DEF 14A of Five9, Inc., Apr 1, 2024

DEF 14A of Five9, Inc.

Filed Apr 1, 2024 · FY20230001288847-24-000042

Open on EDGAR

  1. Information Regarding the Nominees

    Information Regarding the Nominees

  2. Information Regarding the Nominees

    | | Michael Burdiek, age 64, has served as a member of our Board of Directors since September 2015. Mr. Burdiek served as the Chief Executive Officer and also as a member of the board of directors of Motion Acquisition Corp. ("Motion"), a special purpose acquisition company, from 2020 until its business combination with DocGo, Inc. in November 2021. Since November 2021, Mr. Burdiek has served on the board of directors of DocGo. From June 2011 to March 2020, Mr. Burdiek served as President and Chief Executive Officer and as a member of the board of directors of CalAmp Corp., a global provider of telematics software and technologies. Prior to CalAmp, Mr. Burdiek was President and Chief Executive Officer of Telenetics Corporation, a provider of networking and communications products. Mr. Burdiek holds an M.B.A. and an M.S. degree in electrical engineering from California State University, Fullerton, and a B.S. degree in electrical engineering from Kansas State University. Mr. Burdiek shall continue to serve on our Board of Directors because of his strategic and operational experience, experience as Chief Executive Officer of publicly traded companies, as well as his deep understanding of technology and go-to-market strategies. | | Michael Burdiek Age: 64 Director Since: 2015 | |

  3. Information Regarding the Nominees

    | | Julie Iskow, age 62, has served as a member of our Board of Directors since February 2023. Ms. Iskow serves as the President and Chief Executive Officer of Workiva Inc., a position she has held since April 2023. She was previously the Executive Vice President and Chief Operating Officer of Workiva Inc. from October 2019 to March 2022, and the President and Chief Operating Officer from March 2022 to April 2023. Prior to joining Workiva, Ms. Iskow served as Chief Technology Officer of Medidata Solutions, Inc. from April 2015 to October 2019, and was also its Executive Vice President of Product Development from July 2016 to October 2019. From December 2013 to March 2015, Ms. Iskow served as Chief Information Officer and Senior Vice President at WageWorks, Inc., and prior to that as its Senior Vice President of Product Development and Vice President of Product Development. Ms. Iskow has also served as Vice President of Engineering at Asyst Technologies and GW Associates, Inc. Ms. Iskow has served as a member of the board of directors of Workiva since January 2021. Ms. Iskow also previously served as a member of the board of directors of Vocera Communications, Inc. from May 2019 until its acquisition in February 2022 and as a member of the board of directors of Cvent Holding Corp. from May 2022 to July 2022. Ms. Iskow earned a B.S. degree from the University of California, Berkeley and an M.S. degree from University of California, Davis. Ms. Iskow shall continue to serve on our Board of Directors because of her extensive leadership experience in the technology industry and service on the boards of directors and other leadership positions with numerous other companies and organizations. | | Julie Iskow Age: 62 Director Since: 2023 | |

  4. Information Regarding the Nominees

    | VOTE | | The Board of Directors Recommends a Vote “FOR” Each Named Nominee. |

  5. Information Regarding the Nominees

    | Five9, Inc. | 10 | 2024 Proxy Summary |

  6. Information Regarding the Nominees

    | Proposal No. 1 | Table of Contents |

  7. Information Regarding Other Directors Continuing in Office

    Information Regarding Other Directors Continuing in Office

  8. Class II Directors — Term ending at the 2025 annual meeting of stockholders

    Class II Directors — Term ending at the 2025 annual meeting of stockholders

  9. Class II Directors — Term ending at the 2025 annual meeting of stockholders

    | | Jack Acosta, age 76, has served as a member of our Board of Directors since April 2011. Since October, 2013, Mr. Acosta has served on the board of directors of Rimini Street, Inc., an enterprise software support services company. From February 1999 to September 2001, Mr. Acosta served as Chief Financial Officer and Vice President, Finance of Portal Software, a software company acquired by Oracle Corporation in 2006. From July 1996 to January 1999, Mr. Acosta served as Executive Vice President and Chief Financial Officer of Sybase, Inc., a database company acquired by SAP. Mr. Acosta holds a B.S. degree in Industrial Relations from California State University East Bay, an M.B.A. degree in Management Sciences from California State University East Bay and an Honorary Doctor of Humane Letters degree from California State University East Bay. Mr. Acosta shall continue to serve on our Board of Directors because of his accounting, financial, operating and management experience, service on the boards of directors of numerous other companies, financial expertise through his service as chief financial officer of public software companies, and experience in overseeing auditors and financial audits. | | Jack Acosta Age: 76 Director Since: 2011 | |

  10. Class II Directors — Term ending at the 2025 annual meeting of stockholders

    | | Susan Barsamian, age 64, has served as a member of our Board of Directors since January 2021. Ms. Barsamian served as Chief Sales and Marketing Officer for Hewlett Packard Enterprise Software (“HPE”) from November 2016 to September 2017 through its merger with Micro Focus International plc in September 2017. From August 2015 to November 2016, she served as General Manager of Enterprise Security Products at HPE. From 2006 to 2015, she served in various roles at Hewlett Packard. Earlier in her career, she held leadership positions at Mercury Interactive and Verity, Inc. Since August 2020, she has served on the Board of Directors for Kansas State University Foundation. Ms. Barsamian currently serves on the Board of Directors of GEN Digital, Inc., a consumer cyber safety company, and Box, Inc., a cloud content management company. From 2012 to 2017, Ms. Barsamian served on the board of the National Action Council for Minorities in Engineering (NACME), and she served as Chairman of the Board of NACME from 2016 to 2017. Ms. Barsamian holds a B.S. with honors in electrical engineering from Kansas State University. She completed post-graduate studies at the Swiss Federal Institute of Technology in Zurich, Switzerland. Ms. Barsamian shall continue to serve on our Board of Directors because of her extensive product and leadership experience in the technology industry and service on the boards of directors of numerous other companies and organizations. | | Susan Barsamian Age: 64 Director Since: 2021 | |

  11. Class II Directors — Term ending at the 2025 annual meeting of stockholders

    | Five9, Inc. | 11 | 2024 Proxy Summary |

  12. Class II Directors — Term ending at the 2025 annual meeting of stockholders

    | Proposal No. 1 | Table of Contents |

  13. Class II Directors — Term ending at the 2025 annual meeting of stockholders

    | | David Welsh, age 56, has served as a member of our Board of Directors since January 2011 and has served as our Lead Independent Director since February 2014. Mr. Welsh also served as a member of our Board of Directors from May 2005 to March 2007. Mr. Welsh is a Partner and is Head of Tech Growth Equity within KKR’s Private Equity platform, where he serves on the Tech Growth Equity investment committee. Prior to joining KKR in October 2016, Mr. Welsh was a Partner with Adams Street Partners, a venture capital firm, from April 2008 to September 2016. From March 2007 to April 2008, Mr. Welsh served as Executive Vice President of Corporate Strategy and Business Development of McAfee, Inc. From June 2000 to March 2007, Mr. Welsh served as a General Partner of Partech International, LLC, a venture capital firm. From August 2017 to August 2023, Mr. Welsh served on the board of directors of ForgeRock, Inc., a digital identity company, that was acquired by Thoma Bravo in August 2023. Mr. Welsh holds a J.D. degree from the University of California, Berkeley, School of Law and a B.A. degree in International Relations from the University of California, Los Angeles. Mr. Welsh was selected to serve on our Board of Directors because of his experience as a venture capitalist, his corporate strategy and business development expertise and service on the boards of directors of numerous other companies. | | David Welsh Age: 56 Director Since: 2011 | |

  14. Class III Directors — Term ending at the 2026 annual meeting of stockholders

    Class III Directors — Term ending at the 2026 annual meeting of stockholders

  15. Class III Directors — Term ending at the 2026 annual meeting of stockholders

    | | Michael Burkland, age 61, has been a member of our Board of Directors since January 2008 and has served as Chairman or Executive Chairman of the Board of Directors since February 2014. Mr. Burkland has served as our Chief Executive Officer from January 2008 to December 2017, and again since November 2022. He was also our President from January 2012 to December 2017. From 2002 to 2007, Mr. Burkland worked with the Interim CEO Network, serving as an interim CEO for venture-backed technology companies, as well as heading up the firm’s strategic advisory practice. From 2000 to 2001, Mr. Burkland served as Chief Executive Officer of Omniva Policy Systems Inc., a pioneer in enterprise policy management and e-mail security, where he built and implemented the company’s initial go-to-market strategy for the enterprise market. From 1994 to 1998, Mr. Burkland served as Chief Executive Officer of Eventus Software, Inc., a leading developer of web content management software, which was acquired by Segue Software, Inc. in 1998. Earlier in his career, he held various positions at Oracle Corporation, Patrol Software and BMC Software, Inc. Mr. Burkland served on the board of directors of Vocera Communications, Inc. from 2016 to 2022 when the company was sold to Stryker. Mr. Burkland holds M.B.A. and B.A. degrees from the University of California, Berkeley. Mr. Burkland is the brother of Daniel Burkland, the President of the Company. Mr. Burkland shall continue to serve on our Board of Directors because of his perspective and experience as our Chief Executive Officer, and Chairman and board member and his extensive experience as a chief executive officer and board member of companies in the technology industry. | | Michael Burkland Age: 61 Director Since: 2008 | |

  16. Class III Directors — Term ending at the 2026 annual meeting of stockholders

    | Five9, Inc. | 12 | 2024 Proxy Summary |

  17. Class III Directors — Term ending at the 2026 annual meeting of stockholders

    | Proposal No. 1 | Table of Contents |

  18. Class III Directors — Term ending at the 2026 annual meeting of stockholders

    | | Jonathan Mariner, age 69, has served as a member of our Board of Directors since May 2023. Mr. Mariner is the founder and has served as president of TaxDay, LLC, a private software firm, since April 2016. Mr. Mariner previously served as the Chief Administrative Officer of Enjoy Technologies, a premium home delivery company that operated mobile retail stores for major consumer technology companies in North America and the U.K., from December 1, 2020 to September 30, 2022, and was a member of its board of directors. He also served, on an interim basis, from February 2019 to August 2019, as the Head of Regional Sports Networks for the Walt Disney Company. He spent the majority of his professional career as an executive in professional sports, serving as Executive Vice President and Chief Financial Officer for Major League Baseball from 2002 to 2014, where he led the league’s accounting, treasury and budgeting functions, completed more than a dozen franchise purchase and sale transactions, and helped create the league’s strategic investment fund, and as Chief Investment Officer from 2015 to 2016. Prior to his position at Major League Baseball, Jonathan was the CFO for the Florida Marlins Baseball Club, Florida Panthers Hockey Club and Dolphins Stadium. Mr. Mariner serves on the board of directors of Tyson Foods, Inc., one of the world’s largest food companies, where he also serves as the chair of the audit committee, and Rocket Companies, Inc., a technology-driven real estate, mortgage and financial services business, where he also serves as the chair of its audit committee. He also serves on audit committees of private companies, including OneStream Software, IEX Stock Exchange, and Little League Baseball International. He previously served as a director for Ultimate Software, a software company engaged in research, development, and delivery of human capital management technology, from 2017 to 2019, where he served as the chair of its audit committee and on the compensation committee and chaired the audit committee of McGraw Hill Education. Mr. Mariner shall continue to serve on our Board of Directors because of his extensive accounting, financial, operating and management experience, financial expertise through his service as chief financial officer of several companies, and experience in overseeing auditors and financial audits, as well as his service on the boards of directors and other leadership positions with numerous other companies and organizations. | | Jonathan Mariner Age: 69 Director Since: 2023 | |

  19. Class III Directors — Term ending at the 2026 annual meeting of stockholders

    | Five9, Inc. | 13 | 2024 Proxy Summary |

  20. Class III Directors — Term ending at the 2026 annual meeting of stockholders

    | Proposal No. 1 | Table of Contents |

  21. Class III Directors — Term ending at the 2026 annual meeting of stockholders

    | | Robert Zollars, age 66, has served as a member of our Board of Directors since December 2013. Mr. Zollars served as Chairman and CEO of Vocera Communications, Inc. from 2007 to 2013, then executive chairman until May 2014 and as Vocera’s chairman until June 2015. Mr. Zollars served on the board of directors of Change Healthcare Inc., a technology provider to the healthcare industry from 2017 to 2022, when it was sold to United Healthcare. Since November 2014, Mr. Zollars has served in various roles at Frazier Healthcare Partners, a private growth equity firm, including currently as a senior advisor and previously as an operating partner. He served as executive chairman of Parata, a Frazier portfolio company, from 2015 to 2022 when it was sold to Becton Dickinson. From February 2005 to February 2016, Mr. Zollars served on the board of directors of Diamond Foods, Inc., a packaged foods company that was acquired by Snyder’s-Lance, Inc. in February 2016, and as chairman of its board of directors from February 2012 to February 2016. From May 2004 to November 2017, Mr. Zollars served as a member of the board of directors of VWR International, LLC, a global supplier to the life sciences industry. Mr. Zollars holds a B.S. degree in Marketing from Arizona State University, where he is currently a Trustee, and an M.B.A. degree in Finance from John F. Kennedy University. Mr. Zollars is a board leadership fellow with the National Association of Corporate Directors. Mr. Zollars shall continue to serve on our Board of Directors because of his experience as a Chief Executive Officer and service on the boards of directors of numerous other companies. | | Robert Zollars Age: 66 Director Since: 2013 | |

  22. Information Regarding the Board of Directors and Its Committees

    Information Regarding the Board of Directors and Its Committees The Board of Directors has three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. The following table provides membership information for each of these committees as of April 1, 2024:

  23. Information Regarding the Board of Directors and Its Committees

    | Name | Audit Committee | Compensation Committee | Nominating and Governance Committee | | Michael Burkland | | | | | Jack Acosta(1) | chair | | | | Susan Barsamian | member | member | | | Michael Burdiek | member | member | | | David DeWalt(2) | | | member | | Julie Iskow | | member | | | Jonathan Mariner | member | | | | David Welsh | | | chair | | Robert Zollars | | chair | member |

  24. Information Regarding the Board of Directors and Its Committees

    (1) Designated by the Board of Directors as an "audit committee financial expert." (2) Mr. DeWalt, a current Class I director, will serve the remainder of his term, which will end at the Annual Meeting. The composition and responsibilities of each standing committee are described below. Members will serve on these standing committees until their resignation or until otherwise determined by our Board of Directors.

