DEF 14A of Firy Inc.
Filed Oct 21, 2024 · FY20230001140361-24-043803
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
(PROPOSAL NO. 1) Upon the recommendation of our Nominating and Corporate Governance Committee (the “Nominating Committee”), the Board has nominated the seven individuals listed below to stand for election to the Board for a one-year term ending at the annual meeting of stockholders in 2025 or until their successors, if any, are elected or appointed. Our Fourth Amended and Restated Certificate of Incorporation (the “Charter”) and our Amended and Restated Bylaws (“Bylaws”) provide for the annual election of directors. Each director nominee must receive the affirmative vote of a majority of the votes cast to be elected (i.e., the number of shares voted “for” a director nominee must exceed the number of votes cast “against” that nominee). Unless contrary instructions are given, the shares represented by your proxy will be voted FOR the election of all director nominees. Our Chief Executive Officer and Chairman of the Board, Mr. Paradise, beneficially owns 100% of the Company’s Class B Common Stock and controls a majority of the voting power of all outstanding capital stock. As a result, Mr. Paradise has the power to elect each of the nominees named in this proxy statement. All of the director nominees listed below have consented to being named in this proxy statement and to serve if elected. However, if any nominee becomes unable to serve, proxy holders will have discretion and authority to vote for another nominee proposed by the Board. Alternatively, the Board may reduce the number of directors to be elected at the Annual Meeting.
(PROPOSAL NO. 1)
| Name | Position | Audit Committee | Compensation Committee | Nominating Committee | | Andrew Paradise | Chief Executive Officer and Chairman of the Board | | | C | | Anthony Cabot | Independent Director | | | X | | Casey Chafkin | Director | | | X | | Henry Hoffman | Independent Director | X | X | | | Alexender Mandel | Independent Director | C | | | | Kent Wakeford | Independent Director | X | C | |
(PROPOSAL NO. 1)
“C” = Chair of Committee “X” = Member of Committee Biographical information relating to each of the director nominees is set forth below under “Directors and Management” and incorporated by reference herein. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED IN THIS PROXY STATEMENT.
DIRECTORS AND MANAGEMENT
DIRECTORS AND MANAGEMENT
Director Biographical Information
Director Biographical Information The names of our directors, certain biographical information about our directors, and the experiences, qualifications, attributes or skills that the Nominating Committee considered when recommending the directors for nomination, are set forth below. Ages are as of October 21, 2024.
Director Biographical Information
| | ANDREW PARADISE Chief Executive Officer and Chairman of the Board Age: 42 Board Committees: • Nominating Committee (Chair) |
Director Biographical Information
Mr. Paradise is the Chief Executive Officer, Chairman of the Board and founder of Skillz (NYSE: SKLZ). Since its founding in 2012, Mr. Paradise has grown Skillz into a leading mobile games platform for fair, fun, and meaningful competition, backed by leading venture capitalists, media companies, and professional sports leagues and franchises. Mr. Paradise is a thought leader, inventor, and serial entrepreneur with a successful track record. Prior to Skillz, Mr. Paradise founded AisleBuyer, which was best known for pioneering mobile self-checkout prior to its sale to Intuit (NASDAQ: INTU) in 2012. Mr. Paradise has been the founding inventor behind companies in different technology sectors ranging from eCommerce to image recognition to HR technology. He is a regular contributor to Forbes and has been featured in outlets such as The Wall Street Journal, BBC, Bloomberg, Fast Company, CNBC and was named to the San Francisco Business Times’ 40 Under 40 Class of 2018. Mr. Paradise’s industry experience, leadership abilities and strategic insight make him a valued member of the Board.
Director Biographical Information
| | CASEY CHAFKIN Director Age: 40 Board Committees: • Nominating Committee |
Director Biographical Information
Mr. Chafkin is a Director and co-founder of Skillz. Since its founding in 2012 until September 2024, Mr. Chafkin served as the Chief Strategy Officer of Skillz where he was responsible for growing Skillz into the leading mobile games platform for fair, fun and meaningful competition, backed by leading venture capitalists, media companies, and professional sports leagues and franchises. Prior to Skillz, Mr. Chafkin was the VP of Business Development for AisleBuyer (now Intuit GoPayment) (NASDAQ: INTU) from 2010 to 2012. He is an expert in mobile payments and performance marketing. Mr. Chafkin received his B.S. in economics from Duke University and his MBA from Harvard Business School. As a leader, entrepreneur, and co-founder, Mr. Chafkin has been featured in outlets such as CNBC, VentureBeat, and Silicon Valley Business Journal. Mr. Chafkin’s leadership and business experience, along with his experience in the industry make him a valued member of the Board.
Director Biographical Information
| | HENRY HOFFMAN Director Age: 41 Board Committees: • Audit Committee • Compensation Committee |
Director Biographical Information
Mr. Hoffman has served on the Board since August 2022. Mr. Hoffman is a Partner at SL Advisors and Portfolio Manager of the SL Advisors MLP & Infrastructure SMA strategies. Mr. Hoffman is also Co-Portfolio Manager of the Catalyst Energy Infrastructure Fund and Co-Portfolio Manager for the Rational Inflation Growth Fund. Mr. Hoffman is co-creator of the American Energy Indices, with a deep passion for the energy infrastructure space. Mr. Hoffman has been with SL Advisors since 2010. Before joining SL Advisors, Mr. Hoffman worked as a buy-side equity analyst for PNC Capital Advisors and a private equity real estate analyst for PNC Realty Investors. Mr. Hoffman graduated from Duke University with a Bachelor of Science in economics and a minor in chemistry. Mr. Hoffman's extensive experience in the financial services industry makes him a valued member of the Board.
Director Biographical Information
| | ANTHONY CABOT Director Age: 68 Board Committees: • Nominating Committee |
Director Biographical Information
Mr. Cabot has served on the Board since October 2024. Anthony Cabot held the position of Distinguished Fellow of Gaming Law at the UNLV Boyd School of Law until May 2023, overseeing the esteemed gaming law program. For over two decades, he shared his expertise not only with students but also with legislators and regulators worldwide. Prior to transitioning to academia full-time in March 2018, Professor Cabot spent 37 years practicing gaming law. Notably, he chaired the gaming law practice and served on the executive committee at Lewis Roca Rothgerber Christie LLP. Since the outset of his career in 1981, Professor Cabot has been instrumental in shaping significant gaming legislation both domestically in Nevada and on the international stage. Known for his prolific writing, he has authored or edited thirteen books on gaming-related topics, including “Sports Wagering in America: Policies, Economics, and Regulation” (2018), “Regulating Land-based Casinos” (2nd ed. 2018), “The Law of Gambling and Regulated Gaming: Cases and Materials” (3rd ed. 2021), “Regulating Internet Gaming: Challenges and Opportunities” (2013), and “Practical Casino Math” (2nd ed. 2005). Additionally, he is a founding member and former president of the International Masters of Gaming Law.
