DEF 14A of Tenable Holdings, Inc., Apr 11, 2024

DEF 14A of Tenable Holdings, Inc.

Filed Apr 11, 2024 · FY20230001660280-24-000064

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Tenable’s Board of Directors is divided into three classes and 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. The Board of Directors currently consists of nine members. There are three directors in the class whose term of office expires in 2024. Mr. Coviello was previously elected by Tenable's stockholders. Ms. Keane and Mr. Tosheff were recommended to the Board by a member of senior management, nominated by the Nominating and Corporate Governance Committee, and elected by the Board. If elected at the Annual Meeting, each of these nominees would serve until the 2027 Annual Meeting of Stockholders and until their successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. It is the Company’s policy to invite and encourage directors and nominees for director to attend each annual meeting of stockholders. In 2023, all of our then-serving directors attended the Annual Meeting. Directors are elected by a plurality of the votes of the holders of shares present online at the meeting or represented by proxy and entitled to vote on the election of directors. Accordingly, the three nominees receiving the highest number of affirmative 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 three nominees named below. 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 Board. 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 following table reflects certain diversity information regarding our directors based on self-identification by each director.

  2. Board Diversity Matrix (as of March 28, 2024)

    Board Diversity Matrix (as of March 28, 2024)

  3. Board Diversity Matrix (as of March 28, 2024)

    | | Female | Male | | Total Number of Directors | 9 | | | Part I: Gender Identity | | | | Directors | 3 | 6 | | Part II: Demographic Background | | | | African American or Black | 0 | 1 | | White | 3 | 4 | | Did Not Disclose Demographic Background | 1 | |

  4. Board Diversity Matrix (as of March 28, 2024)

    Our Board Diversity Matrix as of March 30, 2023 can be found in our proxy statement for the 2023 Annual Meeting filed with the SEC on April 12, 2023. The following table lists the skills and experience that our Nominating and Corporate Governance Committee and Board consider important for our directors to have given our current business and future market opportunities, and the directors who we believe possess them:

  5. Board Diversity Matrix (as of March 28, 2024)

    | | Coviello | Higgins | Howe | Huffard | Keane | Seawell | Tosheff | Vicks | Yoran | | Cybersecurity Experience | ✔ | ✔ | ✔ | ✔ | | | ✔ | | ✔ | | Enterprise SaaS Experience | ✔ | ✔ | ✔ | ✔ | | ✔ | ✔ | | ✔ | | CEO/COO Management Experience | ✔ | ✔ | | ✔ | ✔ | | | | ✔ | | Operations Experience | ✔ | ✔ | | ✔ | ✔ | ✔ | | ✔ | ✔ | | Business Development Experience | ✔ | ✔ | ✔ | ✔ | | | | | ✔ | | Moving Innovation Through to Commercialization | ✔ | ✔ | | ✔ | | | ✔ | | ✔ | | Relationships with the DoD and/or other Relevant Agencies | | ✔ | ✔ | | | | | ✔ | ✔ | | Capital Markets Experience | ✔ | | | | ✔ | ✔ | | ✔ | ✔ | | Financial Reporting, Accounting and Internal Controls Experience | ✔ | ✔ | | | ✔ | ✔ | ✔ | ✔ | | | Board/Corporate Governance Experience | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | | ✔ | ✔ | | Human Resources/Executive Compensation | ✔ | ✔ | | | ✔ | | | | | | Legal and/or Risk Management Experience | ✔ | ✔ | ✔ | | ✔ | ✔ | ✔ | ✔ | |

  6. CLASS III NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING

    CLASS III NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING The following is a brief biography of each nominee for director and a discussion of the specific experience, qualifications, attributes or skills of each nominee that led the Nominating and Corporate Governance Committee of the Board of Directors to recommend that person as a nominee for director, as of the date of this proxy statement. The Nominating and Corporate Governance Committee seeks to assemble a board of directors that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct the Company’s business. To that end, the Committee has identified and evaluated nominees in the broader context of the Board’s overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Committee views as critical to the effective functioning of the Board. To provide a mix of experience and perspective on the Board, the Committee also takes into account gender, age, and ethnic diversity. The brief biographies below include information, as of the date of this proxy statement, regarding the specific and particular experience, qualifications, attributes or skills of each director or nominee that led the Committee to believe that that nominee should continue to serve on the Board.

  7. CLASS III NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING

    | | Arthur W. Coviello, Jr., age 70 Arthur W. Coviello, Jr. has served as a member of our Board of Directors since February 2018 and as our Lead Independent Director since February 2022. Mr. Coviello has served as Managing Partner of Syn Ventures, a venture capital fund, since June 2021. Mr. Coviello has served on the Board of Directors of Synchrony Financial ("Synchrony") since November 2015. Mr. Coviello was previously a venture partner at Rally Ventures, LLC, a position he held from May 2015 to July 2022, and previously was on the boards of directors of FireEye/Mandiant, Inc. from December 2020 to October 2022, and Epiphany Technology Acquisition Corp. from November 2020 to January 2023. Mr. Coviello received a B.B.A. with a concentration in Accounting from the University of Massachusetts. Our Board of Directors believes that Mr. Coviello is qualified to serve as a director based on his extensive security industry and management experience and his experience as a director of public technology companies. | | | George Alexander Tosheff, age 57 George Alexander Tosheff has served as a member of our Board of Directors since September 2022. Mr. Tosheff has served as Senior Vice President, Chief Security Officer of VMware, Inc. (recently acquired by Broadcom) since February 2022 following his promotion from Vice President, Chief Security Officer, a position he held since 2014. Mr. Tosheff served as a member of our Customer Advisory Board from 2017 until September 2022. Mr. Tosheff received a B.S. in Physics from California State University. Our Board of Directors believes that Mr. Tosheff is qualified to serve as a director based on his extensive cybersecurity expertise and management experience. | | | Margaret Keane, age 64 Margaret Keane has served as a member of our Board of Directors since June 2023. Ms. Keane is the former Executive Chair of the Board of Directors of Synchrony, a position she held from April 2021 to April 2023. Ms. Keane was a member of Synchrony's Board of Directors from 2013 to April 2023. Ms. Keane served as Synchrony’s Chief Executive Officer from February 2014 to March 2021 and President from February 2014 to May 2019. She previously served as the Chief Executive Officer and President of the North American retail finance business of the General Electric Company from April 2011 to February 2014. Ms. Keane serves on the Board of Directors for the Allstate Corporation, an insurance company, a position she has held since April 2018. Ms. Keane earned a bachelor’s degree in government and politics and an M.B.A. from St. John’s University. Our Board of Directors believes that Ms. Keane is qualified to serve as a director based on her extensive management experience. |

  8. CLASS III NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL MEETING

    THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.

  9. DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING

    DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING

  10. DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING

    | | Amit Yoran, age 53 Amit Yoran has served as our Chief Executive Officer and Chairman since December 2016 and was appointed as our President, in addition to Chief Executive Officer and Chairman, in May 2018. Mr. Yoran has served on the Board of Directors of BlackLine Systems, Inc., an enterprise software company, since January 2023. Prior to joining Tenable, Mr. Yoran served as President of RSA Solutions, Inc. from October 2014 to December 2016. Mr. Yoran received a B.S. in Computer Science from the United States Military Academy at West Point and an M.S. in Computer Science from George Washington University. Our Board of Directors believes that Mr. Yoran is qualified to serve as a director based on his role as our Chief Executive Officer and his extensive management experience in the technology and security industries. | | | Niloofar Razi Howe, age 55 Niloofar Razi Howe has served as a member of our Board of Directors since May 2021. Ms. Howe has served as a Senior Operating Partner at Energy Impact Partners, a venture capital fund since 2019. Ms. Howe has served on the Board of Directors of Composecure, Inc. since December 2021. Ms. Howe also currently serves on the board of directors of a number of private technology companies. Ms. Howe received a B.A. in English Literature from Columbia College and holds a Juris Doctor degree from Harvard Law School. Our Board of Directors believes that Ms. Howe is qualified as a director based on her extensive cybersecurity and management experience and her experience as a director of technology companies. | | | Linda Zecher Higgins, age 70 Linda Zecher Higgins has served as a member of our Board of Directors since August 2019. Ms. Higgins is the Chief Executive Officer and Managing Director of the Barkley Group, a consulting firm focused on effective digital transformation, and has held such positions since January 2017. Ms. Higgins has served as a member of the board of directors of Hasbro, Inc. since October 2014. Ms. Higgins served as a member of the board of directors of C5 Acquisition Corp from January 2022 to September 2023 and also served as the Corporate Vice President, Worldwide Public Sector of Microsoft Corporation from 2003 to 2011. In July 2023, Ms. Higgins was hired as the Chief Executive Officer of IronNet, Inc., a cybersecurity company, to assist in its restructuring efforts. In October 2023, IronNet, Inc., filed a voluntary Chapter 11 restructuring plan with the U.S. Bankruptcy Court for the District of Delaware, which was completed in February 2024. Ms. Higgins received a B.S. in Earth Science from The Ohio State University. Our Board of Directors believes that Ms. Higgins is qualified to serve as a director based on her extensive management experience with technology companies and her experience as a director of public companies. |

