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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant Filed by a party other than the Registrant      

CHECK THE APPROPRIATE BOX:
  Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
  Definitive Additional Materials
Soliciting Material under §240.14a-12

Progress Software Corporation

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

PAYMENT OF FILING FEE (CHECK ALL BOXES THAT APPLY):
  No fee required
Fee paid previously with preliminary materials
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11



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2023 Notice of Annual
Meeting & Proxy Statement

 

Progress Software Corporation
15 Wayside Road, Suite 400
Burlington, MA 01803



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Our Values:
ProgressPROUD

Our values drive our everyday, keeping us connected, inspired and moving forward.

ProgressPROUD represents the fundamental beliefs that guide our actions and are core to who we are. Our values revolve around trust, collaboration, accountability, adaptability and respect. Our adherence to these values reinforces who Progress is as an employer and trusted software provider.

                                     
 

P

PROGRESS

collaboratively

         

R

RESPECT

differences and diversity

         

O

OWN

our tomorrow today

         

U

UPHOLD

trust

         

D

DARE

to innovate

 
 

Close relationships and spirited teamwork move us forward.

     

Distinct viewpoints and backgrounds improve our work, culture and success.

     

Our initiative, seen through to completion, secures future results.

     

Consistently keeping our promises earns loyalty.

     

Our bold thinking drives tomorrow’s breakthroughs.

 
                           


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Letter From Our Chair

 

About Progress

Est. 1981

NASDAQ: PRGS

Headquartered in
Burlington,
Massachusetts, USA

Offices across North America, Europe, Latin America and
Asia Pacific

2,300+ employees

 

 

March 29, 2023

To Our Shareholders:

We invite you to attend the 2023 Annual Meeting of Shareholders (the “Annual Meeting”) of Progress Software Corporation (“Progress,” the “Company,” “we,” “us” or “our”), which will be held on May 11, 2023, at 10:00 a.m. Eastern Time.

The Annual Meeting will be conducted via live webcast to facilitate stockholder attendance and participation from any location around the world. Shareholders will be able to submit questions before and during the meeting using online tools, providing our shareholders with the opportunity for meaningful engagement with the Company. For instructions on attending the Annual Meeting virtually and voting your shares, please see “About the Meeting and Voting” in the accompanying Proxy Statement.

The following Notice of Annual Meeting of Shareholders and accompanying Proxy Statement contain details regarding admission to the virtual meeting and the business to be conducted at the Annual Meeting.

Your vote is important. Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted during the meeting. We urge you to promptly vote and submit your proxy via the Internet, by phone or by signing, dating and returning the enclosed proxy card in the enclosed envelope. If you attend the Annual Meeting online, you can vote online even if you have previously submitted your proxy.

We will also provide a recording of the Annual Meeting on our Investor Relations website at http://investors.progress.com/. We hope this will allow those who cannot attend the meeting to hear Progress discuss 2022 and our goals for 2023 at their convenience. As always, you can find a variety of pertinent information about Progress on our Investor Relations website.

On behalf of the Board of Directors, thank you for your continued support. We look forward to seeing many of you at the virtual Annual Meeting.

John R. Egan

Board Chair

2023 Proxy Statement 1


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Letter From Our Board of Directors

March 29, 2023

To Our Shareholders:

This past year as the world emerged from COVID lockdowns, new geopolitical tensions and economic volatility arose on a global scale. From conflict in Ukraine, to rising inflation rates and continuation of the great resignation, 2022 presented more than its share of business and societal challenges. Progress remained strong in this worsening global environment with steady demand across virtually all markets and product lines. Active employee engagement and positive employee experience levels contributed to the retention of strong teams which executed well throughout the year and delivered results ahead of plan.

The Board is encouraged that despite the challenges in 2022, Progress never wavered in its devotion to business continuity, customer commitment, resiliency and delivering sustainable stockholder value. Throughout the year, the Board and executive leadership collaborated closely to ensure that Progress met its commitments and the financial, strategic and business results delivered in fiscal 2022 bore this out.

Our Performance

In fiscal 2022, we further advanced our strategic plan of delivering meaningful stockholder value through our Total Growth Strategy while delivering solid financial annual results. Our business across core and newly integrated products remains well-positioned for continuing success. By building on our decades-long track record of delivering the trusted products to develop, deploy and manage high-impact applications that our customers and partners have relied on for more than forty years, we have navigated the recent geopolitical and economic turbulence with confidence.

Corporate Social Responsibility

The Board is enormously proud of how Progress and its employees performed, not just in their day-to-day responsibilities, but in their commitment to advancing our Corporate Social Responsibility program, Progress for Tomorrow, which focuses on building a culture focused on inclusion, diversity and belonging, supporting the communities in which we live and driving sustainability best practices.

Corporate Governance

This year’s Board nominees represent a wide range of backgrounds and expertise. We believe our diversity of experiences, perspectives and skills contributes to the Board’s effectiveness in managing risk and providing guidance that positions Progress for long-term success in a dynamically changing business environment. Of our nine Board nominees, eight are independent, which includes our Board Chair and all Committee members. This Proxy Statement describes Progress’ corporate governance policies and practices that foster the Board’s effective oversight of the Company’s business strategies and practices.

Executive Compensation

Consistent with our pay-for-performance philosophy, the Compensation Committee emphasized alignment with our long-term business goals in designing our executive compensation programs for 2022. Our executive compensation programs for 2022 reflected management’s continued commitment to our strategic plan.

Looking Ahead

For fiscal 2023, the Board looks forward to advancing the Company’s strategic plan. We are cognizant of the challenges and uncertainty posed by increasing volatility in the global markets in achieving company goals but remain diligent in our work and confident in Progress’ outlook.

Thank you for your ongoing support – we appreciate the opportunity to represent your interests as shareholders.

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Notice of Annual Meeting of Shareholders

You are cordially invited to attend the annual meeting online.

Voting Items

Proposals       Board Vote
Recommendation
      For Further
Details
           
1 Elect nine directors to serve until the 2024 Annual Meeting   “FOR” each director nominee   Page 15
           
           
           
2 Advisory vote to approve the fiscal 2022 compensation of our named executive officers (“say-on-pay” vote)   “FOR”   Page 46
           
           
           
3 Advisory vote on the frequency of “say-on-pay” votes   “ONE YEAR”   Page 83
           
           
           
4 Approve an increase in the number of shares authorized for issuance under the 1991 Employee Stock Purchase Plan (“ESPP”)   “FOR”   Page 84
           
           
           
5 Ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for our current fiscal year   “FOR”   Page 88
           

Other matters properly brought before the meeting may also be considered.

Please vote your shares before the meeting, even if you plan to attend the meeting. Further information about how to attend the virtual Annual Meeting, vote your shares during the meeting and submit questions during the meeting is included in the accompanying Proxy Statement.

Your broker will not be able to vote your shares on the election of directors, the say-on-pay vote, the frequency of say-on-pay vote or the approval of an increase in shares under the ESPP, unless you give your broker specific instructions to do so. A complete list of registered shareholders will be available for examination during the Annual Meeting.

By Order of the Board of Directors,

YuFan Stephanie Wang
Secretary
Burlington, Massachusetts
March 29, 2023

YOUR VOTE IS IMPORTANT

Whether or not you plan to attend the meeting, please promptly vote and submit your proxy.

Date and Time

Day, May 11, 2023
10:00 AM ET

Virtual Meeting

www.virtualshareholdermeeting. com/PRGS2023

Who Can Vote

Shareholders as of March 15, 2023, are entitled to vote

How to Vote

 

Internet

www.proxyvote.com

Telephone

1-800-690-6903

Mail

Complete, sign and promptly mail the proxy card in the enclosed postage-prepaid envelope

During the Meeting

www.virtualshareholdermeeting. com/PRGS2023

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on May 11, 2023: This Proxy Statement and our 2022 Annual Report on Form 10-K are available at: www.proxyvote.com

 

2023 Proxy Statement 3


Table of Contents

Table of Contents

Letter From Our Chair 1
Letter From Our Board of Directors 2
Notice of Annual Meeting of Shareholders 3
Business Overview 6
Proxy Statement Summary 10
PROPOSAL 1: Election of Directors 15
Nominees 15
Our Director Resignation Policy 15
Director Nomination Process 16
Director Selection Process 17
Key Board Qualifications, Expertise and Attributes 19
Board Diversity Matrix 2021 and 2022 20
Director Independence 20
Nominees for Directors 21
Corporate Governance 30
Our Corporate Governance Framework 30
Our Corporate Governance Practices 31
Committees of the Board of Directors 35
Board Oversight 39
Director Compensation 42
Stock Ownership Guidelines 43
Our Executive Officers 44
Named Executive Officers 44
PROPOSAL 2: Advisory Vote on Compensation of Our Named Executive Officers 46
Compensation Discussion and Analysis 47
Introduction 47
Executive Summary 48
Executive Compensation Program 51
Compensation Review Process 52
Components of Executive Compensation 54
2022 Executive Compensation Decisions 56
Other Compensation Elements 65
Other Executive Compensation Matters 66
Compensation Committee Report 68
Analysis of Risk Associated with Our Compensation Plans 69
Summary of Executive Compensation 70
Summary Compensation Table 70
Grants of Plan-Based Awards 72
Outstanding Equity Awards 74
Option Exercises and Stock Vested 75
Severance and Change in Control Agreements 76
Estimate of Severance and Change in Control Benefits at Fiscal-Year End 79
CEO Pay Ratio 82

4


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PROPOSAL 3: Advisory Vote on Frequency of Say-on-Pay 83
PROPOSAL 4: Approval of an increase in the number of shares authorized for issuance under the 1991 Employee Stock Purchase Plan 84
PROPOSAL 5: Ratification of the Selection of Independent Registered Public Accounting Firm 88
Evaluation of the Independent Auditor 89
Tenure 89
Independent Registered Public Accounting Firm Fees 90
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm 90
Audit Committee Report 91
Other Matters 92
Certain Relationships and Related Persons Transactions 92
Information About Progress Software Common Stock Ownership 92
Equity Compensation Plan Information 94
Delinquent Section 16(a) Reports 95
Proposals of Shareholders For 2024 Annual Meeting 95
About the Meeting and Voting 96
Appendix A: Reconciliations of GAAP to Non-GAAP Selected Financial Measures 102
Non-GAAP Measures 103
Adjusted Free Cash Flow 104
Appendix B: ESPP Amendment 105

2023 Proxy Statement 5


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Business Overview

Hundreds of thousands of enterprises, including 1,700 software companies and 3.5 million developers, depend on us to achieve their goals—with confidence.

     

Dedicated to propelling business forward in a technology-driven world, Progress helps businesses drive faster cycles of innovation, fuel momentum and accelerate their path to success. As the trusted provider of the best products to develop, deploy and manage high-impact applications, we enable customers to develop the applications and experiences they need, deploy where and how they want and manage it all safely and securely.

Our strategic plan continues to produce results and is centered around our Total Growth Strategy, the three-pillar approach focused on: investing and innovating in our current product portfolio, customer retention and growth through accretive acquisition.

Our Strategy

     

Trusted Provider of the Best Products to Develop, Deploy and Manage High-Impact Applications

   A key element of our strategy is centered on providing the platform and tools enterprises need to develop, deploy and manage modern, strategic business applications. We offer these products and tools to both new customers and partners as well as our existing partner and customer ecosystems. This strategy builds on our vast experience in application development that we’ve acquired over the past 40 years.

      

Focus on Customer and Partner Retention to Drive Recurring Revenue and Profitability

   Our organizational philosophy and operating principles focus primarily on customer and partner retention and success, and a streamlined operating approach to more efficiently drive predictable and stable recurring revenue and high levels of profitability.

     

 

     
     

M&A Driven Growth

   We are pursuing growth driven by accretive acquisitions of businesses within the infrastructure software space, with products that appeal to both IT organizations and individual developers.

   These acquisitions must meet strict financial and other criteria, with the goal of driving significant stockholder returns by providing scale and increased cash flows.

   In April 2019, we acquired Ipswitch, Inc. and in October 2020, we acquired Chef Software, Inc. and in November 2021, we acquired Kemp Technologies and in January 2023, we acquired MarkLogic Corporation. These acquisitions met our strict financial criteria.

 

Thoughtful Capital Allocation Strategy

   Our capital allocation policy emphasizes accretive M&A, which allows us to expand our business and drive significant stockholder returns, and utilizes share repurchases and dividends to return capital to shareholders.

   We intend to repurchase our shares in sufficient quantities to offset dilution from our equity plans. Lastly, we return a significant portion of our annual cash flows from operations to shareholders in the form of dividends.

     
     

6


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Business Overview

Fiscal 2022 Financial Highlights*

Cash Flow from Operations

$192M

  8% from FY2021

     

Revenue

$602M

  13% from FY2021

     

Operating Income

$132M

  14% from FY2021

       

Adjusted Free Cash
Flow

$189M

  6% from FY2021

     

Non-GAAP
Revenue

$611M

  10% from FY2021

     

Non-GAAP Operating
Income

$242M

  6% from FY2021

       

Annualized Recurring
Revenue

$497M

  4% from FY2021

 

Diluted EPS
 

$2.15

  22% from FY2021

 

Operating Margin
 

22%

(Flat) YoY

       

Dividends
 

$31M

Paid directly to shareholders

 

Non-GAAP Diluted
EPS

$4.13

  7% from FY2021

 

Non-GAAP Operating
Margin

40%

  100bps from FY2021


* Please refer to Appendix A for reconciliations of GAAP to Non-GAAP selected financial measures

2023 Proxy Statement 7


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Business Overview

Praise for Progress

We are proud to share that our company and its leaders continue to be recognized by the industry as a “Best Employer” and for our corporate social responsibility work, including our efforts to be an inclusive organization.

 

8


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Business Overview

Corporate Social Responsibility

In 2022, Progress and our employees provided close to half a million dollars in donations, supplies and volunteer hours to over 130 organizations worldwide. Inside our walls, we expanded our Employee Resource Groups, held 55 inclusive trainings to foster leadership and reduce bias, granted a one-time bonus to reduce economic stressors and advanced the work of our Earth Team to ensure a more sustainable future.

     

Environment

   Established programs including the “Small Sustainability Steps Challenge,” offering monthly challenges for Progressers to better integrate sustainability into business practices.

   Extended our carbon impact initiative by tracking company vehicle footprints, as well as the impact of our servers used in off-site data centers.

   Advanced sustainability practices by discontinuing the purchase and usage of plastic cups and utensils across Progress offices.

      

Inclusion and Diversity

   Hosted Inclusion and Diversity training on inclusive leadership and psychological safety.

   Earned recognition from The Boston Club as one of only nine of the largest 100 publicly traded companies in Massachusetts with a “critical mass of women directors and executive officers.”

   Expanded Employee Resource Groups (ERGs) to include ENABLE, which supports people with differing abilities.

 

     
     
     

Employee Engagement

   Added a new commitment to our U.S. health plan to reimburse all U.S. employees for travel expenses to receive healthcare services not available in their home state.

   Continued Progress’ position as a “Best Employer,” receiving new recognitions from leading industry organizations including Forbes, Inc., The Boston Globe and Boston Business Journal.

   Granted a one-time bonus of approximately one week’s pay to employees, in part, to offset growing concerns about market inflation.

