DEF 14A of Alkami Technology, Inc., Mar 29, 2024

DEF 14A of Alkami Technology, Inc.

Filed Mar 29, 2024 · FY20230001529274-24-000068

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our Board is divided into three classes. Each class has a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. Our Board presently has nine members and nine authorized Board seats. There are two directors in Class III whose term of office expires at the Annual Meeting: Steve Mitchell and Barbara Yastine, each of whom is a nominee for director and who has served on our Board since October 2014 and October 2020, respectively. The current Class I directors, whose terms will expire at the 2025 annual meeting of stockholders, are Maria Alvarez, Todd Clark and Gary Nelson, and the current Class II directors, whose terms will expire at the 2026 annual meeting of stockholders, are Charles Kane, Raphael Osnoss, Alex Shootman and Brian R. Smith. If elected at the Annual Meeting, each of the Class III nominees would serve until the 2027 annual meeting of stockholders and until his or her successor has been duly elected and qualified, or, if sooner, until each such director’s earlier death, resignation or removal. Directors are elected by a plurality of the votes cast. Accordingly, the two nominees receiving the highest number of “For” votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the two nominees named below. Proxies cannot be voted for a greater number of persons than the nominees named. If any nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by the Company. Each person nominated for election has agreed to serve if elected. The Company’s management has no reason to believe that any nominee will be unable to serve. THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE. Set forth below is certain biographical information for each nominee and each director whose term will continue after the Annual Meeting.

  2. ELECTION OF DIRECTORS

    | Name | Age | Director Class | Independent | Audit Committee | Compensation Committee | Information Systems Audit Committee | Nominating & Corporate Governance Committee | | Charles Kane | 66 | Class II | ü | Chair | | | | | Raphael Osnoss | 37 | Class II | ü | | Chair | | ü | | Alex Shootman | 58 | Class II | | | | | | | Brian R. Smith | 58 | Class II | ü | | ü | | Chair | | Steven Mitchell | 54 | Class III | ü | | | | ü | | Barbara Yastine | 64 | Class III | ü | ü | | | | | Maria Alvarez | 59 | Class I | ü | | | ü | | | Todd Clark | 57 | Class I | ü | | | Chair | | | Gary Nelson | 67 | Class I | ü | ü | ü | ü | |

  3. NOMINEES FOR ELECTION TO CLASS III

    NOMINEES FOR ELECTION TO CLASS III Steven Mitchell has served on our Board since October 2014. Mr. Mitchell has served as the Chief Executive Officer of Argonaut Private Capital L.P., a private equity firm, since July 2016, prior to which he was the Managing Director of Argonaut Private Equity, LLC, since November 2004. Prior to joining Argonaut, Mr. Mitchell was a principal in both Radical Incubation and 2929 Entertainment. Mr. Mitchell serves on the boards of Aspen Aerogels, Inc. (ASPN), an energy technology company, and StepStone Group, Inc. (STEP), an investment firm. From 1996 to 1999, Mr. Mitchell was a corporate attorney at Gibson, Dunn & Crutcher LLP. Mr. Mitchell holds a B.B.A. in marketing from Baylor University and a J.D. from University of San Diego School of Law. We believe that Mr. Mitchell is qualified to serve on our Board because of his experience as an investment manager and a board director. Barbara Yastine has served on our Board since October 2020. Ms. Yastine served as Co-Chief Executive Officer of Lebenthal Holdings LLC (“Lebenthal”), a private asset management firm, from September 2015 to June 2016. She previously served as Chair, President and Chief Executive Officer of Ally Bank from March 2012 to June 2015 and as Chair of Ally Bank and Chief Administrative Officer of Ally Financial from May 2010 to March 2012. Prior to joining Ally Financial, she served as a Principal of Southgate Alternative Investments beginning in June 2007. She served as Chief Financial Officer for investment bank Credit Suisse First Boston from October 2002 to August 2004. From 1987 through 2002, Ms. Yastine worked at Citigroup and its predecessor companies. Ms. Yastine also serves on the board of directors of AXIS Capital Holdings Limited (AXS), an insurance holding company, Zions Bancorporation, N.A. (ZION), a bank holding company, and Primerica, Inc. (PRI), an insurance and financial services sales company. She served on the board of directors of First Data Corporation (FDC) from September 2016 to July 2019. She received a B.A. in journalism and an M.B.A. from New York University. We believe Ms. Yastine is qualified to serve on our Board because of her experience as an executive and board director in the financial services and investment industries.