  11. DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING

    DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING

  12. DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING

    | | John C. Huffard, Jr., age 56 John C. Huffard, Jr. has served as a member of our Board of Directors since 2002. Mr. Huffard served as our Chief Operating Officer from May 2018 through December 2019. Prior to that, he served as our President and Chief Operating Officer from November 2008 to May 2018, and he co-founded our company in 2002. Mr. Huffard has also served as a member of the board of directors of Norfolk Southern Corporation since February 2020. Mr. Huffard received a B.S.B.A. from Washington and Lee University and an M.B.A. from Babson College. Our Board of Directors believes that Mr. Huffard is qualified to serve as a director based on his in-depth knowledge of our company and our products due to his role as our co-founder and subsequent role as our Chief Operating Officer. | | | A. Brooke Seawell, age 76 A. Brooke Seawell has served as a member of our Board of Directors since October 2017. Mr. Seawell is a Venture Partner at New Enterprise Associates Inc., a position he has held since January 2005. Mr. Seawell has served on the board of directors of NVIDIA Corporation, an accelerated computing company, since December 1997. He previously served on the board of directors of Eargo, Inc., a medical device company, from September 2020 to December 2022, and Tableau Software, Inc., a business intelligence software company, from November 2011 to August 2019. Mr. Seawell received both a B.A. in Economics and an M.B.A. in Finance from Stanford University. Our Board of Directors believes that Mr. Seawell is qualified to serve as a director based on his extensive experience in technology finance and operations, including having served as the chief financial officer of two public companies and his experience as a director of public technology companies. | | | Raymond Vicks, Jr., age 64 Raymond Vicks, Jr. has served as a member of our Board of Directors since January 2022. Mr. Vicks has served on the Board of Directors of Bowman Consulting Group Ltd since May 2022. Mr. Vicks previously served as Managing Partner at the BMV Group, a position he held from August 2015 until his retirement in 2019. Concurrent with that role, Mr. Vicks also served as the Chief Financial Officer of the HSC Health Care System from 2015 to 2018. Prior to that, Mr. Vicks served in roles of increasing responsibility at PricewaterhouseCoopers LLP from 1995 to 2014, where at the time of his departure, he was a Partner. Mr. Vicks is a Certified Public Accountant and received a B.S. in accounting from Virginia Tech. Our Board of Directors believes that Mr. Vicks is qualified to serve as a director based on his based on his extensive public accounting and management experience. |

  13. INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

    INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

  14. Executive Compensation Highlights

    Executive Compensation Highlights We seek to ensure that executive pay is tied to performance and long-term stockholder value creation. Based on our success in executing our strategic plan in a challenging environment, including progress by the executive leadership team on our diversity and inclusion and employee engagement and development initiatives, the Compensation Committee took the following key actions with respect to the compensation of our Named Executive Officers in 2023 and in early 2024: •No Base Salary Increases - In light of the challenging macro environment, our Compensation Committee determined to keep the base salaries of our Named Executive Officers at the same levels as those set in 2022. In February 2024, the Compensation Committee approved increases to the base salaries of our Named Executive Officers to better position the salaries with the median levels for such positions at our peers. •Cash Bonuses - Our cash bonus structure mirrored that of prior years and incorporated revenue, unlevered free cash flow and bookings goals. Our target cash bonuses are expressed as a percentage of base salary paid out based on quarterly and annual attainment, and remained comparable with 2022. Given our performance in these areas, cash bonuses were paid out in accordance with their plan formula below target at 97.1%. •Long-Term Incentive Compensation - We continue to provide a large percentage of our Named Executive Officers’ target compensation opportunity through our long-term incentive compensation program. In 2023, our long-term incentive plan continued to include the grant of restricted stock units (“RSUs”) subject to service-based vesting and performance restricted stock units ("PSUs") subject to achievement of certain financial performance goals and followed by additional service-based vesting. The aggregate grant date fair value of Messrs. Yoran, Vintz, and Thurmond’s 2023 grants decreased relative to 2022 between 7 and 8%, which was $0.7 million, $0.4 million, and $0.3 million, respectively. •In order to comply with SEC requirements, we adopted a new compensation recoupment policy to replace our existing policy, under which certain incentive compensation paid to or earned by our Named Executive Officers may be recovered in the event of financial restatements. •In 2022, we began incorporating PSUs in our long-term incentive plan as a portion of our long-term incentive grants in order to further tie pay to performance. For 2023, PSUs made up 25% of the total grant date fair value of the long-term incentive grants for our Named Executive Officers. In February 2024, the Compensation Committee increased the proportion of PSUs in the 2024 long-term incentive grant mix from 25% to 35%. In future years and over time, the Compensation Committee intends to continue to gradually shift the mix of equity awards granted to Named Executive Officers to include a higher proportion of performance-based incentives.

  15. Executive Compensation Design; Pay for Performance

    Executive Compensation Design; Pay for Performance The annual compensation arrangements for our Named Executive Officers consist of both fixed and "at risk" compensation elements which have been designed to align pay and performance. Our fixed base salaries are designed to retain our executives by providing dependable and competitive annual income. In addition, we emphasize variable compensation through our short-term incentive cash bonus plan based on our Named Executive Officers attainment of pre-established short-term financial targets as determined from time to time by the Company and reviewed by our Board of Directors in connection with our annual operating plan, and "at-risk" compensation through our long-term equity incentive plan, which consists of service-vesting RSUs and PSUs. Historically, we believed that service-based RSU awards were an appropriate long-term incentive compensation vehicle in so far as they exposed our Named Executive Officers to fluctuations in our stock price, thereby aligning the interests of our Named Executive Officers and stockholders and incentivizing them to build sustainable long-term value for the benefit of our stockholders while satisfying our retention objectives. In 2022, we incorporated PSUs in our long-term incentive plan as a portion of our long-term incentive grants in order to further tie pay to performance. For 2023, PSUs made up 25% of the total grant date fair value of the long-term incentive grants for our Named Executive Officers. In February 2024, the Compensation Committee increased the proportion of PSUs in the 2024 long-term incentive grant mix from 25% to 35%. In future years and over time, the Compensation Committee intends to continue to gradually shift the mix of equity awards granted to Named Executive Officers to include a higher proportion of performance-based incentives. These at-risk pay elements ensure that a substantial portion of our Named Executive Officers’ target total direct compensation is contingent (rather than fixed) in nature, with the amounts ultimately payable commensurate with our actual performance.