  25. Qualifications for Director Nominees

    Qualifications for Director Nominees The Nominating and Governance Committee has established the following minimum criteria for evaluating prospective Board candidates: •Reputation for integrity, strong moral character and adherence to high ethical standards. •Holds or has held a generally recognized position of leadership in his or her community and/or chosen field of endeavor, and has demonstrated high levels of accomplishment. •Demonstrated business acumen and experience, and ability to exercise sound business judgment and common sense in matters that relate to the current and long-term objectives of the Company. •Ability to read and understand basic financial statements and other financial information pertaining to the Company. •Commitment to understand the Company and its business, industry and strategic objectives. •Commitment and ability to regularly attend and participate in meetings of the Board of Directors, committees of the Board of Directors and stockholders. •Number of other company boards of directors on which the candidate serves and ability to generally fulfill all responsibilities as a director of the Company. •Willingness to represent and act in the interests of all stockholders of the Company rather than the interests of a particular group. •Good health, and ability to serve. •For prospective non-employee directors, independence under applicable SEC and stock exchange rules, and the absence of any conflict of interest (whether due to a business or personal relationship) or legal impediment to, or restriction on, the nominee serving as a director. •Willingness to accept the nomination to serve as a director of the Company. •Directors that reach or exceed 72 years of age in a calendar year in which their term of office as a director will expire are required to tender his or her resignation to the Nominating and Governance Committee, for consideration by the Board of Directors upon the recommendation of the Nominating and Governance Committee.

  26. Qualifications for Director Nominees

    | Five9, Inc. | 19 | 2024 Proxy Summary |

  27. Qualifications for Director Nominees

    | Corporate Governance | Table of Contents |

  28. Other Factors for Potential Director Nominee Consideration

    Other Factors for Potential Director Nominee Consideration The Nominating and Governance Committee will also consider the following factors in connection with its evaluation of each prospective nominee: •Whether the prospective nominee will foster a diversity of backgrounds, skills, perspectives and experiences, including diversity disclosure standards under the Nasdaq listing rules and any other applicable disclosure rules. •Whether the prospective nominee has expertise on ESG issues, including social responsibility, environmental, climate, sustainability, and governance. •Whether the prospective nominee has experience and expertise on cybersecurity issues. •For potential Audit Committee members, whether the nominee possesses the requisite education, training and experience to qualify as “financially literate” or as an audit committee “financial expert” or equivalent requirement under applicable SEC and stock exchange rules. •For incumbent directors standing for re-election, the incumbent director’s performance during his or her term, including the number of meetings attended, level of participation, overall contribution to the Company, number of other company boards on which the director serves and any changed circumstances affecting the individual director that may bear on his or her ability to effectively continue to serve on the Board of Directors. •The composition of the Board of Directors and whether the prospective nominee will add to or complement the Board of Director’s existing skills, strengths and needs.

  29. Director Compensation

    Director Compensation Consistent with our non-employee director compensation policy, in 2023 each non-employee director was eligible to earn an annual cash retainer, additional fees based on committee service, and receive an annual equity award under our 2014 Equity Incentive Plan (the “2014 Plan”).

  30. Director Compensation

    | Five9, Inc. | 24 | 2024 Proxy Summary |

  31. Director Compensation

    | Corporate Governance | Table of Contents |

  32. 2023 Director Compensation Table

    2023 Director Compensation Table

  33. 2023 Director Compensation Table

    | Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2)(3) ($) | All Other Compensation ($) | Total ($) | | Jack Acosta | 55,000 | 199,961 | — | 254,961 | | Kimberly Alexy(4) | 18,589 | — | — | 18,589 | | Susan Barsamian | 52,400 | 199,961 | — | 252,361 | | Michael Burdiek | 52,400 | 199,961 | — | 252,361 | | David DeWalt | 39,458 | 199,961 | — | 239,419 | | Julie Iskow(5) | 31,403 | 449,883 | | 481,286 | | Jonathan Mariner(6) | 27,074 | 599,947 | | 627,021 | | Ana Pinczuk(7) | 4,327 | — | — | 4,327 | | David Welsh | 63,875 | 199,961 | — | 263,836 | | Robert Zollars | 54,458 | 199,961 | — | 254,419 |

  34. 2023 Director Compensation Table

    1.Amounts reported in this column represent the fees earned by or paid in cash to our non-employee directors in 2023 based on our non-employee director compensation policy set forth above. 2.The aggregate grant date fair values of equity awards reported in this column have been calculated in accordance with FASB ASC Topic 718. See Note 7 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 21, 2024 for a discussion of assumptions made in determining the grant date fair value of these equity awards. All unvested and outstanding stock awards granted to our non-employee directors will become fully vested upon a change in control (as defined in our 2014 Plan) of the Company. 3.As of December 31, 2023, the number of shares of our common stock subject to outstanding stock options and unvested RSUs held by our non-employee directors were as follows:

  35. 2023 Director Compensation Table

    | Name | Stock Options Outstanding (#) | RSUs That Have Not Vested (#) | | Jack Acosta | — | 3,669 | | Susan Barsamian | — | 4,395 | | Michael Burdiek | — | 3,669 | | David DeWalt | — | 3,669 | | Julie Iskow | — | 5,550 | | Jonathan Mariner | — | 10,335 | | David Welsh | — | 3,669 | | Robert Zollars | — | 3,669 |

  36. 2023 Director Compensation Table

    4.Amounts reported for Ms. Alexy was through her term as a director, which ended at the 2023 Annual Meeting. 5.Upon Ms. Iskow's appointment to the Board of Directors on February 6, 2023, her initial equity grants consisted of (i) an RSU award with an award value of $400,000, which will vest in three equal annual installments on the first, second and third anniversaries of the date of grant, subject to her continued service through such vesting dates; and (ii) an RSU award with an award value of $50,000, which will vest in full in one installment on the first anniversary of the grant date subject to her continued service through such date (and, as previously disclosed, Ms. Iskow's RSUs were subject to the same vesting schedule described in note 6 below). 6. Upon Mr. Mariner's appointment to the Board of Directors on May 24, 2023, his initial equity grants consisted of (i) an RSU award with an award value of $400,000, which will vest in three equal annual installments on the first, second and third anniversaries of the date of grant, subject to his continued service through such vesting dates; and (ii) an RSU award with an award value of $200,000, which will vest in full in one installment on

  37. 2023 Director Compensation Table

    | Five9, Inc. | 26 | 2024 Proxy Summary |

  38. 2023 Director Compensation Table

    | Corporate Governance | Table of Contents |

  39. 2023 Director Compensation Table

    the first anniversary of the grant date subject to his continued service through such date. Vesting of these awards will accelerate upon (A) a change of control of the Company or (B) the termination of Mr. Mariner’s continuous service due to his death or disability. 100% of the remaining unvested portion of the awards, if any, will immediately vest in full in the case of a change of control or Mr. Mariner’s death. 50% of the remaining unvested portion of the grants will immediately vest in the case of termination of Mr. Mariner’s continuous service due to his disability. Mr. Mariner will not be eligible for the regular 2024 automatic annual grant of RSUs to non-employee directors scheduled to occur on the date of the 2024 Annual Meeting, but would be eligible for regular automatic grants thereafter assuming his continued service on the Board of Directors. 7.Amounts reported for Ms. Pinczuk are for fees paid during her term as a director, which ended upon her resignation effective February 6, 2023.

  40. 2024 Director Compensation

    2024 Director Compensation No changes were made to the non-employee director compensation policy for 2024.

  41. Audit Committee Report

    Barry Zwarenstein, age 75, has served as our Chief Financial Officer since January 2012 and was our Interim CEO from December 2017 to May 2018. From September 2008 to November 2011, Mr. Zwarenstein served as Senior Vice President and Chief Financial Officer of SMART Modular Technologies, Inc., a designer, manufacturer and supplier of electronic subsystems to original equipment manufacturers that was acquired by Silver Lake Partners in August 2011. From July 2004 through August 2008, Mr. Zwarenstein served as Chief Financial Officer of VeriFone Holdings, Inc., a provider of point-of-sale systems. From November 2001 to June 2004, Mr. Zwarenstein served as Chief Financial Officer of Iomega Corporation, a provider of storage and network security systems. From January 2001 to June 2001, Mr. Zwarenstein served as Vice President and Chief Financial Officer of Mellanox Technologies Ltd., a fabless semiconductor company. From October 1998 to December 2000, Mr. Zwarenstein served as Chief Financial Officer of Acuson Corporation, a medical ultrasound company that was acquired by Siemens AG in 2000. From July 1996 to September 1998, Mr. Zwarenstein served as Chief Financial Officer of Logitech International S.A., a provider of peripherals for computers and other digital platforms. Since September 2020, Mr. Zwarenstein has served on the board of directors of ON24, Inc., a provider of webinar, virtual event and multimedia products and services. Since December 2019, Mr. Zwarenstein has served on the board of directors of JFrog Ltd., a provider of end-to-end solutions for universal artifact management for DevOps acceleration. From November 2007 to October 2015, Mr. Zwarenstein served on the board of directors of Dealertrack Technologies, Inc., a provider of subscription-based software for the automotive retail industry that was acquired by Cox Automotive, Inc. in October 2015. Mr. Zwarenstein holds a Bachelor of Commerce degree from the University of KwaZulu-Natal, South Africa, and an M.B.A. degree from the Wharton School at the University of Pennsylvania. He is qualified as a Chartered Accountant (South Africa). Daniel Burkland, age 59, has served as our President and Chief Revenue Officer since June 2022. Prior to that, Daniel Burkland served as our President from December 2017, Executive Vice President of Global Sales and Services from October 2016 to December 2017, as our Executive Vice President of Global Sales and Business Development from March 2014 to October 2016, and as our Senior Vice President of Enterprise Sales and Business Development from December 2009 to February 2014. From April 2006 to November 2009, Daniel Burkland served as Senior Vice President of Sales at Transera Communications, Inc., a cloud contact center software company. From December 2003 to March 2006, Daniel Burkland served as Senior Vice President of Worldwide Sales of IP Unity, Inc., a provider of carrier-hosted unified communications and conferencing solutions. From August 1997 to November 2003, Daniel Burkland held various sales management roles with Cisco Systems, Inc. and GeoTel Communications LLC, which was acquired by Cisco in 1999. Daniel Burkland holds a B.S. degree from California State University at Chico. Daniel Burkland is the brother of Michael Burkland, our Chairman and Chief Executive Officer.

  42. Audit Committee Report

    Andy Dignan, age 46, has served as our Chief Operating Officer since November 2023. Prior to that, Mr. Dignan served as our Chief Customer Officer from December 2022, and prior to that served in various executive positions within our company since his initial hire as Senior Vice President, Professional Services in September 2018. Prior to Five9, Mr. Dignan served as the Global Head of Collaboration & Contact Center GTM at Cisco Systems, Inc., a networking, cloud, and cybersecurity solutions company from November 2014 to September 2018. Prior to Cisco, Mr. Dignan led the Collaboration & Contact Center at CDW, an IT solutions and services company from 2007 to 2014. Mr. Dignan earned his B.S. degree in Marketing from Trinity International University. Panos Kozanian, age 43, has served as our Executive Vice President of Product Engineering since July 2022. Prior to that, Mr. Kozanian served as our Executive Vice President of Cloud Operations from February 2021. Prior to Five9, Mr. Kozanian spent 14 years at Cisco where he led the Webex platform team composed of DevOps, SRE, Data Center Operations, SysOps and Cloud Engineers with responsibility for the productivity, reliability, and operating budget of over 3,000 developers. Mr. Kozanian holds a B.S. degree in Computer Engineering from Santa Clara University.