  4. CLASS I DIRECTORS

    CLASS I DIRECTORS

  5. CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING OF STOCKHOLDERS

    CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING OF STOCKHOLDERS Maria Alvarez has served on our Board since January 1, 2023. Ms. Alvarez currently serves as VP, AI Platform and AI Division at Microsoft Corporation, a technology company, and has served in senior roles at Microsoft since 2011, including as General Manager, Shared Engineering Services, AI & Research Group. Before joining Microsoft, Ms. Alvarez served as Chief Technology Officer and Product Head at Panda Security, a cybersecurity software company, and she previously held senior roles at Yahoo! Inc., Hewlett Packard Company and Symantec Corporation. She currently serves as an independent board member of BB Imaging, a private company that offers diagnostic ultrasound services, and previously served on the board of directors of Workfront, Inc., a privately held SaaS software company. Ms. Alvarez brings to the Board expertise in product strategy, operational and technical excellence, international leadership, and digital transformation. She has extensive experience in software development in the security, search advertising and AI industries. Ms. Alvarez holds a M.S. in Computer Science from California Polytechnic University Pomona. Todd Clark has served on our Board since September 2018. Mr. Clark served as President and Chief Executive Officer of CU Cooperative Systems, Inc. (“CU Cooperative”), a credit union solutions provider, from 2016 to 2023. Prior to CU Cooperative, Mr. Clark spent 22 years with First Data Corporation, a financial services company, where he last held the position of Senior Vice President/Head of STAR Network and Debit Processing. In this capacity, he was responsible for the business unit’s profit/loss and led a team of more than 600 product, strategy, communications, strategic sales, technology, operations and support personnel. He also managed the company’s Bank of America relationship as head of the financial institution group. Mr. Clark holds a B.A. in economics from the University of Texas at Austin. We believe Mr. Clark is qualified to serve on our Board because of his past leadership roles and financial services industry knowledge. Gary Nelson has served on our Board since August 2011. Mr. Nelson has 39 years of senior and executive management experience in domestic and international business. Mr. Nelson is the Chairman at The Nelson Family Foundation and a co-founder of Alkami. Previously, he served as Alkami’s Manager from 2009 to 2011 and Chief Executive Officer from 2011 to 2013 and as Chief Executive Officer of Advanced Financial Solutions from 1995 to 2004. We believe Mr. Nelson is qualified to serve on our Board because of his management experience and knowledge of our Company as a former executive.

  6. CLASS II DIRECTORS

    CLASS II DIRECTORS

  7. CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING OF STOCKHOLDERS

    CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING OF STOCKHOLDERS Charles “Chuck” Kane has served on our Board since October 2019. Mr. Kane is an adjunct professor of International Finance at the MIT Sloan Graduate Business School of Management at the Massachusetts Institute of Technology, a position he has held since 2006. Since November 2006, Mr. Kane has also been a Director and Strategic Advisor of One Laptop Per Child, a non-profit organization that provides computing and Internet access for students in the developing world, for whom he served as President and Chief Operating Officer from 2008 until 2009. Mr. Kane served as Executive Vice President and Chief Administrative Officer of Global BPO Services Corp., from July 2007 until March 2008, and as Chief Financial Officer of Global BPO from August 2007 until March 2008. Prior to joining Global BPO, he served as Chief Financial Officer of RSA Security Inc. from May 2006 until RSA was acquired by EMC Corporation in October 2006. From July 2003 until May 2006, he served as Chief Financial Officer of Aspen Technology, Inc. Mr. Kane currently serves on the boards of directors of Progress Software Corporation (PRGS), a software company that specializes in the integration of business applications and Symbotic Inc. (SYM), an automation technology company. Mr. Kane previously served on the boards of directors of RealPage, Inc. (RP), Carbonite, Inc. (CARB), Demandware, Inc. (DWRE), Borland Software Inc. (BORL) and Netezza Corporation (NZ). Mr. Kane holds a B.B.A. in accounting from the University of Notre Dame and an M.B.A. in international finance from Babson College. We believe Mr. Kane is qualified to serve on our Board because of his background in finance and accounting and experience as an executive and a public company director. Raphael “Raph” Osnoss has served on our Board since December 2017. Mr. Osnoss is a Managing Director at General Atlantic and focuses on the firm’s investments in the Financial Services sector. Prior to joining General Atlantic, Mr. Osnoss was an Associate at Berkshire Partners, a private equity firm, from 2010 to 2012. Previously, he was an Analyst in the Investment Banking Division of Goldman Sachs from 2008 to 2010. He currently serves on the boards of EngageSmart, LLC, a SaaS platform for customer engagement and payments, Tripleseat, LLC, a provider of software to the hospitality industry, Amount, Inc., a banking and loan origination software provider, and Avant, LLC, a financial technology company. He previously served on the board of directors of Insurity, Inc., a cloud-based solutions and data analytics company. He also serves on the board of Edible Schoolyard NYC, a food and education-focused charitable organization. Mr. Osnoss holds a B.S. in economics from the Wharton School at the University of Pennsylvania and an M.B.A. from Harvard Business School. We believe Mr. Osnoss is qualified to serve on our Board because of his knowledge of technology and the financial services industry. Alex Shootman has served as our Chief Executive Officer, President and as a Director on our Board since November 2021. Mr. Shootman brings to Alkami more than 20 years of executive leadership experience growing and scaling enterprise software companies across multiple industries. Most recently, he served as President and Chief Executive Officer of Workfront, a cloud-based enterprise work management software company, from July 2016 until its acquisition by Adobe Inc. in December 2020, after which he continued to lead the Workfront team as Vice President and General Manager of Workfront within Adobe until July 2021. Prior to joining Workfront, from September 2013 to June 2016, he served as President, Worldwide Field Operations at Apptio, Inc., a provider of cloud-based technology business management software. He also served as President of Eloqua Corp., an enterprise SaaS company acquired by Oracle Corporation, from March 2009 to September 2013. Mr. Shootman has also held executive leadership positions at IBM Corporation, BMC Software, Vignette Corporation and TeleTech Holdings. We believe Mr. Shootman is qualified to serve on our Board because of his knowledge and executive experience, including as a result of his service as our President and Chief Executive Officer. Brian R. Smith has served on our Board since September 2011. Mr. Smith is the founder of S3 Ventures, a venture capital firm, and has served as its Managing Director since 2005. Previously, he founded and served as Chairman and Chief Executive Officer of Crossroads Systems, Inc. Mr. Smith currently serves on the boards of Liquibase, Inc., an enterprise software provider, Saranas Inc., a medical device company, Alleviant Medical, also a medical device company, and VUV Analytics, Inc., a spectroscopy provider. Mr. Smith earned a B.S. in electrical engineering with honors from the University of Cincinnati and an M.S. in electrical engineering from Purdue University. We believe Mr. Smith is qualified to serve on our Board because of his experience as an investor and as an executive and board director.