  16. Compensation Elements

    | Element | Type and Form of Element | Objective | Key Features | | Base Salary | Fixed/Cash | Designed to attract and retain highly talented executives by providing financial stability and security for performing job responsibilities through a fixed amount that is market competitive and rewards performance | • Established initially through arm’s-length negotiation at the time of hire and then reviewed annually at beginning of year. • Factors considered include: executive's position, qualifications, experience, pre-hire salary level, the base salaries of our other executives, company and individual performance, retention objectives, a competitive market analysis, and recommendations of the CEO (for Named Executive Officers other than the CEO) | | Short-Term Incentive | Variable/Cash Bonus | Designed to motivate and reward executives with financial incentives for achieving or exceeding rigorous quarterly and annual financial objectives related to our key business imperatives | • Target bonus amounts generally are reviewed annually at the beginning of year and determined based on various factors, including company and individual performance, a competitive market analysis, and recommendations of the CEO (for Named Executive Officers other than the CEO) • Bonus payments earned are determined after each quarter and the full-year • Bonus payments are generally dependent upon achievement of pre-established corporate financial objectives selected by our Compensation Committee from our annual operating plan reviewed by our Board of Directors |

  17. Compensation Elements

    | Long-Term Incentive | At risk/RSUs and Variable/PSUs | Designed to motivate and reward executives for successful long-term performance, align interests of executives and stockholders by motivating them to create sustainable long-term stockholder value, and encourage continued employment of executives over the long-term | • Annual award opportunities are generally reviewed and determined annually at beginning of the year or as appropriate during year for new hires, promotions, or other special circumstances • Individual awards are determined based on various factors, including company and individual performance, retention value of outstanding equity holdings, competitive market analysis, and recommendations of the CEO (for Named Executive Officers other than the CEO) • Historically granted RSU awards or stock options with four-year vesting requirements, although the Compensation Committee has discretion to grant other equity vehicles and use different vesting requirements or performance conditions • In 2023, continued to grant PSUs as part of the long-term incentive program in order to more closely tie together Named Executive Officer compensation and Company performance | | Other Compensation | Retirement and health and welfare benefits offered to all employees on the same terms | Employee benefits that promote employee savings and health and welfare, which assists in attracting and retaining our executives and employees | Indirect compensation element consisting of programs such as medical, vision, dental, life and disability insurance, as well as the 401(k) Plan with a company matching contribution and an ESPP, and other plans and programs made available to all eligible employees |

  18. Cash Bonuses

    Cash Bonuses Cash bonuses are based upon a specific percentage of each participant’s annual base salary and are paid, subject to goal attainment, in five equally weighted installments, following each quarter and a fifth payment following year-end. We believe that paying bonuses throughout the year is the most effective way to motivate achievement of our short-term financial goals because quarterly and annual payments align with the time periods for which we provide external guidance to the investment community. 2023 Cash Bonus Structure In February 2023, the Compensation Committee reviewed the target short-term cash incentive bonus opportunities of our Named Executive Officers in place for 2023, taking into consideration a competitive market analysis prepared by its compensation consultant and the recommendations of our CEO (except with respect to the CEO's own bonus opportunity), as well as the other factors described in “Compensation-Setting" below. Following this review, the Compensation Committee determined that the target short-term cash incentive bonus opportunities would remain unchanged as a percentage of their base salaries for our Named Executive Officers. Accordingly, the target short-term cash incentive bonus opportunities of our Named Executive Officers for 2023 were as follows:

  19. Cash Bonuses

    | Named Executive Officer | 2023 Target Cash Bonus Opportunity | Target Percentage of Base Salary | | Mr. Yoran | $487,000 | 100.0% | | Mr. Vintz | 362,250 | 87.5% | | Mr. Thurmond | 362,250 | 87.5% |

  20. Cash Bonuses

    Consistent with the prior year, for 2023, our Board of Directors established anticipated target goals for each performance metric used in our annual operating plan, with actual bonus payments at each periodic payment interval calculated by multiplying 20% of a participant’s target cash bonus opportunity by the weighted average percentage attainment level of the applicable goals for each applicable quarter or full year. No payments are made if attainment is below 75% and the maximum payment is capped at 200% of the target amount. Accordingly, for 2023, the target performance goals for our Named Executive Officers were as follows, each of which exceeds prior year actual performance:

  21. Cash Bonuses

    | Performance Metric | Target Performance Level (in thousands)(1) | Weighting | | Revenue + Unlevered Free Cash Flow (2) | $995,744 | 66.67% | | Bookings | (3) | 33.33% |

  22. Cash Bonuses

    (1) The target performance level for each performance metric was adjusted to include the expected impact of Ermetic from October 2, 2023 (date of acquisition) through the end of the year as approved by our Board of Directors. (2) Unlevered Free Cash Flow is a non-GAAP measure. Refer to the Appendix for reconciliations of non-GAAP measures to comparable GAAP measures. (3) We have chosen not to disclose the target performance level for our bookings performance measure as such information is proprietary in nature, the disclosure of which could result in competitive harm to the Company. For 2023, the Board of Directors considered the target performance achievement levels for the bookings performance measure to be challenging, but achievable with significant effort requiring circumstances to align as projected. The bookings target goal reflected a 22.6% increase over our actual bookings results from 2022. For this purpose, each of the above metrics are defined as follows: •Revenue - to be calculated in accordance with GAAP and as set forth in our quarterly and annual financial statements. •Unlevered Free Cash Flow – to be calculated as free cash flow, defined as GAAP net cash flows from operating activities reduced by purchases of property and equipment, plus cash paid for interest and other financing costs, excluding payments for acquisition-related expenses. •Bookings - to be calculated as sales of new and renewal subscription licenses, perpetual licenses and related first-year maintenance, and services and training, which are closed in a period. Bookings is based on annual contract value (ACV), whereby we include only the first-year contract value as booked in cases where a multi-year deal is prepaid or billed upfront. Our Board of Directors believed that, for purposes of the short-term cash incentive bonus plan, these were the most appropriate corporate performance measures to use because, in its view, they would provide meaningful indicators of our successful execution of our annual operating plan and our ability to enhance long-term value creation. In particular, we believe our bookings levels are an effective measure of annual contract value, which management uses to measure the growth of our business. 2023 Cash Bonus Attainment Our actual performance against the aggregate target level for the various corporate performance measures for each quarter and for the full year, as applicable, as well as the amounts received by each Named Executive Officer, were reviewed by the Compensation Committee in February 2024. The following table provides information regarding the full year cash bonus payout level achieved by the Named Executive Officers during 2023:

  23. Cash Bonuses

    | Performance Metric | Actual Performance Level (in thousands)(1) | Percentage of Target | | Revenue + Unlevered Free Cash Flow | $983,445 | 98.8% | | Bookings | (2) | 93.3% |

  24. Cash Bonuses

    (1) The actual performance level for each performance metric includes the impact of Ermetic from October 2, 2023 (date of acquisition) through the end of the year. (2) We have chosen not to disclose the performance level for our bookings performance measure as such information is proprietary in nature, the disclosure of which could result in competitive harm to the Company. For 2023, the Board of Directors considered the target performance achievement levels for the booking performance measure to be challenging but achievable with significant effort requiring circumstances to align as projected. The bookings performance attainment reflected a 14.4% increase over our actual bookings results from 2022. The following table provides information regarding the actual quarterly and full year cash bonuses earned by the Named Executive Officers during 2023:

  25. Cash Bonuses

    | Named Executive Officer | Performance Period | Target Quarterly/Annual Bonus | Aggregate Weighted Average Achievement/ Payment Percentage | Actual Quarterly/Annual Bonus | | Mr. Yoran | First Quarter | $97,400 | 102.1% | $99,445 | | | Second Quarter | 97,400 | 96.7% | 94,186 | | | Third Quarter | 97,400 | 96.4% | 93,894 | | | Fourth Quarter | 97,400 | 94.9% | 92,433 | | | Full Year | 97,400 | 95.4% | 92,920 | | | Total 2023 | $487,000 | 97.1% | $472,878 | | Mr. Vintz | First Quarter | $72,450 | 102.1% | $73,971 | | | Second Quarter | 72,450 | 96.7% | 70,059 | | | Third Quarter | 72,450 | 96.4% | 69,842 | | | Fourth Quarter | 72,450 | 94.9% | 68,755 | | | Full Year | 72,450 | 95.4% | 69,117 | | | Total 2023 | $362,250 | 97.1% | $351,744 | | Mr. Thurmond | First Quarter | $72,450 | 102.1% | $73,971 | | | Second Quarter | 72,450 | 96.7% | 70,059 | | | Third Quarter | 72,450 | 96.4% | 69,842 | | | Fourth Quarter | 72,450 | 94.9% | 68,755 | | | Full Year | 72,450 | 95.4% | 69,117 | | | Total 2023 | $362,250 | 97.1% | $351,744 |

  26. Cash Bonuses

    The cash bonus payments made to our Named Executive Officers for 2023 are set forth in the Summary Compensation Table below.