 

Community and Giving

   Progress and its employees donated close to half a million dollars in donations, supplies, volunteer hours and more to over 130 certified charitable organizations worldwide.

   Expanded our Charitable Giving Program from the U.S. to global, donating to more than 40 causes nominated by our employees, worldwide.

   Granted scholarships to four women in the U.S., Bulgaria and India, as part of our global Women in STEM Scholarship series.

 

     

2023 Proxy Statement 9


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Proxy Statement Summary

This summary highlights information contained elsewhere in this Proxy Statement. For more complete information about these and other topics, please review our Annual Report on Form 10-K for the fiscal year ended November 30, 2022 (the “Annual Report”), and this entire Proxy Statement.

This Proxy Statement and the accompanying proxy card, including an Internet link to our previously filed Annual Report, were first made available to shareholders on or about March 29, 2023.

       
Proposal
1
Election of Nine Directors

The Board recommends a vote FOR each director nominee.

> See page 15

       

The Board of Directors and Nominating and Corporate Governance Committee believe the nine Board nominees possess the skills, experience and diversity to effectively monitor performance, provide oversight and advise management on the Company’s long-term strategy.

Director Nominees

        Director
Since
  Other Public
Boards
  Committee Membership
Name and Primary Occupation Age                   AC       CC       NC       M&A

John R. Egan  

Board Chair

Managing Partner, Carruth Management, LLC

65   2011   3              

Paul T. Dacier  

General Counsel, Indigo Agriculture, Inc.

65   2017   1              

Rainer Gawlick  

Board Member, Proto Labs, Inc.

55   2017   1            

Yogesh Gupta

President and CEO,
Progress Software Corporation

62   2016   1                

Charles F. Kane  

Senior Lecturer, MIT Sloan

65   2006   2            

Samskriti Y. King  

CEO, Veracode, Inc.

49   2018   1            

David A. Krall  

Strategic Advisor, Roku, Inc.

62   2008   2              

Angela T. Tucci  

Chair, AnitaB.org Institute for Women and Technology

56   2018   –—            

Vivian Vitale, NACD.DC  

Principal, Vivian Vitale Consulting, LLC

69   2019   1            
AC Audit Committee Chair
CC Compensation Committee Member
NC Nominating and Corporate Governance Committee Chair and Financial Expert
M&A    Mergers & Acquisitions / Strategy Committee Independent

10


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Proxy Statement Summary

Key Board Qualifications, Expertise and Attributes

The table and graphs below summarize the director nominees’ experience and the qualifications, skills and attributes most relevant to nominate candidates to serve on the Board. See “Nominees for Directors” for additional details regarding our nominees’ experience and backgrounds.

07
   
09
   
05
             
Cybersecurity     Leadership     Finance and Accounting
             
09
   
06
   
09
             
Technology/Software Industry     Go-to-Market/Sales     Strategy
             
05
   
09
   
09
             
Product Development     Public Company Board
Service and Governance
    Mergers & Acquisitions
             
05
   
06
     
             
Human Capital Management     CSR/ESG      

 

Board Snapshot

Independence   Diversity of Tenure   Diversity of
Background
  Diversity of Age
             
     
             

 Independent: 8

 Not Independent: 1

 

 Shorter-term (1-5 years): 3

 Mid-range (6-10 years): 3

 Longer-term (>10 years): 3

 

 Diverse: 5

 Non-Diverse: 4

 

 In 40s: 1

 In 50s: 2

 In 60s: 6

             
89%
are
independent
 
67%
have served
less than
8 years
 
56%
are diverse
in gender,
ethnicity or
nationality
 
56%
are younger
than 65
             

2023 Proxy Statement 11


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Proxy Statement Summary

Board Effectiveness

Our Board takes a multi-faceted approach to continually assess Board composition and evaluating the effectiveness of the Board.

                 

Practices Contributing
to Board Effectiveness

Chair and CEO positions have been separate since 2012

8 of 9 directors are independent

All committee members are independent

Independent directors meet in executive session without the CEO at every regularly scheduled Board meeting

3 of 9 directors are female

 

Skills Enhanced in the
Past 5 Years

Technology/Software Industry

Cybersecurity

Go-to-Market/Sales

Strategy

Product Development

Organizational effectiveness, culture and people management (human capital management)

 

Meaningful
Refreshment

5 of 8 independent directors have a tenure of 6 years or less

All directors are elected annually

We have adopted a director resignation policy for directors

         

Active and Engaged Board

We have an active and engaged Board that is committed to fulfilling its fiduciary duty to act in good faith in the best interests of Progress and its shareholders. The number of Board and committee meetings held in fiscal year 2022 (December 1, 2021 – November 30, 2022) is set forth below.

  2022 Meetings
Board 5
Audit Committee 10
Nominating & Corporate Governance Committee 3
Compensation Committee 5
Mergers & Acquisitions Committee 4

 

5

Total Board meetings
in 2022

 

98%

Average attendance rate

22

Total Committee meetings
in 2022

 

100%

Average attendance rate


12


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Proxy Statement Summary

       
Proposal
2
Advisory Vote to Approve Fiscal 2022 Executive Compensation of Our Named Executive Officers (Say-on-Pay Vote)

The Board recommends a vote FOR this proposal.

> See page 46

       

Executive Compensation Philosophy

The Compensation Committee’s philosophy is to tie executive pay to performance to incentivize the achievement of outstanding returns to our shareholders and to drive the creation of sustainable long-term stockholder value. Consistent with this pay-for-performance philosophy, the Compensation Committee, in designing our executive compensation programs for 2022, emphasized alignment with our long-term business goals.

2022 Executive Compensation Highlights

Base Salaries for our named executive officers targeted at market competitive levels
   
100% of annual cash bonuses for our named executive officers tied to achieving pre-established financial objectives that are difficult to attain and require achievement closely linked to our annual operating plan and budget and publicly announced expectations
   
Payouts under the annual cash bonuses capped at 150% of target amounts

Annual target equity opportunity for our named executive officers:

70% of annual equity award is performance-based:
      
  50% was delivered in the form of stock awards tied to three-year relative total shareholder return and cumulative operating income metrics
     
  20% was delivered in the form of stock options
   
30% was delivered in the form of time-based restricted stock units

 

Compensation Governance Highlights

             
             
      What We Do             What We Don’t Do      
 

Grant performance-based equity awards with performance measures that span three years

Utilize different measures for performance equity awards and cash incentives

Clawback Policy: committed to updating compensation recovery policy in line with the Security and Exchange Commission’s (the “SEC”) updated clawback rules and Nasdaq’s final listing standards

Cap the amount our executives can earn under our annual incentive plans

             

No perquisites

No guaranteed salary increases or performance-based bonuses

No excise tax gross-ups

 
             

2023 Proxy Statement 13


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Proxy Statement Summary

       
Proposal
3
Advisory Vote on the Frequency of Say-on-Pay Votes

The Board recommends a vote for ONE YEAR on this proposal.

> See page 83

       

We currently hold a say-on-pay vote every year because it enables shareholders to timely vote on executive pay and pay practices, which enables us to consider and respond to any concerns identified on a timely basis. Our Board of Directors believes it is most appropriate to retain the practice of conducting an advisory vote on executive compensation every year. Accordingly, the Board of Directors recommends that you vote for an annual advisory vote on executive compensation. Please see page 83 for additional details on this proposal.

       
Proposal
4
Approve an increase in the number of shares authorized for issuance under the 1991 Employee Stock Purchase Plan

The Board recommends a vote FOR this proposal.

> See page 84

       

We are asking our shareholders to approve an amendment to the Progress Software Corporation 1991 Employee Stock Purchase Plan, as amended and restated (the “ESPP”), to increase the authorized number of shares reserved under the ESPP. On March 17, 2023, our Board of Directors unanimously approved an increase in the number of shares of our common stock reserved for issuance under the ESPP by 1,000,000 shares to a total of 11,250,000 shares, which is subject to stockholder approval at the Annual Meeting. Our Board of Directors believes that the availability of an adequate reserve of shares for issuance under the ESPP will benefit us by providing employees with an opportunity to acquire shares of our common stock and will enable us to attract, retain and motivate valued employees. Please see page 84 for additional details on this proposal.

       
Proposal
5
Ratify the Selection of Deloitte & Touche LLP as Our Independent Registered Public Accounting Firm for Our Current Fiscal Year

The Board recommends a vote FOR this proposal.

> See page 88

       

Based on the Audit Committee’s assessment of Deloitte & Touche LLP’s qualifications and performance, it believes their retention for fiscal year 2023 is in the best interests of the Company.

     
Experience and effectiveness       Strong independence controls

Enhanced audit quality

 

Thorough Audit Committee oversight

Effective audit plans and efficient fee structures

 

Robust pre-approval policies and limits on non-audit services

Maintaining continuity avoids disruption

 

Deloitte’s strong internal independence procedures and regulatory framework

     

14



Table of Contents

       
Proposal
1
Election of Directors

The Board recommends a vote FOR each director nominee.

       

Nominees

Nine individuals have been nominated for election at the Annual Meeting to hold office until the 2024 Annual Meeting. The nominees were evaluated and recommended by the Nominating and Corporate Governance Committee in accordance with its charter and our Corporate Governance Guidelines. The Board of Directors and Nominating and Corporate Governance Committee believe the nine Board nominees possess the skills, experience and diversity to effectively monitor performance, provide oversight and advise management on the Company’s long-term strategy. For additional information about the nominees and their qualifications, please see the sections of this Proxy Statement entitled “Director Nomination Process” and “Nominees for Directors.”

Each director elected at the Annual Meeting will hold office until the next Annual Meeting of Shareholders or special meeting in lieu of such an Annual Meeting or until their successor has been duly elected and qualified, or until their earlier death, resignation or removal. There are no family relationships among any of our executive officers or directors. Each of the director nominees named in this Proxy Statement has agreed to serve as a director if elected and we have no reason to believe that any nominee will be unable to serve. If, before the Annual Meeting, one or more nominees named in this Proxy Statement should become unable to serve or for good cause will not serve, the persons named in the enclosed proxy will vote the shares represented by any proxy received by our Board of Directors for such other person or persons as may thereafter be nominated for director by the Nominating and Corporate Governance Committee and our Board of Directors.

Our Director Resignation Policy

Our Corporate Governance Guidelines set forth our director resignation policy for directors, which provides that any nominee for election to the Board in an uncontested election who receives a greater number of votes “withheld” from their election than votes “for” such election is required to submit their offer of resignation for consideration by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is to consider all relevant facts and circumstances and recommend to the Board the action to be taken with respect to that offer of resignation. The Board will then act on the Nominating and Corporate Governance Committee’s recommendation. Promptly following the Board’s decision, the Company will disclose that decision and an explanation of such decision in a filing with the SEC or a press release. If the Board accepts a director’s resignation, then the Board may fill any resulting vacancy or may decrease the size of the Board, in each case pursuant to our Bylaws.

If a director’s resignation is not accepted by the Board, such director will continue to serve until the next Annual Meeting of Shareholders or special meeting in lieu of such an Annual Meeting or until their successor has been duly elected and qualified, or until their earlier death, resignation or removal. Through this policy, the Board seeks to be accountable to all shareholders and respects the rights of shareholders to express their views through their votes for directors. At the same time, the policy allows the Board sufficient flexibility to make sound evaluations based on the relevant circumstances and to act in the best interest of the Company and its shareholders in the event of a greater than 50% “withhold” vote against a specific director.

2023 Proxy Statement 15


Table of Contents

Proposal 1: Election of Directors

Director Nomination Process

Board Membership Criteria

Our Board of Directors has delegated the search for, and recommendation of, director nominees to the Nominating and Corporate Governance Committee. When considering a potential candidate for membership on our Board of Directors, the Nominating and Corporate Governance Committee will consider any criteria it deems appropriate, including, among other things, the background, experience and qualifications of any candidate as well as such candidate’s past or anticipated contributions to our Board of Directors and its committees. At a minimum, each nominee is expected to have:

Highest personal and
professional integrity
      Demonstrated exceptional
ability and judgment
      Ability to collaborate effectively
with other Board members and
management to serve the long-
term interests of our shareholders

In addition, the Nominating and Corporate Governance Committee has established the following minimum requirements:

at least five years of business experience;
   
no identified conflicts of interest as a prospective director;
   
no convictions in a criminal proceeding (aside from traffic violations) during the five years prior to the date of selection; and
   
willingness to comply with our Code of Conduct and Business Ethics.

The Board of Directors retains the right to modify these minimum qualifications from time-to-time and exceptional candidates who do not meet these criteria may still be considered.

The Nominating and Corporate Governance Committee also considers numerous other qualities, skills and characteristics when evaluating director nominees, including:

         
Direct experience in the software industry or in the markets in which we operate       An understanding of, and experience in, accounting, legal, finance, product, sales and/or marketing matters       Experience on other public or private company boards and involvement in corporate governance best practices
         
         
         
Leadership experience with public companies or other major organizations with a proven track record in developing and executing a strategic vision and making executive-level decisions   M&A experience around the strategic acquisition of complementary businesses while meeting strict financial criteria   Diversity of the Board, considering business and professional experience, educational background, reputation and industry expertise across various market segments and technologies relevant to our business, as well as other relevant attributes
         

The Nominating and Corporate Governance Committee considers a variety of standards that may be appropriate from time-to-time for the overall structure and composition of our Board of Directors, but it does not assign specific weights to the various criteria and no single criterion is necessarily applicable to all prospective nominees.

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Proposal 1: Election of Directors

Director Selection Process

     
1 IDENTIFYING CANDIDATES  
  Generally, the Nominating and Corporate Governance Committee identifies candidates for director nominees in consultation with the other directors and management, using search firms or other advisors, through recommendations submitted by shareholders or through other methods that the Nominating and Corporate Governance Committee deems to be helpful to identify candidates.
 
     
2 INCUMBENT DIRECTORS  
  In the case of incumbent directors, the Nominating and Corporate Governance Committee reviews each incumbent director’s overall past service to us, including the number of meetings attended, level of participation, quality of performance and whether the director continues to meet applicable independence standards.
 
     
3 MINIMUM QUALIFICATIONS FOR NEW DIRECTOR CANDIDATE  
  In the case of a new director candidate, the Nominating and Corporate Governance Committee confirms that the candidate meets the minimum qualifications for a director nominee established by the Nominating and Corporate Governance Committee.
 
     
4 INTERVIEWING CANDIDATES  
  The candidate will also be interviewed by the Nominating and Corporate Governance Committee and other Board members.
 
     
5 EVALUATION OF CANDIDATES  
  The Nominating and Corporate Governance Committee then meets to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and considering the overall composition and needs of our Board of Directors. The same procedures apply to all candidates for director nomination, including candidates submitted by shareholders.
 
     
6 RECOMMENDATION OF CANDIDATES  
  Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for our Board of Directors’ approval as director nominees for election to our Board of Directors. The Nominating and Corporate Governance Committee also recommends candidates to our Board of Directors for appointment to its committees.

2023 Proxy Statement 17


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Proposal 1: Election of Directors

 
We Value Diversity
  
The Board and the Nominating and Corporate Governance Committee value diversity of backgrounds, experience, perspectives and leadership in different fields when identifying nominees. We believe that we have assembled a diverse set of directors with the varied backgrounds, experiences and perspectives critical to our long-term success. Presently, more than half of our Board members are diverse in gender, ethnicity or nationality. Our Board of Directors conducts regular self-evaluations. The survey questions include an assessment of whether the composition of the Board is appropriately diverse and possesses the skills and experience consistent with achieving our short and long-term corporate goals.
 