  43. 2023 Executive Compensation Actions

    2023 Executive Compensation Actions In line with our performance and compensation objectives, the following actions related to 2023 compensation for our NEOs were approved: •Base Salary During 2023, the Compensation Committee approved annual base salaries for its newly appointed executive officer, Mr. Dignan. Also during 2023, and after a comprehensive market review to align NEO compensation with our target market positioning relative to peer organizations, the Compensation Committee approved a base salary increase for Messrs. Zwarenstein, Daniel Burkland and Kozanian. The Company did not increase the base salary of our CEO as a result of this market review. •Short-Term Cash Incentive Awards In February 2023, the Compensation Committee approved performance targets for 2023 that were used to determine the amount of cash bonus awards that could be earned on a semi-annual basis by our NEOs. Consistent with 2022, the performance targets with respect to revenue and Adjusted EBITDA were established to focus our NEOs on key semi-annual Company financial goals contained in our annual operating plan, as well as individual performance objectives (other than our CEO, whose bonus was determined solely based on our company financial goals and Daniel Burkland, whose bonus determination also included bookings). We exceeded the target levels established for our Adjusted EBITDA goals in each semi-annual period in 2023 and our revenue goal in the first half of 2023, but did not achieve our revenue goal in the second half of 2023 and, after taking into account the level of achievement of each NEO’s individual performance objectives (if applicable), our NEOs received an average payout of 100% of their target annual cash bonus opportunity for 2023. •Equity Awards In 2023, the Compensation Committee continued its prior practice of granting seventy-five percent (75%) service-based RSUs and twenty-five percent (25%) performance-based RSUs ("PRSU") for our NEOs, other than our CEO, during the Company's annual "refresh" grant cycle for executive officers in the first quarter of 2023. Our CEO received an equity grant in December 2022 in connection with his commencement of services as our CEO and, therefore, was not eligible for an annual "refresh" grant in 2023 pursuant to the terms of his employment offer letter.

  44. 2023 Executive Compensation Policies and Practices

    •Executive Compensation Policies and Practices Our compensation philosophy and related corporate governance policies and practices are complemented by several specific compensation practices that are designed to align our executive compensation with long-term stockholder interests, including the following: ◦Compensation At-Risk Our executive compensation program is designed so that a significant portion of compensation is “at risk” based on corporate performance, as well as equity-based to align the interests of our executive officers and stockholders. ◦Limited Perquisites We provide only limited perquisites and other personal benefits to our executive officers including standard relocation benefits. ◦No Tax Reimbursements We do not provide any tax reimbursement payments (including “gross-ups”) on any perquisites or other personal benefits. ◦No Change-In-Control Tax Reimbursements We do not provide any tax reimbursement payments (including “gross-ups”) on any severance or change-in-control payments or benefits. ◦“Double-Trigger” Change in Control Arrangements All change in control payments and benefits for our NEOs are based on a “double-trigger” arrangement (that is, they require both a change in control of the Company plus a qualifying termination of employment before payments and benefits are paid). ◦Minimum Share Ownership Our executive officers, including our NEOs, and the non-employee members of the Board of Directors, are subject to stock ownership guidelines as described below. ◦Hedging and Pledging Prohibited We prohibit our employees, including our NEOs, and the non-employee members of the Board of Directors from engaging in transactions that are of a speculative nature, including entering into any short sales, put option contracts, straddles or similar arrangements based on our securities. We also prohibit our employees, including our NEOs, and the non-employee members of the Board of Directors from pledging our securities or holding our securities in a margin account. ◦Clawback Policy We adopted a compensation recovery (“clawback”) policy intended to comply with Exchange Act Rule 10D-1 and applicable NASDAQ listing standards.

  45. 2023 Stockholder Advisory Vote to Approve Named Executive Officer Compensation

    | What We Heard | How We Are Responding | Effective Time of Implementation | | CEO’s initial equity award in 2022 | | | | •Some stockholders questioned the size and structure of our CEO’s initial equity award. •While certain other stockholders may have voted against our Say on Pay proposal due to proxy advisor concerns with the CEO’s initial award, some of the stockholders we met with stated they understood the need for the one-time equity grant, including in light of the competitive market for qualified senior executives and the value added by appointing our CEO, given his vast experience with the Company and our business. | •Given the size and structure of the CEO’s initial equity grant in December 2022, he was not eligible for (and did not receive) any equity awards during 2023. Our CEO also did not receive an increase in his base salary or target annual bonus opportunity for 2023. •The target value of our CEO’s equity awards decreased from that of the initial grant in 2022 to a more modest annual grant amount for 2024. •The Compensation Committee continues to work with its independent compensation consultant to design a competitive compensation program that will motivate and retain our senior executives. | 2024 and ongoing |

  46. 2023 Stockholder Advisory Vote to Approve Named Executive Officer Compensation

    | What We Heard | How We Are Responding | Effective Time of Implementation | | Other NEO Retention Awards in 2022 | | | | •Some stockholders questioned the special retention equity grants to certain NEOs, including those based on revenue targets. | •The special retention equity awards granted in 2022 were granted in response to unique circumstances and specific executive retention concerns during 2022 and the retention PRSUs included an aggressive "stretch" revenue performance target. The Company did not grant any retention equity awards to our NEOs in 2023. •Outstanding unearned revenue-based PRSUs granted in 2022 to our President/CRO expired at the end of 2023. | 2023 and ongoing | | Performance-based Equity | | | | •Some stockholders suggested that the Company should consider a 3-year performance measurement period instead of three one-year periods. | •Annual refresh grants for 2024 include a transitional approach using three overlapping measurement periods: a one-year period (2024), a two-year period (2024 through 2025), and a three-year period (2024 through 2026) period. •We will continue to consider switching to a 3-year performance measurement period for future PRSU grants. | February 2024 and ongoing | | •Some stockholders suggested that a greater percentage of equity award value be allocated to PRSUs rather than RSUs. | •For our NEOS (other than our CEO), for 2024, we increased the performance-based share of equity awards from 25% PRSUs to 33.33% PRSUs. •For our CEO, we plan to continue using an allocation of 50% RSUs and 50% PRSUs. | February 2024 and ongoing |

  47. 2023 Stockholder Advisory Vote to Approve Named Executive Officer Compensation

    | What We Heard | How We Are Responding | Effective Time of Implementation | | Bonus Program | | | | •Consider moving from semi-annual performance periods to an annual performance period. | •Modified the bonus program for 2024 to include an annual performance period, with a transitional semi-annual capped draw feature, as described below. •For 2024, removed the individual performance feature such that the 2024 bonus will be 100% based on Company performance for each of our NEOs, except for our Executive Vice President of Product Engineering, who is also subject to strategic engineering objectives. •We will continue to review our executive bonus program in the future. We expect that the bonus for 2025 and beyond will use annual performance periods without the transitional draw feature used in 2024. | February 2024 and ongoing |

  48. •Short-Term Cash Incentive Awards

    •Short-Term Cash Incentive Awards ◦Eliminated the individual performance objectives for our NEOs, shifting entirely (other than Mr. Kozanian, who is also subject to strategic product engineering objectives) to the Company's financial goals contained in our annual operating plan. ◦Transitioned to an annual performance period (rather than semi-annual) for the annual bonus program. The bonus for 2024 includes a transitional draw feature which allows executive officers to receive a mid-year draw based on the forecasted performance for 2024, based on the performance during the first half of 2024. The non-repayable draw is capped at 80% of the semi-annual target, and the bonus paid for 2024 will be reduced by the amount of the mid-year draw taken (if any). The 2024 draw feature is transitional only, and we do not expect to include the draw feature in 2025 or beyond.

  49. •Equity Awards

    •Equity Awards ◦Consistent with prior stockholder feedback, we increased the performance-based focus of our equity award program by increasing the regular annual equity award allocation from approximately 75% of the value to RSU awards and 25% of the value to PRSU awards for our NEOs (other than our CEO) to approximately 66-2/3% of the value to RSU awards and 33-1/3% of the value to PRSU awards. The allocation for our CEO remains at approximately 50% of the value to RSU awards and approximately 50% of the value to PRSU awards.

  50. •Equity Awards

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  51. •Equity Awards

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  52. •Equity Awards

    ◦We increased the length of the second and third measurement periods for our PRSU awards. Previously, PRSUs were subject to three distinct one-year measurement periods. For 2024, the PRSUs are subject to the following three overlapping measurement periods: •Performance during 2024 (one year period) •Performance from 2024 through 2025 (two year period) •Performance from 2024 through 2026 (three year period). In addition, our Severance Plan (as defined below) was set to expire by its terms on April 4, 2024. After consultation with Compensia, in March 2024, the Compensation Committee approved an extension of our Severance Plan for an additional one-year period on its existing terms.

  53. Role of Compensation Consultant

    Role of Compensation Consultant The Compensation Committee has the authority to retain the services of external advisors, including compensation consultants, legal counsel, accounting and other advisors. During 2023, the Compensation Committee continued to directly engage Compensia as its advisor for executive officer and non-employee director compensation and broad-based equity compensation matters. More specifically, Compensia: •reviewed and recommended updates to our compensation peer group; •reviewed and provided competitive market data on executive officer and non-employee director cash and equity compensation for our 2023 compensation determinations; •reviewed and provided recommendations on an equity strategy and the development of equity grant guidelines; and

  54. Role of Compensation Consultant

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  55. Role of Compensation Consultant

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  56. Role of Compensation Consultant

    •reviewed and provided comments on the Compensation Discussion & Analysis section of our Proxy Statement for 2023. In 2023, the Compensation Committee considered the independence of Compensia in light of the listing standards of NASDAQ on compensation committee independence and the rules of the Securities and Exchange Commission. Based on these standards and rules, the Compensation Committee concluded that the work performed by Compensia did not raise a conflict of interest.

  57. Competitive Positioning

    Competitive Positioning In July 2022, with the assistance of Compensia, the Compensation Committee reviewed and updated our compensation peer group to reflect changes in our market capitalization, recognize our evolving business focus, and account for acquisitions of former peer companies. The compensation peer group described below was utilized when determining the compensation of our executive officers for 2023. The companies in this updated compensation peer group were selected on the basis of their similarity to us, based on the following criteria: •similar revenue size - ~0.5x to ~2.0x our last four quarter revenue of approximately $654 million as of the first quarter of 2022 (approximately $330 million to approximately $1.3 billion); •similar market capitalization - ~0.33x to ~3.0x our market capitalization of approximately $6.6 billion as of July 1, 2022 (approximately $2.2 billion to approximately $20.0 billion); •Industry - SaaS companies; •executive positions similar in breadth, complexity and/or scope of responsibility; and •competitors for executive talent. As a result, the Compensation Committee approved an updated compensation peer group consisting of the following companies:

  58. Competitive Positioning

    | Alteryx | Dynatrace | Rapid7 | | AppFolio | Elastic N.V. | RingCentral | | Avalara(1) | HubSpot | Smartsheet | | Bill.com | MongoDB | The Trade Desk | | Blackline | New Relic | Zscaler | | Cloudflare | Q2 Holdings | | | Coupa Software(1) | Qualys | |

  59. Competitive Positioning

    1.Both Avalara and Coupa Software have subsequently been acquired, and thus are no longer considered part of our compensation peer group. In August 2023, with the assistance of Compensia, the Compensation Committee reviewed and updated our compensation peer group to reflect changes in our market capitalization, recognize our evolving business focus, and account for acquisitions of former peer companies. The compensation peer group described below was utilized when determining the compensation of Mr. Dignan upon his promotion in November 2023 and the compensation for all of our executive officers for 2024. The companies in this updated compensation peer group were selected on the basis of their similarity to us, based on the following criteria: •similar revenue size - ~0.5x to ~2.0x our last four quarter revenue of approximately $815 million as of the first quarter of 2023 (approximately $410 million to approximately $1.6 billion); •similar market capitalization - ~0.33x to ~3.0x our market capitalization of approximately $5.3 billion as of July 1, 2023 (approximately $1.7 billion to approximately $16.0 billion); •Industry - SaaS companies; •executive positions similar in breadth, complexity and/or scope of responsibility; and •competitors for executive talent.

  60. Competitive Positioning

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  61. Competitive Positioning

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  62. Competitive Positioning

    As a result, the Compensation Committee approved an updated compensation peer group consisting of the following companies:

  63. Competitive Positioning

    | Alteryx | Freshworks | Rapid7 | | AppFolio | Guidewire Software | RingCentral | | Bill.com | New Relic | Samsara | | Blackline | Paylocity | Smartsheet | | Cloudflare | Procore Technologies | Sprinklr | | Dynatrace | Q2 Holdings | Zscaler | | Elastic N.V. | Qualys | |

  64. Competitive Positioning

    To analyze the compensation practices of the companies in our compensation peer group, Compensia gathered data from public filings (primarily proxy statements) for the peer group companies. We also considered survey data from the Radford McLagan Compensation Database, including a custom cut of our peer group companies and a broader cut of financially comparable software companies. This market data was then used as a reference point for the Compensation Committee to assess our current compensation levels in the course of its deliberations on compensation elements and amounts. Going forward, the Compensation Committee intends to review and update the compensation peer group at least annually and make adjustments to its composition when appropriate, taking into account changes in both our business and the businesses of the companies in the peer group.