  27. Long-Term Incentive Compensation

    Long-Term Incentive Compensation We have historically granted equity compensation to our Named Executive Officers primarily in the form of RSU awards or stock options. The Compensation Committee introduced PSUs for our Named Executive Officers beginning in 2022. For 2023, as part of its annual compensation review the Compensation Committee determined to continue granting a mix of equity awards consisting of 75% RSUs and 25% PSUs (based on target grant date values). Each RSU and PSU granted represents a contingent right to receive one share of our common stock for each unit that ultimately vests. Based upon a review of competitive market practice and the incentive power of these awards, in February 2023, the Compensation Committee granted RSU and PSU awards to our Named Executive Officers in amounts that it considered to be consistent with our compensation philosophy and its desired market competitiveness as follows:

  28. Long-Term Incentive Compensation

    | Named Executive Officer | Restricted Stock Unit Award (shares) | Restricted Stock Unit Award (grant date fair value) | Performance Stock Unit Award (target shares) | Performance Stock Unit Award (target grant date fair value) | Total Grant Date Fair Value | Total Year-over-Year Change | | Mr. Yoran | 143,963 | $6,224,960 | 47,987 | $2,074,958 | $8,299,918 | (7.8)% | | Mr. Vintz | 81,521 | 3,524,968 | 27,173 | 1,174,961 | 4,699,929 | (7.8)% | | Mr. Thurmond | 59,406 | 2,568,715 | 19,802 | 856,239 | 3,424,954 | (7.4)% |

  29. Long-Term Incentive Compensation

    2023 RSU Awards RSU awards serve as an incentive that is aligned with the long-term interests of our stockholders because their value increases (or decreases) with any change in the value of the underlying shares. Further, RSUs serve our retention objectives because they are subject to a multi-year vesting requirement based on continued service. The RSU awards granted to our Named Executive Officers vest over a four-year period, with 25% of the total number of units subject to the award vesting on the first anniversary of February 22, 2023, the vesting commencement date, and 1/16th of the total number of units subject to the award vesting in quarterly installments over the following three years, contingent upon the Named Executive Officer’s continued employment by us through each applicable vesting date. 2023 PSU Awards For 2023, the Compensation Committee continued to grant PSUs, representing 25% of the equity award mix (based on target grant date values), to strengthen the Company's pay for performance philosophy and in light of stockholder and institutional investor feedback. Because PSUs are only earned upon achievement of key performance goals that drive our business and our stockholder value, the Compensation Committee believes that these awards increase the alignment between the interests of our executive officers and stockholders. In February 2024, the Compensation Committee increased the proportion of PSUs in the long-term incentive grant mix from 25% to 35% for 2024. In future years and over time, the Compensation Committee intends to continue to gradually shift the mix of equity awards granted to Named Executive Officers to include a higher proportion of performance-based incentives. The PSU awards were subject to the achievement of (i) pre-established target levels for global bookings (weighted 33.33%) and revenue + unlevered free cash flow (weighted 66.67%) during the one-year performance period beginning on January 1, 2023, and (ii) a service-based vesting requirement, with 25% of the total number of PSUs deemed to be earned based on performance by the Compensation Committee vesting on the first anniversary of February 22, 2023, and the remainder vesting quarterly over the following three years, subject to the Named Executive Officer's continuous service through each applicable vesting date. The vesting of the PSUs may accelerate upon certain change in control events. For purposes of the PSU awards, global bookings, revenue and unlevered free cash flow have the same definitions set forth above under “Cash Bonuses.” The Compensation Committee selected these performance measures based on its belief that they were the best indicators of our successful execution of our annual operating plan and our ability to enhance long-term value creation. The number of units (and, correspondingly, the number of shares) that could be earned under the PSU awards ranged from 0% to 200% of the target number of PSUs granted, subject to the service- based vesting requirement described above. The levels of performance required to earn the target number of PSUs was approved by the Compensation Committee at the time of grant as follows:

  30. Long-Term Incentive Compensation

    | Global Bookings and Revenue + Unlevered Free Cash Flow | Achievement Percentage | Payout Percentage(1) | | Maximum | 125.0% | 200% | | Target | 100.0% | 100% | | Threshold | 75.0% | 50% | | <Threshold | <75.0% | 0% |

  31. Long-Term Incentive Compensation

    (1) In the event of actual performance between the threshold and target, or between the target and maximum, performance levels, the payout percentage would be calculated between each designated segment on a linear basis. The threshold performance level for each corporate performance measure was the minimum performance level that had to be achieved before the performance-vesting condition would be satisfied with respect to any PSUs. If the threshold performance level was not achieved, then no PSUs would become eligible to vest with respect to that measure. The Compensation Committee viewed these performance levels as challenging, but achievable with significant effort requiring circumstances to align as projected. In February 2024, the Compensation Committee determined that, for 2023, our corporate performance measures were achieved as follows, resulting in an aggregate weighted payment percentage of 93.9% with respect to the PSUs:

  32. Long-Term Incentive Compensation

    | Corporate Performance Measure | Measure Achieved(1) | Percentage of Target Measure Achieved (2) | Scaled Payment Percentage | Plan Weight | Weighted Payment Percentage | | Revenue + Unlevered Free Cash Flow | 983,446 | 98.8% | 97.5% | 66.67% | 65.0% | | Bookings | (3) | 93.3% | 86.7% | 33.33% | 28.9% | | Total | | | | | 93.9% |

  33. Long-Term Incentive Compensation

    _____________ (1) The actual performance levels for each performance metric includes the impact of Ermetic from October 2, 2023 (date of acquisition) through the end of the year. (2) The target performance level for each performance metric was adjusted to include the expected impact of Ermetic from October 2, 2023 (date of acquisition) through the end of the year as approved by our Board of Directors. (3) We have chosen not to disclose the target performance level for our bookings performance measure as such information is proprietary in nature, the disclosure of which could result in competitive harm to the Company. For 2023, the Board of Directors considered the target performance achievement levels for the booking performance measure to be challenging but achievable with significant effort requiring circumstances to align as projected. The bookings performance attainment reflected a 14.4% increase over our actual bookings results from 2022. Accordingly, the number of PSUs that were earned based on performance by the Named Executive Officers are:

  34. Long-Term Incentive Compensation

    | Named Executive Officer | Number of 2023 PSUs Eligible to Service-Vest | | Mr. Yoran | 45,059 | | Mr. Vintz | 25,515 | | Mr. Thurmond | 18,594 |

  35. Long-Term Incentive Compensation

    The equity awards granted to our Named Executive Officers in 2023 are set forth in the Summary Compensation Table and the Grants of Plan-Based Awards Table below.

  36. Factors Used in Determining Executive Compensation

    Factors Used in Determining Executive Compensation In making decisions about the compensation of our Named Executive Officers, the members of the Compensation Committee do not establish a specific target or benchmark against our peers for each executive and instead take a holistic approach, relying primarily on their general experience and consideration of various factors, including the following: •our executive compensation program objectives; •our performance against the financial, operational, and strategic objectives established by the Compensation Committee and our Board of Directors; •each individual Named Executive Officer’s knowledge, skills, experience, qualifications, and tenure relative to other similarly situated executives at the companies in our compensation peer group; •the scope of each Named Executive Officer’s role and responsibilities compared to other similarly situated executives at the companies in our compensation peer group; •the prior performance of each individual Named Executive Officer, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function, and work as part of a team, all of which reflect our core values; •the potential of each individual Named Executive Officer to contribute to our long-term financial, operational, and strategic objectives; •the value of each Named Executive Officer's target total direct compensation opportunity (the sum of base salary, cash bonus opportunity and equity awards); •our financial performance relative to our peers; •the compensation practices of our compensation peer group and the positioning of each Named Executive Officer’s compensation in a ranking of peer company compensation levels based on an analysis of competitive market data; and •the recommendations of our CEO with respect to the compensation of our Named Executive Officers (except with respect to his own compensation). The Compensation Committee does not weigh these factors in any predetermined manner or formulaically, nor is any single factor determinative in setting compensation levels or making compensation decisions. In addition, we have not adopted any formal policies or employed guidelines for allocating compensation between current and long-term compensation, between cash and non-cash compensation, or among different forms of non-cash compensation. Instead, the members of the Compensation Committee consider the above and other information in light of their individual experience, knowledge of the Company, knowledge of the competitive market, knowledge of each Named Executive Officer, and business judgment in making their decisions.