Stockholder Recommendations

The Nominating and Corporate Governance Committee will consider director nominee candidates who are recommended by shareholders of our company. Recommendations sent by shareholders must provide the following information:

the name and address of record of the stockholder;
   
a representation that the stockholder is a record holder of our common stock, or if the stockholder is not a record holder, evidence of ownership in accordance with Rule 14a-8(b)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”);
   
the name, age, business and residential address, educational background, current principal occupation or employment and principal occupation or employment for the preceding five full fiscal years of the proposed director candidate;
   
a description of the qualifications and background of the proposed director candidate which addresses the minimum qualifications described above;
   
a description of all arrangements or understandings between the stockholder and the proposed director candidate; and
   
any other information regarding the proposed director candidate that is required to be included in a Proxy Statement filed under SEC rules.

The submission must be accompanied by a written consent of the individual to be named in our Proxy Statement as standing for election if nominated by our Board of Directors and to serve if elected by the shareholders. Stockholder recommendations of candidates for election as directors at an Annual Meeting of Shareholders must be timely and submitted to the Company in accordance with the requirements set forth in the Company’s bylaws.

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Proposal 1: Election of Directors

Key Board Qualifications, Expertise and Attributes

The table and graphs below summarize the director nominees’ experience and the qualifications, skills and attributes most relevant to nominate candidates to serve on the Board. Director biographies in the section below entitled “Nominees for Directors” describe each director’s background and relevant experience in more detail.

      Director Skills and Experience
  Cybersecurity
Mitigating risk through cybersecurity is a key area of focus for us. The Audit Committee receives quarterly updates from our IT/Cybersecurity Team, including regarding governance processes, projects to strengthen cybersecurity processes and infrastructure
   
  Leadership
Our business is complex and ever-evolving. CEOs and individuals with experience leading large business units have proven track records in developing and executing a vision and making executive-level decisions.
  Finance and Accounting
Individuals with financial expertise are able to identify and understand the relevant financial considerations applicable to us as a global public company.
       
  Technology/Software Industry
Progress is the trusted provider of application development and infrastructure software. Those with relevant technology/ software experience are better able to understand the opportunities and challenges facing our business.
  Go-to-Market/Sales
Our business depends on successfully creating awareness of our products and entering new markets as well as executing our sales strategy.
     
  Strategy
Development and execution of a strong corporate strategy is critical to sustaining and growing our business.
  Product Development
Our business depends on our ability to successfully develop our products and expand our offerings. Experience in product development enhances understanding of the challenges we face and facilitates strategic planning in this area.
       
  Public Company Board Service and Governance
Individuals having experience serving on public company boards better understand the roles and responsibilities of directors and corporate governance best practices.
  Mergers & Acquisitions
A key element of our corporate strategy includes the acquisition of businesses that offer complementary products, services and technologies, augment our revenues and cash flows and meet our strict financial criteria. M&A experience enhances understanding of the complexities, issues and risks involved with any such acquisitions and their integration.
  Human Capital Management
Progress is driven by our people, so expertise in human capital management and related issues is critical to our long-term success.
     
  CSR/ESG
Corporate social responsibility is an integral part of our culture and we consider environmental, social and governance issues in multiple aspects of our operations.
     

2023 Proxy Statement 19


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Proposal 1: Election of Directors

Board Diversity Matrix 2021 and 2022

As of March 29, 2023            
Total Number of Directors       9
Part I: Gender Identity   Female   Male
Directors   3   6
Part II: Demographic Background        
African American or Black   -   -
Alaskan Native or American Indian   -   -
Asian   1   1
Hispanic or Latinx   -   -
Native Hawaiian or Pacific Islander   -   -
White   2   5
Two or More Races or Ethnicities   -   -
LGBTQ+   1

The above table is intended to comply with the format suggested by Nasdaq (See Nasdaq Rules 5605(f) and 5606). None of our directors declined to disclose their gender or demographic background. The information reported in the above table is unchanged from the information previously disclosed at https://investors.progress.com/board-progress-diversity-matrix as of July 22, 2022.

Director Independence

Having an independent Board is a core component of our governance philosophy. Our Corporate Governance Guidelines provide that, as a matter of policy and consistent with applicable laws, rules and regulations, a majority of the Board should be independent directors, as defined by the Nasdaq Stock Market Marketplace Rules. To help ensure independence, our Corporate Governance Guidelines contain limits on director outside activities. Directors are expected to avoid any action, position or arrangement that conflicts with an interest of the Company or gives the appearance of a conflict. Directors who also serve as CEOs or in equivalent positions should not serve on more than two boards of public companies in addition to the Board, and other directors should not serve on more than four other boards of public companies in addition to the Company’s board.

Based on the review and recommendation of our Nominating and Corporate Governance Committee, our Board has determined that all current directors except Yogesh Gupta (our President and Chief Executive Officer) are independent within the meaning of the director independence standards of the Nasdaq Stock Market, LLC (“Nasdaq”) and the applicable rules of the SEC.

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Proposal 1: Election of Directors

Nominees for Directors

Director Since:
September 2011

Chair since
December 2012

Age: 65

Current Board
Committees
:

Nominating and Corporate Governance

                               
    John R. Egan                  
    Independent                  
                       
   

Background:

Mr. Egan is managing partner of Carruth Management, LLC, a Boston-based venture capital fund he founded in October 1998 that specializes in technology and early-stage investments. From October 1986 until September 1998, Mr. Egan served in several executive positions with EMC Corporation, a publicly held global leader in information technology, including Executive Vice President, Products and Offerings, Executive Vice President, Sales and Marketing, Executive Vice President, Operations and Executive Vice President, International Sales.

Other Current Public Company Boards:

   Verint Systems, Inc. (Nasdaq: VRNT), a provider of systems to the internet security market, where he serves as Lead Director

   NetScout Systems, Inc. (Nasdaq: NTCT), a network performance management company, where he serves as Lead Director

   Agile Growth Corp. (Nasdaq: AGGRU), a special purpose company for the purpose of effecting an acquisition with one or more technology businesses

Prior Public Company Boards in Last 5 Years:

   EMC Corporation

   VMware, Inc.

                           
Skills and Experiences:     Cybersecurity       CSR/ESG       Leadership       Finance and Accounting
                           
      Technology/
Software Industry
  Go-to-Market/
Sales
  Strategy   Public Company Board Service and Governance
                           
      M&A                  

2023 Proxy Statement 21


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Proposal 1: Election of Directors

Director Since:
June 2017

Age: 65

Current Board
Committees
:

Nominating and Corporate Governance (Chair)

                               
    Paul T. Dacier            
    Independent                  
                       
   

Background:

Mr. Dacier is currently the General Counsel of Indigo Agriculture, Inc., a Boston-based agricultural technology start-up company that specializes in products designed to maximize crop health and productivity, which he joined in March 2017. Previously, Mr. Dacier was the Chief Legal Officer of EMC Corporation from 1990 until September 2016, when EMC was acquired by Dell Technologies. Mr. Dacier was responsible for the worldwide legal affairs of EMC and its subsidiaries and oversaw the company’s internal audit, real estate and facilities organizations, sustainability aviation and government affairs departments.

Other Current Public Company Boards:

   AerCap Holdings NV (NYSE: AER), the world’s largest independent commercial aircraft leasing company

Prior Public Company Boards in Last 5 Years:

GTY Technology Holdings, Inc.

                           
Skills and Experiences:     Leadership       Cybersecurity       Strategy       M&A
                           
      Public Company
Board Service
and Governance
  Technology/
Software Industry
  Human Capital
Management
  CSR/ESG

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Proposal 1: Election of Directors

Director Since:
June 2017

Age: 55

Current Board
Committees
:

Audit; Mergers and Acquisitions/Strategy

                               
    Rainer Gawlick            
    Independent                  
                       
   

Background:

Dr. Gawlick is a public and private company board member and formerly served as President of Perfecto Mobile, Ltd., a leader in mobile testing, from July 2015 until September 2016 and as Executive Vice President of Global Sales at lntralinks, Inc., a computer software company providing virtual data rooms and other content management services, from April 2012 until July 2015. From August 2008 to April 2012, Dr. Gawlick served as Chief Marketing Officer of Sophos Ltd., a computer security company providing endpoint, network and data protection software. From April 2005 to August 2008, Dr. Gawlick served as Vice President of Worldwide Marketing and Strategy at SolidWorks Corp., a CAD software company. He has also held a variety of executive positions in other technology businesses and was a consultant with McKinsey & Company. Dr. Gawlick holds a Ph.D. in Computer Science from the Massachusetts Institute of Technology.

Other Current Public Company Boards:

   Proto Labs, Inc. (NYSE: PRLB), a leading online and technology-enabled quick-turn manufacturer of custom parts for prototyping and short-run production

Prior Public Company Boards in Last 5 Years:

None

                           
Skills and Experiences:     Cybersecurity       Product
Development
        CSR/ESG       Leadership
                           
      Finance and Accounting   Technology/
Software 
Industry
  Go-to-Market/
Sales
  Strategy
                           
      Public Company Board Service and Governance   M&A            

2023 Proxy Statement 23


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Proposal 1: Election of Directors

Director Since:
October 2016

Age: 62

                               
    Yogesh Gupta            
    President and Chief Executive Officer        
                       
   

Background:

Mr. Gupta became our President and Chief Executive Officer in October 2016. Prior to that time, Mr. Gupta served as an advisor to various venture capital and private equity firms from October 2015 until September 2016. Prior to that time, Mr. Gupta was President and Chief Executive Officer at Kaseya, Inc., a provider of IT management software solutions, from June 2013 until July 2015, at which time, Mr. Gupta became Chair of the Board of Directors of Kaseya, Inc., a position he held until October 2015. From July 2012 until June 2013, Mr. Gupta served as an advisor to various venture capital and private equity firms in several mergers and acquisitions opportunities. Mr. Gupta was previously President and Chief Executive Officer of FatWire Software from July 2007 until February 2012, prior to the acquisition of FatWire Software by Oracle Corporation. Prior roles held by Mr. Gupta include Chief Technology Officer at CA, Inc., with which Mr. Gupta held various senior positions.

Other Current Public Company Boards:

   Blackbaud, Inc. (Nasdaq: BLKB), a leading provider of software for powering social impact

Prior Public Company Boards in Last 5 Years:

None

                           
Skills and Experiences:     Cybersecurity       Public Company Board Service
and Governance
      Human Capital Management       CSR/ESG
                           
      Leadership   Finance and Accounting   Technology/
Software Industry
  Go-to-Market/ Sales
                           
      Strategy   Product Development   M&A      

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Proposal 1: Election of Directors

Director Since:
November 2006

Age: 65

Current Board
Committees
:

Audit (Chair);
Mergers and Acquisitions/Strategy

                               
    Charles F. Kane            
    Independent                  
                       
   

Background:

Mr. Kane is currently Senior Lecturer, Global Economics and Management and Technological Innovation, Entrepreneurship and Strategic Management at the MIT Sloan Graduate Business School of Management. 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 which 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., a special purpose acquisition corporation, 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., a provider of e-security solutions, 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. (NYSE: AZPN), a publicly traded provider of supply chain management software and professional services.

Other Current Public Company Boards:

   Alkami Technology, Inc. (Nasdaq: ALKT), a digital banking platform that enables banks and credit unions to grow confidently and compete with Megabanks and Fintechs

   Symbotic Robotics (Nasdaq: SYM), a robotics hardware and software company for supply chain management

Prior Public Company Boards in Last 5 Years:

   Carbonite, Inc.

   Demandware, Inc.

   Realpage, Inc.

                           
Skills and Experiences:     Cybersecurity       Go-to-Market/
Sales
      Product Development       Human Capital Management
                           
      CSR/ESG   Leadership   Finance and Accounting   Technology/
Software Industry
                           
      Strategy   Public Company
Board Service
and Governance
  M&A      

2023 Proxy Statement 25


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Proposal 1: Election of Directors

Director Since:
February 2018

Age: 49

Current Board
Committees
:

Audit; Mergers and Acquisitions/Strategy (Chair)

                               
    Samskriti (Sam) Y. King            
    Independent                  
                       
   

Background:

Ms. King is currently Chief Executive Officer of Veracode, Inc., a leading provider of application security testing. Previously, from July 2017 to January 2019, Ms. King served as Senior Vice President and General Manager of Veracode. From August 2015 until July 2017, Ms. King was the Chief Strategy Officer of Veracode. Prior to that time, from April 2012 until July 2015, Ms. King was Executive Vice President, Product Strategy and Corporate Development GM, Mobile at Veracode. Ms. King joined Veracode in November 2006 and also served as Veracode’s Senior Vice President, Product Marketing and Vice President, Service Delivery.

Other Current Public Company Boards:

   ZeroFox Holdings, Inc. (Nasdaq: ZFOX), a leading external cybersecurity provider

Prior Public Company Boards in Last 5 Years:

None

                           
Skills and Experiences:     Cybersecurity       Public Company Board Service and Governance       Human Capital Management       Leadership
                           
      Finance and Accounting   Technology/
Software Industry
  Go-to-Market/
Sales
  Strategy
                           
      Product Development   M&A            

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Proposal 1: Election of Directors

Director Since:
February 2008

Age: 62

Current Board
Committees
:

Compensation (Chair)

                               
    David A. Krall            
    Independent                  
                       
   

Background:

Mr. Krall has served as a strategic advisor to Roku, Inc. (Nasdaq: ROKU), a leading manufacturer of media players for streaming entertainment, since January 2011. From February 2010 to December 2010, he served as President and Chief Operating Officer of Roku, where he was responsible for managing all functional areas of the company. Prior to that, Mr. Krall spent two years as President and Chief Executive Officer of QSecure, Inc., a privately held developer of secure credit cards based on micro-electro-mechanical system technology. From 1995 to July 2007, he held a variety of positions of increasing responsibility and scope at Avid Technology, Inc. (Nasdaq: AVID), a publicly traded leading provider of digital media creation tools for the media and entertainment industry. His tenure at Avid included serving seven years as the company’s President and Chief Executive Officer.

Other Current Public Company Boards:

   Harmonic Inc. (Nasdaq: HLIT), a leader in video delivery and cable access virtualization

   Audinate Group Ltd (ASX: AD8), a leading developer of professional AV-over-IP solutions

Prior Public Company Boards in Last 5 Years:

   None

                           
Skills and Experiences:     Mergers & Acquisitions       Leadership       Technology/
Software Industry
      Strategy
                           
      Product Development   Public Company
Board Service and Governance
           

2023 Proxy Statement 27


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Proposal 1: Election of Directors

Director Since:
February 2018

Age: 56

Current Board
Committees
:

Compensation; Mergers and Acquisitions/Strategy

                               
    Angela T. Tucci            
    Independent                  
                       
   

Background:

Ms. Tucci was the Chief Operating Officer of Uplight, Inc., a provider of end-to-end technology solutions dedicated to serving the energy ecosystem, a position she held from January 2020 until October 2022. Since December 2019, she has also served as an advisor to TPG Celegene Aggregation GP, Inc. in connection with its then investment CollabNet/Version One, now Digital.ai. Previously, Ms. Tucci was Chief Executive Officer of Apto, Inc., from August 2017 to September 2019. Prior to that time, Ms. Tucci was General Manager, Agile Management Business Unit of CA, Inc. from September 2015 until July 2017. Prior to that, Ms. Tucci was Chief Revenue Officer, Office of the CEO of Rally Software Development Corp. (“Rally”) from December 2014 until August 2015, when Rally was acquired by CA, Inc. Ms. Tucci joined Rally in December 2013 as Chief Marketing Officer. From January 2011 until August 2013, Ms. Tucci was Chief Strategy Officer of Symantec Corporation.