Director Biographical Information
| | ALEXANDER MANDEL Director Age: 54 Board Committees: • Audit Committee (Chair) |
Director Biographical Information
Mr. Mandel has served on the Board since January of 2023 and is an independent financial consultant. He served as Chief Financial Officer of the Influential Network Inc., a privately-held influencer marketing company, from January 2022 through September 2023, and as Interim Chief Financial Officer through December 2023. From January 2019 through December 2021, he served as Chief Financial Officer of Fluent, Inc. (NASDAQ: FLNT) and as an independent financial consultant to the company from July 2018 through December 2018. From February 2016 to June 2018, Mr. Mandel served as the Chief Financial Officer of IAC Applications, a division of IAC/InterActiveCorp (NASDAQ: IAC). From 2010 to 2015, Mr. Mandel was employed by LendingTree, Inc. (NASDAQ: TREE), including as its Chief Financial Officer from 2012 to 2015. He was a Managing Director at Centerview Partners LLC, an investment banking advisory firm in New York City, from 2008 to 2010. Prior to that, Mr. Mandel held various positions at investment banking firm Bear, Stearns & Co. Inc. from 1996 to 2008, including Managing Director beginning in 2003. He received his Bachelor of Arts in Economics from Tufts University and his Masters of Business Administration from Columbia Business School. Mr. Mandel's decades of financial experience, coupled with his deep understanding of user acquisition, makes him a valued member of the Board.
Director Biographical Information
| | KENT WAKEFORD Director Age: 55 Board Committees: • Audit Committee • Compensation Committee (Chair) |
Director Biographical Information
Mr. Wakeford has been an independent director of Skillz since 2020 and has more than 20 years of experience in the technology, digital media, ad tech, gaming and esports industries. Mr. Wakeford has co-founded multiple companies, including Gen.G Esports (“Gen.G”), tvScientific, Colossal Inc. (“Colossal”), Integral Ad Science, and Rally Networks. Mr. Wakeford currently serves as Co-Chief Executive officer of Form Bio since 2022 and as a director of tvScientific since 2017. Mr. Wakeford previously served as Chief Operating Officer of Colossal from March 2021 to September 2022 and in various roles at Gen.G, including President, Chief Operating Officer and Vice Chairman of the Board of Directors, from June 2017 to October 2022. He has extensive experience in the game industry having served as Chief Operating Officer of Kabam from 2014 to 2017, where he helped grow Kabam to a globally diverse game company with over 1,000 employees in seven countries. Kabam games were played by over 500 million people around the world and generated over a billion dollars in revenue. Mr. Wakeford helped lead the sale of Kabam to Netmarble Games for $800 million. Mr. Wakeford is a co-inventor on over 80 issued patents in the game industry and a prolific industry spokesperson featured in Bloomberg, CNBC, The Wall Street Journal, Los Angeles Times, and ESPN. Mr. Wakeford received an undergraduate degree from the University of California, Los Angeles and a Juris Doctor from the University of Southern California. Mr. Wakeford’s leadership experience and industry experience make him a valued member of the Board.
Criteria for Selection of Directors
Criteria for Selection of Directors The Nominating Committee is responsible for identifying individuals that are qualified to become members of the Board and ensuring that the Board has the requisite expertise and that its membership consists of persons with sufficiently diverse and independent backgrounds. Pursuant to our Corporate Governance Guidelines, the Nominating Committee may take into account many factors and seek individuals with backgrounds and qualities that, when combined with those of the Company’s incumbent directors, provide a blend of skills and experience to further enhance the effectiveness of the Board. Consideration will be given to individual qualifications, including, but not limited to: relevant career experience; strength of character; judgment; familiarity with the Company’s business and industry; independence of thought; ability to work collegially; diversity of background and perspective, for example, with respect to age, gender, race, ethnicity, place of residence, specialized experience and global perspective; and all other factors deemed appropriate. Such other factors may include, but are not limited to: existing commitments to other businesses; potential conflicts of interest with other pursuits; legal considerations; corporate governance background; financial and accounting background; executive compensation background; relevant industry experience and technical skills; and the size, composition and combined expertise of the existing Board.
Director Compensation Program
Director Compensation Program The Skillz non-employee director compensation program is designed to provide competitive compensation necessary to attract and retain high quality non-employee directors and to encourage ownership of Skillz stock to further align their interests with those of our stockholders. In 2023, our non-employee director compensation program provided the following compensation components:
Director Compensation Program
| • | An annual cash retainer of $45,000; |
Director Compensation Program
| • | An annual cash retainer of $25,000 for the chair of the Audit Committee, $25,000 for the chair of the Compensation Committee and $10,000 for the chair of the Nominating Committee; |
Director Compensation Program
| • | An annual cash retainer of $12,500 for members of the Audit Committee, $12,500 for members of the Compensation Committee and $5,000 for members of the Nominating Committee; |
Director Compensation Program
| • | An initial grant of restricted stock units (“RSUs”) under the Skillz Inc. 2020 Omnibus Incentive Plan (the “Omnibus Plan”) upon each director’s election to office; the RSUs have a target value of $400,000 (with the number of RSUs being determined using the volume weighted average price (“VWAP”) on the NYSE of a share of Class A Common Stock over the fifteen (15) trading day period preceding the grant date) and vest ratably on an annual basis over four years; |
Director Compensation Program
| • | An annual grant of RSUs under the Omnibus Plan with a target grant value of $200,000 (with the number of RSUs being determined using a fifteen (15) trading day VWAP preceding the grant date) for each director who has completed at least six months’ service, which vests after one year; the Company may pay such grant in cash in lieu of equity. |
Director Compensation Program
| • | Meeting fees of $10,000 per meeting for participation on the Special Task Force on Material Weakness Remediation of the Board; and |
Director Compensation Program
| • | An additional annual cash retainer of $25,000 for serving as our non-executive chair and $15,000 for serving as our lead director, in each case, if applicable. |
Director Compensation Program
Director Compensation Consultant: The Compensation Committee retains Pearl Meyer, a national compensation consulting firm, to assess trends and developments in director compensation practices and to compare the Company’s practices against them. The Compensation Committee uses the analysis prepared by the consultant as part of its periodic review of Skillz’s director compensation practices. Other than the foregoing consulting services and the services provided to the Compensation Committee with respect to Executive Compensation (as set forth under the heading “Executive Compensation; Compensation Discussion and Analysis; How Compensation Decisions Are Made; Role of Compensation Consultants” below), Pearl Meyer did not provide any other material services to the Company in 2023.
