Audit and Non-Audit Services Pre-Approval Policy to ensure compliance with SEC and other rules and regulations relating to auditor independence, with the goal of safeguarding the continued independence of our Independent Accountant. The Pre-Approval Policy sets forth the procedures and conditions pursuant to which audit, review, and attest services and non-audit services to be provided to the Company by our Independent Accountant may be pre-approved. The Audit Committee is required to pre-approve the audit and non-audit services performed by our Independent Accountant to assure that the provision of such services does not impair independence. Unless a type of service to be provided has received pre-approval as set forth in the Pre-Approval Policy, it will require separate pre-approval by the Audit Committee before commencement of the engagement. Any proposed service that has received pre-approval, but which will exceed pre-approved cost limits will require separate pre-approval by the Audit Committee. All audit services were pre-approved by the Audit Committee during fiscal years 2024 and 2023.
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2024 Proxy Statement | 49 |
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PROPOSAL 4 |
V ote Required
The affirmative vote of the holders of shares representing a majority of the shares present or represented by proxy and entitled to vote will be required for the advisory approval of this proposal. Abstentions will have the effect of a vote against this proposal. We do not expect any broker non-votes to result from this proposal.
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PROPOSAL 4 Recommendation of the Board of Directors The board recommends that stockholders vote “for” the ratification of Grant Thornton as our independent registered public accounting firm. Proxy cards received by the company will be voted “for” proposal 4 unless the stockholder specifies otherwise on the proxy card. |
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50 | 2024 Proxy Statement |
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RELATED PERSON TRANSACTIONS |
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Since April 1, 2023, there has not been, and there is not currently proposed, any transaction or series of similar transactions requiring disclosure under Item 404 of Regulation S-K.
All related person transactions with the Company require the prior approval or ratification by our Audit Committee. The board of directors adopted Related Person Transaction Procedures to formalize the procedures by which our Audit Committee reviews and approves or ratifies related person transactions. The procedures set forth the scope of transactions covered, the process for reporting such transactions, and the review process. Covered transactions include any transaction, arrangement, or relationship with the Company in which any director, executive officer, or other related person has a direct or indirect material interest, except for business travel and expense payments, share ownership, and executive compensation approved by the board of directors. Transactions are reportable to the Company’s General Counsel, who will oversee the initial review of the reported transaction and notify the Audit Committee of transactions within the scope of the procedures, and the Audit Committee will determine whether to approve or ratify the transaction. Through our Nominating and Corporate Governance Committee, we make a formal yearly inquiry of all of our executive officers and directors for purposes of disclosure of related person transactions, and any such newly revealed related person transactions are conveyed to the Audit Committee. All officers and directors are charged with updating this information with our internal legal counsel.
HO USEHOLDING
Some banks, brokers and other nominee record holders may be participating in the practice of “householding.” This means that only one copy of this proxy statement and Annual Report on Form 10-K may have been sent to multiple stockholders sharing an address unless the stockholders provide contrary instructions. We will promptly deliver a separate copy of these documents to you if you call or write us at: Agilysys, Inc., 3655 Brookside Parkway, Suite 300, Alpharetta, Georgia 30022, Attention: Secretary; telephone (770) 810-7800.
If you want to receive separate copies of our proxy statements and annual reports to stockholders or Notice of Internet Availability of Proxy Materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker or other nominee record holder, or you may contact us at the above address or telephone number.
O THER MATTERS
The Board is not aware of any matter to come before the Annual Meeting of Stockholders other than those mentioned in the accompanying Notice. If other matters properly come before the Annual Meeting, the persons named in the accompanying proxy card intend, to the extent permitted by law, to vote using their best judgment on such matters.
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2024 Proxy Statement | 51 |
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RELATED PERSON TRANSACTIONS |
STO CKHOLDER PROPOSALS
Stockholders who, in accordance with SEC Rule 14a-8, wish to present proposals for inclusion in the proxy materials to be distributed in connection with the 2025 Annual Meeting of Stockholders must submit their proposals so that they are received by our Secretary at our Alpharetta office, located at 3655 Brookside Parkway, Suite 300, Alpharetta, Georgia 30022, no later than the close of business on March 28, 2025. Each proposal submitted should be accompanied by the name and address of the stockholder submitting the proposal and the number of common shares owned. If the proponent is not a stockholder of record, proof of beneficial ownership should also be submitted. All proposals must be a proper subject for action and comply with the proxy rules of the SEC.