  65. Short-Term Cash Incentive Compensation

    Short-Term Cash Incentive Compensation We use performance-based cash incentives to motivate our executive officers, including our NEOs, to focus on specific goals established by the Board of Directors in our annual operating plan and specific individual performance goals (other than for our CEO), to provide additional cash compensation opportunities beyond base salary in a manner that is consistent with competitive market practices, and to recognize and reward achievement at or above our pre-established levels of performance.

  66. 2023 Bonus Program: Target Annual Cash Bonus Opportunities

    2023 Bonus Program: Target Annual Cash Bonus Opportunities In 2023, each of our executive officers, including our NEOs, was eligible to earn cash bonuses on a semi-annual basis under our short-term cash incentive program (the “2023 Bonus Program”), with commission-based goals for Daniel Burkland measured quarterly. Funding of the 2023 Bonus Program was based upon Company financial performance and each NEO’s individual performance for each semi-annual period in 2023 as summarized below:

  67. 2023 Bonus Program: Target Annual Cash Bonus Opportunities

    | Name | Financial Performance Component Weighting(1) (%) | Individual Performance Component Weighting(2) (%) | | Michael Burkland | 100 | — | | Barry Zwarenstein | 80 | 20 | | Daniel Burkland | 18.75 | 81.25 | | Andy Dignan | 80 | 20 | | Panos Kozanian | 80 | 20 |

  68. 2023 Bonus Program: Target Annual Cash Bonus Opportunities

    1.The financial performance component was based upon our achievement of pre-established revenue and Adjusted EBITDA targets with the revenue performance measure weighted 75% and the Adjusted EBITDA performance measure weighted 25%. 2.Individual performance was based on the achievement of individual objectives consistent with the key strategic goals established by the Board of Directors, except with respect to our CEO (whose bonus was based solely on the Company's financial performance). Daniel Burkland’s individual performance objectives were based on a combination of bookings and bookings-related commissions (75% of target annual cash bonus opportunity) and key individual strategic goals (6.25% of target annual cash bonus opportunity). In addition, if Daniel Burkland exceeded his 2023 quarterly cumulative bookings commissions goals in the aggregate across all of the bookings components in a quarter by 20% or more, he was eligible to earn an additional $50,000 cash bonus for each such quarter, payable on a semi-annual basis. Mr. Burkland did not achieve this additional bookings goal in any of the four quarters of 2023 and, therefore, did not receive the additional $50,000 cash bonus for any quarter in 2023. At the start of 2023, the Compensation Committee reviewed the target annual cash bonus opportunity for each NEO at the time (expressed as a percentage of his annual base salary), and, after taking into account internal pay equity with our other executive officers, pay practices within our compensation peer group, and other competitive market data provided by Compensia, the Compensation Committee decided not to increase the target annual cash bonus opportunity percentage of our NEOs, except for Mr. Kozanian whose percentage increased from 60% in 2022 to 65% in 2023. Due to an increase in the base salary of Messrs. Zwarenstein, Daniel Burkland and Kozanian, the dollar value of each of their target annual cash bonuses increased accordingly. In addition, in connection with the appointment of Mr. Dignan as our Chief Operating Officer in November 2023, the Compensation Committee set his annual target bonus opportunity at 75% of his annual base salary. This target annual cash bonus opportunity was set after taking into account the same factors identified above for the other NEOs.

  69. 2023 Bonus Program: Target Annual Cash Bonus Opportunities

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  71. 2023 Bonus Program: Target Annual Cash Bonus Opportunities

    The following table shows each NEO’s target annual cash bonus opportunity (expressed as a percentage of base salary and as a dollar amount) for 2023:

  72. 2023 Bonus Program: Target Annual Cash Bonus Opportunities

    | | Annual Target Bonus for 2023 | | | NEO | % of Base Salary | Dollar Amount | | Michael Burkland | 100 | 585,000 | | Barry Zwarenstein | 75 | 322,500 | | Daniel Burkland | 100 | 425,000 | | Andy Dignan(1) | 75 | 334,500 | | Panos Kozanian | 65 | 292,500 |

  73. 2023 Bonus Program: Target Annual Cash Bonus Opportunities

    1.Mr. Dignan's annual target bonus % and dollar amount was effective from his appointment as an executive officer on November 9, 2023.

  74. 2023 Bonus Program: Company Financial Performance Component

    2023 Bonus Program: Company Financial Performance Component In February 2023, the Compensation Committee approved revenue and Adjusted EBITDA as the Company performance measures for 2023 and established target performance levels for each semi-annual period based on our annual operating plan approved by the Board of Directors. The Compensation Committee chose revenue and Adjusted EBITDA as the performance measures for the 2023 Bonus Program because they are key performance indicators used by us in managing our business, and are linked to our growth and profitability and the creation of long-term stockholder value. For purposes of the 2023 Bonus Program, “Adjusted EBITDA” was calculated as net loss before (1) depreciation and amortization, (2) stock-based compensation, (3) interest expense, (4) interest (income) and other, (5) exit costs related to the closure and relocation of our Russian operations, (6) acquisition and related transaction costs and one-time integration costs, (7) contingent consideration expense, (8) refund for prior year overpayment of USF fees, (9) lease amortization for finance leases, (10) provision for (benefit from) income taxes, and (11) other items that do not directly affect what we consider to be our core operating performance. Achievement below 85% of the revenue target, or 80% below the Adjusted EBITDA target, would result in no cash payout with respect to such performance measure. Achievement up to 125% of the revenue target would result in increasing payouts up to a maximum payout of 150% of the portion of the financial performance component allocated to the revenue measure. Achievement up to 150% of the Adjusted EBITDA target would result in increasing payouts up to a maximum payout of 150% of the portion of the financial performance component allocated to the Adjusted EBITDA measure. In the event that our actual Adjusted EBITDA was below 80% of the Adjusted EBITDA target, the maximum cash payout for achieving the revenue target would have been 100% of the revenue target.

  75. 2023 Bonus Program: Company Financial Performance Component

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  77. 2023 Bonus Program: Company Financial Performance Component

    The following table summarizes the target performance levels for revenue and Adjusted EBITDA for each semi-annual period of 2023 and our actual results with respect to each semi-annual target.

  78. 2023 Bonus Program: Company Financial Performance Component

    | | Semi-Annual Period Ending June 30, 2023 | | Semi-Annual Period Ending December 31, 2023 | | | | Revenue | Adjusted EBITDA | Revenue | Adjusted EBITDA | | Target (in millions) | $435.7 | $56.4 | $478.3 | $85.2 | | Actual (in millions) | $441.3 | $76.7 | $469.2 | $89.6 | | Payout (% of Target)(1) | 110.9% | | 97.7% | |

  79. 2023 Bonus Program: Company Financial Performance Component

    1.Prior to determination of the final payout percentage, the results of any unbudgeted acquisitions during the period were excluded from the calculation.

  80. 2023 Bonus Program: Individual Performance Component

    2023 Bonus Program: Individual Performance Component Payout of the individual performance component of the 2023 Bonus Program was based on achievement of challenging, but achievable, individual strategic objectives for each NEO (other than our CEO, whose target annual cash bonus opportunity was based solely on our company financial performance) that aligned with our key strategic goals established by the Board of Directors. Each applicable NEO’s individual strategic objectives generally included results to be achieved in the NEO’s functional area or business unit, such as achievement of corporate development initiatives and technological milestones, successful releases of new products or updates, hiring and retention of key employees, and increased efficiency and gross margins. In each half of 2023, the Compensation Committee determined that our NEOs with individual performance objectives achieved between 72% and 100% of their individual strategic objectives. The Compensation Committee's determination with respect to our other NEOs (other than Mr. Daniel Burkland) was based on recommendations from our CEO. 75% of Daniel Burkland’s bonus under the 2023 Bonus Program was based on achievement against the quarterly bookings and bookings-related quotas for our larger and smaller clients and 6.25% was based on the achievement of key individual strategic goals. In the two semi-annual payment periods of 2023, the Compensation Committee determined that Daniel Burkland achieved bookings commissions of $158,628 and $150,715, respectively. As Daniel Burkland did not exceed his quarterly cumulative bookings commissions goals in any quarter of 2023 in the aggregate across all of the bookings components by more than 20%, he did not earn an additional $50,000 cash bonus in any quarter of 2023.

  81. 2023 Bonus Program: 2023 Payment Summary

    2023 Bonus Program: 2023 Payment Summary The following table summarizes the total payments made to each of our NEOs for 2023 as a result of the achievement of the Company financial and, where applicable, individual performance objectives as described above.

  82. 2023 Bonus Program: 2023 Payment Summary

    | NEO | First Half 2023 ($) | Second Half 2023 | Total 2023 Payout | % of Target | | Michael Burkland | 324,438 | 285,773 | 610,211 | 104 | | Barry Zwarenstein | 175,013 | 157,316 | 332,329 | 103 | | Daniel Burkland | 213,839 | 200,380 | 414,219 | 97 | | Andy Dignan(1) | 160,563 | 147,575 | 308,138 | 94 | | Panos Kozanian | 155,004 | 133,380 | 288,384 | 99 |

  83. 2023 Bonus Program: 2023 Payment Summary

    1.Mr. Dignan's % of Target amount was based upon his actual target amounts during 2023, which was comprised of his target amounts prior to and after his appointment as an executive officer on November 9, 2023.

  84. 2023 Bonus Program: 2023 Payment Summary

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  86. Long-Term Incentive Compensation

    Long-Term Incentive Compensation We provide equity compensation opportunities to our executive officers, including our NEOs, to align their financial interests with those of our stockholders and to provide compensation that is consistent with the practices of our compensation peer group so that we can attract and retain qualified talent. In 2022, we revised our approach by granting service-based RSUs combined with market-based and revenue-based PRSUs as we believed these awards provided a better incentive for our NEOs to enhance stockholder value. Our RSU awards, except for certain retention-based awards, generally vest over four-year vesting schedules, contingent upon the recipient’s continued service through each vesting date. Our PRSU awards generally vest over two to three year vesting schedules, depending on the type of award and contingent upon the recipient's continued service through each vesting date.

  87. 2023 Equity Awards

    2023 Equity Awards In the first quarter of 2023, the Compensation Committee made ordinary-course annual "refresh" equity awards to our NEOs at that time, except for our CEO who received equity awards upon his appointment as our CEO in December 2022 and, therefore, was not eligible for an annual "refresh" grant in 2023, pursuant to the terms of his employment offer letter. The amounts and terms of such equity awards were determined after taking into account internal pay equity with our other executive officers, pay practices and equity award types used within our compensation peer group, and an analysis of the competitive market data provided by Compensia. The terms and conditions of the PRSU awards granted in 2023 are described below. PRSUs with Market and Service Conditions. As described above, in 2023, the Company granted PRSUs subject to market-based performance and service conditions (“market-based PRSUs”) as part of its annual grant of equity incentive awards to our NEOs, other than our CEO who received PRSUs upon his appointment as our CEO in December 2022 and, therefore, was not eligible to (and did not) receive any further equity awards during the Company's annual "refresh" grant cycle for other executive officers in the first quarter of 2023 and Mr. Dignan, who was not an executive officer when such PRSUs were granted. The amount that may be earned pursuant to the market-based PRSUs ranges from 0% to 200% of the target number of units based on the Company's relative total shareholder return ("RTSR") performance as compared to the companies in the S&P Software and Services Select Index for three one-year measurement periods. Each earned unit will be settled through the issuance of one share of our common stock. One-third of the total PRSUs may be earned and settled in shares following the end of each one-year measurement period based on RTSR performance and subject to continued employment through the payment date, but the amount initially paid for the first two one-year measurement periods is limited to 100% of the target amount for such years, and any PRSUs resulting from above-target performance in those first two years will be paid following the end of the final one-year measurement period, subject to the NEO's continued employment through the payment date. If the Company’s absolute total shareholder return for any performance period is negative, then no more than 100% of the target amount of PRSUs for such period may be earned. If an NEO's employment with the Company terminates before the end of the final one-year performance period due to death or disability, 100% (if due to death) or 50% (if due to disability) of the unvested PRSUs may be earned subject to ultimate RTSR performance in each remaining measurement period. Upon a qualifying termination of employment in connection with a change in control of the Company, the unvested PRSUs will vest on a double-trigger basis (i) at the target level for the uncompleted portions of the performance periods and (ii) at the actual level of performance measured through the date of the change in control of the Company, based on the share price per share paid in such change in control. The fair value of the PRSUs are determined on their grant date using a Monte Carlo Simulation model based upon assumptions presented below. The Company recognizes the fair value of the PRSUs ratably over their requisite service period. PRSUs with Revenue and Service Conditions. In 2023, the Company did not grant any PRSUs subject to revenue-based performance and service conditions (“revenue-based PRSUs”).