2023 Director Compensation Table
2023 Director Compensation Table The following table provides information concerning the compensation of each non-employee director who served on the Board in 2023. Mr. Paradise and Mr. Chafkin did not receive any additional compensation for their services as directors of the Company during 2023. All dollar amounts are rounded to the nearest whole dollar.
2023 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards(2) ($) | All Other Compensation ($) | Total | | Henry Hoffman | 187,500 | — | — | 187,500 | | Alexander Mandel(3) | 254,375 | 344,906 | — | 599,281 | | Vandana Mehta-Krantz(4) | 17,500 | — | — | 17,500 | | Seth Schorr(6) | 168,750 | — | — | 168,750 | | Kent Wakeford | 397,708 | — | — | 397,708 | | Kevin Chessen(5) | 165,000 | 344,906 | — | 509,906 |
2023 Director Compensation Table
| (1) Excludes expense reimbursements. We reimburse our directors for expenses incurred to attend board meetings. |
2023 Director Compensation Table
| (2) The amounts reported in this column represent the aggregate grant date fair value of RSU awards granted to the non-employee directors in 2023, computed in accordance with FASB ASC Topic 718. See Note 14 to Skillz’s audited consolidated financial statements included in its Annual Report on Form 10-K filed with the SEC for a discussion of all assumptions made by us in determining the grant date fair value of our equity awards. As of December 31, 2023, our non-employee directors who were members of the Board on such date held the following outstanding and unvested equity awards: Henry Hoffman 10,532 RSUs; Alexender Mandel 28,271 RSUs; Seth Schorr 9,351 RSUs; Kent Wakeford 304 RSUs. |
2023 Director Compensation Table
| (3) Mr. Mandel joined the Board in January 2023. |
2023 Director Compensation Table
| (4) Ms. Mehta-Krantz left the Board in January 2023. |
2023 Director Compensation Table
| (5) Mr. Chessen joined the Board in February 2023 and left the Board in November 2023. Mr. Chessen’s RSUs were forfeited for no consideration upon his recognition from the Company in accordance with the terms set forth in the Omnibus Plan. |
2023 Director Compensation Table
| (6) Mr. Schorr left the Board in September 2024. Upon his resignation from the Board in September 2024, Mr. Schorr’s unvested RSUs were forfeited for no consideration in accordance with the terms set forth in the Omnibus Plan. |
Compensation Philosophy & Strategy
| • | Balance rewards for both short-term results and the long-term strategic decisions needed to ensure sustained business performance over time without excessive risk-taking; and |
How Compensation Decisions Are Made
How Compensation Decisions Are Made An employee’s compensation, at any level, reflects that employee’s value to the business, taking into account the market value of their skills, their individual contribution and business results. To be sure we appropriately assess the value of our senior executives, Skillz utilizes the following evaluation process: 1. Develop Performance Commitments. All Skillzians, including the Chief Executive Officer and our executive officers, develop goals, both qualitative and quantitative, that they seek to achieve in a particular year in support of the business in consultation with their supervisors and, for our executives, the Board and/or Compensation Committee. The Board reviews and approves the Chief Executive Officer’s performance goals and formally reviews progress and outcomes. 2. Determine Annual Bonus Payouts. Evaluation of Chief Executive Officer by the Compensation Committee - The Chair of the Compensation Committee works directly with the Compensation Committee’s compensation consultant to provide a decision-making framework for use by the Compensation Committee in determining annual incentive payouts for the Chief Executive Officer. This framework considers the Chief Executive Officer’s self-assessment of performance against commitments in the year, both qualitative and quantitative, and also considers progress against strategic objectives, as well as an analysis of the Company’s total performance over the year. The Compensation Committee considers all of this information in developing its recommendations, which are then presented to the independent members of the Board for further review, discussion, and final approval. The Compensation Committee meets regularly in executive session. Our Chief Executive Officer is not present during Compensation Committee deliberations or votes on his compensation and also recuses himself from sessions of the Board where the Board acts on the Compensation Committee’s recommendations regarding his compensation. Evaluation of Executive Officer Results by the Chief Executive Officer and the Compensation Committee - Executives work with their managers throughout the year to update their own results against their stated goals. The self-assessments of the Executive Officers are reviewed by the Head of People Operations and the Chief Executive Officer, who evaluate the information. Following this in-depth review and taking into account the Company’s performance, the Chief Executive Officer makes compensation recommendations to the Compensation Committee based on an evaluation of the executive officers’ compensation for the year, and the Compensation Committee ultimately decides whether to approve or adjust the Chief Executive Officer’s recommendations. The Compensation Committee then presents the compensation decisions for the Chief Executive Officer to the independent members of the Board for ratification. 3. Set Competitive Target Pay. Benchmarking - Skillz utilizes several compensation surveys that provide general trend information and details on levels of salary, target annual incentives and long-term incentives, the relative mix of short- and long-term incentives, and mix of cash and stock-based pay. Given the battle for talent that exists in our industry, the benchmark companies that are used by the Compensation Committee to guide its decision making have included a broad range of key information technology companies and size appropriate (at the time of adoption) companies in the following industries: gaming, media and entertainment. The surveys and benchmark data are supplemented by input from the Compensation Committee’s outside consultant on factors such as recent market trends. The Compensation Committee reviews and approves this list annually. In setting 2023 target compensation levels for the NEOs, the Company used the peer group detailed below. This peer group was determined by the Compensation Committee based on an in-depth review by its independent compensation consultant, Pearl Meyer, which included an assessment of potential comparators to evaluate the degree to which the current peers have kept pace with the Company’s size (revenue and market capitalization), growth and evolution.