In order for a stockholder to bring a matter properly before the 2025 Annual Meeting present (other than a matter brought pursuant to SEC Rule 14a-8), the stockholder must comply with the requirements set forth in our Bylaws, including: (i) be a stockholder of record at the time notice of the matter is given and at the time of the meeting, (ii) be entitled to vote at the meeting, and (iii) have given timely written notice of the matter to the Secretary. A stockholder’s notice of a matter the stockholder wishes to present at the 2025 Annual Meeting (other than a matter brought pursuant to SEC Rule 14a-8), must be received by our Secretary at our Alpharetta office, located at 3655 Brookside Parkway, Suite 300, Alpharetta, Georgia 30022, no earlier than May 15, 2025, and no later than June 14, 2025.
In addition, a person who intends to solicit proxies in support of director nominees other than the Company’s nominees must provide notice to the Company no later than July 14, 2025 that sets forth the information required by the Company’s bylaws and Rule 14a-19 under the Exchange Act, including a statement that such person intends to solicit the holders of shares representing at least 67% of the voting power of the Company’s shares entitled to vote in the election of directors in support of director nominees other than the Company’s nominees.
Any stockholder entitled to vote at the Annual Meeting on September 12, 2024, may make a request in writing and we will mail, at no charge, a copy of our 2024 Annual Report, including the financial statements and schedules required to be filed with the SEC pursuant to Rule 13a-1 under the Exchange Act, for the most recent fiscal year. Written requests should be directed to Agilysys, Inc., Attn: Investor Relations, 3655 Brookside Parkway, Suite 300, Alpharetta, Georgia 30022.
Please sign and return your proxy card promptly or vote via the Internet or telephone. For your convenience, a return envelope is enclosed requiring no additional postage if mailed in the United States.
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52 | 2024 Proxy Statement |
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION |
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CA UTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This proxy statement and other publicly available documents, including the documents incorporated herein and therein by reference, contain, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, our ability to achieve operational efficiencies and meet customer demand for products and services and the risks described in the Company’s filings with the Securities and Exchange Commission, including those listed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2024. Any forward-looking statement made by us is based only on information currently available and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement made herein or any forward-looking statement that may be made from time to time, whether written or oral, whether as a result of new information, future events, or otherwise.
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2024 Proxy Statement | 53 |
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Appendix A |
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App endix A
AGILYSYS, INC. 2024 EQUITY INCENTIVE PLAN
“Affiliate” means a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under common control with, the Company.
“Applicable Laws” means the requirements related to or implicated by the administration of the Plan under applicable state corporate law, United States federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Shares are listed or quoted, and the applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.
“Award” means any right granted under the Plan, including an Incentive Stock Option, a Non-Qualified Stock Option, a Stock Appreciation Right, a Restricted Award, a Performance Share Award, a Cash Award, or an Other Equity-Based Award.
“Award Agreement” means a written agreement, contract, certificate or other instrument or document evidencing the terms and conditions of an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically to any Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan.
“Beneficial Owner” or “Beneficial Ownership” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular Person, such Person shall be deemed to have beneficial ownership of all securities that such Person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.
“Board” means the Board of Directors of the Company, as constituted at any time.
“Cash Award” means an Award denominated in cash that is granted under Section 7.4 of the Plan.
“Caus e” means:
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2024 Proxy Statement | A- 1 |
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Appendix A |
The Committee has the discretion to determine the effect of all matters and questions relating to whether a Participant has been discharged for Cause.
“Change in Control” shall mean the first occurrence of any of the following:
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A- 2 | 2024 Proxy Statement |
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Appendix A |
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Notwithstanding the foregoing, if with respect to an Award that is subject to Section 409A of the Code under which a Change in Control is a “payment event”, then for such purpose, the Company will not be deemed to have undergone a Change in Control unless the Company is deemed to have undergone a “change in control event” pursuant to the definition of such term in Section 409A of the Code.
The Board may, in its sole discretion and without a Participant’s consent, amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section 409A of the Code, and the regulations thereunder.
The Committee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto.
“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.