  37. Role of Compensation Consultant

    Role of Compensation Consultant The Compensation Committee has retained an independent compensation consultant, Compensia, to advise on executive compensation matters, including competitive market pay practices for our Named Executive Officers, and to assist with the data analysis and development of the compensation peer group. During 2023, Compensia attended the meetings of the Compensation Committee (both with and without management present) as requested and provided various services to assist the committee in carrying out its duties. Under this engagement, Compensia reported directly to the Compensation Committee chair and also coordinated with our management for data collection, job matching for our executives and feedback on PSU design and compensation decisions. In 2023, Compensia did not provide any other services to us other than those done on behalf of the Compensation Committee. In 2023, the Compensation Committee evaluated the independence of Compensia and, based on this review, determined that no conflict of interest was raised as a result of the work performed by Compensia. In reaching this conclusion, the Compensation Committee considered applicable SEC rules and regulations and the corresponding Nasdaq independence factors regarding compensation advisor independence.

  38. Competitive Positioning

    Competitive Positioning For purposes of assessing our executive compensation against the competitive market, the Compensation Committee reviews and considers the compensation levels and practices of a select group of peer companies as well as data drawn from the Radford Global Technology Survey. The Compensation Committee reviews our compensation peer group at least annually with the assistance of Compensia and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group. When reviewing the peer group in August 2022, Compensia and the Compensation Committee used the following criteria to identify companies reasonably similar to us in terms of revenue, market capitalization, and industry focus: •publicly traded companies headquartered in the United States and traded on a major United States stock exchange; •companies in the information technology industry; •companies with similar revenues - within a range of approximately 0.33x to approximately 3.0x of our last four quarters' revenue of approximately $577 million (approximately $190 million to $1.7 billion) •companies with similar market capitalizations - within a range of approximately 0.33x to approximately 3.0x of our then market capitalization of approximately $5.35 billion (approximately $1.8 billion to approximately $16.1 billion); •companies in the Internet/network security software sector; and •companies with revenue growth generally greater than 20%. The Compensation Committee approved a compensation peer group for use in 2023 consisting of the following companies:

  39. Competitive Positioning

    | Alteryx (AYX) | Dynatrace (DT) | Q2 Holdings (QTWO) | | Avalara (AVLR) | Elastic N.V. (ESTC) | Qualys (QLYS) | | Blackbaud (BLKB) | Five9 (FIVN) | Rapid7 (RPD) | | Blackline (BL) | Guidewire Software (GWRE) | Smartsheet (SMAR) | | Box (BOX) | New Relic (NEWR) | Varonis Systems (VRNS) | | Commvault Systems (CVLT) | Paylocity Holding (PCTY) | Workiva (WK) |

  40. Employment Arrangements

    Employment Arrangements In February 2019, we entered into amended and restated written employment agreements with each of our Named Executive Officers at the time which superseded each officer’s prior employment agreement. These amended and restated employment agreement reflect a standardized approach for the payment of severance and change in control payments and benefits to our Named Executive Officers. Under this approach, the post-employment compensation arrangements of our Named Executive Officers were established on a uniform basis and at levels that generally align with current market practice. Mr. Thurmond entered into a substantially similar employment agreement as our other Named Executive Officers upon joining the Company in 2020. For detailed descriptions of the amended and restated employment agreements with our Named Executive Officers, see Potential Payments upon Termination or Change in Control below.

  41. Post-Employment Compensation

    Post-Employment Compensation Under their amended and restated employment agreements, our Named Executive Officers are eligible for certain benefits in the event of their termination of employment by virtue of death or disability and in the event of an involuntary termination of employment, including an involuntary termination of employment in connection with a change in control of the Company. We believe that these benefits are representative of market practice and therefore are necessary to motivate and retain our Named Executive Officers. These arrangements provide reasonable compensation to the Named Executive Officer if he or she leaves our employ under certain circumstances to facilitate his or her transition to new employment. Further, in some instances we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing Named Executive Officer to execute and deliver an effective general release of claims in favor of the Company in a form acceptable to us as a condition to receiving post-employment compensation payments or benefits. We also believe that these arrangements help maintain the continued focus and dedication of our Named Executive Officers to their assigned duties to maximize stockholder value if there is a potential transaction that could involve a change in control of the Company. Under the amended and restated employment agreements, all payments and benefits in the event of a change in control of the Company are payable only if there is a subsequent loss of employment by a Named Executive Officer (a so-called “double-trigger” arrangement). In the case of the acceleration of vesting of outstanding equity awards, we use this double-trigger arrangement to protect against the loss of retention value following a change in control of the Company and to avoid windfalls, both of which could occur if vesting of either equity or cash-based awards accelerated automatically as a result of the transaction. We do not use excise tax payments (or “gross-ups”) relating to a change in control of the Company and have no such obligations in place with respect to any of our Named Executive Officers. We believe that having in place reasonable and competitive post-employment compensation arrangements, including in the event of a change in control of the Company, are essential to attracting and retaining highly qualified executives. The Compensation Committee does not consider the specific amounts payable under the post-employment compensation arrangements when determining the annual compensation for our Named Executive Officers. We do believe, however, that these arrangements are necessary to offer compensation packages that are competitive. For detailed descriptions of the post-employment compensation arrangements with our Named Executive Officers, as well as an estimate of the potential payments and benefits payable under these arrangements, see Potential Payments upon Termination or Change in Control below.

  42. Accounting for Stock-Based Compensation

    Accounting for Stock-Based Compensation The Compensation Committee takes accounting considerations into account in designing compensation plans and arrangements for our executives and other employees. Chief among these is Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”), the standard which governs the accounting treatment of certain stock-based compensation. Among other things, ASC Topic 718 requires us to record a compensation expense in our income statement for all equity awards granted to our executives and other employees. This compensation expense is based on the grant date “fair value” of the equity award and, in most cases, will be recognized ratably over the award’s requisite service period (which, generally, will correspond to the award’s vesting schedule). This compensation expense is also reported in the compensation tables below, even though recipients may never realize any value from their equity awards.

  43. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The following table sets forth information regarding compensation awarded to, earned by and paid to our Named Executive Officers with respect to the years ended December 31, 2021, 2022 and 2023.

  44. SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Year | Salary | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total | | Amit Yoran(4) Chief Executive Officer and Chairman | 2023 | $487,000 | $8,299,918 | $472,878 | $— | $9,259,796 | | | 2022 | 484,167 | 8,999,981 | 500,636 | — | 9,984,784 | | | 2021 | 466,667 | 7,499,972 | 513,992 | — | 8,480,631 | | Stephen A. Vintz Chief Financial Officer | 2023 | 414,000 | 4,699,929 | 351,744 | 13,200 | 5,478,873 | | | 2022 | 411,667 | 5,099,958 | 372,393 | 12,200 | 5,896,218 | | | 2021 | 395,833 | 4,099,975 | 382,760 | 11,600 | 4,890,168 | | Mark Thurmond Chief Operating Officer | 2023 | 414,000 | 3,424,954 | 351,744 | 9,950 | 4,200,648 | | | 2022 | 411,667 | 3,699,997 | 372,393 | 8,832 | 4,492,889 |

  45. SUMMARY COMPENSATION TABLE

    _____________ (1) This column reflects the aggregate grant date fair value of RSUs and PSUs granted during the year measured pursuant to ASC Topic 718. This calculation assumes that the Named Executive Officer will perform the requisite service for the award to vest in full as required by SEC rules. The PSUs must satisfy both a performance-based requirement and a service-based requirement to vest. Accordingly, the grant date fair value of the PSUs is based upon achieving the target performance conditions on the grant date. Assuming maximum performance conditions are achieved, the total value of stock awards granted in 2023 to Messrs. Yoran, Vintz, and Thurmond would be $10,374,876, $5,874,889, and $4,281,192, respectively. The amounts reported do not reflect the actual economic value that will be realized by the Named Executive Officer upon vesting of the RSU or PSU or the sale of common stock underlying such RSUs or PSUs. The assumptions we used in valuing RSUs and PSUs are described in Note 10 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. (2) These amounts reflect the cash awards paid under the short-term cash incentive bonus plan for performance during the applicable year. See the Compensation Discussion and Analysis for a more complete description of how the cash bonuses were determined for the year ended December 31, 2023. (3) These amounts include company matching contributions under our 401(k) Plan. (4) Mr. Yoran is also a member of our Board of Directors but does not receive any additional compensation in his capacity as a director.