Other Current Public Company Boards:

None

Prior Public Company Boards in Last 5 Years:

None

                           
Skills and Experiences:     Leadership       Public Company Board Service and Governance       Mergers & Acquisitions       Go-to-Market/Sales
                           
      Technology/
Software Industry
  Strategy        

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Proposal 1: Election of Directors

Director Since:
October 2019

Age: 69

Current Board
Committees
:

Compensation; Nominating and Corporate Governance

                               
    Vivian Vitale, NACD.DC            
    Independent                  
                       
   

Background:

Ms. Vitale owns and operates Vivian Vitale Consulting, LLC, a consulting practice assisting organizations in the development of human resources and people management practices, a role she has held since April 2018. From April 2012 until March 2018, she held multiple positions of increasing responsibility at Veracode, Inc., a provider of application security testing. Her tenure at Veracode included serving as Executive Vice President of Human Resources, continuing in her role through Veracode, Inc.’s acquisition by CA Technologies in March 2017. Prior to 2012, Ms. Vitale served as Senior Vice President at Care.com, Inc., an online provider of support services to families. Previously, Ms. Vitale has also held senior leadership roles at RSA Security, Unica Corporation and IBM. Ms. Vitale is National Association of Corporate Directors NACD Directorship Certified ® since December 2022.

Other Current Public Company Boards:

   NetScout Systems, Inc. (Nasdaq: NTCT), a network performance management company

Prior Public Company Boards in Last 5 Years:

None

                           
Skills and Experiences:     Cybersecurity       CSR/ESG       Leadership       Technology/Software Industry
                           
      Strategy   Public Company Board Service and Governance   M&A   Human Capital Management

2023 Proxy Statement 29


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Corporate Governance

Our Corporate Governance Framework

We believe we have in place corporate governance processes and practices that are designed to promote and enhance the long-term interests of our shareholders, solidify board oversight, strengthen management accountability and foster responsible decision-making. We regularly monitor developments in corporate governance and review our processes and practices in light of such developments.

             
 

Boards are accountable to shareholders

  All directors are elected annually

  We have adopted a director resignation policy for directors

  Shareholders of 40% of outstanding shares have the right to call a special meeting

  We have no shareholders rights plan (“poison pill”) in place

  We hold annual say-on-pay votes

     

Boards should be responsive to shareholders and be proactive in order to understand their perspectives

  96% say-on-pay support at our 2022 Annual Meeting. We believe the vote indicates strong support for our executive compensation program, including enhancements made over prior years.

  We hold say-on-pay votes annually to help ensure continued alignment with shareholder values.

 
             
     
     
  Boards should adopt structures and practices that enhance their effectiveness  
 

  8 of 9 director nominees are independent

  6 of 9 director nominees have a tenure of less than eight years; current Board composition strikes an appropriate balance between directors with deep knowledge of the Company and those with a fresh perspective

  All committee members are independent

  All Audit Committee members are financially literate and our Audit Committee Chair is a financial expert

 

  Our Compensation Committee uses an independent compensation consultant

  Robust stock ownership requirements for directors and officers

  No hedging or pledging of stock by directors or officers

  Director access to officers and employers

  Director onboarding and continuing education

  Performance evaluation of the Board and its committees

 
         
                     
                     
 

Boards should have strong, independent leadership

  Independent Board Chair: Chair and CEO positions have been separate since 2012

  Independent directors meet in executive session without the Chief Executive Officer at every regularly scheduled Board Meeting

     

Shareholders should be entitled to voting rights in proportion to their economic interest

  One class of voting stock

  “One share, one vote” standard

     

Boards should develop management incentive structures that are aligned with the long-term strategy of the company

  Long-term incentive compensation goals are tied to long-range Company plans

  Board reviews of incentive structures take into account our long-term strategy

 
                     

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Corporate Governance

Our Corporate Governance Documents

  Certificate of Incorporation

  Amended and Restated Bylaws

  Audit Committee Charter Nominating and Corporate Governance

  Nominating and Corporate Governance Committee Charter

  Compensation Committee Charter

 

●  Code of Conduct and Business Ethics

  Finance Code of Ethics

  Corporate Governance Guidelines

  Stock Option Grant Policy

Our Certificate of Incorporation and our Bylaws are filed with the SEC and are available electronically at www.sec.gov. The other documents listed above can be found on our website at www.progress.com under the heading “Corporate Governance” located on the “Investor Relations” page. Any substantive amendment to or waiver of any provision of the Code of Conduct and Business Ethics may be made only by the Board and will be disclosed as required by Nasdaq listing standards or applicable law.

Our Corporate Governance Practices

Our Board is Independent

8 of 9 nominees are independent If the director nominees are elected at the Annual Meeting, the Board will continue to be composed of one employee director (Mr. Gupta, our CEO) and eight independent, non-employee directors (Messrs. Egan, Dacier, Kane and Krall, Dr. Gawlick and Mses. King, Tucci and Vitale).
Regular executive sessions of independent directors Our independent directors meet in executive session without the Chief Executive Officer at every regularly scheduled Board meeting to discuss, among other matters, the performance of the Chief Executive Officer.
Committees are independent Each of the Board’s committees is strictly comprised of independent directors.
Independent compensation consultant The compensation consultant is retained by and reports directly to the Compensation Committee. The compensation consultant is independent of the Company and management.

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Corporate Governance

We Have Strong Board Refreshment

We believe it is important to maintain a mix of longer-tenured, experienced directors, who can help to preserve continuity and institutional knowledge, and new directors, who can provide fresh perspectives. In furtherance of this objective, the Board elected Mr. Dacier and Dr. Gawlick in June 2017, Mses. King and Tucci in February 2018 and Ms. Vitale in October 2019. We do not impose director tenure limits, although our Corporate Governance Guidelines do impose a mandatory retirement age of eighty-five. We believe our current Board composition strikes an appropriate balance between directors with deep historical knowledge of the Company and those with a fresh viewpoint.

June 2017

Paul T. Dacier –
Mr. Dacier’s success and expertise
with ESG initiatives is a valuable addition to our Board. Mr. Dacier also brings a wealth of experience pertaining to the software industry and applicable regulatory frameworks.

Rainer Gawlick –
Dr. Gawlick brings deep expertise in
a variety of areas of technology key to the Progress success strategy. Dr. Gawlick’s expertise in sales and marketing strategy in the software industry is a valuable addition to the Board.

February 2018

Samskriti Y. King –
Ms. King is a highly accomplished business leader with an extraordinary track record, and she brings a wealth of expertise and diversity to our Board. Ms. King’s industry expertise aligns with the Company’s strategy to deliver strong, sustainable performance in the enterprise infrastructure software industry.

Angela T. Tucci –
Ms. Tucci brings valuable software industry experience, entrepreneurship and diversity to our Board. Ms. Tucci’s addition supports our longstanding and continuous focus on ensuring our Board has the right skills and perspectives to enable the Company to execute on its business strategy, strengthen its competitive position and deliver value to all its shareholders.

October 2019

Vivian Vitale –
Ms. Vitale brings a wealth of experience in creating high-impact programs and systems aimed at scaling for growth, acquisition integration and talent management. Ms. Vitale’s skillset is critical to our go-forward M&A strategy.


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Corporate Governance

We Have an Independent Board Chair

We believe the current Board leadership structure serves us and our shareholders well by having a strong independent Board Chair to provide independent leadership of the Board and because it allows our CEO to focus primarily on the Company’s business strategy, operations and corporate vision. This leadership structure, coupled with a strong emphasis on Board independence, provides effective independent oversight of management. Board members have complete access to and are encouraged to utilize members of our senior management regularly, and they have the authority to retain independent advisors as they deem necessary. The Board believes this leadership structure affords our company an effective combination of internal and external experience, continuity and independence.

John R. Egan
Board Chair

Key Responsibilities of the Independent Board Chair:

  Calling meetings of the Board and independent directors;

  Setting the agenda for Board meetings in consultation with the CEO and our Secretary;

  Chairing executive sessions of the independent directors;

  Engaging with shareholders;

  Acting as an advisor to Mr. Gupta on strategic aspects of the CEO role with regular consultations on major developments and decisions likely to interest the Board; and

  Performing other duties specified in the Corporate Governance Guidelines or assigned by the Board.

Mr. Egan currently serves as our independent Board Chair and brings extensive board leadership experience as a current director of publicly traded companies, including EMC Corporation, VMWare, Inc., Verint Systems and NetScout Systems, Inc., where he serves as Lead Director. Mr. Egan also holds a variety of leadership roles within the boards of directors of several privately held technology companies, including HighRoads Corporation, Platform Computing Corporation and Healthrageous, Inc. Mr. Egan has led global technology companies through strategic growth and operational change. His strong integrity and professional credibility with the other directors and executive officers has helped Mr. Egan to effectively oversee management and execute on the Company’s business strategy.

Our Corporate Governance Guidelines do not require the separation of the roles of Board Chair and Chief Executive Officer, as our Board believes that it is important that the Board retain flexibility to determine whether these roles should be separate or combined based upon the Board’s assessment of the Company’s needs and Progress’s leadership at a given point in time. We believe that an effective board leadership structure is highly dependent on the experience, skills and personal interaction between those in leadership roles. Our policy is to have a Lead Independent Director if the Board Chair is not independent.

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Corporate Governance

We Proactively Engage with our Shareholders

We actively seek to engage with our shareholders as part of our corporate governance cycle. During the past year, members of senior management spoke to, or sought to engage with, a large cross-section of our shareholders. While approximately 49% of our outstanding shares are held by passive investors that do not participate in traditional engagements, our investor relations team has engaged with the ESG departments at the largest of these passive investment firms.

Our stockholder
engagement team
comprised of:

  Vice President of Investor Relations

  Chief Executive Officer

  Chief Financial Officer

  Chief Legal Officer

  Chief Accounting Officer

  Members of our Finance, Legal and Communications & Marketing Teams, who provide support and relevant information.

We reached out
to shareholders
representing:

 

We met with
shareholders
representing:

This represents ~84% of outstanding stock held by active shareholders since 49% our shares are held by passive investors

Topics discussed
during our meetings
included:

  Our Total Growth Strategy – execution, progress, results, plans

  Capital Allocation to M&A, dividends and stock buy-backs

  The state of the M&A market and our outlook for transactions, valuation and multiples

  The types, sources and growth of our revenues

  The integration of prior acquisitions

  Quarterly results, projections/guidance

       
       
  Investor Relations Outreach  
  We conduct a proactive, year-round investor outreach program with existing shareholders and potential investors, with whom we engage both passively (by responding promptly to inbound queries) and actively (through outbound solicitation). Our outreach program is run by our Investor Relations Department, and our CEO and CFO regularly participate in investor meetings. We routinely attend investor conferences, participate in non-deal roadshows and host meetings with investors at their request or by our invitation. We aim to maintain a consistent dialog with portfolio managers, analysts and ESG contacts at all institutional investment funds that own 0.5% or more of our shares. However, our Investor Relations Department communicates with current and potential investors of all sizes and we routinely engage shareholders and potential investors on matters pertaining to ESG and related topics.  
       
       
       
  How to Communicate with Our Board  
  Our Board of Directors welcomes communications from shareholders. Any stockholder may communicate either with our Board as a whole, or with any individual director, by sending written communications addressed to the Board of Directors or to such director at our offices located at 15 Wayside Road, Suite 400, Burlington, Massachusetts 01803, or by submitting an email communication to BOD@progress.com. All good-faith communications sent to our Board of Directors will be forwarded to the full Board or to the individual director to whom such communication was addressed.  
       

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Corporate Governance

Our Board Evaluates Its Effectiveness

Our Board of Directors conducts periodic self-evaluations to determine whether the Board is functioning effectively. In addition, each committee of the Board also conducts a self-assessment of its performance and its members’ effectiveness relative to the goals and standards set forth in each committee’s charter. The Nominating and Governance Committee leads these evaluations and is responsible for reporting the results to the full Board and management. Directors may be required to submit responses through a survey or other means to assess the effectiveness of the Board. The Nominating and Governance Committee also evaluates and reports to the Board on the performance of individual directors, whose performance is reviewed annually in connection with standing for reelection.

Committees of the Board of Directors

Our Board of Directors has standing Audit, Compensation, Nominating and Corporate Governance and Mergers and Acquisitions/Strategy Committees.

Director       Audit       Compensation       Nominating
and
Corporate
Governance
      Mergers and
Acquisitions/
Strategy
John R. Egan              
Paul T. Dacier              
Rainer Gawlick            
Yogesh Gupta                
Charles F. Kane            
Samskriti (Sam) Y. King            
David A. Krall              
Angela T. Tucci            
Vivian Vitale            

   Chair        Member

The Committee Charters adopted by our Board of Directors can be found on our website at www.progress.com under the heading “Corporate Governance” located on the “Investor Relations” page.

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Corporate Governance

       
  Audit Committee  
 

Members

Charles F. Kane (Chair)
Rainer Gawlick
Samskriti (Sam) Y. King

Principal Responsibilities:

 Assists our Board of Directors in fulfilling its oversight responsibilities for accounting and financial reporting compliance

 Appoints, compensates, retains and oversees the work performed by our independent registered public accounting firm for the purpose of preparing or issuing an audit report or related work

 Reviews the independent registered public accounting firm’s fees for services performed

 Reviews with the independent registered public accounting firm, the Company’s internal audit and financial management and the integrity of the Company’s internal and external financial reporting processes and the adequacy and effectiveness of the Company’s internal controls over financial reporting

 Reviews with management various matters related to our internal controls and legal, compliance and regulatory matters

 Reviews with management and the independent registered public accounting firm the annual audited financial statements and the quarterly financial statements, prior to the filing of reports containing those financial statements with the SEC

 Reviews with management policies with respect to our risk assessment and risk management, including appropriate guidelines and policies to govern the process, as well as the steps management has taken to monitor and control those risks

 Is responsible for producing the Audit Committee Report included in this Proxy Statement

Our Board of Directors has determined that each member of the Audit Committee meets the independence requirements promulgated by Nasdaq and the SEC, including Rule 10A-3(b)(1) under the Exchange Act. In addition, our Board of Directors has determined that each member of the Audit Committee is financially literate, and that Mr. Kane qualifies as an “audit committee financial expert” under the rules of the SEC.