How Compensation Decisions Are Made
| 2023 Benchmark Group | | | | Avid Technology, Inc. | LivePerson, Inc. | Riot Platforms, Inc. | | DraftKings Inc. | Magnite, Inc. | Smartsheet Inc. | | Everbridge, Inc. | Momentive Global Inc. | Vimeo, Inc. | | Fastly, Inc. | nCino, Inc. | Zuora, Inc. | | Integral Ad Science Holding Corp. | PLAYSTUDIOS, Inc. | |
How Compensation Decisions Are Made
Individual Compensation - For individual compensation decisions, the benchmark information is used together with an internal view of individual performance relative to other executives and recognizing that the skills and experience of our senior executives are highly sought after by other companies and, in particular, by our competitors. The Compensation Committee does not benchmark directly to the peer group, but rather uses it as a frame of reference in determining executive compensation. Because factors such as performance and retention, as well as size and complexity of the job role, are considered when compensation decisions are made, the cash and total compensation for an individual named executive officer may be higher or lower than the broader benchmark group. Evaluation of Chief Executive Officer Target Pay by the Compensation Committee - The Chair of the Compensation Committee works directly with the Compensation Committee’s compensation consultant to provide a decision-making framework for use by the Compensation Committee in setting target compensation opportunities for the Chief Executive Officer. The independent members of the Board review and provide final approval. Where appropriate and as both previously disclosed and described in greater detail below, the Special Committee makes decisions with respect to Chief Executive Officer’s compensation arrangements, including the grant and terms and conditions of long-term compensation. Evaluation of Executive Officers by the Chief Executive Officer and the Compensation Committee - The Chief Executive Officer makes compensation recommendations on the executive officers’ target compensation to the Compensation Committee. The Compensation Committee evaluates all of the factors considered by the Chief Executive Officer and reviews compensation summaries that tally the dollar value of all compensation and related programs, including salary, annual incentive, long-term compensation, deferred compensation, retention payments and pension benefits. These summaries provide the Compensation Committee with an understanding of how their decisions affect other compensation elements, and the impact of potential separations of employment or retirement. The Compensation Committee decides whether to approve or adjust the Chief Executive Officer’s recommendations for the NEOs. The Compensation Committee then presents the compensation decisions for the Chief Financial Officer to the independent members of the Board for ratification. Role of Compensation Consultants - The Compensation Committee believes that independent advice is important in developing and overseeing our executive compensation program. The Compensation Committee has continued its engagement with Pearl Meyer to provide consulting services in relation to executive and director compensation decisions. Pearl Meyer reports directly to the Compensation Committee and only provides services to us on such matters as needed and as directed solely by the Compensation Committee. These services include providing guidance on trends in CEO, executive, and non-employee director compensation; the development of the specific components of our executive compensation program; and a competitive market assessment of our executive compensation program, including the composition of our compensation peer group. The Compensation Committee has assessed the independence of Pearl Meyer in accordance with applicable SEC and NYSE rules and confirmed that Pearl Meyer’s work does not raise any conflicts of interest and that Pearl Meyer remains independent under applicable rules.
Key Components of Skillz’s Executive Compensation Program and 2023 Compensation Decisions for NEOs
| Component | Key Characteristics | | Salary | Salary is a market-competitive, fixed level of compensation. | | Annual Cash Bonus Program | At target, annual cash incentives provide a market-competitive total cash opportunity. Actual annual cash incentive payments are funded by the achievement of business performance against financial metrics and distributed based on annual performance scores, with top performers typically earning the greatest payouts and the lowest performers earning no incentive payouts. | | Performance Stock Units (PSUs) | Periodically, the Compensation Committee and/or the Chairman and Chief Executive Officer reviews outstanding stock-based awards for key executives. Depending on individual performance and the competitive environment for senior executive leadership talent, additional awards may be made in the form of PSUs to align executive compensation with stockholder interests or as part of a new hire grant. | | Restricted Stock Units (RSUs) | RSUs vest over time; typically over four years, with a cliff vest in the first year and ratable quarterly vesting thereafter. We view RSUs as a valuable retentive and incentivizing component of our compensation program. | | Perquisites and Other Benefits | Perquisites are intended to ensure safety and productivity of executives in order for them to be in the best position to complete their Company duties, though we do not view perquisites as a significant component of our executive compensation program. Perquisites include such things as personal security, personal assistant fees and executive coaching services. | | Post-Employment Savings Plans | U.S. employees, including our NEOs, may participate in the Skillz Inc. 401(k) Retirement Savings Plan by saving a portion of their pay in the plan. The Company provides matching contributions for this plan up to a maximum threshold in order to retain key employees by providing vehicles to plan for the future. |
Annual Cash Bonuses
Annual Cash Bonuses In order to more closely align the Company’s annual bonus program with the interests of stockholders and the Company’s short-term operating goals, effective January 1, 2022, the Compensation Committee approved two significant modifications to the Company’s bonus program:
Annual Cash Bonuses
| • | Adopted corporate financial metrics that tie to the Company’s growth and profitability, and |
Annual Cash Bonuses
| • | Based individual NEO payouts solely on the achievement against the adopted corporate financial metrics. |
Annual Cash Bonuses
The Company sets business objectives at the beginning of each year. At the end of the year, performance for the Company is assessed against these predetermined financial targets in combination with the Compensation Committee’s assessment of an executive’s individual performance. An executive generally must be employed by the Company at the end of the performance period in order to be eligible to receive an annual bonus payout. This incentive design ensures payouts are aligned to the Company’s overall business performance. For 2023, our NEOs had the following target bonuses.
Annual Cash Bonuses
| Name | Target Bonus (Effective January 1, 2023) | | Andrew Paradise | $525,000 | | Casey Chafkin | $276,250 | | Jason Roswig | $500,000 | | Andrew Dahlinghaus(1) | $350,000 | | Charlotte Edelman | $255,000 |
Annual Cash Bonuses
| (1) Mr. Dahlinghaus’ target bonus was pro-rated for 2023 based on his June 26, 2023 start date |
Annual Cash Bonuses
Bonuses under the annual cash bonus program can be earned at threshold, target and maximum amounts representing 75%, 100% and 125%, respectively, of the annual total incentive opportunity for each named executive officer. If Revenue After Engagement Marketing performance was achieved at $130 million, $154 million, or $169 million, the bonus would payout at 75%, 100%, or 125%, respectively, of target. Revenue After Engagement Marketing is not a generally accepted accounting principle (“GAAP”) financial performance metric. Revenue After Engagement Marketing is determined by taking consolidated revenue and adjusting for engagement marketing expenses included in sales and marketing expenses. Accordingly, stockholders should not rely on this metric as an indicator of financial performance. If Adjusted EBITDA was achieved at negative $52 million, negative $41 million or negative $37 million, the bonus would payout at 75%, 100%, or 125%, respectively, of target. To the extent performance falls between threshold and target or target and maximum, interpolation is used to determine the amount of bonus payable. If less than threshold performance is achieved, no bonus is paid out. For 2023, the Compensation Committee determined not to pay any bonuses under the annual cash bonus program to the Company’s NEOs.
Long Term Equity Incentive Grants
Long Term Equity Incentive Grants Our equity award program is the primary vehicle for offering long-term incentives to our named executive officers. The equity awards we have historically granted and currently grant include options to purchase shares of our Class A Common Stock and RSU awards that are settled in shares of our Class A Common Stock upon vesting, and we have granted to our named executive officers both awards that vest over a long-term period and awards that vest only upon the achievement of specified performance milestones, in each case subject to continued service. As a result, a significant portion of our named executive officers’ total compensation is at risk, depending on long-term stock price performance. While we strive to offer a total level of compensation that is competitive within specific roles and geographical markets, we do not have an inflexible set of criteria for granting equity awards; instead, the Compensation Committee exercises its judgment and discretion, in consultation with our Chief Executive Officer and a compensation consultant. The Compensation Committee considers, among other things, the role and responsibility of the named executive officer, competitive market factors, the amount of stock-based equity compensation already held by the named executive officer, the impact of any dramatic changes in our stock price over a short period of time and the cash-based compensation received by the named executive officer, to determine the level and types of equity awards that it approves. We generally grant substantial one-time new hire equity awards to our employees, including executives, upon their commencement of employment with us, or upon their promotion to new positions. Additionally, as part of our ongoing executive compensation review and alignment process, we periodically grant additional equity awards to our executives. The Compensation Committee meets periodically, including to approve equity award grants to our executives from time to time. We do not have, nor do we plan to establish, any program, plan or practice to time equity award grants in coordination with releasing material non-public information.