  88. 2023 Equity Awards

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  89. 2023 Equity Awards

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  90. 2023 Equity Awards

    The following table shows the target award values and the number of RSU awards and/or PRSU awards to each of our NEOs during 2023.

  91. 2023 Equity Awards

    | NEO | Aggregate Target Award Values(1) ($) | RSUs (excluding PRSUs) Granted (#) | PRSUs Granted (#) | | Michael Burkland(2) | — | — | — | | Barry Zwarenstein | 3,674,000 | 34,259 | 11,419 | | Daniel Burkland | 4,023,000 | 37,513 | 12,504 | | Andy Dignan(3) | 4,750,000 | 64,767 | — | | Panos Kozanian | 3,860,000 | 35,994 | 11,998 |

  92. 2023 Equity Awards

    1.Target award values differ from grant date fair values under the applicable accounting standards (FASB ASC Topic 718) which are reported in the Summary Compensation Table due to (i) the multi-day stock price average that is used to convert target award values into units under our standard Equity Award Grant Policy and (ii) the higher accounting grant date fair value assigned to PRSUs with a relative TSR performance condition under the Monte Carlo Simulation model - for example, the target number of PRSUs granted to Messrs. Zwarenstein, Daniel Burkland and Kozanian had grant date fair values that were more than 1.3 times the grant date fair value for their RSUs granted on the same date. 2.Mr. Michael Burkland received equity awards upon his commencement as our CEO in December 2022. In accordance with terms of his Employment Offer Letter, Michael Burkland was not eligible for (and did not receive) the 2023 annual refresh grant of RSUs and PRSUs to NEOs during the first quarter of 2023. 3.Because Mr. Dignan was not an executive officer at the time PRSU awards were granted in February 2023, Mr. Dignan did not receive a PRSU award in 2023. On February 13, 2023, the Compensation Committee certified the performance results for the 2022 measurement period for the PRSUs subject to the 2022-2024 performance period. Under the PRSU agreement, the TSR payout percentage ranges from 0% to 200%, with a 50% payout at the 25th TSR percentile (threshold), 100% payout at the 55th TSR percentile (target), 200% payout at the 90th percentile or greater (maximum) and no payout below the threshold performance level. The Compensation Committee determined that its actual total shareholder return was -52.64% for 2022, and that its relative total shareholder return ranking was in the 30.2 percentile relative to companies in the S&P Software & Services Select Index, which resulted in a payout percentage of 58.7% of target. The following table shows the number of PRSUs earned by each of our NEOs (other than Messrs. Michael Burkland, Dignan and Kozanian) based on such performance for the 2022 measurement period:

  93. 2023 Equity Awards

    | NEO(1) | Target Number of PRSUs for the 2022 Measurement Period (#) | Percentage Earned (%) | Number of PRSUs Earned(2) (#) | | Barry Zwarenstein | 2,348 | 58.7 | 1,378 | | Daniel Burkland | 2,684 | 58.7 | 1,575 |

  94. 2023 Equity Awards

    1.Because Messrs. Michael Burkland, Dignan and Kozanian were not executive officers at the time PRSU awards were granted in February 2022, they did not receive a PRSU award for the 2022-2024 performance period. 2.The PRSUs described in this column vested and were earned upon the Compensation Committee’s certification of the performance on February 13, 2023. On October 31, 2023, the Compensation Committee certified that the first revenue target of Daniel Burkland's PRSUs subject to revenue-based performance and service conditions granted in June 2023 was achieved. However, the Compensation Committee certified on February 14, 2024 that, as of December 31, 2023, the second revenue target of this grant was not achieved, and cancelled the PRSUs associated with the second revenue target. The following table shows the number of PRSUs deemed conditionally earned based on such performance. The PRSUs that were conditionally earned as of October 31, 2023 will vest in four quarterly installments, with the first installment occurring on October 31, 2023, subject to Mr. Daniel Burkland’s continuous service through the applicable vesting dates.

  95. 2023 Equity Awards

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  96. 2023 Equity Awards

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  97. 2023 Equity Awards

    | | | | Certified Achieved | | | NEO | Grant Date | PRSUs Granted (Performance-Based) (#) | First Revenue Target (#) | Second Revenue Target (#) | | Daniel Burkland | 6/2/2022 | 60,963 | 20,321 | — |

  98. 2023 Equity Awards

    On February 14, 2024, the Compensation Committee certified the performance results for the 2023 measurement period for the market-based PRSUs subject to the 2022-2024 performance period. The Compensation Committee determined that its actual total shareholder return was 19.95% for 2023, and that its relative total shareholder return ranking was in the 53.8 percentile relative to companies in the S&P Software & Services Select Index, which resulted in a payout percentage of 98.0% of target. The following table shows the number of PRSUs earned by each of our NEOs (other than Messrs. Michael Burkland, Dignan and Kozanian) based on such performance for the 2023 measurement period:

  99. 2023 Equity Awards

    | NEO(1) | Target Number of PRSUs for the 2023 Measurement Period (#) | Percentage Earned (%) | Number of PRSUs Earned(2) (#) | | Barry Zwarenstein | 2,348 | 98.0 | 2,301 | | Daniel Burkland | 2,684 | 98.0 | 2,630 |

  100. 2023 Equity Awards

    1.Because Messrs. Michael Burkland, Dignan and Kozanian were not executive officers at the time PRSU awards were granted in February 2022, they did not receive a PRSU award for the 2022-2024 performance period. 2.The PRSUs described in this column vested and were earned upon the Compensation Committee’s certification of the performance on February 14, 2024. On February 14, 2024, the Compensation Committee also certified the performance results for the 2023 measurement period for the market-based PRSUs subject to the 2023-2025 performance period. The Compensation Committee determined that its actual total shareholder return was 19.95% for 2023, and that its relative total shareholder return ranking was in the 50.5 percentile relative to companies in the S&P Software & Services Select Index, which resulted in a payout percentage of 92.5% of target. The following table shows the number of PRSUs earned by each of our NEOs (other than Mr. Dignan) based on such performance for the 2023 measurement period:

  101. 2023 Equity Awards

    | NEO | Target Number of PRSUs for the 2023 Measurement Period (#) | Percentage Earned (%) | Number of PRSUs Earned(2) (#) | | Michael Burkland | 74,966 | 92.5 | 69,343 | | Barry Zwarenstein | 3,806 | 92.5 | 3,520 | | Daniel Burkland | 4,168 | 92.5 | 3,855 | | Panos Kozanian | 3,999 | 92.5 | 3,699 |

  102. 2023 Equity Awards

    1.Because Mr. Dignan was not an executive officer at the time these PRSU awards were granted, he did not receive a PRSU award for the 2023-2024 performance period. 2.The PRSUs described in this column vested and were earned upon the Compensation Committee’s certification of the performance on February 14, 2024.

  103. Key Employee Severance Plan

    Key Employee Severance Plan Each of our NEOs participates in our 2019 Key Employee Severance Plan (the “Severance Plan”), which provides severance payments and benefits, including “double trigger” payments and benefits in the event of a qualifying termination of employment in connection with a change of control of the Company, as more fully described under “Potential Payments Upon Termination or Change of Control” below. The Compensation Committee believes the Severance Plan maximizes stockholder value because it prevents an unintended windfall to our executive officers in the event of a change of control of the Company, while still providing them appropriate incentives to cooperate in negotiating a transaction involving a potential change of control in which they believe they may lose their jobs. We believe providing the Severance Plan helps us compete for and retain executive talent. We believe that the payments and benefits under the Severance Plan are generally comparable with severance packages offered to the comparable executives of the companies in our compensation peer group.

  104. Equity Award Grant Policy

    Equity Award Grant Policy The Compensation Committee has adopted an equity award grant policy that establishes a predictable and deliberative process for consideration and approval of equity awards. Under the policy, new hire, promotion or retention equity awards have a grant date that is after the later of the date on which the recipient's employment begins, promotion is effective, or retention event occurs and the date on which all necessary corporate actions for the approval of the applicable equity award are complete. Regular annual "refresh" equity awards have a grant date that is on or after the date of approval of the equity award by the Compensation Committee. The equity award grant policy also includes rules on how we calculate the number of shares of our common stock subject to equity awards granted based on a target grant date dollar value. The exercise price of all newly issued stock options and stock appreciation rights must be equal to or greater than the fair market value of our common stock on the date of grant.

  105. Equity Award Grant Policy

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  106. Equity Award Grant Policy

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  107. Taxation of “Parachute” Payments

    Taxation of “Parachute” Payments Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the Company that exceeds certain prescribed limits, and that we (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We are not obligated to provide any NEO with a “gross-up” or other reimbursement payment for any tax liability that he or she may owe as a result of the application of Sections 280G or 4999 in the event of a change in control of the Company.

  108. Compensation-Related Risks

    Compensation-Related Risks In August 2023, the Compensation Committee, with the assistance of Compensia, reviewed our compensation policies and practices applicable to all employees and determined that our compensation programs do not encourage excessive or inappropriate risk-taking. The Compensation Committee believes that our compensation policies and practices, taken as a whole, are not reasonably likely to have a material adverse effect on the Company and that no changes to the compensation policies and practices are needed at this time, and that the design and mix of our compensation programs appropriately encourages our executive officers and other employees to focus on the creation of long-term stockholder value. In its review, the Compensation Committee noted the following features: •the compensation programs include a reasonable mix of cash, short-term incentive and equity compensation, with the vesting of equity compensation tied to multi-year time periods; •the performance goals for the 2023 Bonus Program are generally based on a mix of corporate goals and individual performance, with payouts capped if the corporate goals are achieved above a certain threshold; and •we have formal policies in place for equity administration, insider trading, hedging, pledging and clawback, and stock ownership guidelines, and we annually review succession plans for key executives.

  109. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table summarizes all compensation for the fiscal years ended December 31, 2023, 2022 and 2021, as applicable, earned by or paid to our Chief Executive Officer, our Chief Financial Officer, and our three other executive officers serving during 2023. We refer to these executive officers as our NEOs.

  110. 2023 Summary Compensation Table

    | Name and Principal Position | Year(1) | Salary ($) | Bonus ($) | Stock Awards(1)(2)(3)(4) ($) | Option Awards(1) ($) | Non-Equity Incentive Plan Compensation(5) ($) | All Other Compensation(6) ($) | Total Compensation ($) | | Michael Burkland Chief Executive Officer | 2023 | 585,000 | — | — | — | 610,211 | — | 1,195,211 | | | 2022 | 55,398 | — | 38,025,826 | — | 13,732 | 130,829 | 38,225,785 | | Barry Zwarenstein Chief Financial Officer | 2023 | 430,000 | — | 3,112,956 | — | 332,329 | 519 | 3,875,804 | | | 2022 | 423,000 | — | 5,444,918 | — | 279,892 | 530 | 6,148,340 | | | 2021 | 400,000 | — | 3,438,888 | 939,502 | 340,382 | 530 | 5,119,302 | | Daniel Burkland President and Chief Revenue Officer | 2023 | 425,000 | — | 3,408,659 | — | 414,219 | 4,440 | 4,252,318 | | | 2022 | 410,000 | — | 14,188,668 | — | 476,816 | 4,293 | 15,079,777 | | | 2021 | 410,000 | — | 3,481,033 | 939,502 | 608,270 | 320 | 5,439,125 | | Andy Dignan Chief Operating Officer(7) | 2023 | 415,182 | — | 4,582,799 | — | 308,138 | 1,921 | 5,308,040 | | Panos Kozanian Executive Vice President, Product Engineering | 2023 | 450,000 | — | 3,270,655 | — | 288,384 | 1,523 | 4,010,562 | | | 2022 | 379,000 | — | 6,363,209 | 513,965 | 224,034 | 2,347 | 7,482,555 |

  111. 2023 Summary Compensation Table

    1.The aggregate grant date fair value of equity awards reported in this column has been calculated in accordance with FASB ASC Topic 718, and such fair values differ from the target award values for the NEOs due to the Company using a multi-day average closing price to determine unit amounts and due to the additional value assigned to PRSUs with a relative TSR performance condition under the Monte Carlo Simulation model. See Note 7 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 22, 2024, for a discussion of assumptions made in determining the grant date fair value of equity awards. These amounts do not correspond to the actual value, if any, that our NEOs will recognize from these awards. Our NEOs will only realize compensation from these awards to the extent they meet the vesting requirements under the awards. 2.For our CEO, the amounts reported in this column for 2022 include a grant of RSU awards of 2,132 shares and aggregate grant date fair value of $0.2 million received under his independent contractor agreement for his services as Chairman prior to November 28, 2022, as well as RSUs and PRSUs granted in connection with his appointment as our CEO, effective as of November 28, 2022, with a total grant date fair value of approximately $37.8 million. For Mr. Zwarenstein, the amounts reported in this column for 2022 include both (i) annual RSU awards granted in February 2022 and (ii) retention-based RSU awards granted in November 2022, and the number of shares and aggregate grant date fair values are (i) 21,136 shares and $2.3 million for the RSUs, 7,045 shares and $1.0 million for the PRSUs and (ii) 35,306 shares and $2.1 million for the RSUs, respectively. For Daniel Burkland, the amounts reported in this column for 2022 include (a) annual RSU and PRSU awards granted in February 2022, (b) retention-based RSU and PRSU awards granted in June 2022 and (c) additional retention-based RSU awards granted in November 2022, and the number of shares and aggregate grant date fair value was (a) 24,156 shares and $2.7 million for the RSUs, and 8,052 shares and $1.1 million for the PRSUs, (b) 20,321 shares and $2.1 million for the RSUs and 60,963 shares and $6.3 million for the PRSUs, and (c) 32,883 shares and $2.0 million for the RSUs, respectively. For Mr. Kozanian, the amounts reported in this column for 2022 include (x) annual RSU and stock option awards granted in February 2022, (y) promotion-based RSU awards granted in August 2022, and (z) additional retention-based RSU awards granted in November 2022, and the number of shares and aggregate grant date fair value was (x) 15,097 shares and $1.7 million for the RSUs and 10,218 shares and $0.5 million for the stock options, (y) 22,011 shares and $2.6 million for the RSUs, and (z) 35,133 shares and $2.1 million for the RSUs, respectively.