 
       

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Corporate Governance

     
  Compensation Committee  
 

Members

David A. Krall (Chair)
Angela T. Tucci
Vivian Vitale

Principal Responsibilities:

 Oversees our overall compensation structure and benefits, policies and programs

 Administers our equity-based plans

 Reviews and makes recommendations to our Board of Directors regarding the performance of our Chief Executive Officer

 Reviews and recommends to our Board of Directors for its approval, the compensation of our Chief Executive Officer

 Consults with our Chief Executive Officer to review and determine compensation of all of our other executive officers

 Assists in developing and reviewing succession plans for our senior management, including the Chief Executive Officer

 Review our policies, programs and initiatives for inclusion and diversity, and provide guidance to our Board of Directors and management on these matters

 Reviews our processes and procedures for the consideration and determination of director and executive compensation

●  Is responsible for producing the Compensation Committee Report included in this Proxy Statement

Our Board of Directors has determined that each member of the Compensation Committee meets the independence requirements promulgated by Nasdaq.

 
       

Compensation Committee Interlocks and Insider Participation

The members of our Compensation Committee for fiscal 2022 were Mr. Krall and Mses. Tucci and Vitale, with Mr. Krall serving as Chair. Mr. Krall, Ms. Tucci and Ms. Vitale are not, nor have they ever been, an officer or employee of our company or of any of its subsidiaries or had any relationship with us requiring disclosure in this Proxy Statement. There are no compensation committee interlocks amongst any of our directors.

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Corporate Governance

     
  Nominating and Corporate Governance Committee  
 

Members

Paul T. Dacier (Chair)
John R. Egan
Vivian Vitale

Principal Responsibilities:

 Responsible for identifying qualified candidates for election to our Board of Directors and recommending nominees for election as directors at the Annual Meeting

 Assists in determining the composition of our Board of Directors and its committees

 Assists in developing and monitoring a process to assess the effectiveness of our Board of Directors

 Assists in developing and implementing our Corporate Governance Guidelines

 Assists in U.S. federal security clearance and government contracting matters

The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee meets the independence requirements promulgated by Nasdaq.

 
       
       
     
  Mergers and Acquisitions/Strategy Committee  
 

Members

Samskriti Y. King (Chair)
Rainer Gawlick
Charles F. Kane
Angela T. Tucci

Principal Responsibilities:

 Reviews and provide guidance to Company’s management and the Board on the Company’s merger and acquisition strategy as part of overall corporate strategy.

 Assists management in the review of acquisition transactions to be brought before the Board and the review of our corporate strategy

 Reviews and evaluates the performance and integration of completed transactions.

 Makes regular reports to the Board concerning areas of the Committee’s responsibility.

The Board of Directors has determined that each member of the Mergers and Acquisitions/Strategy Committee meets the independence requirements promulgated by Nasdaq.

 
       

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Corporate Governance

Board Oversight

Role of the Board

The Board is elected by shareholders. Except for those matters reserved for stockholder approval, the Board is the ultimate decision-making body of the Company. The Board advises and guides senior management and monitors its performance.

The fundamental role of the directors is to exercise their business judgment to act in what they reasonably believe to be the best interests of the Company and its shareholders. In fulfilling that responsibility, the directors may rely on the honesty and integrity of the Company’s senior management and on legal, accounting, financial and other advisors.

Strategic Oversight

Our Board delegates substantial authority in certain areas to the Company’s CEO and senior management enabling and trusting them to run the Company. The Board remains responsible however for overseeing management’s performance within the delegated areas including: strategic initiatives, financial performance, accounting and financial reporting, risk management and compliance.

Our Board engages with the Company’s management regularly and plays a vital role informing management’s understanding of the Company’s strategic objectives and performance drivers while ensuring proper focus on the risks associated with those corporate strategies and continually evaluating the level of authority delegated to management to ensure that it is reasonable.

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Corporate Governance

Our Board of Directors Has a Significant Role in Risk Oversight

Our Board of Directors believes that its oversight responsibility with respect to the various risks confronting our company is one of its most important areas of responsibility and provides further checks and balances on our leadership structure. Our Board of Directors views its oversight of risk as an ongoing process that occurs throughout the year while evaluating the strategic direction and actions of our company. A fundamental aspect of risk management is not only understanding the risks a company faces and what steps management is taking to manage those risks, but also determining what level of risk is appropriate for the Company. We believe that having an independent Board Chair enhances our Board’s ability to oversee our risks.

In carrying out this critical function, our Board is involved in risk oversight through direct decision-making authority with respect to significant matters and the oversight of management directly by our Board and through its committees. Each committee’s specific area of responsibility as it relates to risk management is as follows:
                     
 

Audit Committee

 Financial condition, financial statements and financial reporting process

●  Internal controls and accounting matters

●  Cybersecurity matters

●  Conflict of interest issues and compliance with legal and ethical standards

     

Compensation
Committee

●  Overall compensation practices, policies and program design

  Inclusion and diversity initiatives

  Human capital management considerations

     

Nominating and Corporate Governance Committee

●  Corporate governance practices

  Leadership structure of the Board

●  Director and management succession planning

●  U.S. federal security clearance and government contracting matters

     

Mergers & Acquisitions / Strategy Committee

●  Review of overall company strategy

●  Acquisitions and other strategic transactions

 
                             
Our Board of Directors receives reports from members of senior management on the functional areas for which they are responsible. These reports may include information concerning operational, financial, sales, competitive, legal and regulatory, strategic and other risks, as well as any related management and mitigation.
       
       
    Board Oversight of ESG  
  With rising expectations from investors, customers, employees and regulators related to environmental, social and governance issues (ESG), companies are increasingly taking action and implementing ESG initiatives. It is the role of our Board to guide management in connecting the Company’s ESG efforts to the industry, markets, products and strategies that are unique to Progress in order to ensure such efforts are aligned with the best interests of our stakeholders.  
       

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Corporate Governance

       
  Oversight of Cybersecurity  
  A key area of focus for us is our risk mitigation practices around cybersecurity risk. Cybersecurity protection is vital to our organization and our stakeholders, and we are committed to ensuring that our products, data and systems are secure from potential breach. Our cybersecurity governance team provides periodic updates to the Board and quarterly updates to the Audit Committee on cybersecurity matters, including information about cybersecurity governance processes, the status of projects to strengthen internal cybersecurity and security features of the products and services we provide our customers. Our cybersecurity program includes external audits of our internal and product security practices under top information security standards, including System and Organization Controls (SOC) 2, Health Insurance Portability and Accountability Act of 1996 and Payment Card Industry Data Security Standard. We have implemented a comprehensive cybersecurity training program for all employees, and we have taken steps to mitigate the impact of potential cybersecurity risks, including by procuring a separate cyber insurance policy as part of our comprehensive corporate insurance program.  
       

Director Attendance

Our Board of Directors met five times during the fiscal year ended November 30, 2022. During fiscal 2022, each director nominee attended at least 75% of the aggregate of the total number of meetings of our Board of Directors and the total number of meetings of all committees of our Board of Directors on which he or she served from and after their election to the Board.

In January 2018, the Board of Directors adopted a policy requiring members of our Board of Directors to attend the Annual Meeting of Shareholders. All members of our Board of Directors virtually attended the 2022 Annual Meeting of Shareholders.

             
 

5 meetings in 2022

Our Board holds five regular meetings a year, with special meetings occurring when necessary.

2022 Regular Board Meetings:

      Each director attended at least 75% of the total number of meetings of our Board and the Committees on which he or she served during their respective term of service during 2022. In addition, all directors attended our 2022 Annual Meeting of Shareholders.  
             
           
Our Board’s organizational meeting follows our annual meeting of shareholders. Our Board meets in executive session at every regularly scheduled Board meeting, which is followed by a session of only independent directors led by the Chair. Directors are expected to attend Board meetings, meetings of the Committees on which they serve and our annual meeting of shareholders, with the understanding that on occasion a director may be unable to attend a meeting.

Executive Sessions of Independent Directors

The independent directors of the Board will meet in Executive Session as required and at least two times each year, typically before or after a regularly scheduled Board meeting, and at any other time requested by any independent director. The Executive Sessions are led by the Board Chair.

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Director Compensation

We pay our non-employee directors a mix of cash and equity compensation. Employee directors receive no compensation for their service as directors.

In accordance with the 2022 Director Compensation Plan adopted by the Board, for 2022, our non-employee directors were paid an annual retainer of $275,000, of which $50,000 was paid in cash and $225,000 in equity in the form of deferred stock units (“DSUs”). Committee members and chairs also received the additional compensation described below.

ANNUAL RETAINER ADDITIONAL ANNUAL CASH RETAINER

Independent Board Chair
$75,000

Audit Committee

Chair - $25,000

Members - $20,000

Nominating and Corporate
Governance Committee

Chair - $12,500

Members - $10,000

 

Compensation Committee

Chair - $25,000

Members - $15,000

Mergers and Acquisitions/Strategy
Committee

Chair - $25,000

Members - $15,000

Prior to adopting the 2022 Director Compensation Plan, the Compensation Committee received market data from Pay Governance, the Compensation Committee’s independent compensation consultant, and considered whether any changes in director compensation should be proposed. Based on the market data, the Compensation Committee recommended to the Board no changes to director compensation and the Board adopted this recommendation.

The cash retainers for Board and Committee services were paid in June 2022 and the equity retainers were issued in June 2022.

The number of DSUs granted was determined by dividing the equity retainer by the grant-date closing price of our common stock as reported by Nasdaq. The DSUs vest in a single installment on the date of the Annual Meeting, subject to continued service on our Board of Directors through such date. DSUs do not convert to shares of common stock until a director terminates service on the Board of Directors or upon a change in control, whichever occurs first. Prior to March 2019, newly elected directors were also entitled to receive an initial director appointment grant of $300,000 of DSUs in connection with their appointment to our Board of Directors. In March 2019, the Board of Directors eliminated this initial director appointment grant for future appointees to the Board to remain in line with market practice.

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Director Compensation

Stock Ownership Guidelines

Non-employee members of our Board are required to own shares of Progress common stock. The Board of Directors sets and periodically reviews and makes changes to these ownership requirements. In March 2017, our Board of Directors adopted revised stock retention guidelines for non-employee directors. These guidelines provide for all non-employee directors to hold an amount of our common stock, restricted shares and/or DSUs having a value equal to at least five times the annual cash retainer. Directors have five years to attain this ownership threshold. As of the date of this Proxy Statement, all non-employee directors are in compliance with the stock ownership guidelines.

Director Compensation Table—Fiscal 2022

The following table sets forth a summary of the compensation paid or granted to our non-employee directors for service on our Board in 2022.

Name Unvested DSUs
Outstanding at
November 30, 2022(1)
      Fees Earned or
Paid in Cash
($)
      Stock
Awards(2)
($)
      Total
($)
Paul T. Dacier 4,967   62,500   225,005   287,505
John R. Egan 4,967   135,000   225,005   360,005
Rainer Gawlick 4,967   85,000   225,005   310,005
Charles F. Kane 4,967   90,000   225,005   315,005
Samskriti Y. King 5,642   95,000   225,005   320,005
David A. Krall 4,967   75,000   225,005   300,005
Angela T. Tucci 5,642   80,000   225,005   305,005
Vivian Vitale 4,967   75,000   225,005   300,005
(1) The number of outstanding unvested DSUs held by each director as of November 30, 2022, is shown. No director held stock options.
(2) Represents the fair value of the awards measured at the grant date. The number of units granted to each director in 2022 was determined by dividing the grant date value of the award, $225,000, by $45.30, the closing price of our common stock on June 30, 2022, rounded up to the nearest whole unit.
   
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Our Executive Officers

The following table sets forth certain information regarding our current executive officers and key employees.

Name     Age     Position
Yogesh Gupta   62   President and Chief Executive Officer
Anthony Folger   51   Executive Vice President, Chief Financial Officer
John Ainsworth   58   Executive Vice President and General Manager, Application and Data Platform
Loren Jarrett   48   Executive Vice President and General Manager, Digital Experience
Kathryn Kulikoski   46   Executive Vice President, Chief People Officer
Jennifer Ortiz   47   Executive Vice President, Marketing
Ian Pitt   56   Executive Vice President, Chief Information Officer
Jeremy Segal   52   Executive Vice President, Corporate Development
Sundar Subramanian   44   Executive Vice President and General Manager, Infrastructure Management
YuFan Stephanie Wang   40   Executive Vice President, Chief Legal Officer and Corporate Secretary

Named Executive Officers

   

Yogesh Gupta

President and Chief Executive Officer

Age: 62

Background:

  Mr. Gupta became President and Chief Executive Officer in October 2016. Since he is also a Board member, his biography appears on page 24 in Proposal One: Election of Directors.
 

   

Anthony Folger

Executive Vice President, Chief Financial Officer

Age: 51

Background:

  Mr. Folger joined Progress as Chief Financial Officer in January 2020. As CFO, Mr. Folger is responsible for our finance and accounting, financial planning, treasury, tax and investor relations functions. Prior to joining Progress, Mr. Folger was Chief Financial Officer and Treasurer of Carbonite, Inc., from January 2013 until Carbonite was acquired by OpenText Corporation in late December 2019. Prior to that time, from June 2006 to December 2012, Mr. Folger held a variety of senior leadership positions at Acronis AG, including Chief Financial Officer from October 2008 to December 2012.
 

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Table of Contents

Our Executive Officers

   

John Ainsworth

Executive Vice President and General Manager, Application and Data Platform

Age: 58

Background:

  Mr. Ainsworth joined Progress as Senior Vice President, Products-Core in January 2017 and was elevated to Executive Vice President in November 2021. Since December 2022, Mr. Ainsworth has been serving as the General Manager for the Application and Data Platform business unit (“ADP”). As General Manager, Mr. Ainsworth is responsible for guiding all aspects of engineering, support and sales for ADP. Prior to taking on this role, Mr. Ainsworth was responsible for the product management, product marketing, technical support and engineering functions for OpenEdge, Corticon, DataDirect Connect, DataDirect Hybrid Data Pipeline, Sitefinity, MOVEit, WhatsUp Gold, Kemp Loadmaster and Kemp Flowmon. Before joining Progress, Mr. Ainsworth was Senior Vice President, Engineering Services at CA Technologies, Inc., a position he assumed in April 2016. Prior to that time, Mr. Ainsworth held various senior positions within CA Technologies, Inc., which he joined through acquisition in 1994.
 

   

Loren Jarrett

Executive Vice President and General Manager, Digital Experience

Age: 48

Background:

  Ms. Jarrett joined Progress as Chief Marketing Officer in January 2017. She transitioned to Senior Vice President and General Manager of our Developer Tools Business in June 2019 and was elevated to Executive Vice President in November 2021. Ms. Jarrett currently serves as Executive Vice President and General Manager of the Digital Experience business unit. She has been in this role since December 2022. As General Manager, Ms. Jarrett is responsible for sales, product management, product marketing, demand generation, technical support and engineering for Progress’ Digital Experience business. Prior to joining Progress, Ms. Jarrett was Chief Marketing Officer at Acquia, from 2015 until December 2016, Chief Marketing Officer at Kaseya, Inc. from 2013 until 2015 and Vice President, Corporate Charge Card and Loyalty Products at American Express, in 2013. Prior to that time, Ms. Jarrett was Vice President, Product Management and Strategy at Oracle Corporation from 2011 until 2012 and Senior Vice President of Marketing and Product Management at FatWire from 2007 until its acquisition by Oracle in 2011.
 