CEO Long-Term Equity Grant
CEO Long-Term Equity Grant As previously disclosed, in November 2022, the Special Committee approved a long-term equity award to Mr. Paradise using a mix of 75% RSUs ($25.875 million grant date fair value) and 25% PSUs ($8.625 million grant date fair value). The RSUs were granted subject to the Company’s standard time-vesting schedule, continued service through each applicable vesting date and the terms of the Omnibus Plan, and as required under SEC rules, were reported in the 2023 proxy. The PSUs were granted on January 1, 2023, following the determination and approval of the performance metrics and targets by the Compensation Committee. As such, and as required under SEC rules, are reported in the Summary Compensation Table in this proxy statement. A Closer Look at the PSUs. Mr. Paradise received a grant of 9,661,525 PSUs, which vest over four, one-year periods (January 1, 2023 to December 31, 2023, January 1, 2024 to December 31, 2024, January 1, 2025 to December 31, 2025, January 1, 2026 to December 31, 2026) in each case subject to continuous service with the Company through each applicable vesting date and the attainment of certain corporate performance goals.
2023 Equity Awards Made to Other Named Executive Officers
2023 Equity Awards Made to Other Named Executive Officers In June 2023, the Compensation Committee approved an equity award for Mr. Dahlinghaus who joined as the General Counsel and Corporate Secretary. Mr. Dahlinghaus was awarded 44,235 RSUs which were to vest 100% on the first anniversary of the grant date, generally subject to the NEO’s continued employment with the Company through the applicable vesting date. Mr. Dahlinghaus’ RSUs were forfeited for no consideration upon his resignation from the Company in accordance with the grant terms. Mr. Dahlinghaus was also awarded 44,235 PSUs, subject to certain performance goals. Mr. Dahlinghaus separated with the Company prior to the PSU grant being issued.
Employment Arrangements
Employment Arrangements All of our NEOs are employees-at-will and none of them have employment agreements with Skillz. Some of our executive officers have offer letters with the Company, including our NEOs: Mr. Roswig is party to an offer letter with the Company dated June 1, 2022, pursuant to which he served as President and Chief Financial Officer of the Company (the “Roswig Offer Letter”). On February 27, 2023, he transitioned to the role of President and on April 14, 2023, transitioned back to the role of President and Chief Financial Officer. There are no other changes to the Roswig Offer Letter. He is paid a salary of $500,000 per year, and is eligible to receive annual target incentive compensation of $500,000, subject to achievement of certain performance goals. In connection with the Roswig Offer Letter, Mr. Roswig received a RSU award equal to $15,000,000 of the Company’s Class A Common Stock, calculated based on the 90 day volume weighted average stock price of the Company’s Class A Common Stock as of the end of the first quarter of Mr. Roswig’s employment. The award vests 25% on the first anniversary of Mr. Roswig’s start date and the remainder vests in twelve substantially equal quarterly installments, in each case subject to continuous service with the Company through each applicable vesting date and the terms of the Omnibus Plan. Mr. Roswig also received a PSU award equal to $5,000,000 of the Company’s Class A Common Stock. The award is scheduled to vest over four years according to the achievement of certain Company performance goals. Mr. Roswig resigned from his position in January 2024. Mr. Dahlinghaus is party to an offer letter with the Company (the “Dahlinghaus Offer Letter”) dated May 19, 2023, pursuant to which he served as General Counsel and Corporate Secretary. He is paid a salary of $350,000 per year, and is eligible to receive annual target incentive compensation of $350,000 (pro-rated for 2023), subject to achievement of certain performance goals. In connection with the Dahlinghaus Offer Letter, Mr. Dahlinghaus received a RSU award equal to $500,000 of the Company’s Class A Common Stock, calculated based on the 90 day volume weighted average stock price of the company’s Class A Common Stock as of the end of the second quarter of 2023. The award vests 100% on the first anniversary of Mr. Dahlinghaus’ start date, subject to the continuous service with the Company through each applicable vesting date and the terms of the Omnibus Plan. Mr. Dahlinghaus resigned from his position in February 2024. As Mr. Dahlinghaus resigned, he forfeited all unvested awards and was not entitled to any separation, transition or post-termination payments or benefits.
Transition Arrangements
Transition Arrangements Ms. Edelman was a party to a transition letter with the Company dated April 14, 2023 (the “Edelman Transition Agreement”), pursuant to which she continued to provide services to the Company up to September 2023. During the transition period, Ms. Edelman was paid her base salary and remained eligible to vest in prior equity awards. Upon completion of the transition period, the Company (i) paid Ms. Edelman severance equal to nine months of her base salary, (ii) allowed her the full remaining option term to exercise her vested stock options, and (iii) provided up to nine months of COBRA premiums, in each case subject to Ms. Edelman’s execution of a general release of claims. The Edelman Transition Agreement also contains cooperation and non-disparagement provisions.
2023 Summary Compensation Table and Related Narrative
2023 Summary Compensation Table and Related Narrative The following Summary Compensation Table shows information concerning the annual compensation for services provided to Skillz by our NEOs for the years ended December 31, 2023 and 2022. Certain other information is provided in the narrative footnotes following the Summary Compensation Table. All dollar amounts are rounded to the nearest whole dollar.