  8. Involvement in Certain Legal Proceedings

    Involvement in Certain Legal Proceedings Barbara Yastine, one of our directors, was the Co-Chief Executive Officer and a director of Lebenthal for approximately nine months from September 2015 to June 2016. In November 2017, approximately 17 months after Ms. Yastine left that position, Lebenthal and certain of its subsidiaries filed voluntary petitions for bankruptcy under Chapter 7 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York.

  9. INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

    INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

  10. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table sets forth information regarding compensation awarded to or earned by the executive officers listed below during the year ended December 31, 2023.

  11. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-equity Incentive Plan Compensation ($)(3) | All Other Compensation(3) | Total ($) | | Alex Shootman Chief Executive Officer | 2023 | 516,500 | — | 3,090,000 | 690,561 | 8,975 | 4,306,036 | | | 2022 | 450,000 | — | — | 540,774 | 7,525 | 998,299 | | W. Bryan Hill Chief Financial Officer | 2023 | 460,000 | — | 4,097,376 | 461,265 | 10,299 | 5,028,940 | | | 2022 | 432,250 | 215,000 | 2,892,012 | 313,433 | 8,591 | 3,861,286 | | Stephen Bohanon Chief Strategy Officer | 2023 | 434,700 | — | 2,048,688 | 581,194 | 8,608 | 3,073,190 | | | 2022 | 432,250 | — | 6,231,540 | 622,404 | 7,028 | 7,293,222 |

  12. 2023 Summary Compensation Table

    (1) Amounts shown do not reflect compensation actually received. Instead the amounts shown are the aggregate grant date fair value of equity awards, as computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. Assumption used in the calculation of these amounts are included in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. (2)Amounts represent bonuses earned under the annual bonus plan for 2023 based on the achievement of certain performance goals. (3)$5,625, $6,949 and $5,258 of the amount reported constitutes matching contributions made under our 401(k) Plan to Messrs. Shootman, Hill, and Bohanon. $3,350 of the amount reported relates to cell phone stipends and home allowance.

  13. Outstanding Equity Awards at December 31, 2023

    Outstanding Equity Awards at December 31, 2023 The following table provides information regarding outstanding equity awards held by our named executive officers at December 31, 2023.