   

Jeremy Segal

Executive Vice President, Corporate Development

Age: 52

Background:

  Mr. Segal joined Progress as Senior Vice President, Corporate Development in May 2020 and was elevated to Executive Vice President in November 2021. In this role, Mr. Segal is responsible for leading our inorganic growth strategy to deliver sustained shareholder value through accretive acquisitions. Prior to joining our company, Mr. Segal was Global Head of Corporate Development at LogMeIn, a position he assumed in September 2019. Prior to that time, Mr. Segal was Vice President, Corporate Development at LogMeIn beginning in March 2016. Prior to that time, Mr. Segal was Vice President, Corporate Development at Akamai Technologies, which he joined in April 2000.
 

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Proposal
2
Advisory Vote on Compensation of Our Named Executive Officers

Our Board of Directors recommends that you vote FOR the approval of the compensation of our named executive officers.

       

In accordance with Section 14A of the Exchange Act, we are asking our shareholders to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement. We urge you to read the “Compensation Discussion and Analysis” section of this Proxy Statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the “Summary Compensation Table” and related compensation tables and narrative, which provide detailed information on the 2022 compensation of our named executive officers. We believe our executive compensation programs demonstrate our pay-for-performance philosophy, which creates alignment with our shareholders and drives the creation of sustainable long-term stockholder value.

Board Recommendation

We are asking our shareholders to indicate their support for the compensation of our named executive officers, as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask our shareholders to vote “FOR” the following resolution at our Annual Meeting:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2022 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the SEC, including the “Compensation Discussion and Analysis,” the “Summary Compensation Table” and the other related tables and narrative disclosure.”

This say-on-pay vote is advisory only and not binding on the Company, the Compensation Committee or our Board of Directors. Although the vote is advisory, our Board of Directors and our Compensation Committee value the opinions of our shareholders and expect to take the outcome of this vote into account when considering future compensation arrangements for our executive officers.


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Compensation Discussion and Analysis

Introduction

This “Compensation Discussion and Analysis” section describes the elements of our compensation programs for our executive officers. This section also provides an overview of our executive compensation philosophy and analyzes how and why the Compensation Committee of our Board of Directors arrives at specific compensation decisions and policies.

We describe below our compensation philosophy, policies, and practices relating to the fiscal year ended November 30, 2022, with respect to the following “named executive officers” (“NEOs”), whose compensation is set forth in the “Summary Compensation Table” and other compensation tables contained in this Proxy Statement:

Yogesh Gupta

President and
Chief Executive
Officer

Anthony Folger

Executive Vice
President, Chief
Financial Officer

John Ainsworth

Executive Vice
President and
General Manager,
Application and
Data Platform

Loren Jarrett

Executive Vice
President and
General Manager,
Digital Experience

Jeremy Segal

Executive Vice President
Corporate
Development

We present our Compensation Discussion and Analysis in the following sections:

1

Executive Summary

In this section, we discuss our strategy, our fiscal 2022 corporate performance and certain governance aspects of our executive compensation program.

See page 48
2

Executive Compensation Program

In this section, we describe our executive compensation philosophy and process and the material elements of our executive compensation program.

See page 51
3

2022 Executive Compensation Decisions

In this section, we provide an overview of our Compensation Committee’s executive compensation decisions for fiscal 2022 and certain actions taken before or after fiscal 2022, when doing so enhances the understanding of our executive compensation program.

See page 56
4

Other Executive Compensation Matters

In this section, we describe our other compensation policies and review the accounting and tax treatment of compensation.

See page 66

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Compensation Discussion and Analysis

Executive Summary

Fiscal 2022 Performance

As outlined below, our financial and operating performance in fiscal 2022 was strong across virtually every financial metric and we benefited from steady demand across virtually all our products lines and markets. Our employees, most of whom continued to work remotely, worked tirelessly, enabling us to execute exceptionally well against our strategic plan.

Highlights of our fiscal 2022 operational and financial results include:

Exceeded revenue guidance

on both a GAAP and non-GAAP basis for each fiscal quarter of, and full year, fiscal 2022

Exceeded top end of earnings per share guidance

on both a GAAP and non-GAAP basis for each fiscal quarter of, and full year, fiscal 2022


             
     

Annualized recurring revenue
(“ARR”) of
$497 million

as of the end of fiscal 2022, increased 3.5% year-over-year on a constant currency basis

     

Achieved cash flows from
operations of over

$192 million

Achieved record adjusted free
cash flow (non-GAAP) of over

$189 million

     

Shareholder-focused
capital allocation

Over $108 million

of capital returned to
shareholders
in fiscal 2022,
including more than
$31 million in dividends

     

 

Above 101% NDRR

net dollar retention rate

(current period ARR divided by prior period ARR) as

of the end of fiscal 2022, illustrating our predictable and durable revenue performance
 
 
Successful integration of
Kemp, which closed in October
of 2021
 
 
 

20% Operating Margins

40% Non-GAAP Operating Margins

(FY22 non-GAAP operating margins exceeded our stated target of +35%
 
Diluted earnings per share
was $2.15 in FY22, up 22%
Non-GAAP diluted earnings
per share was $4.13 in FY22,
up 7%
 
 
Key product releases, including
Developer Tools, Sitefinity DX,
WhatsUp Gold, Chef Cloud
Security, MOVEit, Flowmon and
DataDirect.

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Fiscal 2022 Compensation Structure

The Compensation Committee’s philosophy is to tie executive pay to Company performance, thereby creating alignment with our shareholders and driving the creation of sustainable long-term stockholder value. Despite the challenges presented by geopolitical tensions and economic volatility during fiscal year 2022, our compensation programs continued to reflect this philosophy and compensation earned reflected our business achievements.

Our fiscal 2022 budget and operating plan prioritized enhancing customer retention and reflected our expectations for strong recurring revenue and high renewal rates but limited revenue growth beyond the inclusion of Kemp for the entire fiscal year. Consistent with past years, we also prioritized operating our business as efficiently as possible to strengthen Progress for the benefit of shareholders which included internal reorganization work to better align our products and go-to-market strategy.

As was the case in fiscal 2021, the Compensation Committee utilized a combination of short and long-term compensation programs to advance our strategy.

2022 Executive Compensation Highlights

●  Base Salaries for our named executive officers targeted at market competitive levels

●  100% of annual cash bonuses for our named executive officers tied to achieving pre-established financial objectives that are difficult to attain and require achievement closely linked to our annual operating plan and budget and publicly announced expectations

●  Payouts under the annual cash bonuses capped at 150% of target amounts

     

● 50% of annual target equity opportunity for our named executive officers was delivered in the form of cliff-vested performance-based stock awards tied to three-year relative total shareholder return and cumulative operating income metrics

● 30% of annual target equity opportunity for our named executive officers was delivered in the form of time-based restricted stock units and 20% in the form of stock options

Our fiscal 2022 compensation structure at the start of fiscal 2022 was consistent with our fiscal 2021 compensation structure. As described below, the Compensation Committee modified the fiscal 2022 long-term performance-based restricted stock units (“PSUs”) applicable to the NEOs by adjusting the weighting of the performance measures. The Compensation Committee reviewed our fiscal 2022 compensation structure in November 2021 and January 2022 in consultation with Pay Governance, our external compensation consultant. Consistent with prior years, our annual incentive bonus plan was designed to achieve financial goals related to our business plan for fiscal 2022 and in line with our financial guidance to shareholders.

For fiscal 2022, payouts under our Corporate Bonus Plan were made at 112% of target, based on our solid performance. The construct, underlying metrics and resulting performance and payout outcome under the Corporate Bonus Plan are described further in the section below entitled “Cash Incentive Compensation”.

The three-year performance period for PSUs awarded under our 2020 Long-Term Incentive Plan (“LTIP”) ended on November 30, 2022. Based on our relative total shareholder return (“TSR”) during that period, we achieved a final payout of 127.5% for the TSR metric and 191% performance for the cumulative total operating income metric. As a result, 159% of the awarded PSUs were earned, as described further in the section entitled “2022 Executive Compensation Decisions – Equity Compensation – LTIP PSUs” below.


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Compensation Governance

      What We Do:                   What We Don’t Do:      
 

  70% of annual equity award is performance-based, through performance-based stock units and stock options.

  Grant performance-based equity awards with performance measures that span three years

  Utilize different measures for performance equity awards and cash incentives

  Maintain stock ownership guidelines to ensure our directors’ and executives’ interests are aligned with those of our shareholders

  Clawback Policy: committed to updating compensation recovery policy in line with the SEC’s recently updated rules and Nasdaq’s proposed listing standards (when available)

  Cap the amounts our executives can earn under our annual incentive plans

  Compensation Committee retains independent compensation consultant

       

  No perquisites

  No guaranteed salary increases or non-performance-based bonuses

  No pledging or hedging of company stock by directors or executive officers

  No excise tax gross-ups

   

Response to 2022 Say-on-Pay Vote and the Evolution of our Executive Compensation Programs

We value the input of our shareholders on our compensation programs. We hold an advisory vote on executive compensation on an annual basis. We also regularly seek feedback from our shareholders to better understand their opinions on governance issues, including compensation. The Compensation Committee carefully considers stockholder feedback and the outcome of each vote when reviewing our executive compensation programs each year.

At our 2022 annual shareholders meeting, approximately 96% of the votes cast approved, on an advisory basis, our executive compensation for fiscal year 2021. As shown in the table at right, for each of the past six years, we received approximately 96% or greater, support with respect to the advisory vote on executive compensation.

     

Say-on-Pay Votes (2017-2022)

The Compensation Committee will continue to consider the outcome of our say-on-pay votes and our shareholders’ views when making future compensation decisions for our executives.


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Executive Compensation Program

Philosophy and Objectives

Our philosophy is to reward executive officers based upon corporate performance, as well as to provide long-term incentives for the achievement of financial and strategic goals. We use a combination of cash compensation, composed of base salary and an annual cash bonus program, long-term equity incentive compensation programs and a broad-based benefits program to create a competitive compensation package for our executive management team. We tie the payment of cash and long-term equity incentive compensation to executive officers exclusively to the achievement of financial objectives.

The Compensation Committee uses the following principles to guide its decisions regarding the compensation of our executive officers:

Pay for Performance      Total compensation should reflect a “pay-for-performance” philosophy in which more than 50% of each executive officer’s compensation is tied to the achievement of company financial objectives. Cash compensation for our executive officers is weighted toward short-term incentive bonus awards tied to company financial objectives that are difficult to attain and require achievement closely linked to our annual operating plan and budget and publicly announced expectations. Long-term incentive awards, namely PSUs and stock options, also ensure pay and performance alignment over the long term.
Alignment with Shareholders’ Interests   Total compensation levels should include long-term performance-based equity awards to align executive officer and stockholder interests.
Internal Parity   To the extent practicable, base salaries and short- and long-term incentive targets for similarly situated executive officers should be comparable to avoid divisiveness and encourage teamwork, collaboration and a cooperative working environment.
External Competitiveness   Total compensation should be competitive with peer companies so that we can attract and retain high performing key executive talent. To achieve this goal within market ranges, our Compensation Committee annually reviews the compensation practices of other companies in our peer group, as discussed in the “Peer Group” section below.

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Compensation Review Process

         
January March June September November
         

●  Determine achievement under prior period performance-based compensation

●  Review pay-for-performance alignment

●  Grant annual performance-based and time-based equity awards

●  Establish executive compensation for year

●  Review Compensation Discussion and Analysis

●  Review non-executive Board of Directors compensation

●  Review annual say-on-pay vote results and proxy advisor recommendations

●  Consider Performance criteria for next fiscal year

●  Review Compensation Committee Charter

●  Review and establish compensation peer group for upcoming year

●  Review executive compensation trends and regulatory updates

●  Review equity use and forecast expense

●  Establish final performance-based compensation plans for next year

Role of Compensation Committee

Toward the end of each fiscal year, the Compensation Committee begins the process of reviewing executive officer compensation for the next fiscal year. The Compensation Committee is provided with reports from its independent compensation consultant comparing our executive compensation and equity granting practices relative to the market and to our peer group. The Compensation Committee reviews recommendations from management on the current fiscal year annual and long-term incentive compensation programs. The Compensation Committee then reviews and approves any changes to executive officers’ total target cash compensation and long-term equity incentive compensation. The Compensation Committee reviews all recommendations considering our compensation philosophy and seeks input from its independent compensation consultant prior to making any final decisions.

The Compensation Committee meets in executive session (without management) with its independent compensation consultant to deliberate on executive compensation matters. None of our executive officers participate in the Compensation Committee’s deliberations or decisions regarding their own compensation.

Role of Chief Executive Officer

Our Chief Executive Officer makes recommendations to the Compensation Committee with respect to compensation for his direct reports (including our other named executive officers). In making these recommendations, the factors considered include market data, tenure, individual performance, responsibilities and experience levels of the executives, as well as the compensation of the executives relative to one another.

These initial CEO recommendations are presented at Compensation Committee meetings. The Total Rewards team within our People function and individuals within our Finance and Legal teams support the Compensation Committee in the performance of its responsibilities. During fiscal 2022, our Chief Financial Officer, Chief Legal Officer, Chief People Officer and Vice President, Global Rewards & Systems attended the Compensation Committee meetings to provide perspectives on the competitive landscape, the needs of the business, information about our financial performance and relevant legal and regulatory developments.

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Role of Compensation Consultant

Our Compensation Committee again retained Pay Governance to advise it on matters related to executive compensation for fiscal 2022.

Other than providing limited guidance regarding our broad-based equity plan design for all employees, which was approved by the Compensation Committee, Pay Governance did not provide any services for management in fiscal 2022. Pay Governance consulted with our management when requested by the Compensation Committee and only as necessary to obtain relevant compensation and performance data for the executives as well as essential business information so that it could effectively support the Compensation Committee with appropriate competitive market information and relevant analyses.

During fiscal 2022, Pay Governance provided a range of services to the Compensation Committee to support the Compensation Committee’s agenda and obligations under its charter, including providing advice relating to the impact of regulatory updates, industry trends and peer group compensation data, advice on the structure and competitiveness of our compensation programs, advice on the consistency of our programs with our executive compensation philosophy and advice on director compensation. Representatives of Pay Governance also attended Compensation Committee meetings.

The Compensation Committee assessed the independence of Pay Governance and determined that Pay Governance is independent of our company and has no relationships that could create a conflict of interest with us. As part of its assessment, the Compensation Committee considered the fact that Pay Governance did not provide any other services to us and consults with our management only as necessary to provide the services described above.

Peer Group

To assist the Compensation Committee in making decisions on total compensation for executives and company-wide equity grants, the Compensation Committee utilizes peer and industry group data and analyses. Each year, as necessary, the Compensation Committee reviews with its independent compensation consultant the list of peer companies as points of comparison to ensure that comparisons are meaningful.

With management’s input, and focus on the following considerations, Pay Governance provided recommendations on the composition of our peer group for fiscal 2022.

General Description

Application Software or Systems Software companies which operate in similar or related businesses and with which Progress competes for business or talent.

Criteria Considered

Publicly traded on a major U.S. exchange and based in U.S.
   
Revenues-0.5x to 2.5x of Progress
   
Market Cap-0.2x to 5.0x of Progress
   
Qualitative Factors:
   
   Proxy advisor-defined peers
     
  Recent financial performance
     
  Growth and profitability (including dividend payors) profiles

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For fiscal 2022, the Compensation Committee removed four peer companies utilized in 2021 and added two new peer companies as shown in the table below. The four companies removed (HubSpot Inc., MongoDB, Inc., Synchronoss Technologies, Inc. and Talend S.A) either no longer meet our criteria for inclusion (e.g., market caps above/below the ranges specified above) or were acquired during 2021.