2023 Summary Compensation Table and Related Narrative
| Name and Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($) | All Other Compensation ($)(3) | Total ($) | | Andrew Paradise | 2023 | 525,000 | — | — | — | 20,259(4) | 545,259 | | Chief Executive Officer | 2022 | 525,000 | — | 25,875,000 | — | 23,093 | 26,423,093 | | Casey Chafkin | 2023 | 425,000 | — | — | — | 48,178(5) | 473,178 | | Former Chief Strategy Officer | 2022 | 425,000 | 225,000 | 2,320,276 | — | 30,917 | 3,000,193 | | Jason Roswig | 2023 | 500,000 | — | — | — | 23,115(6) | 523,115 | | Former President, Chief Financial Officer | 2022 | 201,923 | 200,000 | 15,000,000 | — | — | 15,401,923 | | Charlotte Edelman | 2023 | 222,308 | — | — | — | 355,788(7) | 578,096 | | Former General Counsel and Corporate Secretary | 2022 | 409,616 | 225,000 | 1,199,040 | — | 109,865 | 1,943,521 | | Andrew Dahlinghaus | 2023 | 168,269 | — | 402,539 | — | 75,337(8) | 646,145 | | Former General Counsel and Corporate Secretary | | | | | | | |
2023 Summary Compensation Table and Related Narrative
| (1) The amounts reported in this column for 2022 include a one-time sign-on bonus for Mr. Roswig and transaction retention bonus payments relating to the closing of the Business Combination for Mr. Chafkin and Ms. Edelman. |
2023 Summary Compensation Table and Related Narrative
| (2) The amounts reported in this column represent the aggregate grant date fair value of RSU and PSU awards granted to the NEOs, computed in accordance with FASB ASC Topic 718. See Note 14 to Skillz’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the 2023 fiscal year for a discussion of all assumptions made by us in determining the grant date fair value of our equity awards granted in 2023. |
2023 Summary Compensation Table and Related Narrative
| (3) In addition to items further described below, the amounts in this column represent the amount of 401(k) plan match contributions made by Skillz and vacation payout. This column does not include any imputed income with respect to life insurance premiums or group health, medical or dental reimbursement plans as Skillz’s plans (i) do not discriminate in favor of the NEOs in scope, terms, or operation and (ii) are available generally to all salaried employees of Skillz. |
2023 Summary Compensation Table and Related Narrative
| (4) Consists of (i) $6,730, which represents the value of 401(k) plan match contributions; and (ii) $13,529 for untaken vacation time paid out. |
2023 Summary Compensation Table and Related Narrative
| (5) Consists of: (i) $26,000, which represents the value of executive coaching services provided to Mr. Chafkin; (ii) $14,005, which represents the value of 401(k) plan match contributions; and (iii) $8,173 for untaken vacation time paid out. |
2023 Summary Compensation Table and Related Narrative
| (6) Consists of: (i) $12,500, which represents the value of executive coaching services provided to Mr. Roswig; and (ii) $10,615 for untaken vacation time paid out. |
2023 Summary Compensation Table and Related Narrative
| (7) Consists of: (i) $13,500, which represents the value of executive coaching services; (ii) $6,375, which represents the value of 401(k) plan match contributions; (iii) $6,538 for untaken vacation time paid out; (iv) $318,750 for severance; and (v) 10,625 which represents the value of six months of COBRA premiums. |
2023 Summary Compensation Table and Related Narrative
| (8) Consists of (i) $75,000 which represents a relocation payment to Mr. Dahlinghaus; and (ii) $337 for untaken vacation time paid out. |
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End The following table shows information regarding equity awards held by the NEOs that were outstanding as of December 31, 2023. Dollar amounts, except exercise prices, are rounded to the nearest whole dollar.
Outstanding Equity Awards at 2023 Fiscal Year-End
| | | Option Awards | | | | | Stock Awards | | | Name(1) | Grant Date(2) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#)(3) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(4) | Option Exercise Price ($) | Option Expiration Date | Number of shares or units of stock that have not vested (#)(5) | Market value of shares or units of stock that have not vested ($)(6) | | Andrew Paradise | | | | | | | | | | | 4/15/2020 | — | — | — | — | — | 62,009 | 386,936 | | | 12/16/2020 | — | — | 498,000 | 353.60 | 12/16/2030 | — | — | | | 11/23/2022 | — | — | — | — | — | 1,449,228 | 9,043,183 | | Casey Chafkin | | | | | | | | | | | 11/5/2018 | 51,344 | — | — | 7.80 | 11/4/2028 | — | — | | | 4/15/2020 | — | — | — | — | — | 11,586 | 72,297 | | | 12/16/2020 | — | — | 102,000 | 353.60 | 12/16/2030 | — | — | | | 3/4/2021 | — | — | — | — | — | 4,581 | 28,585 | | | 3/14/2022 | — | — | — | — | — | 30,353 | 189,403 | | Jason Roswig | 9/30/2022 | — | — | — | — | — | 357,918 | 2,233,408 | | Andrew Dahlinghaus | 6/26/2023 | — | — | — | — | — | 44,235 | 276,026 | | Charlotte Edelman(7) | 7/17/2020 | 6,514 | — | — | — | — | — | — |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (1) All outstanding equity awards as of December 31, 2023, as reported in this table, are denominated in (i) for Mr. Paradise for awards granted prior to 2022, shares of Class B Common Stock, and (ii) for all other awards, shares of Class A Common Stock. As of the closing of the Business Combination, all outstanding pre-closing equity awards under the 2017 Plan (as defined below) were replaced by economically equivalent substitute awards under our new Omnibus Plan, and the share numbers and exercise prices of such awards are shown in this table on an as-converted basis. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (2) This column shows the original grant dates for the awards that were substituted under the Omnibus Plan. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (3) The stock options shown in this column vest (or vested) 25% on the first anniversary of the grant date or vesting commencement date and 6.25% in quarterly installments over the next three years. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (4) The stock options shown in this column were awarded to Messrs. Paradise and Chafkin in connection with the closing of the Business Combination, and they vest as described under the heading “Closing Option Grants,” below. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (5) The shares of restricted stock and restricted stock units shown in this column vest (or vested) as follows: |
Outstanding Equity Awards at 2023 Fiscal Year-End
| • | On August 8, 2023 Mr. Chafkin exercised an option to purchase 87,805 shares of Class A Common stock granted to him on November 5, 2018. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| • | For Messrs. Chafkin, Roswig and for Mr. Paradise’s November 23, 2022 RSU award, the RSUs listed in this column vest 25% on the first anniversary of the grant date and 6.25% in quarterly installments over the next three years. In addition, as required under SEC rules, the accounting grant date under FASB ASC Topic 718 is being reported here for Mr. Paradise’s RSU award, as opposed to the January 1, 2023 grant date set forth in his award agreement. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| • | For Mr. Dahlinghaus, the RSU listed in the column vest 100% on the first anniversary of the grant date. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (6) For purposes of this table, the market value of unvested shares of restricted stock is determined by multiplying the number of shares by $6.24, the closing price of a share of Class A Common Stock on December 29, 2023. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| (7) In connection with Ms. Edelman’s resignation, she was not entitled to receive any additional compensation or benefits and the tables and summaries in this proxy statement are included to comply with the Company’s disclosure obligations but will have no force. Each previously granted unvested award was forfeited upon each applicable termination. |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The Skillz Inc. Executive Severance and Change in Control Plan (the “Severance Plan”) was adopted by the Company in order to: (i) provide financial support to a select group of senior-level executives of Skillz, including the NEOs, in the period following the termination of their employment, (ii) recognize the valuable contributions made by eligible employees to the Company, and (iii) help attract and retain highly qualified employees who are essential to the Company’s success. Under the Severance Plan, a covered executive who experiences a qualifying termination is eligible to receive severance benefits based on the executive’s years of service and position, consisting of (i) cash severance equal to an amount ranging from three to eighteen months’ base salary, and (ii) healthcare continuation payments for a period ranging from three to eighteen months. In addition, an executive who experiences a qualifying termination in connection with a change in control (as such term is defined in the Omnibus Plan) is eligible to receive a portion of their target bonus.