  112. 2023 Summary Compensation Table

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  113. 2023 Summary Compensation Table

    | Executive Compensation | Table of Contents |

  114. 2023 Summary Compensation Table

    3.For Messrs. Zwarenstein and Daniel Burkland, the amounts reported in this column for 2021 include retention-based RSU awards granted in August 2021 that were conditioned upon the close of our then-proposed Merger and that were subsequently cancelled on September 30, 2021 upon the termination of the Merger Agreement. The number of shares and aggregate grant date fair value of the cancelled RSU awards was 3,670 shares and $699,869, and 3,891 shares and $742,014, for Messrs. Zwarenstein and Daniel Burkland, respectively. 4.The amounts reported in this column includes grant date fair value of PRSU awards based upon the probable outcome of such conditions at the time of their grant. For 2023, the values of the PRSU awards assuming the highest level of performance conditions, along with the related fair value amount based on achievement at the target level included in this column, were as follows: Mr. Zwarenstein (target - $778,205, maximum - $1,556,410), Daniel Burkland (target - $852,148, maximum - $1,704,296), and Mr. Kozanian (target - $817,664, maximum - $1,635,328). For 2022, the values of the PRSU awards assuming the highest level of performance conditions, along with the related fair value amount based on achievement at the target level included in this column, were as follows: Michael Burkland (target - $22,330,303, maximum - $44,660,606), Mr. Zwarenstein (target - $979,356, maximum - $1,958,711), and Daniel Burkland (target - $7,433,166, maximum - $8,552,394). 5.The amounts reported in this column represent amounts earned under our 2023, 2022 and 2021 Bonus Programs based on the achievement of Company and individual performance goals. As discussed in the section above entitled “Compensation Discussion and Analysis - Key Elements of Our 2023 Executive Compensation Program,” the total payments for Messrs. Michael Burkland, Zwarenstein, Daniel Burkland, Dignan and Kozanian, as of the end of 2023 were 104%, 103%, 97%, 94% and 99% of each NEO’s annual target annual cash bonus opportunities, respectively. Michael Burkland's bonus amount earned for 2022 was from his appointment as CEO, effective November 28, 2022. The amounts reported for 2022 also includes a special incentive bonus of $50,000 payable to each of the NEOs (other than Michael Burkland) due to fully achieving the earn-out contingent consideration related to the acquisition of Inference Solutions, Inc. 6.The amounts reported for 2023, 2022 and 2021 represent disability insurance paid by us for the NEOs (other than Michael Burkland) and Company matching contributions under the Section 401(k) plan. For Michael Burkland, the amounts reported for 2022 include cash compensation of $95,584 and continued healthcare benefits of $35,245 pursuant to his Chairman independent contractor agreement, in consideration of his service as our Chairman, prior to his appointment as our CEO effective as of November 28, 2022. 7.Mr. Dignan's 2023 base salary was $410,000 from January 1, 2023 through November 8, 2023, and was $446,000 from his appointment as an executive officer on November 9, 2023 through December 31, 2023.

  115. 2023 Summary Compensation Table

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  117. 2023 Grants of Plan-Based Awards Table

    2023 Grants of Plan-Based Awards Table The following table presents information regarding grants of non-equity incentive and equity incentive awards to our NEOs during 2023.

  118. 2023 Grants of Plan-Based Awards Table

    | Name | Grant Date | Grant Approval Date | Grant Type | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards Target (1) $ | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards Maximum (1) $ | Estimated Possible Payouts Under Equity Incentive Plan Awards Threshold(2) (#) | Estimated Possible Payouts Under Equity Incentive Plan Awards Target(2) (#) | Estimated Possible Payouts Under Equity Incentive Plan Awards Maximum(2) (#) | All Other Stock Awards: Number of Shares of Stock or Units # | All Other Option Awards: Number of Securities Underlying Options # | Exercise or Base Price of Option Awards ($/share) | Grant Date Fair Value of Stock and Option Awards (3) $ | | Michael Burkland | | | | 585,000 | 877,500 | | | | | | | | | Barry Zwarenstein | | | | 322,500 | 451,500 | | | | | | | | | | 2/27/23 | 2/13/23 | RSU | | | | | | 34,259 | | | 2,334,751 | | | 2/27/23 | 2/13/23 | PRSU | | | 5,710 | 11,419 | 22,838 | 11,419 | | | 778,205 | | Daniel Burkland | | | | 425,000 | — | | | | | | | | | | 2/27/23 | 2/13/23 | RSU | | | | | | 37,513 | | | 2,556,511 | | | 2/27/23 | 2/13/23 | PRSU | | | 6,252 | 12,504 | 25,008 | 12,504 | | | 852,148 | | Andy Dignan | | | | 334,500 | 468,300 | | | | | | | | | | 2/27/23 | 2/13/23 | RSU | | | | | | 37,299 | | | 2,541,927 | | | 11/27/23 | 11/9/23 | RSU | | | | | | 27,468 | | | 2,040,872 | | Panos Kozanian | | | | 292,500 | 409,500 | | | | | | | | | | 2/27/23 | 2/13/23 | RSU | | | | | | 35,994 | | | 2,452,991 | | | 2/27/23 | 2/13/23 | PRSU | | | 5,999 | 11,998 | 23,996 | 11,998 | | | 817,664 |

  119. 2023 Grants of Plan-Based Awards Table

    1.These columns set forth the target and maximum annual cash bonus opportunities payable under our 2023 Bonus Program for each NEO other than Daniel Burkland, for whom only the target amount is shown since he had no fixed maximum annual bonus amount. We do not establish threshold annual cash bonus amounts for each individual NEO. Refer to "Compensation Discussion and Analysis - Key Elements of Our 2023 Executive Compensation Program” above for more information. 2.These columns set forth the number of PRSUs that may vest based on achievement of the threshold, target and maximum measures under our 2023 PRSU awards. The market-based PRSU awards are subject to threshold, target and maximum opportunity percentages (as a percentage of the target number of PRSUs) of 50%, 100% and 200%, respectively. 3.The amounts reported reflect the grant date fair value of equity awards granted in 2023 in accordance with FASB ASC Topic 718. See Note 7 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 22, 2024, for a discussion of assumptions made in determining the grant date fair value of equity awards. These amounts do not correspond to the actual value, if any, that the NEOs will recognize from these awards. Our NEOs will only realize compensation from these awards to the extent they meet the vesting requirements under the awards.

  120. 2023 Grants of Plan-Based Awards Table

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  121. 2023 Grants of Plan-Based Awards Table

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  122. Outstanding Equity Awards at December 31, 2023, Fiscal Year-End Table

    Outstanding Equity Awards at December 31, 2023, Fiscal Year-End Table The following table provides information concerning unexercised stock options or unvested RSU awards and PRSU awards held by our NEOs as of December 31, 2023. The vesting schedule applicable to each outstanding award is described in the footnotes to the table below. Please see the section below entitled “Potential Payments upon Termination or Change in Control” for accelerated vesting provisions that apply in the event of certain specified terminations of employment.

  123. Outstanding Equity Awards at December 31, 2023, Fiscal Year-End Table

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  124. Outstanding Equity Awards at December 31, 2023, Fiscal Year-End Table

    | Executive Compensation | Table of Contents |

  125. Outstanding Equity Awards at December 31, 2023, Fiscal Year-End Table

    | | | Option Awards | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) | Market Value of Shares or Units of Stock that have not Vested(1) ($) | | Michael Burkland | 03/09/16 | 54,375 | — | 8.13 | 03/09/26 | | | | | 02/23/17 | 181,020 | — | 16.25 | 02/23/27 | | | | | 12/12/22 | | | | | 149,933(4) | 11,798,228 | | | 12/12/22 | | | | | 224,899(5) | 17,697,302 | | Barry Zwarenstein | 02/26/18 | 55,376 | — | 29.89 | 02/26/28 | | | | | 02/22/19 | 25,486 | — | 53.00 | 02/22/29 | | | | | 02/24/20 | 16,769 | 730(2) | 72.29 | 02/24/30 | | | | | 02/25/21 | 8,090 | 3,332(2) | 181.20 | 02/25/31 | | | | | 02/24/20 | | | | | 1,521(6) | 119,687 | | | 02/25/21 | | | | | 4,724(6) | 371,732 | | | 02/28/22 | | | | | 11,889(6) | 935,545 | | | 02/28/22 | | | | | 4,697(7) | 369,607 | | | 11/23/22 | | | | | 11,769(8) | 926,103 | | | 02/27/23 | | | | | 27,836(6) | 2,190,415 | | | 02/27/23 | | | | | 11,419(5) | 898,561 | | Daniel Burkland | 03/09/16 | 882 | — | 8.13 | 03/09/26 | | | | | 11/14/16 | 11,459 | — | 14.39 | 11/14/26 | | | | | 02/23/17 | 55,537 | — | 16.25 | 02/23/27 | | | | | 12/18/17 | 81,295 | — | 24.60 | 12/18/27 | | | | | 02/22/19 | 25,486 | — | 53.00 | 02/22/29 | | | | | 02/24/20 | 16,769 | 730(2) | 72.29 | 02/24/30 | | | | | 02/25/21 | 8,090 | 3,332(2) | 181.20 | 02/25/31 | | | | | 02/24/20 | | | | | 1,521(6) | 119,687 | | | 02/25/21 | | | | | 4,724(6) | 371,732 | | | 02/28/22 | | | | | 13,588(6) | 1,069,240 | | | 02/28/22 | | | | | 5,368(7) | 422,408 | | | 06/02/22 | | | | | 5,081(9) | 399,824 | | | 06/02/22 | | | | | 15,241(10) | 1,199,314 | | | 11/23/22 | | | | | 10,961(8) | 862,521 | | | 02/27/23 | | | | | 30,480(6) | 2,398,471 | | | 02/27/23 | | | | | 12,504(5) | 983,940 |

  126. Outstanding Equity Awards at December 31, 2023, Fiscal Year-End Table

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  127. Outstanding Equity Awards at December 31, 2023, Fiscal Year-End Table

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  128. Outstanding Equity Awards at December 31, 2023, Fiscal Year-End Table

    | | | Option Awards | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) | Market Value of Shares or Units of Stock that have not Vested(1) ($) | | Andy Dignan | 10/01/18 | 320 | —(3) | 42.25 | 10/01/28 | | | | | 05/06/19 | 1,042 | —(2) | 51.00 | 05/06/29 | | | | | 02/05/20 | 654 | 77(2) | 73.28 | 02/05/30 | | | | | 02/24/20 | 2,583 | 304(2) | 72.29 | 02/24/30 | | | | | 02/28/22 | 3,746 | 4,429(2) | 110.00 | 02/28/32 | | | | | 02/05/20 | | | | | 158(6) | 12,433 | | | 02/24/20 | | | | | 634(6) | 49,889 | | | 02/25/21 | | | | | 630(6) | 49,575 | | | 02/28/22 | | | | | 6,794(6) | 534,620 | | | 11/23/22 | | | | | 8,654(11) | 680,983 | | | 11/23/22 | | | | | 25,961(6) | 2,042,871 | | | 02/27/23 | | | | | 30,306(6) | 2,384,779 | | | 11/24/23 | | | | | 27,468(6) | 2,161,457 | | Panos Kozanian | 02/16/21 | 7,141 | 2,941(3) | 182.74 | 02/16/31 | | | | | 02/28/22 | 4,683 | 5,535(2) | 110.00 | 02/28/32 | | | | | 02/16/21 | | | | | 4,096(12) | 322,314 | | | 02/28/22 | | | | | 8,493(6) | 668,314 | | | 08/08/22 | | | | | 15,133(6) | 1,190,816 | | | 11/23/22 | | | | | 11,711(8) | 921,539 | | | 02/27/23 | | | | | 29,246(6) | 2,301,368 | | | 02/27/23 | | | | | 11,998(5) | 944,123 |