  14. Outstanding Equity Awards at December 31, 2023

    | | | Options Awards | | | | Stock Awards | | | | | Number of | Number of | | | Number of | Market Value | | | | Securities | Securities | | | Shares or | of Shares | | | | Underlying | Underlying | | | Units of | or Units of | | | | Unexercised | Unexercised | Option | Option | Stock that | Stock that | | | Grant | Options (#) | Options (#) | Exercise | Expiration | have not | have not | | Name | Date | Exercisable | Unexercisable | Price ($) | Date | vested (#) | Vested ($)(1) | | Alex Shootman | 11/29/2021 | — | — | — | — | 500,000(2) | 12,125,000 | | | 3/3/2023 | — | — | — | — | 162,500(3) | 3,940,625 | | W. Bryan Hill | 4/1/2019(4) | 950,000 | — | 2.34 | 3/3/2029 | — | — | | | 2/5/2021(5) | 83,300 | 34,300 | 15.46 | 2/4/2031 | — | — | | | 4/14/2021(6) | — | — | — | — | 6,667 | 161,675 | | | 2/16/2022(7) | — | — | — | — | 101,424 | 2,459,532 | | | 2/15/2023(7) | — | — | — | — | 187,380 | 4,543,965 | | Stephen Bohanon | 12/11/2018(8) | 19,250 | — | 2.34 | 12/10/2028 | — | — | | | 2/20/2020(9) | 1,408 | 1,408 | 3.32 | 2/19/2030 | — | | | | 3/13/2020(8) | 2,969 | — | 3.32 | 3/12/2030 | — | | | | 2/5/2021(5) | 83,300 | 34,300 | 15.46 | 2/4/2031 | — | | | | 4/14/2021(6) | — | — | — | — | 8,333 | 202,075 | | | 2/16/2022(7) | — | — | — | — | 218,533 | 5,299,425 | | | 2/15/2023(10) | — | — | — | — | 101,499 | 2,461,351 |

  15. Outstanding Equity Awards at December 31, 2023

    (1)Amounts calculated using $24.25 per share, the closing trading price of our common stock on December 29, 2023, the last trading day of the year. (2)Remaining restricted stock units vest in substantially equal quarterly installments through December 8, 2025, subject to continued service through the applicable vesting date. (3)Remaining restricted stock units vest in substantially equal quarterly installments through March 8, 2027, subject to continued service through the applicable vesting date. (4)20% of the shares originally subject to the option vest on the first anniversary of the grant date, 1/36th of 60% of the shares originally subject to the option vest monthly thereafter, and the remaining 20% of shares originally subject to the option vest on the fifth anniversary of the grant date, subject in each case to continued service through the applicable vesting date. This option may be exercised prior to the vesting with any shares purchased subject to a right of repurchase at the original exercise price that lapses in accordance with the option's vesting schedule. (5)1/48th of the shares originally subject to the option vest monthly measured from March 5, 2021, subject to continued service through the applicable vesting date. (6)1/3rd of these restricted stock units vest on each anniversary of May 15, 2021, subject to continued service through the applicable vesting date. (7)Remaining restricted stock units vest in substantially equal quarterly installments through March 1, 2026, subject to continued service through the applicable vesting date. (8)This option is fully vested. (9)1,408 of the shares subject to the option were unvested as of December 31, 2023. The shares fully vested on January 1, 2024. (10)Remaining restricted stock units vest in substantially equal quarterly installments through March 1, 2027, subject to continued service through the applicable vesting date.

  16. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The following table shows certain information with respect to the compensation of all non-employee directors of the Company for the fiscal year ended December 31, 2023.

  17. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid In Cash ($) (1) | Stock Awards ($)(2) | Total ($) | | Maria Alvarez | 36,000 | 189,594 | 225,594 | | Todd Clark | 42,000 | 189,594 | 231,594 | | Charles Kane | 50,000 | 189,594 | 239,594 | | Steve Mitchell | 34,000 | 189,594 | 223,594 | | Gary Nelson | 52,000 | 189,594 | 241,594 | | Raphael Osnoss | 46,000 | 189,594 | 235,594 | | Brian R. Smith | 64,000 | 189,594 | 253,594 | | Barbara Yastine | 40,000 | 189,594 | 229,594 |

  18. DIRECTOR COMPENSATION

    (1)Ms. Alvarez and Messrs. Clark, Mitchell, Nelson and Smith elected to be paid their cash retainers in fully vested restricted stock units, and amounts reported for them constitute the grant date fair value of the fully vested restricted stock units granted to them up to the amount of the cash fees to which they were entitled, as calculated in accordance with FASB ASC Topic 718. (2)Represents the annual award of restricted stock units per the Non-Employee Director Compensation Program. The awards will generally vest in full on the anniversary of the grant date. Amounts reported represents the aggregate grant date fair value of restricted stock units granted to our non-employee directors computed in accordance with FASB ASC Topic 718. Assumption used in the calculation of these amounts are included in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. As of December 31, 2023, our non-employee directors had equity awards outstanding with respect to the following number of shares:

  19. DIRECTOR COMPENSATION

    | Name | Shares Underlying Option Awards Exercisable | Unvested Restricted Stock Units | | Maria Alvarez | — | 39,594 | | Todd Clark | — | 13,699 | | Charles Kane | 38,800 | 13,699 | | Steve Mitchell | — | 13,699 | | Gary Nelson | — | 13,699 | | Raphael Osnoss | — | 13,699 | | Brian R. Smith | — | 13,699 | | Barbara Yastine | — | 13,699 |

  20. DIRECTOR COMPENSATION

    Additionally, we provide reimbursement to our non-employee directors for their reasonable expenses incurred in attending meetings of our Board and its committees. We have approved a compensation program for our non-employee directors (“Director Compensation Program”). Under the Director Compensation Program, our non-employee directors will receive cash compensation as follows: •Each non-employee director receives an annual cash retainer of $30,000 per year. •Any non-executive chairperson will receive an additional annual cash retainer of $50,000 per year. •The members of the following committees will receive additional annual cash retainers in the amounts set forth below, depending on whether the member serves as chairperson of the committee:

  21. DIRECTOR COMPENSATION

    | Committee | Chair | Non-Chair | | Audit Committee Member | $20,000 | $10,000 | | Compensation Committee Member | $12,000 | $6,000 | | Information Systems Audit Committee Member | $12,000 | $6,000 | | Nominating and Corporate Governance Committee Member | $8,000 | $4,000 |

  22. DIRECTOR COMPENSATION

    •All annual cash retainers are paid quarterly in arrears promptly following the end of the applicable quarter. •Each non-employee director may elect to receive all or part of his or her annual cash retainer in the form of restricted stock units under our 2021 Plan. Elections to convert all or part of the annual cash retainer into restricted stock units must generally be made on or before December 31 of the year before the year in which the annual cash retainer is scheduled to be paid, or such earlier deadline as established by our Board or Compensation Committee. Each individual who first becomes a non-employee director is permitted to elect to convert the annual cash retainer payments scheduled to be paid in the same calendar year into restricted stock units, provided that the election is made before the date the individual becomes a non-employee director. Restricted stock units granted in lieu of all or a portion of the annual cash retainer are fully vested on the date of grant, and the number of restricted stock units is calculated by dividing (a) the amount of the annual retainer that would have otherwise been paid by (b) the average per share closing trading price of our Common Stock over the most recent 30 trading days as of the grant date. •If permitted by our Board or the Compensation Committee, non-employee directors may elect to defer all or part of the settlement of their restricted stock units (whether issuable in lieu of all or a portion of the annual cash retainer or issuable under their Initial Grant or Annual Grant, described below). Any such deferral election is subject to the rules, conditions and procedures as determined by our Board or the Compensation Committee in its sole discretion, which are intended to comply with the requirements of Section 409A of the Internal Revenue Code. The timing of the settlement of any deferred restricted stock units is made in accordance with the terms of the applicable deferral election. As of December 31, 2023, Ms. Alvarez and Messrs. Clark, Kane, Mitchell, Osnoss and Smith deferred settlement of 1,765, 19,770, 15,512, 19,184, 14,179 and 23,595 vested RSUs, respectively, under the Director Compensation Program. •Upon a non-employee director’s initial appointment or election to our Board following this offering, the director will automatically be granted an award of a number of restricted stock units calculated by dividing (a) $340,000 by (b) the average per share closing trading price of our Common Stock over the most recent 30 trading days as of the grant date (the “Initial Grant”). The Initial Grant will vest as to one-third of the underlying shares on each anniversary of the grant date, subject to continued service through each applicable vesting date. •Each non-employee director who has served for at least four months as of the date of each annual meeting of stockholders and will continue to serve thereafter will automatically be granted on the date of the annual meeting of stockholders an award of a number of restricted stock units calculated by dividing (a) $170,000 by (b) the average per share closing trading price of our common stock over the most recent 30 trading days as of the grant date (the “Annual Grant”). Each Annual Grant will vest on the earlier of (i) the first anniversary of the grant date and (ii) immediately before our annual meeting of stockholders following the grant date, subject to continued service through the applicable vesting date. •In the event of a change in control (as defined in the 2021 Plan), each Initial Grant and Annual Grant, along with any other equity-based awards held by any non-employee director, will vest and, if applicable, become exercisable immediately before such change in control.