Pay Versus Performance
Pay Versus Performance In August 2022, the SEC released the final version of its pay versus performance disclosure rules as mandated under Dodd-Frank, and other official guidance issued thereunder, and which became effective starting with fiscal year ending December 31, 2023. The final rules were codified under Item 402(v) of Regulation S-K (along with other official guidance issued, “PvP disclosure rules”) and require the Company to provide the following tabular and narrative disclosures.
Pay Versus Performance
| Pay Versus Performance |
Pay Versus Performance
The below table sets forth the following information determined pursuant to the PvP disclosure rules for the previous three fiscal years (i) the total and average total compensation set forth in the Summary Compensation Table (“SCT”) for the Chief Executive Officer and the named executive officers as a group (excluding the Chief Executive Officer), respectively, (ii) the total and average total “compensation actually paid” (as determined in accordance with the PvP disclosure rules) for the Chief Executive Officer and the named executive officers as a group (excluding the Chief Executive Officer), respectively, and (iii) the Company’s cumulative Total Shareholder Return (“Cumulative TSR”).
Pay Versus Performance
| | | | | | Value of Initial Fixed $100 Investment Based on(4): | | | Year(a)(1) | SCT Total for PEO(b) | Compensation Actually Paid to PEO(c)(2) | Average SCT Total for Non-PEO Named Executive Officers(d)(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(e)(2) | Total Shareholder Return(f) | Net Loss (thousands) (h) | | 2023 | $545,259 | $(5,326,369) | $555,134 | $39,978 | $1.37 | $(104,886) | | 2022 | $26,423,093 | $(68,061,530) | $5,142,309 | $(5,408,957) | $2.24 | $(438,875) | | 2021 | $75,339,231 | $(152,876,793) | $10,400,790 | $(19,094,910) | $32.73 | $(187,925) |
Pay Versus Performance
| (1). | Mr. Paradise served as Principal Executive Officer (“PEO”) for all three years. The following individuals served as the Non-PEO NEOs for the covered years: |
Pay Versus Performance
| a. | For 2023, Messrs. Chafkin, Roswig, Dahlinghaus, and Ms. Edelman. |
Pay Versus Performance
| b. | For 2022, Messrs. Chafkin, Roswig, Lee and Bhardwaj and Ms. Edelman. |
Pay Versus Performance
| c. | For 2021, Messrs. Bhardwaj, Chafkin, Lee, and Henry, and Mses. Fritz-Bianchi and Aquirre. |
Pay Versus Performance
| (2). | Represents Compensation Actually Paid (“CAP”) for our PEO and average CAP for our Non-PEO NEOs as a group, as computed in accordance with the PvP disclosure rules (determined as set forth below). The dollar amounts do not reflect the amounts of compensation ultimately earned or realized by our NEOs during the covered years. |
Pay Versus Performance
| (3). | Amounts reflected in this column represents the average “Total Compensation” from the SCT and CAP for our Non-PEO NEOs as a group for the covered years. |
Pay Versus Performance
| (4). | These columns reflect the Company’s Cumulative TSR and our Peer Group Cumulative TSR for each measurement period from December 17, 2020 (our first trading day) through December 31, 2023. We have assumed that dividends have been reinvested. The resulting amounts assume that $100 was invested on December 17, 2020, in each of our Class A Common Stock and the stocks of our PvP Peer Group. |
Pay Versus Performance
CAP is determined by taking the “Total Compensation” column amount from the SCT for each covered fiscal year and adjusting as follows for our PEO and Non-PEO NEOs, respectively:
Pay Versus Performance
| Adjustments to Determine CAP for PEO | | | | | Covered Fiscal Year | 2023 | 2022 | 2021 | | SCT Total for PEO | $545,259 | $26,423,093 | $75,339,231 | | Pension Adjustments | | | | | Subtract “Change in Actuarial Present Value” reported in the SCT for the covered fiscal year | $— | $— | $— | | Add pension value attributable to covered fiscal year’s “service cost” | $— | $— | $— | | Add pension value attributable to the entire “prior service cost” of benefits granted (or credit for benefits reduced) in a plan amendment made in the covered fiscal year attributable to prior service periods | $— | $— | $— | | Equity Adjustments(i) | | | | | Subtract fair value (as of grant date) reported in the “Stock Awards” and “Option Awards” columns in the SCT for the covered fiscal year | $— | $(25,875,000) | $(70,776,870) | | Add fair value (as of end of year) of equity awards granted during the covered fiscal year that remain unvested as of year end | $— | $14,680,688 | $30,852,000 | | Add fair value (as of vesting date) of equity awards granted during the covered fiscal year that vest during the covered year | $— | $— | $— | | Add/Subtract the change in fair value from the prior year-end to the covered fiscal year-end for equity awards granted in prior fiscal years that remain outstanding and unvested at the end of the covered fiscal year | $(6,040,542) | $(35,950,016) | $(170,748,816) | | Add/Subtract the change in fair value from the prior year-end to the vesting date for equity awards granted in prior fiscal years that vested during covered fiscal year | $168,914 | $(16,488,295) | $(17,542,338) | | Subtract fair value (as of end of prior year) for equity awards granted in prior fiscal years that were forfeited during covered fiscal year | $— | $(30,852,000) | $— | | Add incremental fair value (as of modification date) of equity awards modified during covered fiscal year | $— | $— | $— | | Add dividends or other earnings paid on equity awards during covered fiscal year prior to vesting date of award that are not otherwise included in the total compensation for the covered fiscal year | $— | $— | $— | | TOTAL ADJUSTMENTS | $(5,871,628) | $(94,484,623) | $(228,216,024) | | CAP | $(5,326,369) | $(68,061,530) | $(152,876,793) |
Pay Versus Performance
| Adjustments to Determine Average CAP for Non-PEO Named Executive Officers as a Group | | | | | Covered Fiscal Year | 2023 | 2022 | 2021 | | Average SCT Total for Non-PEO Named Executive Officers | $555,134 | $5,142,309 | $10,400,790 | | Pension Adjustments | | | | | Subtract “Change in Actuarial Present Value” reported in the SCT for the covered fiscal year | $— | $— | $— | | Add pension value attributable to covered fiscal year’s “service cost” | $— | $— | $— | | Add pension value attributable to the entire “prior service cost” of benefits granted (or credit for benefits reduced) in a plan amendment made in the covered fiscal year attributable to prior service periods | $— | $— | $— | | Equity Adjustments(i) | | | | | Subtract fair value (as of grant date) reported in the “Stock Awards” and “Option Awards” columns in the SCT for the covered fiscal year | $(100,635) | $(4,583,100) | $(9,680,536) | | Add fair value (as of end of year) of equity awards granted during the covered fiscal year that remain unvested as of year end | $69,007 | $1,212,551 | $4,604,258 | | Add fair value (as of vesting date) of equity awards granted during the covered fiscal year that vest during the covered year | $— | $138,192 | $— | | Add/Subtract the change in fair value from the prior year-end to the covered fiscal year-end for equity awards granted in prior fiscal years that remain outstanding and unvested at the end of the covered fiscal year | $(401,365) | $(1,713,869) | $(5,649,706) | | Add/Subtract the change in fair value from the prior year-end to the vesting date for equity awards granted in prior fiscal years that vested during covered fiscal year | $(37,011) | $(1,163,553) | $(2,218,885) | | Subtract fair value (as of end of prior year) for equity awards granted in prior fiscal years that were forfeited during covered fiscal year | $(45,152) | $(4,441,487) | $(16,550,831) | | Add incremental fair value (as of modification date) of equity awards modified during covered fiscal year | $— | $— | $— | | Add dividends or other earnings paid on equity awards during covered fiscal year prior to vesting date of award that are not otherwise included in the total compensation for the covered fiscal year | $— | $— | $— | | TOTAL ADJUSTMENTS | $(515,157) | $(10,551,266) | $(29,495,700) | | CAP | $39,978 | $(5,408,957) | $(19,094,910) |