“Committee” means a committee of one or more members of the Board appointed by the Board to administer the Plan in accordance with Section 3.3 and Section 3.4 , or any Officers of the Company to whom it has delegated authority as permitted under Section 3.3 .
“Common Shares ” means the common shares, without par value, of the Company, or such other securities of the Company as may be designated by the Committee from time to time in substitution thereof.
“Company” means Agilysys, Inc., a Delaware corporation, and any successor thereto.
“Consultant” means any individual or entity which performs bona fide services to the Company or an Affiliate, other than as an Employee or Director, and who may be offered securities registerable pursuant to a registration statement on Form S-8 under the Securities Act or any successor form thereto.
“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Consultant or Director, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service; provided further that if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code. For example, a change in status from an Employee of the Company to a Director of an Affiliate will not constitute an interruption of Continuous Service. The Committee or its delegate, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal or family leave of absence. In the case an Employee is holding an Incentive Stock Option the determination of leave and when such an Employee is deemed terminated will be determined in accordance with the statutory rules governing Incentive Stock Options. The Committee or its delegate, in its sole discretion, may determine whether a Company transaction, such as a sale or spin-off of a division or subsidiary that employs a Participant, shall be deemed to result in a termination of Continuous Service for purposes of affected Awards, and such decision shall be final, conclusive and binding.
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2024 Proxy Statement | A- 3 |
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Appendix A |
“Deferred Stock Units” has the meaning set forth in Section 7.2 hereof.
“Director” means a member of the Board.
“Disability” means, unless the applicable Award Agreement says otherwise, that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment; provided, however, for purposes of determining the term of an Incentive Stock Option pursuant to Section 6.10 hereof, the term Disability shall have the meaning ascribed to it under Section 22(e)(3) of the Code. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee is determining Disability for purposes of the term of an Incentive Stock Option pursuant to Section 6.10 hereof within the meaning of Section 22(e)(3) of the Code, the Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates.
“Disqualifying Disposition” has the meaning set forth in Section 14.11 .
“Effective Date” shall mean July 25, 2024, the date as of which this Plan was adopted by the Board.
“Employee” means any person, including an Officer or Director, employed by the Company or an Affiliate; provided, that, for purposes of determining eligibility to receive Incentive Stock Options, an Employee shall mean an employee of the Company or a parent or subsidiary corporation within the meaning of Section 424 of the Code. Mere service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” means, as of any date, the value of the Common Shares as determined below. If the Common Shares are listed on any established stock exchange or a national market system, including without limitation, the New York Stock Exchange or the NASDAQ Stock Market, the Fair Market Value shall be the closing price of a Common Share (or if no sales were reported the closing price on the date immediately preceding such date) as quoted on such exchange or system on the day of determination, as reported in the Wall Street Journal. In the absence of an established market for the Common Shares, the Fair Market Value shall be determined in good faith by the Committee and such determination shall be conclusive and binding on all persons. Notwithstanding the foregoing, the Committee may also determine the Fair Market Value upon the average selling price of the Common Shares during a specified period that is within thirty (30) days before or thirty (30) days after such date, provided that, with respect to the grant of an Option or Stock Appreciation Right, the commitment to grant such Award based on such valuation method must be irrevocable before the beginning of the specified period and otherwise compliant with Section 409A of the Code.
“Free Standing Rights” has the meaning set forth in Section 7.1(a) .
“Grant Date” means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution.
“Incentive Stock Option” means an Option that is designated by the Committee as an incentive stock option within the meaning of Section 422 of the Code and that meets the requirements set out in the Plan.
“ Incumbent Directors” means individuals who, on the Effective Date, constitute the Board, provided that any individual becoming a Director subsequent to the Effective Date whose election or nomination for election to the Board was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for Director without objection to such nomination) shall be an Incumbent Director. No individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to Directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be an Incumbent Director.
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A- 4 | 2024 Proxy Statement |
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Appendix A |
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“Non-Employee Director” means a Director who is a “non-employee director” within the meaning of Rule 16b-3 of the Exchange Act and an “independent director” as defined in the Marketplace Rules of The NASDAQ Stock Market LLC.
“Non-Qualified Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
“Option” means an Incentive Stock Option or a Non-Qualified Stock Option granted pursuant to the Plan.