  46. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table provides information on cash-based performance awards and restricted stock unit awards in 2023 to our Named Executive Officers. There can be no assurance that the Grant Date Fair Value, as listed in this table, of the Stock Awards will ever be realized. These Grant Date Fair Value amounts also are included in the “Stock Awards” column of the Summary Compensation Table.

  47. Grants of Plan-Based Awards

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | | | | | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | Grant Date Fair Value of Stock Awards ($)(3) | | Amit Yoran | (4) | $304,375 | $487,000 | $974,000 | | | | | | | | 2/22/2023 | | | | 23,993 | 47,987 | 95,974 | 143,963 | $8,299,918 | | Stephen A. Vintz | (4) | 226,406 | 362,250 | 724,500 | | | | | | | | 2/22/2023 | | | | 13,586 | 27,173 | 54,346 | 81,521 | 4,699,929 | | Mark Thurmond | (4) | 226,406 | 362,250 | 724,500 | | | | | | | | 2/22/2023 | | | | 9,901 | 19,802 | 39,604 | 59,406 | 3,424,954 |

  48. Grants of Plan-Based Awards

    _____________ (1) PSUs granted under our 2018 Equity Incentive Plan were subject to the achievement of (i) pre-established target levels for global bookings (weighted 33.33%) and revenue + unlevered free cash flow (weighted 66.67%) during the one-year performance period beginning on January 1, 2023, and (ii) a service-based vesting requirement, with 25% of the shares subject to the RSU award vesting on February 22, 2024, and the remainder continue to vest in equal quarterly installments over three years thereafter, in each case subject to the recipient’s continued service, and subject to accelerated vesting in specified circumstances. The amount shown reflect the share amounts, specifically the threshold, target and the maximum potential awards of PSUs granted. The material terms of the PSUs are further described in "Compensation Discussion and Analysis-Compensation Elements-Long-Term Incentive Compensation". (2) RSUs granted under our 2018 Equity Incentive Plan vest 25% on February 22, 2024, and quarterly thereafter for the following three years. Each award is settled in shares of common stock on each vesting date, subject to the recipients continued service with the company through the applicable vesting date and subject to accelerated vesting in specified circumstances. (3) The grant date fair value is computed in accordance with FASB ASC Topic 718 for PSUs and RSUs granted during the year. (4) These rows represent possible payouts pursuant to the short-term cash incentive bonus plan for 2023. For 2023, the short-term cash incentive bonus plan included a minimum threshold of 75% of each quarterly and annual short-term cash incentive bonus opportunity and are capped at 200% of the target amount. For more information about these payments, see the Compensation Discussion and Analysis.

  49. Outstanding Equity Awards

    Outstanding Equity Awards The following table sets forth certain information about outstanding equity awards granted to our Named Executive Officers that remain outstanding as of December 31, 2023.

  50. Outstanding Equity Awards

    | | Option Awards(1) | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price(2) | Option Expiration Date | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | | Amit Yoran | 1/18/2017 | 1,905,155 | — | $4.25 | 1/18/2027 | | | | | | | 6/21/2018 | 565,657 | — | 16.21 | 6/21/2028 | | | | | | | 2/19/2020 | — | — | | | 14,551(4) | 670,219 | | | | | 2/17/2021 | — | — | | | 53,450(5) | 2,461,907 | | | | | 2/23/2022 | — | — | | | 84,432(6) | 3,888,938 | 29,834(7) | 1,374,154 | | | 2/22/2023 | — | — | | | 143,963(8) | 6,630,936 | 47,987(9) | 2,210,281 | | Stephen A. Vintz | 12/16/2014(10) | 305,500 | — | 2.36 | 12/16/2024 | | | | | | | 6/30/2016 | 105,000 | — | 4.15 | 6/30/2026 | | | | | | | 6/21/2018 | 423,434 | — | 16.21 | 6/21/2028 | | | | | | | 2/19/2020 | — | — | | | 8,819(4) | 406,203 | | | | | 2/17/2021 | — | — | | | 29,220(5) | 1,345,873 | | | | | 2/23/2022 | — | — | | | 47,844(6) | 2,203,695 | 16,906(7) | 778,690 | | | 2/22/2023 | — | — | | | 81,521(8) | 3,754,857 | 27,173(9) | 1,251,588 | | Mark Thurmond | 2/7/2020 | — | — | | | 13,103(11) | 603,524 | | | | | 2/17/2021 | — | — | | | 22,805(5) | 1,050,398 | | | | | 2/23/2022 | — | — | | | 34,713(6) | 1,598,881 | 12,267(7) | 565,018 | | | 2/22/2023 | — | — | | | 59,406(8) | 2,736,240 | 19,802(9) | 912,080 |

  51. Outstanding Equity Awards

    _____________ (1) Except as noted, all of the options listed in the table were granted under our 2016 Stock Incentive Plan. (2) All of the options listed in the table were granted with a per share exercise price equal to or above the fair market value of one share of our common stock on the date of grant, as determined in good faith by our Board of Directors. (3) Represents the market value of the RSU or PSU based on the closing price of our common stock of $46.06 per share on December 29, 2023. (4) Granted under our 2018 Equity Incentive Plan. 25% of the shares subject to the RSU award vested on February 19, 2021, and the remainder continue to vest in equal quarterly installments over three years thereafter, in each case subject to the recipient’s continued service, and subject to accelerated vesting in specified circumstances. (5) Granted under our 2018 Equity Incentive Plan. 25% of the shares subject to the RSU award vested on February 17, 2022, and the remainder continue to vest in equal quarterly installments over three years thereafter, in each case subject to the recipient’s continued service, and subject to accelerated vesting in specified circumstances. (6) Granted under our 2018 Equity Incentive Plan. 25% of the shares subject to the RSU award vested on February 23, 2023, and the remainder continue to vest in equal quarterly installments over three years thereafter, in each case subject to the recipient’s continued service, and subject to accelerated vesting in specified circumstances. (7) Granted under our 2018 Equity Incentive Plan. The PSU awards are subject to the achievement of (i) pre-established target levels for global bookings (weighted 33.33%) and revenue + unlevered free cash flow (weighted 66.67%) during the one-year performance period beginning on January 1, 2022, and (ii) a service-based vesting requirement, with 25% of the shares subject to the PSU award vesting on February 23, 2023, and the remainder continuing to vest in equal quarterly installments over three years thereafter, in each case subject to the recipient’s continued service, and subject to accelerated vesting in specified circumstances. The performance period for the PSU awards ended as of December 31, 2022. (8) Granted under our 2018 Equity Incentive Plan. 25% of the shares subject to the RSU award vested on February 22, 2024, and the remainder continue to vest in equal quarterly installments over three years thereafter, in each case subject to the recipient’s continued service, and subject to accelerated vesting in specified circumstances. (9) Granted under our 2018 Equity Incentive Plan. The PSU awards are subject to the achievement of (i) pre-established target levels for global bookings (weighted 33.33%) and revenue + unlevered free cash flow (weighted 66.67%) during the one-year performance period beginning on January 1, 2023, and (ii) a service-based vesting requirement, with 25% of the shares subject to the PSU award vesting on February 22, 2024, and the remainder continuing to vest in equal quarterly installments over three years thereafter, in each case subject to the recipient’s continued service, and subject to accelerated vesting in specified circumstances. The performance period for the PSU awards ended as of December 31, 2023. (10) Granted under our 2012 Stock Incentive Plan. (11) Granted under our 2018 Equity Incentive Plan. 25% of the shares subject to the RSU award vested on February 3, 2021, and the remainder continue to vest in equal quarterly installments over three years thereafter, in each case subject to the recipient’s continued service, and subject to accelerated vesting in specified circumstances.