  129. Outstanding Equity Awards at December 31, 2023, Fiscal Year-End Table

    1.The amounts listed in this column represent the product of the closing market price of our common stock as of December 29, 2023, the last trading day of 2023, of $78.69 per share and the number of shares of stock or units subject to the award. 2.Award is subject to a four-year vesting schedule and the NEO’s continued service with us on each vesting date, with 1/48th of the options vesting on each monthly anniversary following the applicable vesting commencement date, until all options are vested. 3.Award is subject to a four-year vesting schedule and the NEO’s continued service with us on each vesting date, with 25% of the total number of options vesting on the first anniversary of the vesting commencement date, and 1/36th of the total number of options vesting on each monthly anniversary following the applicable vesting commencement date until all options are vested. 4.Award is subject to a three-year vesting schedule and the NEO’s continued service with us on each vesting date, with 1/12th of the total number of RSUs vesting every three months after the vesting commencement date, until all RSUs are vested. 5.The amount of PRSUs that may be earned pursuant to the PRSU Award ranges from 0% to 200% of the target number of PRSUs based on the Company’s RTSR performance as compared to the companies in the S&P Software and Services Select Index during three one-year measurement periods consisting of the Company’s 2023, 2024 and 2025 fiscal years. One-third of the total PRSUs may be earned and settled in shares following the end of each one-year measurement period based on RTSR performance and subject to continued employment through the payment date, but the amount initially paid in 2024 and 2025 (for the 2023 and 2024 measurement periods) is limited to 100% of the target amount for the year, and

  130. Outstanding Equity Awards at December 31, 2023, Fiscal Year-End Table

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  132. Outstanding Equity Awards at December 31, 2023, Fiscal Year-End Table

    any PRSUs resulting from above-target performance in those years will be paid following the end of 2025, subject to the NEO's continued employment through the payment date. If the Company’s actual total shareholder return for any measurement period is negative, then no more than 100% of the target amount of PRSUs for such period may be earned. 6.Award is subject to a four-year vesting schedule and the NEO’s continued service with us on each vesting date, with 1/16th of the total number of RSUs vesting every three months after the vesting commencement date, until all RSUs are vested. 7.The amount that may be earned pursuant to the PRSUs ranges from 0% to 200% of the target number based on the Company’s RTSR performance as compared to the companies in the S&P Software and Services Select Index during three one-year measurement periods consisting of the Company’s 2022, 2023 and 2024 fiscal years. One-third of the total PRSUs may be earned and settled in shares following the end of each one-year measurement period based on RTSR performance and subject to continued employment through the payment date, but the amount initially paid in 2023 and 2024 (for the 2022 and 2023 measurement periods) is limited to 100% of the target amount for the year, and any PRSUs resulting from above-target performance in those years will be paid following the end of 2024, subject to the executive’s continued employment through the payment date. If the Company’s absolute total shareholder return for any measurement period is negative, then no more than 100% of the target amount of PRSUs for such period may be earned. 8.Award is subject to an 18-month vesting schedule and the NEO's continuous service on each vesting date, with l/3rd of the total number of RSUs vesting on the six-month anniversary of the vesting commencement date and 1/6th of the total number of RSUs vesting every three months after thereafter until all RSUs are vested. 9.Award is subject to a two-year vesting schedule and the NEO’s continued service with us on each vesting date, with 1/8th of the total number of RSUs vesting every three months after the vesting commencement date, until all RSUs are vested. 10.The amount of PRSUs that may be earned will be determined based on achievement of two quarterly revenue goals. One third of the PRSUs may be earned based on achievement of the first revenue target and, if achieved, will vest in four quarterly installments, with the first installment occurring on the date such achievement is certified, subject to the executive's continuous service through the applicable vesting dates. Two thirds of the PRSUs may be earned based on achievement of the second revenue target and, if achieved, will vest in eight quarterly installments, with the first installment occurring on the date such achievement is certified, subject to the executive's continuous service through the applicable vesting dates. 11.Award vests as to 1/3rd of the total number of shares subject to the RSU award on the six-month anniversary of the vesting commencement date and 1/4th of the remaining shares subject to each RSU award every three months thereafter. 12.Award is subject to a four-year vesting schedule and the NEO’s continued service with the Company on each vesting date, with 25% of the total number of RSUs vesting on the first anniversary of the vesting commencement date, and 1/16th of the total number of RSUs vesting every three months thereafter until all RSUs are vested.

  133. 2023 Option Exercises and Stock Vested Table

    2023 Option Exercises and Stock Vested Table The following table presents information concerning option exercises and RSU (including PRSU) awards that vested for our NEOs during the year ended December 31, 2023.

  134. 2023 Option Exercises and Stock Vested Table

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise (1) | Number of Shares Acquired on Vesting | Value Realized on Vesting (2) | | Michael Burkland | 161,011 | 10,812,445 | 77,098 | 5,546,549 | | Barry Zwarenstein | 22,500 | 1,125,313 | 48,685 | 3,562,439 | | Daniel Burkland | 110,369 | 7,046,879 | 63,872 | 4,713,065 | | Andy Dignan | — | — | 42,700 | 3,136,773 | | Panos Kozanian | — | — | 46,185 | 3,380,179 |

  135. 2023 Option Exercises and Stock Vested Table

    1.Amount represents the excess of the fair market value of the shares of our Common Stock at the time of the exercise over the exercise price of the stock options multiplied by the number of shares exercised. 2.Amount is determined based on the closing market price of our Common Stock on the vesting date of such shares multiplied by the number of shares vested.

  136. 2023 Option Exercises and Stock Vested Table

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  138. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control Our Compensation Committee has approved the Severance Plan to provide consistency in severance payments and benefit rights for our senior executives, including our NEOs, upon certain qualifying terminations of employment, whether or not in connection with a change in control of our company. Under the Severance Plan, if an NEO’s employment with us is terminated by us without “cause” (as defined in the 2014 Plan) (other than due to death or disability), and such termination is not in connection with a “change in control” (as defined in the Severance Plan) of the Company, then the NEO is eligible to receive: •a lump sum cash payment equal to 12 months (in the case of our CEO), or a lump sum cash payment equal to 9 months (in the case of Mr. Zwarenstein), or 6 months (in the case of Messrs. Daniel Burkland, Dignan and Kozanian) of his then-current annual base salary, and •either payment of the premiums for his continued post-termination health insurance coverage, or continued coverage under our health insurance plans for up to 12 months (in the case of our CEO), or up to 9 months (in the case of Mr. Zwarenstein), or 6 months (in the case of Messrs. Daniel Burkland, Dignan and Kozanian). If our CEO terminates his employment with us pursuant to a “constructive termination” (as defined in the Severance Plan), and such termination is not in connection with a “change in control” (as defined in the Severance Plan) of the Company, then he is eligible to receive the same payments and benefits as described above in the event of a termination without “cause.” If an NEO’s employment with us is terminated by us without cause (other than due to death or disability) or by the NEO pursuant to a “constructive termination” (as defined in the Severance Plan), and in each case, such qualifying termination occurs within three months prior to, on or within 12 months after a change in control of the Company, then the NEO is eligible to receive: •a lump sum cash payment equal to 18 months (in the case of our CEO), or a lump sum cash payment equal to 15 months (in the case of Mr. Zwarenstein), or 12 months (in the case of Messrs. Daniel Burkland, Dignan and Kozanian) of his then-current base salary and his target annual cash bonus opportunity, •either payment of the premiums for his continued post-termination health insurance coverage for up to 18 months (in the case of our CEO), or up to 15 months (in the case of Mr. Zwarenstein), or 12 months (in the case of Messrs. Daniel Burkland, Dignan and Kozanian), and •full accelerated vesting of his then-outstanding and unvested equity awards. If the payments or benefits payable to under the Severance Plan would be subject to the excise tax imposed under Section 4999 of the Code, then those payments or benefits will be reduced if such reduction would result in a higher net after tax benefit to him. Each NEO must execute and deliver an effective release of claims and continue to comply with any applicable restrictive covenants in order to receive the payments and benefits provided for under the Severance Plan. In addition to the benefits under the Severance Plan, pursuant to the Employment Offer Letter, our CEO is also eligible to receive continued company-provided healthcare benefits (for himself, his spouse, and eligible dependents) during and following his service as our CEO or as a director, generally on the same basis as was previously provided under his prior Chairman agreement.

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  141. Potential Payments upon Termination or Change in Control

    The table below sets forth the estimated payments and benefits that would be provided to each of our NEOs upon a qualifying termination of employment under the Severance Plan and, for our CEO, under the Employment Offer Letter, as of December 31, 2023.

  142. Potential Payments upon Termination or Change in Control

    | Name | Type of Benefit | Involuntary Termination Without Cause Not In Connection With a Change in Control (1) | Involuntary Termination Without Cause or Termination Due to a Constructive Termination, each in connection with a Change in Control | | Michael Burkland | Cash severance - base salary | $585,000 | $877,500 | | | Cash severance - bonus | — | 877,500 | | | Value of accelerated vesting of equity awards(2) | — | 29,495,530 | | | Company-paid health care premiums | 42,108 | 63,162 | | | Total | $627,108 | $31,313,692 | | Barry Zwarenstein | Cash severance - base salary | $322,500 | $537,500 | | | Cash severance - bonus | — | 403,125 | | | Value of accelerated vesting of equity awards (2) | — | 5,816,322 | | | Company-paid health care premiums | 22,122 | 36,870 | | | Total | $344,622 | $6,793,817 | | Daniel Burkland | Cash severance - base salary | $212,500 | $425,000 | | | Cash severance - bonus | — | 425,000 | | | Value of accelerated vesting of equity awards (2) | — | 7,831,809 | | | Company-paid health care premiums | 21,054 | 42,108 | | | Total | $233,554 | $8,723,917 | | Andy Dignan | Cash severance - base salary | $223,000 | $446,000 | | | Cash severance - bonus | — | 334,500 | | | Value of accelerated vesting of equity awards (2) | — | 7,918,969 | | | Company-paid health care premiums | 21,054 | 42,108 | | | Total | $244,054 | $8,741,577 | | Panos Kozanian | Cash severance - base salary | $225,000 | $450,000 | | | Cash severance - bonus | — | 292,500 | | | Value of accelerated vesting of equity awards (2) | — | 6,348,474 | | | Company-paid health care premiums | 13,356 | 26,712 | | | Total | $238,356 | $7,117,686 |

  143. Potential Payments upon Termination or Change in Control

    1.Michael Burkland is also entitled to the same payments and benefits in the event of a constructive termination of employment. 2.Amount represents the aggregate intrinsic value of the equity awards to vest upon either an involuntary termination of employment without cause or a termination of employment due to a constructive termination, each in connection with a change in control of the Company, which was calculated based on the closing market price of $78.69 per share of our Common Stock at December 29, 2023, the last trading day of 2023. In addition, if a successor entity refused to assume or replace a NEO’s outstanding equity awards at the time of the change in control of the Company, all such outstanding awards would become fully vested as of immediately prior to the closing of the change in control under the terms of our 2014 Plan, in these same amounts, regardless of whether such NEO experiences a termination of employment.

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  146. CEO Pay Ratio

    CEO Pay Ratio In accordance with Item 402(u) of Regulation S-K, we are providing below disclosure relating to the ratio of the median of the annual total compensation of all of our employees (other than our Chief Executive Officer) and the annual total compensation of our Chief Executive Officer, Mr. Michael Burkland (our “CEO”). Since there has been no change in our employee population or employee compensation arrangements in the past fiscal year that we reasonably believe would result in a significant change to our pay ratio disclosure, we have elected to use the same median employee that was identified for 2021 to calculate our 2023 CEO pay ratio, as allowed by Item 402(u) of Regulation S-K. The methodology we used to identify our median employee for 2021 was as follows: •We selected December 31, 2021, the last day of our 2021 fiscal year, as the determination date for purposes of identifying our median employee. •We selected our median employee based on 2,154 full-time and part-time employees who were employed as of the determination date. •We selected our median employee using a compensation measure that consisted of cash compensation payable and paid during 2021 (base salary rate, hourly wages and quarterly and annual incentive compensation) and the grant date fair value of equity awards granted in 2021. •We did not rely on the data privacy or de minimis exceptions allowed by SEC rules to exclude any non-U.S. employees from our employee population, nor did we use any cost-of-living adjustment. •We converted amounts paid to non-U.S. employees in foreign currencies to U.S. dollars using foreign currency exchange rates in effect as of December 31, 2021. •All employees except for our CEO were ranked from lowest to highest with the median employee determined from this list. We calculated the annual total compensation of our median employee in the same manner that we calculated the total compensation of our CEO for purposes of the 2023 Summary Compensation Table. This annual total compensation amount for our median employee was then compared to the annual total compensation of our CEO (as required by Item 402(c)(x) of Regulation S-K) to determine the pay ratio. For 2023: •The median of the annual total compensation of all our employees was $148,885; •The annual total compensation of our CEO, Michael Burkland, was $1,195,211; and •The ratio of the annual total compensation of our CEO to the median of the annual total compensation of all our employees was 8.0 to 1. Please note that this pay ratio is significantly lower than our CEO pay ratio in 2022 when Rowan Trollope, our former chief executive officer and Michael Burkland both served as chief executive officer and Michael Burkland was granted an equity award with a significant grant date fair value in connection with his appointment. Given the size and structure of his initial equity grant in December 2022, Michael Burkland was not eligible for (and did not receive) any equity awards during 2023, which resulted in a lower pay ratio in 2023. The pay ratio for 2023 is also lower than our CEO pay ratio in 2021 when Mr. Trollope served as chief executive officer and received a more customary “refresh” equity award. This ratio is a reasonable estimate calculated in a manner consistent with SEC rules. Because SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have

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  149. CEO Pay Ratio

    different employee populations and compensation practices and may use different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.