Peer Group List
Aspen Technology, Inc.      Cornerstone OnDemand, Inc.      QAD Inc.
Avid Technology, Inc.   Everbridge, Inc.   Rapid7, Inc.
Appian Corporation   Manhattan Associates, Inc.   SailPoint Technologies Holdings, Inc.
Blackbaud, Inc.   MicroStrategy, Incorporated   SPS Commerce, Inc.
Bottomline Technologies (de), Inc.   OneSpan Inc.   Upland Software, Inc.*
CommVault Systems, Inc.   Pegasystems, Inc.   Xperi Holding Corporation*

* Added for 2022.

Pay Governance then prepared a compensation analysis based on survey data and data gathered from publicly available information for our peer group companies. Pay Governance separately analyzed and advised the Compensation Committee regarding the pay practices of companies engaged in a total growth strategy like ours.

As of November 30, 2022 ($Ms)

Survey Data

The executive compensation analysis prepared by Pay Governance included data from Radford’s 2020 Global Technology Survey for companies with revenues similar to ours. The Compensation Committee used this data to compare the current compensation of our named and other executive officers to the peer group and to determine the relative market value for each position, based on direct, quantitative comparisons of pay levels. The survey data was used when there was a lack of public peer data for an executive’s position and to obtain a general market understanding of current compensation practices.

Competitive Positioning

Fiscal 2022 target total direct compensation for our named executive officers was set by the Compensation Committee based predominantly on competitive pay practices, as reflected in the peer group and survey data. The Compensation Committee reviews market data at the 25th, 50th and 75th percentile and, for 2022, sought to target total direct compensation for the named executive officers as a group at the 50th percentile of our peer group in setting our executive compensation programs. Additional adjustments were considered based on individual tenure, experience, performance, criticality of role, succession planning, internal pay equity and historical pay levels, as well as the level of an executive officer’s unvested equity awards and incentives.

Components of Executive Compensation

Compensation for our named executive officers currently consists of three primary components that are designed to reward performance in a simple and straightforward manner: base salary, annual cash bonus and long-term equity awards. The objectives and key attributes of these components, as well as how each element accomplishes the goals and objectives of our overall program are summarized below.


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  Compensation Element      
  CEO Other NEOs Objective Key Attributes Key Features
Base Salary        
To secure and retain services of key executive talent by providing a fixed level of cash compensation Aligns with scope and complexity of role and prevailing market conditions; salary levels are generally at market median Adjustments may be made to reflect market conditions for a position, changes in responsibilities, individual performance or internal pay equity
Annual Cash Bonus      
To encourage and reward annual corporate performance that enhances short and long-term stockholder value

100% financial/formulaic

Fiscal 2022 metrics utilized are:

●  Total non-GAAP revenue (40%)

●  Total non-GAAP operating income (40%)

●  Total adjusted free cash flow (20%)

Cash bonuses are based on percentage of base salary, with actual awards based exclusively on attainment of objective corporate financial goals. For General Managers, a small portion of the total bonus opportunity is also tied to business unit performance goals.(1)
PSUs under the
Long-Term Incentive Plan
     
To align interests of management with those of our shareholders with the goal of creating long-term growth and value

Three-year performance period with cliff-vesting 50% of annual equity award

Performance metrics utilized are:

●  75% operating income (subject to 35% annual operating margin threshold)

●  25% relative TSR in comparison to the S&P Software and Services Select Industry Index

Restricted Stock Units      
To retain executive talent

Time-based over three years with vests every six months to support retention

30% of annual equity award

Stock Options      
To align interests of management with those of our shareholders with the goal of creating long-term growth and value Time-based over four years with a 7-year expiration and vests every six months.
20% of annual equity award Exercise price equal to fair market value on date of grant

(1) Loren Jarrett is the only named executive officer who served as a General Manager in fiscal 2022, therefore a portion of her overall bonus target is tied to the performance of her business unit during fiscal 2022. Her overall annual cash bonus is 60% of her base salary, with 50% tied to corporate performance and 10% tied to business unit metrics.

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2022 Executive Compensation Decisions

Program Design

Consistent with its pay-for-performance philosophy, the Compensation Committee emphasized alignment with our long-term business goals in designing our executive compensation programs for fiscal 2022. Our executive compensation programs for fiscal 2022 were designed to reflect our continued commitment to the goals of our total growth strategy:

Be the trusted provider of the best products to develop, deploy and manage high-impact business applications.
   
Focus on customer and partner retention to drive recurring revenue and increased profitability.
   
Execute our total growth strategy driven by targeting accretive M&A.
   
Execute our capital allocation strategy.

Pay Mix

In setting the mix among the different elements of executive compensation, we do not target specific allocations, but generally weight target compensation more heavily toward performance-based compensation, both cash and equity. The percentage of performance-based compensation for our executive officers and other employees increases with job responsibility, reflecting our view of internal pay equity and the ability of a given employee to contribute to our results. We also generally align our compensation mix with the practices of our peer group when possible and to the extent consistent with our compensation strategy and business plan.

As shown in the charts below, the total direct compensation mix for Mr. Gupta and our other named executive officers in fiscal 2022 was closely aligned with our peer group.

Progress - CEO   Peers - CEO
   
91% Performance-based Compensation   85% Performance-based Compensation
Progress - CFO   Peers - CFO
   
85% Performance-based Compensation   80% Performance-based Compensation
Progress - Other NEOs   Peers - Other NEOs
 
76% Performance-based Compensation   76% Performance-based Compensation

  “Other NEOs” reflects average of NEO salaries, excluding CFO

These allocations reflect our belief that a significant portion of our named executive officers’ compensation should be performance-based and therefore “at risk” based on Company performance, as well as subject to service requirements. Since our cash incentive opportunities and equity incentive awards have both upside opportunities and downside risks and our actual performance can deviate from the target goals, the amount of compensation earned will differ from the target allocations.

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Individual Considerations

Below is a summary of the fiscal compensation decisions and, where applicable, changes for each named executive officer from fiscal 2021.

       
     

Yogesh Gupta

President and Chief Executive Officer

       

2022 Target (in $ millions)

Total Target Annual Compensation:
$6,650,000

 

●  Target Annual Cash Compensation: $1,150,000

●  Target Annual Equity Compensation: $5,500,000

The Committee evaluated Mr. Gupta’s fiscal 2021 total target annual compensation against our compensation peer group to determine if changes should be made. Based on this evaluation, we determined that the value of Mr. Gupta’s target annual equity compensation should be increased to $5,500,000 for fiscal 2022, with 50% of the award in the form of LTIP PSUs, 30% in time-based RSUs and 20% in the form of stock options.

 

Alignment of CEO Realizable Pay Value and Performance

The Compensation Committee reviews realizable pay value analyses for the executive officers to inform design and award levels for long-term incentive awards. We believe our overall executive compensation program has been effective at driving the achievement of our target financial and strategic results, appropriately aligning executive pay and corporate performance and enabling us to attract and retain top executives within our industry.

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When results do not meet our expectations, our named executive officers receive compensation that is below our target levels and may be below market in comparison to our peer group. The table below shows the target and realizable pay for our CEO, Mr. Gupta, for fiscal years 2020 through 2022. The realizable pay values shown below are as of our 2022 fiscal year-end, November 30, 2022. Realizable pay calculations show the potential value of pay as of a specific date; however, the actual pay realized will vary due to performance, vesting provisions and changes in stock price.

        Total Target
Compensation
($)(1)
       Total Realizable
Compensation
($)(2)
       Realizable Pay as
a Percentage of
Target Pay %
2020   5,000,000   5,861,785   117%
2021   5,650,000   8,983,460   159%
2022   6,650,000   8,180,276   123%
Average 2020-2022   5,766,667   7,675,174   133%

(1) Total Target Compensation is defined as the sum of (a) annual base salary, (b) target bonus, (c) the value of stock options awarded, equal to the number of options granted multiplied by the Black-Scholes value of such options on the grant date, (d) the value of RSUs awarded, equal to the number of RSUs granted multiplied by the closing price of our stock on the grant date and (e) the value of PSUs awarded under our LTIP, equal to the number of PSUs granted assuming 100% performance multiplied by the closing price of our stock on the grant date.
(2) Total Realizable Compensation is defined as the sum of (a) annual base salary, (b) actual corporate bonus plan award paid, (c) the “in-the-money” value of stock options as of November 30, 2022 (the last trading day of our fiscal year 2022), (d) the value of RSUs awarded, equal to the number of RSUs granted multiplied by the closing price of our stock on November 30, 2022, which was $53.32 and (e) the value of PSUs awarded, determined by measuring the performance thus far in the performance period and determining the resulting level of assumed payout as of the most recent fiscal year end. With respect to the 2020 LTIP PSUs, the amounts in this column reflect that based on our relative TSR during the three-year performance period, we performed at a final payout of 127.5% performance for the TSR metric and 191% level of performance for the cumulative total operating income metric and, as a result, 159% of the awarded PSUs were earned. With respect to each of the 2021 and 2022 LTIP PSUs, we have assumed achievement of both the total shareholder return and the operating income metrics based on Company performance as of November 30, 2022, and determined the resulting level of payout. As a result of our financial performance in fiscal years 2020, 2021 and 2022, Mr. Gupta earned 94%, 150%, and 112% of his annual bonus, respectively.

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Anthony Folger

Chief Financial Officer

       

2022 Target (in $ millions)

 

Total Target Annual Compensation:
$2,684,750

 

●  Target Annual Cash Compensation: $684,750

●  Target Annual Equity Compensation: $2,000,000

The Compensation Committee and CEO evaluated Mr. Folger’s fiscal 2021 total target annual cash compensation against our compensation peer group, Mr. Folger’s individual contributions and overall Company performance. The CEO recommended and the Committee approved an increase to Mr. Folger’s base salary to $415,000 and an increase to his target annual equity compensation to $2,000,000 for fiscal 2022.

For fiscal 2022, Mr. Folger’s target bonus was tied to performance under the Corporate Bonus Plan.


       
   

John Ainsworth

Executive Vice President and General Manager, Application and Data Platform

       

2022 Target (in $ millions)

Total Target Annual Compensation:
$1,585,000

 

●  Target Annual Cash Compensation: $585,000

●  Target Annual Equity Compensation: $1,000,000

The Compensation Committee and CEO evaluated Mr. Ainsworth’s fiscal 2021 total target annual compensation against our compensation peer group and his individual, business unit and overall Company performance. Based on this evaluation, the CEO recommended, and the Committee approved an increase to Mr. Ainsworth’s base salary to $390,000 and an increase to his target annual equity compensation to $1,000,000 for fiscal 2022.

For fiscal 2022, Mr. Ainsworth’s target bonus was tied to performance under the Corporate Bonus Plan.


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Loren Jarrett

Executive Vice President and General Manager, Digital Experience

       

2022 Target (in $ millions)

 

Total Target Annual Compensation:
$1,624,000

 

●  Target Annual Cash Compensation: $624,000

●  Target Annual Equity Compensation: $1,000,000

The Compensation Committee and the CEO evaluated Ms. Jarrett’s fiscal 2021 total target annual cash compensation against our compensation peer group, her individual, business unit and overall Company performance. Based on this evaluation, The CEO recommended and the Committee approved an increase to Ms. Jarrett’s base salary to $390,000 and an increase to her target annual equity compensation to $1,000,000 for fiscal 2022.

As the only named executive officer who served as a General Manager in fiscal 2022, Ms. Jarrett’s target bonus was composed of two parts: five-sixths of this target was tied to performance under the Corporate Bonus Plan and one-sixth of this target was tied to financial objectives with respect to the products for which she served as General Manager.


       
     

Jeremy Segal

Executive Vice President Corporate Development

       

2022 Target (in $ millions)

Total Target Annual Compensation:
$1,525,000

 

●  Target Annual Cash Compensation: $525,000

●  Target Annual Equity Compensation: $1,000,000

The Compensation Committee and CEO evaluated Mr. Segal’s fiscal 2021 total target annual compensation against our compensation peer group and his individual, business unit and overall Company performance. Based on this evaluation, the CEO recommended, and the Committee approved an increase to Mr. Segal’s base salary to $350,000 and an increase to his target annual equity compensation to $1,000,000 for fiscal 2022.

For fiscal 2022, Mr. Segal’s target bonus was tied to performance under the Corporate Bonus Plan.

 


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Cash Compensation

Cash Incentive Compensation

Annual Cash Bonus

It is our philosophy to base a significant portion of each executive officer’s total compensation opportunity on performance incentives. Our annual bonus plan is intended to motivate eligible participants toward overall business results, to tie their goals and interests to those of the Company and its shareholders and to enable the Company to attract and retain highly qualified executives. Our bonus plan is administered by our Compensation Committee.

The Compensation Committee set the target annual cash incentive opportunity for 2022 (expressed as a percentage of base salary earned during the year) for each named executive officer in January 2022. In setting the target levels, the Compensation Committee considered each named executive officer’s 2022 target total cash opportunity against the peer group data provided by our independent compensation consultant, internal pay equity and the roles and responsibilities of the named executive officers. The Compensation Committee believes that the target annual cash bonus opportunity should make up a larger portion of an executive officer’s total target cash compensation as the executive’s level of responsibility increases.

The Compensation Committee set each named executive officer’s cash bonus target at the same percentage as their respective target opportunity in 2021. In Ms. Jarrett’s case, as the only named executive officer who served as a General Manager in fiscal 2022, five-sixths of her respective target bonus was tied to performance under the fiscal 2022 Corporate Bonus Plan and one-sixth of her respective target was tied to performance under the fiscal to financial objectives with respect to the products for which she is responsible.

2022 Plan Design

In January 2022, the Compensation Committee approved the fiscal 2022 Corporate Bonus Plan. For fiscal 2022, the Compensation Committee adopted three plan metrics for the Corporate Bonus Plan applicable to our named executive officers, all of which would be utilized to determine funding and payout under the cash bonus plan. These plan metrics were the same metrics utilized by the Compensation Committee in fiscal 2021.

Performance metric       Weighting       Rationale
Non-GAAP corporate revenue   40%   reflect the priority of customer retention and recurring revenue
Non-GAAP operating income   40%   reflect the priority for efficient scalable operations
Adjusted free cash flow metric   20%   reflect the importance of cash flow on our Total Growth Strategy execution.

Each metric was measured separately and was not impacted by performance with respect to the other metrics. The performance measures selected for our cash bonus plan were designed to support our goals of expanding our non-GAAP operating income, while at the same time preserving our strong cash flow, which would result in increased stockholder returns.

For 2022, the Compensation Committee set the thresholds for purposes of earning any award under the Corporate Bonus Plan at approximately 97% of the total revenue target, approximately 92% of the operating income target and approximately 97% of the adjusted free cash flow target under our fiscal 2022 annual budget. These thresholds are unchanged from 2021.

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Amounts Earned under the 2022 Corporate Bonus Plan

As a result of our performance during fiscal 2022, we achieved an overall payout percentage of 112% under the fiscal 2022 Corporate Bonus Plan. For Mr. Gupta and the other executive officers, the actual bonuses earned were based 100% on the financial metrics described above and no portion of the annual bonuses were based on subjective measures.