  52. Options Exercised and Stock Vested

    Options Exercised and Stock Vested The following table shows information regarding the exercise of options and the vesting of stock previously granted to our Named Executive Officers during 2023.

  53. Options Exercised and Stock Vested

    | | 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) | | Amit Yoran | 82,900 | $3,572,825 | 203,074 | $8,538,548 | | Stephen A. Vintz | — | — | 117,555 | 4,943,687 | | Mark Thurmond | — | — | 107,185 | 4,433,229 |

  54. Options Exercised and Stock Vested

    (1) The dollar amounts shown are determined by multiplying the number of options that were exercised by the intrinsic value of the options exercised based on the per share closing price of our common stock on the exercise date. (2) The dollar amounts shown are determined by multiplying the number of shares that vested by the per share closing price of our common stock on the vesting date.

  55. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control The table below sets forth the values that the continuing Named Executive Officers would derive in the event of (i) death or disability, (ii) termination without cause or resignation for good reason not in connection with a change of control (“Non-CIC Termination”), and (iii) termination without cause or resignation for good reason in connection with a change of control (“CIC Termination”), assuming that in each case the event occurred on the last business day of 2023.

  56. Potential Payments Upon Termination or Change in Control

    | | Death/Disability | | Non-CIC Termination | | CIC Termination | | | Name | Cash Severance(1) | Equity Severance(2) | Cash Severance(3) | Equity Severance(2) | Cash Severance(4) | Equity Severance(5) | | Amit Yoran | $958,601 | $17,236,435 | $958,601 | $— | $1,932,601 | $17,236,435 | | Stephen A. Vintz | 17,421 | 9,740,907 | 579,799 | — | 942,049 | 9,740,907 | | Mark Thurmond | 78,386 | 7,466,142 | 640,764 | — | 1,003,014 | 7,466,142 |

  57. Potential Payments Upon Termination or Change in Control

    (1) For Mr. Vintz and Mr. Thurmond, represents the value of the payment by the company of the employer-paid portion of premiums for continued group health coverage for 12 months following termination. For Mr. Thurmond, it also includes the value of any accrued but unused vacation, as required by state law. For Mr. Yoran, represents the value of 18 months of continued base salary, payment by the company of the employer-paid portion of premiums for continued group health coverage for 12 months following termination, and a lump sum cash payment equal to Mr. Yoran’s target annual bonus reduced by the amount of the quarterly bonuses paid during 2023. (2) Represents the value of accelerated vesting of restricted stock units and the value of accelerated vesting of the target amount of performance restricted stock units, as applicable, in each case based on the closing price of our common stock of $46.06 per share on December 29, 2023. The PSUs granted in 2023 would have been forfeited in connection with a termination due to a Non-CIC Termination prior to satisfaction of the applicable performance-based vesting condition. (3) Represents the value of 12 months of continued base salary (18 months for Mr. Yoran), payment by the company of the employer-paid portion of premiums for continued group health coverage for 12 months following termination, and a lump sum cash payment equal to the Named Executive Officer’s target annual bonus reduced by the amount of the quarterly bonuses paid during 2023. For Mr. Thurmond, it also includes the value of any accrued but unused vacation, as required by state law. (4) Represents the value of a lump sum cash payment equal to 12 months of base salary (18 months for Mr. Yoran), payment by the company of the employer-paid portion of premiums for continued group health coverage for 12 months following termination, a lump sum cash payment equal to one times the Named Executive Officer’s target annual bonus (1.5 times for Mr. Yoran) reduced by the amount of the quarterly bonuses paid during 2023, and a lump sum cash payment equal to one times the Named Executive Officer’s target annual bonus (1.5 times for Mr. Yoran). For Mr. Thurmond, it also includes the value of any accrued but unused vacation, as required by state law. (5) Represents the value of accelerated vesting of restricted stock units and the value of accelerated vesting of PSUs granted in 2023, as applicable. In connection with a CIC Termination (or upon the occurrence of a change of control where the PSUs are not continued, assumed or substituted by the acquirer), the performance-based vesting condition would be deemed satisfied at 100% of target, and the service-based condition would be deemed satisfied as of the later to occur of the closing date of the change in control or the CIC Termination. All values reported in this column are based on the closing price of our common stock of $46.06 per share on December 29, 2023.

  58. CEO Pay Ratio

    CEO Pay Ratio Under the Dodd-Frank Wall Street Reform and Consumer Protection Act and SEC rules, we are required to provide a reasonable estimate of the ratio of the annual total compensation of Mr. Yoran, our Chief Executive Officer, to the median of the annual total compensation of our other employees. For our last completed year, which ended December 31, 2023: •The median of the annual total compensation of all of our employees (other than Mr. Yoran), including employees of our consolidated subsidiaries, was $200,816. This annual total compensation is calculated in accordance with Item 402(c)(2)(x) of Regulation S-K, and reflects, among other things, salary and bonus earned and aggregate “grant date fair value” of RSU awards granted during 2023. •Mr. Yoran's annual total compensation for 2023, as reported in the Summary Compensation Table, was $9,259,796. •Based on the above, for 2023, the ratio of Mr. Yoran's annual total compensation to the median of the annual total compensation of all employees was 46.1 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Act of 1933, as amended, and applicable guidance and is based upon our reasonable judgment and assumptions. The SEC rules do not specify a single methodology for identification of the median employee or calculation of the pay ratio, and other companies may use assumptions and methodologies that are different from those used by us in calculating their pay ratio. Accordingly, the pay ratio disclosed by other companies, even companies within the same industry as us, may not be comparable to our pay ratio as disclosed above. The methodology, including any material assumptions, adjustments and estimates, we used to calculate identify the median employee and calculate the 2023 pay ratio is described below. •For purposes of the pay ratio calculation, we included substantially all of our full-time, part-time and temporary employees globally as of December 31, 2023. As permitted by the SEC rules, we excluded 5% of our global employee population from the calculation by excluding all employees in a given jurisdiction located outside of the United States, starting with the jurisdiction that had the lowest number of employees as of December 31, 2023, and continuing to exclude all employees in jurisdictions with an increasingly greater number of employees as of such date until 5% of our total global employee population was excluded. We excluded these employees given the small number of employees in those jurisdictions and the estimated cost of obtaining their compensation information. As of December 31, 2023, our workforce consisted of 1,903 employees (including individuals employed by our consolidated subsidiaries), 1,101 of whom were U.S. employees, and 802 (or approximately 42.14% of our total employee population as of December 31, 2023) were employees located outside of the United States, after excluding 96 employees located outside the United States via the methodology described above. •To identify the median employee from the employee population described above, we determined the sum of each employee's (i) annual base salary as of December 31, 2023 (calculated as annual base pay using a reasonable estimate of hours worked during 2023 for hourly employees and using annual base salary for our remaining employees), plus (ii) earned annual cash incentive bonus or commission, as applicable, for 2023. Permanent employees who joined in 2023 were assumed to have worked for the entire year, and thus we annualized the pay of such new hires. This compensation measure was consistently applied to all employees included in the calculation and reasonably reflects the annual compensation of all of our employees. Compensation paid in foreign currency was converted to U.S. dollars using a spot exchange rate on December 31, 2023 In determining the median compensated employee, we did not make any cost of living adjustments to the compensation paid to any employee outside of the U.S. •Once we identified our median employee, we calculated the median employee’s annual total compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, including for this purpose the aggregate grant date fair value of equity awards (as determined in accordance with footnote 1 of the 2023 Summary Compensation Table) granted in 2023, yielding the median annual total compensation disclosed above. With respect to Mr. Yoran's annual total compensation, we used the amount reported in the “Total” column of our 2023 Summary Compensation Table.