Pay Versus Performance
| (i) The fair value or incremental fair value of all incentive equity awards is determined in accordance with ASC 718, “Compensation – Stock Compensation,” generally using the same assumptions used in determining the grant date fair value of our equity awards reflected in the Summary Compensation Table. Notwithstanding the foregoing, in order to properly value the option awards and market-based awards, we made appropriate adjustments to the grant date assumptions in our Black-Scholes and Monte Carlo valuation models, respectively. For our Black-Scholes model, we adjusted the assumptions to reflect changes in the stock price historical and implied volatility, expected life (including remaining vesting periods, remaining expiration periods and option gain levels), dividend yield and risk-free interest rates as of each measurement date. For our Monte Carlo model, we adjusted the assumptions to reflect changes in the stock price, historical and implied volatility, and risk free interest rates as of the relevant measurement date. The value of outstanding performance-based awards in the covered fiscal year is based upon the probable outcome of the performance conditions as of the last day of the fiscal year. |
Narrative to the Pay versus Performance Table
Narrative to the Pay versus Performance Table As noted above, we are required to provide the above tabular and below narrative disclosures in order to comply with Item 402(v) of Regulation S-K. To view the data that our Compensation Committee finds most valuable in designing and administering our executive compensation program, see our disclosures under the “Compensation Discussion and Analysis” section of this proxy statement, which describe in detail how our current pay practices reflect our pay philosophy. The following provides a description of the relationship between the CAP for our PEO and the average CAP of our Non-PEO named executive officers and the performance measures disclosed in the above table.
BOARD OF DIRECTORS
BOARD OF DIRECTORS This Article VIII is inserted for the management of the business and for the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders. (A) General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, except as otherwise provided by law. (B) Number of Directors. Subject to the rights of holders of any series of Preferred Stock to elect directors, the number of the directors of the Corporation shall be fixed from time to time by the Board; provided, further, that unless otherwise approved by the Requisite Stockholder Consent, the number of the directors shall not exceed nine (9). For the avoidance of doubt, no decrease in the number of directors constituting the Board shall shorten the term of any incumbent director. (C) Tenure. The directors shall be elected or appointed for a term of office continuing until the next annual meeting of stockholders of the Corporation. Each director shall hold office until such director’s successor is elected and qualified, or until such director’s earlier death, resignation, disqualification or removal from office. Any director may resign at any time upon notice to the Corporation given in writing by any electronic transmission permitted in the Corporation’s Bylaws or in accordance with applicable law. (D) Vacancies; Newly Created Directorships. Subject to the rights of holders of any series of Preferred Stock and subject to Section 1.1(d) of that certain Director Nomination Agreement, dated December 16, 2020, between the Corporation and Eagle Equity Partners II, LLC, any newly created directorship that results from an increase in the number of directors or any vacancy on the Board that results from the death, disability, resignation, disqualification or removal of any director or from any other cause shall be filled: (i) prior to the Voting Threshold Date, solely by the stockholders of the Corporation with the Requisite Stockholder Consent unless any such vacancy or newly created directorships remains unfilled for at least sixty (60) days, in which case such vacancy or newly created directorships may also be filled by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director; or (ii) on or after the Voting Threshold Date solely by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director. (E) Removal. Subject to the rights of the holders of any series of Preferred Stock expressly set forth in a Preferred Stock Designation adopted in compliance with this Amended and Restated Certification of Incorporation, any director or the entire Board may be removed from office at any time with or without cause and for any or no reason only with and immediately upon the Requisite Stockholder Consent. (F) Committees. Pursuant to the Bylaws of the Corporation, the Board may establish one or more committees to which may be delegated any or all of the powers and duties of the Board to the full extent permitted by law. (G) Stockholder Nominations and Introduction of Business. Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders before a meeting of stockholders shall be given in the manner provided by the Bylaws. (H) Preferred Stock Directors. During any period when the holders of any series of Preferred Stock have the right to elect additional directors as provided for or fixed pursuant to and in accordance with the provisions of Article IV hereof or any Preferred Stock Designation, then upon commencement and for the duration of the period during which such right continues: (i) the then otherwise total number of authorized directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions, and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to his earlier death, disqualification, resignation or removal. Except as otherwise provided for or fixed pursuant to and in accordance with the provisions of Article IV hereof or any Preferred Stock Designation, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, all such additional directors elected by the holders of such stock, or elected or appointed to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors shall automatically cease to be qualified as directors, the terms of office of all such directors shall forthwith terminate and the total authorized number of directors of the Corporation shall be reduced accordingly.
ARTICLE IX
ARTICLE IX
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Unless and except to the extent that the Bylaws shall so require, the election of directors of the Corporation need not be by written ballot. The vote required for election of a director by the stockholders at a meeting of stockholders shall, except in a contested election, be the affirmative vote of a majority of the votes cast in favor or against the election of a nominee at a meeting of stockholders. In a contested election, (i) the directors shall be elected by a plurality of the votes cast at a meeting of stockholders by the holders of stock entitled to vote in such election, and (ii) stockholders shall not be permitted to vote against a nominee. An election shall be considered contested if, as the tenth (10th) preceding the date the Corporation first mails its notice of meeting for such meeting to the stockholders of the Corporation, there are more nominees for election than directorships on the Board to be filled by election at the meeting.