  150. Pay versus Performance

    Pay versus Performance As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive "compensation actually paid" (as defined by SEC rules and as further described below) to our named executive officers and certain company financial performance measures. The following table provides information showing the relationship during 2023, 2022, 2021 and 2020 between (1) executive "compensation actually paid” to (a) each person serving as our principal executive officer or PEO (also referred to as our CEO) and (b) our non-PEO named executive officers (also referred to below as our "other NEOs"), on an average basis, and (2) the Company’s financial performance. The Company selected performance measure (the "CSM") included in the charts below is Revenue and Adjusted EBITDA is included as a supplemental measure because it is almost equally important. Both of the measures are described in more detail in the "Compensation Discussion and Analysis - Key Elements of Our 2023 Executive Compensation Program" section above.

  151. Pay Versus Performance Table

    Pay Versus Performance Table

  152. Pay Versus Performance Table

    | Year (a) | Summary Compensation Table Total for Michael Burkland (b) | Compensation Actually Paid to Michael Burkland (c)(1)(8) | Summary Compensation Table Total for Rowan Trollope (b) | Compensation Actually Paid to Rowan Trollope (c)(2)(8) | Average Summary Compensation Table Total for Other NEOs (d) | Average Compensation Actually Paid to Other NEOs (e)(3)(8) | Value of Initial Fixed $100 Investment Based On: | | | (in thousands) | | | | | | | | | | | | Peer Group Total Shareholder Return (g)(4) | | | | | | | | | | | | | Total Shareholder Return (f) | Nasdaq Computer Index | Nasdaq Computer & Data Processing Index | Net Loss (h)(5) | CSM Revenue (i)(6) | Supplemental Measure Adjusted EBITDA (j)(7) | | 2023 | 1,195,211 | 3,136,538 | — | — | 4,361,681 | 4,919,123 | 120 | 213 | — | (81,764) | 910,488 | 166,265 | | 2022 | 38,225,785 | 35,344,854 | 11,137,770 | (7,178,662) | 7,857,310 | 1,669,124 | 103 | 130 | 115 | (94,650) | 778,846 | 140,436 | | 2021 | — | — | 10,825,689 | 4,461,892 | 4,617,926 | 1,270,926 | 209 | 200 | 186 | (53,000) | 609,591 | 110,503 | | 2020 | — | — | 6,417,891 | 37,440,834 | 3,003,657 | 15,448,098 | 266 | 157 | 147 | (42,130) | 434,908 | 85,681 |

  153. Pay Versus Performance Table

    1.Michael Burkland served as our CEO beginning on November 28, 2022. 2.Mr. Rowan Trollope served as our CEO for the entirety of 2020 and 2021, and through November 28, 2022, for 2022. 3.The NEOs included in this calculation for each year are: a.2023 - Barry Zwarenstein, Daniel Burkland, Andy Dignan and Panos Kozanian. b.2022 - Barry Zwarenstein, Daniel Burkland, Scott Welch and Panos Kozanian. c.2021 - Barry Zwarenstein, Daniel Burkland and Scott Welch. d.2020 - Barry Zwarenstein, Daniel Burkland and Scott Welch. 4.For each of 2023, 2022, 2021 and 2020, total shareholder return for the Company and the peer group was calculated as the yearly percentage change in cumulative total shareholder return based on a deemed fixed investment of $100 at market close on December 31, 2019. The yearly percentage change in cumulative total shareholder return was measured as the quotient of (a) the difference between stock price per share at the end and the beginning of the Measurement Period, divided by (b) stock price per share at the beginning of the Measurement Period. For purposes of this pay versus performance disclosure, our peer group is the NASDAQ Computer Index (the "Peer Group"). Beginning in 2023, we started to compare our common stock to the NASDAQ Computer Index and ceased using the NASDAQ Computer and Data Processing Index as that index is no longer available. Because fiscal years are presented in the table in reverse chronological order (from top to bottom), the table should be read from bottom to top for purposes of understanding cumulative returns over time.

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  156. Pay Versus Performance Table

    5.Net loss attributable to Five9, Inc. as reported in the consolidated financial statements included in our Form 10-K for the year ended December 31, 2023. 6.Revenue as reported in the consolidated financial statements included in our Form 10-K for the year ended December 31, 2023. 7.Adjusted EBITDA as reported in the consolidated financial statements included in our Form 10-K for the year ended December 31, 2023. Adjusted EBITDA is calculated as net loss before (1) depreciation and amortization, (2) stock-based compensation, (3) interest expense, (4) interest (income) and other, (5) exit costs related to the closure and relocation of our Russian operations, (6) acquisition and related transaction costs and one-time integration costs, (7) contingent consideration expense, (8) refund for prior year overpayment of USF fees, (9) lease amortization for finance leases, (10) provision for (benefit from) income taxes, and (11) other items that do not directly affect what we consider to be our core operating performance. 8.The additional table below sets forth each of the amounts required by Item 402(v) of Regulation S-K to be deducted from and added to the amount of total compensation as reflected in the Summary Compensation Table, to calculate Compensation Actually Paid.

  157. Pay Versus Performance Table

    | | 2023 | | 2022 | | | | 2021 | | | 2020 | | | | Michael Burkland | Other NEOs Average | Michael Burkland | Rowan Trollope | Other NEOs Average | | Rowan Trollope | Other NEOs Average | | Rowan Trollope | Other NEOs Average | | Total Compensation for covered fiscal year (FY) from Summary Compensation Table (SCT) | $1,195,211 | $4,361,681 | $38,225,785 | $11,137,770 | $7,857,310 | | $10,825,689 | $4,617,926 | | $6,417,891 | $3,003,657 | | DEDUCT: grant date fair value (GDFV) of equity awards granted during FY | $— | $(3,593,767) | $(38,025,826) | $(10,162,740) | $(7,099,739) | | $(9,459,383) | $(3,825,956) | | $(5,063,006) | $(2,206,921) | | ADD: Fair value (FV) as of FY-end of equity awards granted during the year that are outstanding and unvested as of FY-end | $— | $3,649,593 | $35,199,685 | $534,533 | $3,034,839 | | $5,797,555 | $1,932,539 | | $10,995,441 | $4,792,937 | | ADD: change as of end of FY in FV of awards granted in any prior year that are outstanding and unvested as of FY-end | $2,121,481 | $484,708 | $— | $— | $(1,487,434) | | $(3,117,851) | $(1,527,385) | | $14,892,137 | $6,022,969 | | ADD: vesting date FV for any equity awards granted during the year that vested at the end of or during FY | $— | $508,968 | $— | $647,040 | $443,019 | | $1,623,743 | $541,145 | | $1,788,797 | $779,593 | | ADD: change as of the vesting date (from end of prior FY) in FV for any equity awards granted in any prior year that vested at the end of or during FY | $314,678 | $217,214 | $(54,790) | $(2,825,529) | $(1,078,871) | | $(1,207,861) | $(467,343) | | $8,409,574 | $3,055,863 | | DEDUCT: FV at the end of the prior FY for awards granted in any prior year that failed to meet applicable vesting conditions during FY | $(494,832) | $(709,274) | $— | $(6,647,736) | $— | | $— | $— | | $— | $— | | ADD: excess FV for equity award modifications during FY | $— | $— | $— | $138,000 | $— | | $— | $— | | $— | $— | | Compensation Actually Paid (as defined by SEC rule) | $3,136,538 | $4,919,123 | $35,344,854 | $(7,178,662) | $1,669,124 | $— | $4,461,892 | $1,270,926 | $— | $37,440,834 | $15,448,098 |

  158. Analysis of the Information Presented in the Pay versus Performance Table

    Analysis of the Information Presented in the Pay versus Performance Table In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay versus Performance table. Total Shareholder Return (TSR): The graphs below shows the relationship between "compensation actually paid" ("CAP") to each of our CEOs and the average of the CAP to our other NEOs and the total shareholder return of Five9, Inc. and our Peer Group over the four fiscal years ending December 31, 2023, based on the hypothetical investment of $100 on December 31, 2019.

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  161. Analysis of the Information Presented in the Pay versus Performance Table

    Net Loss: The graph below shows the relationship between CAP to each of our CEOs and the average of the CAP to our other NEOs and net loss attributable to Five9, Inc. over the four fiscal years ending December 31, 2023, as reported in the Company’s consolidated financial statements.

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  164. Analysis of the Information Presented in the Pay versus Performance Table

    Revenue and Adjusted EBITDA: Revenue is the CSM for 2023 and Adjusted EBITDA is the supplemental measure, each of which are key performance indicators used by us in managing our business, and are linked to our growth and profitability and the creation of long-term stockholder value. The graphs below show the relationship between CAP to each of our CEOs and the average of the CAP to our other NEOs and our revenue and Adjusted EBITDA over the four fiscal years ending December 31, 2023.

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  167. Analysis of the Information Presented in the Pay versus Performance Table

    Tabular List: The following table lists the three financial performance measures that we believe represent the most important financial performance measures we use to link CAP to our NEOs for fiscal year 2023 to our performance:

  168. Analysis of the Information Presented in the Pay versus Performance Table

    | •Revenue | | •Adjusted EBITDA | | •Relative total shareholder return |

  169. Analysis of the Information Presented in the Pay versus Performance Table

    For more information regarding how each of these performance measures are used in our executive compensation programs, see the “Compensation Discussion and Analysis” section above.

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  171. Analysis of the Information Presented in the Pay versus Performance Table

    Equity Compensation Plan Information The following table summarizes certain information with respect to our common stock that may be issued under the equity compensation plans as of December 31, 2023:

  172. Analysis of the Information Presented in the Pay versus Performance Table

    | | Number of Securities to be Issued Upon Exercise of Outstanding Options and Warrants and Vesting of Restricted Stock Units | Weighted-average Exercise Price of Outstanding Options and Warrants | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a) | | | (a) | (b) | (c) | | Equity compensation plans approved by stockholders | 4,985,394(1) | $56.33(2) | 19,589,313(3) | | Equity compensation plans not approved by stockholders | 8,045(4) | 14.33 | — | | Total | 4,993,439 | | 19,589,313 |

  173. Analysis of the Information Presented in the Pay versus Performance Table

    1.Includes 909,725 shares underlying outstanding stock options and 4,075,669 shares underlying outstanding RSUs. 2.The weighted-average exercise price does not take into account shares issuable upon the vesting of outstanding RSUs, which have no exercise price. 3.Includes 15,652,797 shares of Common Stock reserved for issuance under the 2014 Plan and 3,936,516 shares of Common Stock reserved for issuance under the ESPP. The 2014 Plan provides for an annual automatic increase to the shares reserved for issuance in an amount equal to 5% of the total number of shares outstanding on December 31st of the preceding calendar year or a lesser number as determined by our Board of Directors continuing through 2024. Pursuant to the automatic annual increase, 3,665,848 additional shares were reserved under the 2014 Plan on January 1, 2024. The ESPP also provides for an automatic increase to the shares reserved for issuance, continuing through January 1, 2024, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year; (ii) 1,000,000 shares of common stock (subject to adjustment to reflect any split or combination of our common stock); or (iii) such lesser number as determined by our Board of Directors. Pursuant to the automatic annual increase, 733,169 additional shares were reserved under the ESPP on January 1, 2024. 4.Represents assumed unvested stock options in connection with the acquisition of Inference Solutions Inc.

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  175. Analysis of the Information Presented in the Pay versus Performance Table

    Transactions With Related Persons Other than the compensation arrangements with our non-employee directors and executive officers, there have been no transactions since January 1, 2023 (and there are no currently proposed transactions) in which: •we have been or are to be a participant; •the amount involved exceeds $120,000; and •any of our directors, executive officers or holders of more than 5% of our common stock, or any immediate family member of or person sharing the household with any of these individuals (other than tenants or employees), had or will have a direct or indirect material interest.