“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
“Option Exercise Price” means the price at which a Common Share may be purchased upon the exercise of an Option.
“Other Equity-Based Award” means an Award that is not an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, or Performance Share Award that is granted under Section 7.4 and is payable by delivery of Common Shares and/or which is measured by reference to the value of Common Shares.
“Participant” means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.
“Performance Goals” means, for a Performance Period, the one or more goals established by the Committee for the Performance Period based upon business criteria or other performance measures determined by the Committee in its discretion.
“Performance Period” means the one or more periods of time, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Performance Share Award or a Cash Award.
“Performance Share Award” means any Award granted pursuant to Section 7.3 hereof.
“Performance Share” means the grant of a right to receive a number of actual Common Shares or share units based upon the performance of the Company during a Performance Period, as determined by the Committee.
“Permitted Transferee” means a member of the Optionholder’s immediate family (child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships), any person sharing the Optionholder’s household (other than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons (or the Optionholder) control the management of assets, and any other entity in which these persons (or the Optionholder) own more than 50% of the voting interests.
“Person” means a person as defined in Section 13(d)(3) of the Exchange Act.
“Plan” means this Agilysys, Inc. 2024 Equity Incentive Plan, as amended from time to time.
“Prior Plan” means the 2016 Stock Incentive Plan and the 2020 Equity Incentive Plan, as Amended and Restated.
“Related Rights” has the meaning set forth in Section 7.1(a) .
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“Restricted Award” means any Award granted pursuant to Section 7.2(a) .
“Restricted Period” has the meaning set forth in Section 7.2(a) .
“Restricted Stock” has the meaning set forth in Section 7.2(a) .
“Restricted Stock Units” has the meaning set forth in Section 7.2(a) .
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.
“Securities Act” means the Securities Act of 1933, as amended.
“Stock Appreciation Right” means the right pursuant to an Award granted under Section 7.1 to receive, upon exercise, an amount payable in cash or shares equal to the number of shares subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (a) the Fair Market Value of a Common Share on the date the Award is exercised, over (b) the exercise price specified in the Stock Appreciation Right Award Agreement.
“Stock for Stock Exchange” has the meaning set forth in Section 6.2 .
“ Subsidiary ” means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.
“Substitute Award” has the meaning set forth in Section 4.5 .
“Ten Percent Shareholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) shares possessing more than 10% of the total combined voting power of all classes of shares of the Company or of any of its Affiliates.
“Total Share Reserve” has the meaning set forth in Section 4.1 .
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2024 Proxy Statement | A- 21 |
Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be received by 11:59 P.M. ET on September 11, 2024. Online Go to www.investorvote.com/AGYS or scan the QR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/AGYS 2024 Annual Meeting Proxy Card • IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. • Proposals — The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2, 3 and 4. A 1. Election of Directors: + 01 - Donald A. Colvin 02 - Dana Jones 03 - Jerry Jones 04 - Michael A. Kaufman 05 - Melvin L. Keating 06 - John Mutch 07 - Ramesh Srinivasan Mark here to vote FOR all nominees Mark here to WITHHOLD vote from all nominees 01 020304050607 For All EXCEPT - To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right. For Against Abstain For Against Abstain 2. Approval of the Agilysys, Inc. 2024 Equity Incentive Plan 3. Approval, on a non-binding advisory basis, of the compensation of the Company’s named executive officers set forth in the attached Proxy Statement 4. Ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the fiscal year ending March 31, 2025 Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. B Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. 1UPX + 040WIA
2024 Annual Meeting of Stockholders of Agilysys, Inc. September 12, 2024 at 8:00 am ET 3655 Brookside Parkway, Suite 300 Alpharetta, GA 30022 Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders. The material is available at: www.agilysys.com/en/company/investor-relations Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/AGYS • IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. • Proxy — Agilysys, Inc + Notice of 2024 Annual Meeting of Stockholders of Agilysys, Inc. Proxy Solicited by Board of Directors for Annual Meeting — September 12, 2024 Kyle Badger and Ramesh Srinivasan, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Agilysys, Inc. to be held on September 12, 2024 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of the Board of Directors and FOR items 2, 3 and 4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side) Non-Voting Items C Change of Address — Please print new address below. Comments — Please print your comments below. +