  59. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how the Company or the Compensation Committee view the link between the Company’s performance and NEO pay. For additional information about our pay-for-performance philosophy and how we align executive compensation with Company performance, refer to the Compensation Discussion and Analysis.

  60. Pay Versus Performance Table

    Pay Versus Performance Table

  61. Pay Versus Performance Table

    | | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Value of Initial Fixed $100 Investment Based On: | | Net Loss (in 000s) | Revenue(7) (In 000s) | | | | | | | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | | | | 2023 | $9,259,796 | $11,610,194 | $4,839,761 | $6,033,046 | $192.24 | $221.06 | $(78,284) | $798,710 | | 2022 | 9,984,784 | 2,495,451 | 4,437,051 | (307,171) | 159.22 | 132.79 | (92,222) | 683,191 | | 2021 | 8,480,631 | 9,080,956 | 3,826,808 | 3,777,785 | 229.84 | 206.76 | (46,677) | 541,130 | | 2020 | 7,450,968 | 42,535,471 | 3,483,987 | 12,993,389 | 218.11 | 149.98 | (42,731) | 440,221 |

  62. Pay Versus Performance Table

    _____________ (1) The dollar amounts are the total compensation reported for Mr. Yoran (our principal executive officer ("PEO") for each corresponding year in the “Total” column of the Summary Compensation Table. (2) Compensation actually paid to Mr. Yoran does not reflect the actual amount of compensation earned by or paid. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Yoran’s total compensation to determine the compensation actually paid:

  63. Pay Versus Performance Table

    | | | | Equity Award Adjustments(a) | | | | | | Summary Compensation Table Total for PEO | Less: Reported Value of Equity Awards(b) | Add: Year End Fair Value of Equity Awards Granted in the Year | Add: Change in Fair Value from the end of the Prior Year to the end of the Covered Year of Equity Awards Granted in Prior Years | Add: Change in Fair Value on the Vesting Date of Equity Awards Granted in Prior Years that Vested in the Year | Total Compensation Actually Paid to PEO | | 2023 | $9,259,796 | $8,299,918 | $8,302,787 | $1,506,143 | $841,386 | $11,610,194 |

  64. Pay Versus Performance Table

    (a) There were no other assumptions made in the valuation of equity awards that differ materially from those disclosed as of the grant date of such equity awards. (b) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” columns in the Summary Compensation Table for the applicable year. (3) The dollar amounts represent the average of the amounts reported for our NEOs as a group (excluding Mr. Yoran) in the “Total” column of the Summary Compensation Table in each applicable year. The non-PEO NEOs in each applicable year are as follows: (i) for 2023, Messrs. Thurmond and Vintz; (ii) for 2022, Messrs. Riddick, Thurmond and Vintz and (iii) for 2021 and 2020, Messrs. Riddick and Vintz. (4) Average compensation actually paid to our non-PEO NEOs does not reflect the actual amount of compensation earned by or paid. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to our non-PEO NEOs average total compensation to determine the compensation actually paid, using the same methodology described above in Note 2:

  65. Pay Versus Performance Table

    | | | | Equity Award Adjustments(a) | | | | | | Average Summary Compensation Table Total for Non-PEO NEOs | Less: Reported Value of Equity Awards(b) | Add: Year End Fair Value of Equity Awards Granted in the Year | Add: Change in Fair Value from the end of the Prior Year to the end of the Covered Year of Equity Awards Granted in Prior Years | Add: Change in Fair Value on the Vesting Date of Equity Awards Granted in Prior Years that Vested in the Year | Total Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | $4,839,761 | $4,062,442 | $4,063,845 | $765,842 | $426,040 | $6,033,046 |

  66. Pay Versus Performance Table

    _____________ (a) There were no other assumptions made in the valuation of equity awards that differ materially from those disclosed as of the grant date of such equity awards. (b) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” columns in the Summary Compensation Table for the applicable year. (5) Total shareholder return ("TSR") is determined based on the value of an initial fixed investment of $100 on December 31, 2019. Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. (6) Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. As permitted by SEC rules, the peer group used for this purpose is the group of companies included in the NASDAQ Computer Index, which is the industry peer group used in our Annual Report pursuant to Item 201(e) of Regulation S-K for the year ended December 31, 2023. (7) Revenue is selected as the most important performance measurement for the current year.

  67. Relationships Between Compensation Actually Paid and Financial Performance Measures

    Relationships Between Compensation Actually Paid and Financial Performance Measures As required by Item 402(v) of Regulation S-K, we are providing the following graphs to illustrate the relationships between the pay and performance measures that are included in the pay versus performance tabular disclosure above. As noted above, other than with respect to Revenue, the performance measures included in the graphs below do not align with how the Company or the Compensation Committee view the link between the Company's performance and NEO pay. The “compensation actually paid” for purposes of the tabular disclosure and the following graphs were calculated in accordance with SEC rules and do not fully represent how our Compensation Committee assesses or determines the actual final amount of compensation earned by or actually paid to our NEOs during the applicable years. Compensation Actually Paid, TSR and Peer Group TSR The following graph sets forth the relationship between compensation actually paid to our PEO, the average of compensation actually paid to our other NEOs, and the Company’s cumulative TSR and the cumulative TSR of the NASDAQ Computer Index over the four most recently completed fiscal years. Compensation Actually Paid and Net Loss The following graph sets forth the relationship between compensation actually paid to our PEO, the average of compensation actually paid to our other NEOs, and the Company’s net loss over the four most recently completed fiscal years. Compensation Actually Paid and Revenue The following graph sets forth the relationship between compensation actually paid to our PEO, the average of compensation actually paid to our other NEOs, and revenue over the four most recently completed fiscal years. For further information on how Revenue impacts executive compensation, please see the Compensation Discussion and Analysis beginning on page 45. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.

  68. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  69. Director Compensation

    Director Compensation This section provides information regarding the compensation of our non-employee directors in 2023. Our non-employee directors are also entitled to reimbursement of direct expenses incurred in connection with attending meetings of our Board of Directors or committees thereof. We may provide both cash and equity compensation to our independent directors.

  70. 2023 Director Compensation Table

    2023 Director Compensation Table The following table provides information as to the compensation of our non-employee directors for the year ended December 31, 2023.

  71. 2023 Director Compensation Table

    | Name(1) | Fees Earned or Paid in Cash | Stock Awards(2)(3) | Total | | Arthur W. Coviello, Jr. | $61,000 | $199,978 | $260,978 | | Niloofar Razi Howe | 43,000 | 199,978 | 242,978 | | John C. Huffard, Jr. | 49,500 | 199,978 | 249,478 | | A. Brooke Seawell | 55,000 | 199,978 | 254,978 | | Linda Zecher Higgins | 52,500 | 199,978 | 252,478 | | George Alexander Tosheff | 50,000 | 199,978 | 249,978 | | Raymond Vicks | 45,000 | 199,978 | 244,978 | | Margaret Keane | 23,000 | 399,978 | 422,978 |

  72. 2023 Director Compensation Table

    _____________ (1) Mr. Yoran did not earn compensation during 2023 for his service on our Board of Directors. Mr. Yoran’s compensation is fully reflected in the Summary Compensation Table above. (2) The amounts in the Stock Awards column reflect the aggregate grant date fair value of each RSU award granted during the year ended December 31, 2023, computed in accordance with ASC Topic 718. This calculation assumes that the director will perform the requisite service for the award to vest in full as required by SEC rules. These amounts do not reflect the actual economic value that will be realized by the director upon vesting of the RSUs or the sale of the common stock underlying such RSUs. (3) As of December 31, 2023, Mr. Seawell held options to purchase 230,000 shares of our common stock. None of our other non-employee directors held options to purchase shares of our common stock as of December 31, 2023. As of December 31, 2023, Ms. Higgins and Messrs. Coviello, Huffard and Seawell each held 5,201 RSUs, Mr. Tosheff held 11,776 RSUs, Ms. Howe held 8,510 RSUs, Mr. Vicks held 10,592 RSUs and Ms. Keane held 9,562 RSUs. Historically, the Board has provided an initial and annual RSU grant to directors with aggregate dollar values on the date of grant, of $400,000 and $200,000, respectively.