The following table shows the bonuses earned by our named executive officers under the fiscal 2022 Corporate Bonus Plan.

NEO   Target Annual Bonus
($)
      Amount Earned
($)
Yogesh Gupta   575,000   644,000
Anthony Folger   269,750   302,120
John Ainsworth   195,000   218,400
Loren Jarrett(1)   195,000   218,400
Jeremy Segal   175,000   196,000

(1) Reflects the portion of Ms. Jarrett’s target bonus (five-sixths) that is tied to the Corporate Bonus Plan. The remaining portion (one-sixth) of Ms. Jarrett’s target bonus is tied to financial objectives within the products for which she is the General Manager. For fiscal 2022, Ms. Jarrett earned 112% of the portion of her fiscal 2022 target bonus that was tied to the Corporate Bonus Plan and 99.2% of the portion of her bonus that was tied to the financial objectives within the products for which she is the General Manager.

Equity Compensation

We use equity compensation to attract, retain, motivate and reward our named executive officers and other employees and to align our executives’ interests with those of our shareholders. Equity-based incentive awards are intended to be the longer-term components of our overall executive compensation program and are designed to encourage performance by our executive officers over several years. The Compensation Committee’s decisions regarding the amount and type of equity incentive compensation, the allocation of equity and relative weighting of these awards within total executive compensation have been based on advice provided by our independent compensation consultant and the Compensation Committee’s understanding and individual experiences with market practices of similarly situated companies. We issue annual and new hire equity awards based on guidelines for awards commensurate with position levels and that reflect grant practices within our peer group and the broader software industry generally.

The following is a summary of our fiscal 2022 equity program.

Program       Fiscal 2022 Equity Program
Form of Equity   Time-based Restricted Stock Units equal to 30% of annual grant value
    Non-Qualified Stock Options equal to 20% of annual grant value
    Performance-Based Stock Units equal to 50% of annual grant value
Performance Periods   PSUs have three-year performance period
Metrics   LTIP PSUs tied 75% to cumulative operating income (subject to 35% annual operating margin threshold) and 25% to relative TSR
Vesting  

Time-based RSUs vest in six equal installments over three years
Stock options vest in eight equal installments over four years
LTIP: 3-year cliff vest

●  With respect to TSR metric, participants can earn between 0% to 200% of target amount of LTIP PSUs, with threshold vesting at the 35th percentile achievement, target at 55th percentile and maximum vesting at the 90th percentile

●  With respect to operating income metric, participants can earn between 0% and 200% of the target amount of LTIP PSUs, once operating income criteria is met, subject to a 35% annual operating margin threshold

Frequency of Grant   Annual

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Target Value and Award Determination

The Compensation Committee reviews the mix of equity awards granted to our named executive officers on an annual basis. Consistent with the Compensation Committee’s philosophy that a significant portion of the equity mix to named executive officers should be tied to our long-term performance, the Compensation Committee determined that there should be no changes to the equity mix utilized for fiscal 2022. Accordingly, the equity mix for fiscal 2022 was 50% LTIP PSUs, 30% RSUs and 20% stock options.

For the named and other executive officers, to determine the size of the individual annual equity awards, the Compensation Committee, utilizing data provided by Pay Governance, compared the long-term equity incentive compensation levels of our executives with similar positions within our peer group and survey data to determine the long-term equity incentive compensation amount for each executive. The Compensation Committee reviews market data at the 25th, 50th and 75th percentile. In finalizing the amounts of the annual equity awards, the Compensation Committee considers this market data, the CEO’s recommendations, each executive’s performance over a multi-year period and the Committee’s assessment of the value the individual delivers to the organization, the burn rate of the executive grants and the degree to which those amounts would be aligned with our goals of motivating and retaining key employees.

RSUs

RSUs typically vest in six equal installments over a three-year period. In a volatile stock market, RSUs continue to provide value when other forms of equity such as stock options may not, which the Compensation Committee believes is useful in retaining talented executives in unpredictable economic times.

The RSUs awarded as part of the fiscal 2022 equity program were issued on January 20, 2022. The Compensation Committee awarded these RSUs as a dollar amount, which were then converted to RSUs based on our closing stock price on the date of grant.

Stock Options

Stock option awards provide individuals with the right to purchase shares of our common stock at a fixed exercise price, typically for a period of seven years, subject to continuous employment with our company. Stock option grants are intended to correlate executive compensation to our long-term success as measured by our stock price. Stock options are tied to our future success because options granted have an exercise price equal to the closing market value at the date of grant and will only provide value to the extent that the price of our stock increases above the exercise price. As a result, the Compensation Committee views stock options as a form of performance equity, but with a longer-term focus than PSUs, which are tied to three-year performance metrics.

Stock options vest in eight equal installments over a four-year period. We believe that meaningful vesting periods encourage recipients to remain with our company over the long term and, because the value of the awards is based on our stock price, stock options encourage recipients to focus on achievement of longer-term goals, such as strategic growth, business innovation and stockholder return.

The stock options awarded as part of the fiscal 2022 equity program were issued on January 20, 2022. The Compensation Committee awarded these stock options as a dollar amount, which were then converted to stock options based on the Black-Scholes value of our stock options on the date of grant.

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Compensation Discussion and Analysis

LTIP PSUs

We currently have in place a long-term equity incentive compensation plan consisting of PSUs that are earned based on Company performance over a three-year measurement period. PSUs under our long-term equity incentive compensation plan are subject to three-year performance criteria aligned with our business plan and are earned only to the extent the performance criteria are achieved. These PSUs are awarded to the named executive officers and other executive officers and represent 50% of the total annual equity compensation granted to these individuals.

For fiscal 2022, the Compensation Committee, in consultation with Pay Governance and management, reviewed the terms of the fiscal 2021 LTIP to ensure that the plan was aligned with the objectives of the Compensation Committee and with market practices. The Compensation Committee concluded that the fiscal 2021 LTIP met the objectives of the Compensation Committee because the terms of the LTIP tied the vesting of the PSUs to the long-term objectives of achieving both profitable growth and enhanced stockholder value. Pay Governance advised the Compensation Committee that the terms of the fiscal 2021 LTIP were consistent with market practices. Based on this review, the Compensation Committee determined that the metrics and terms of the fiscal 2022 LTIP should remain identical to the fiscal 2021.

With respect to the relative TSR metric, the Compensation Committee left unchanged the payout scale utilized in fiscal 2021 to reflect current trends and stockholder-friendly practices (e.g., above-median performance required to achieve target payout). Participants can earn between 0% and 200% (the payout cap under the LTIP) of the target number of PSUs attributable to the relative TSR metric. The cumulative three-year TSR measure compares the TSR of our common stock against the TSR of companies included in the S&P Software and Services Select Industry Index during the three-year period. Our relative TSR performance must be at the 55th percentile of the index group for 100% of the target award to be earned. Additionally, regardless of our relative position with respect to the S&P Software and Services Select Industry Index, the award with respect to the TSR metric will be capped at 100% if our absolute TSR over the measurement period is negative.

With respect to the operating income metric, participants can earn between 0% and 200% of the target number of PSUs attributable to the operating income metric. In designing the operating income metric to include both operating margin dollar and percentage goals, the Compensation Committee sought to ensure discipline and reinforce, consistent with our stated strategy, that profitable growth and margin expansion/maintenance are key to long-term value creation. The cumulative three-year operating income measure is based on the sum of the operating income amounts for 2022, 2023 and 2024 contained in our 2022 strategic plan.

We must achieve 100% of the operating income target for a given performance period for payout with respect to this metric to occur. Furthermore, with respect to the operating income metric, the 35% annual operating margin threshold “performance gatekeeper” applies at all levels of performance and requires that annual operating margin to be at or above 35% for each of 2022, 2023 and 2024 or no payout can occur with respect to this metric, regardless of cumulative operating income performance.

The below table sets forth the payout criteria for the 2022 LTIP:

        % of Target Earned(1)
Performance Metric       Weight Factor       0%       50%       100%       150%       200%
Relative TSR Performance (% Rank)   25%   <35%   35%   55%   75%   90%
Operating Income (3-year Cumulative)(2)   75%   <$720   N/A   $720   $762   $802

(1) Award interpolated for performance within stated percentiles
(2) $ amounts in millions and using budgeted exchange rates. In addition, if operating margin in any of the three annual periods of the performance period is less than 35%, the operating income metric earned will be zero.

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Compensation Discussion and Analysis

The three-year performance period with respect to the LTIP awarded in 2020 (the “2020 LTIP PSUs”) completed on November 30, 2022. Based on the price of our common stock for the 30-day trading period ending November 30, 2022, our TSR compared to the S&P Software & Services Index for the same period placed us in the 66th percentile, meaning that the payout percentage with respect to the TSR metric was 127.5%. Based on our actual total three-year operating income for fiscal 2020, 2021 and 2022, the payout percentage with respect to the operating income metric was 191%. Blending the two metrics together, each weighted at 50%, resulted in a blended 159% payout percentage.

The following table shows the portion of the 2020 LTIP PSUs earned by our named executive officers based on Company performance.

Named Executive Officer       Target LTIP Value ($)       Target PSUs (#)(1)       PSUs Earned
Yogesh Gupta   1,925,000   40,819   65,003
Anthony Folger   800,000   25,405   40,456
John Ainsworth   350,000   7,422   11,819
Loren Jarrett   350,000   7,422   11,819
Jeremy Segal   500,000   12,841   20,448

(1) Target PSUs for the 2020 LTIP were determined by dividing the Target LTIP Value listed above by the closing price on the date of grant, which was $47.16 for Gupta, Jarrett and Ainsworth and $31.49 on March 30, 2020, for Folger and $38.94 on June 29, 2020, for Segal.

For the fiscal 2022 award under the LTIP, the three-year performance period commenced on December 1, 2021, and will end on November 30, 2024.

Other Compensation Elements

Compensation
Element
Objective Key Features
Other Compensation To provide benefits that promote employee health and welfare, which assists in attracting and retaining our executive officers Indirect compensation element consisting of programs such as medical, dental and vision insurance, a 401(k) plan with up to a 3% matching contribution, an employee stock purchase plan program and other plans and programs generally made available to employees
Severance and
Change in Control
Benefits
To serve our retention and motivational objectives helping our named executive officers maintain continued focus and dedication to their responsibilities and objectivity to maximize stockholder value, including in the event of a transaction that could result in a change in control of our company; particularly important in a time of increased consolidation in our industry and increased competition for executive talent Provides protection in the event of an involuntary termination of employment under specified circumstances, including following a change in control of our company as described below under “Executive Compensation-Severance and Change in Control Agreements” and “Estimate of Severance and Change in Control Benefits.”

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Compensation Discussion and Analysis

Other Executive Compensation Matters

Timing of Equity Grants

We do not time grants either to take advantage of a depressed stock price or in anticipation of an increase in stock price and have limited the amount of discretion that can be exercised in connection with the timing of awards. We generally make awards only on pre-determined dates to ensure that awards cannot be timed to take advantage of material non-public information.

Equity awards may be made only by the Compensation Committee. The Compensation Committee makes awards only at Compensation Committee meetings and awards are not granted during regular quarterly trading blackout periods.

Stock Ownership Guidelines

In January 2018, our Board of Directors adopted revised stock ownership guidelines for our senior executive officers, including our named executive officers. These guidelines provide for the Chief Executive Officer to hold shares of our common stock having an aggregate value equal to at least three times their base salary. For other senior executive officers, the stock ownership requirement is at least one times their base salary. Executive officers have five years to attain the applicable ownership threshold. As of the date of this Proxy Statement, all the named executive officers met the applicable ownership threshold except Mr. Segal, who joined our company in May 2020 and is still within the allowable window for compliance.

Compensation Recovery Policy

Our current clawback policy provides that in the event of a material restatement of financial statements triggered by executive-level misconduct, we may require that the bonuses and other incentive compensation paid to that executive be forfeited. The amount of incentive compensation subject to recovery would be the amount in excess of what the executive officer would have earned in accordance with the restatement, as determined by the Compensation Committee.

Given the SEC’s recent approval of new clawback requirements, our Board of Directors will review the standards and oversee updates to the Company’s clawback policy to ensure compliance with the final rules.

Hedging and Pledging Policy

Our directors and executive officers are prohibited from engaging in short sales, transactions in derivative securities such as put or call options, hedging transactions or other inherently speculative transactions with respect to our stock. In addition, no director or executive officer may pledge or margin, or make any offer to pledge or margin, any of our stock, including without limitation, borrowing against such stock, at any time. Stock options granted under our stock option plans are not deemed to be derivative securities covered by this policy. Employees, other than our executive officers, are generally permitted to engage in transactions designed to hedge or offset market risk.

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Compensation Discussion and Analysis

Tax and Accounting Considerations and Compensation Recovery Policies

Section 409A of the Internal Revenue Code

Section 409A of the Internal Revenue Code imposes additional significant taxes if an executive officer, director or service provider receives “deferred compensation” that does not satisfy the requirements of Section 409A. Our severance and change in control agreements described below, including the Employee Retention and Motivation Agreements we entered with our named executive officers, contain provisions that are intended to either avoid the application of Section 409A or, to the extent doing so is not possible, comply with the applicable Section 409A requirements. The Compensation Committee has the sole discretion to change the severance guidelines applicable to executive officers to the extent necessary to avoid the application of Section 409A or comply with applicable Section 409A requirements.

Accounting for Stock-Based Compensation

Stock-based compensation expense reflects the fair value of stock-based awards, measured at the grant date and recognized over the relevant service period. We estimate the fair value of each stock-based award on the measurement date using either the current market price of the stock, the Black-Scholes option valuation model or the Monte Carlo Simulation valuation model.

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Compensation Committee Report

This report is submitted by the Compensation Committee of our Board of Directors. The Compensation Committee has reviewed the “Compensation Discussion and Analysis” included in this Proxy Statement and discussed it with management. Based on such review and discussions, the Compensation Committee has recommended to our Board of Directors that the “Compensation Discussion and Analysis” be included in this Proxy Statement and in our Proxy Statement for the 2023 Annual Meeting of Shareholders.

No portion of this Compensation Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), through any general statement incorporating by reference in its entirety the Annual Report or Proxy Statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.

Respectfully submitted by the Compensation Committee,

David A. Krall, Chair
Angela T. Tucci
Vivian Vitale

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Analysis of Risk Associated with Our Compensation Plans

In setting compensation, the Compensation Committee considers the risks to our shareholders and to the achievement of our goals that may be inherent in the compensation plans and programs for all employees, including our executives. When evaluating our overall executive compensation program, the Compensation Committee considers whether the program is based on the appropriate philosophy, benchmarked against the appropriate peer group and balanced between long and short-term performance targets and company and individual performance. Although a significant portion of our executives’ compensation is performance-based and “at-risk,” we believe our compensation plans and programs are appropriately structured so as not to encourage our employees to take excessive or unreasonable risks.

We considered the following elements of our compensation plans and policies when evaluating whether such plans and policies are structured to encourage our employees to take unreasonable risks:

A detailed planning process with executive or Compensation Committee oversight exists for all compensation programs.
The proportion of an employee’s performance-based pay increases as the responsibility and potential impact of the employee’s position increases, which structure is in line with market practices.
Compensation consists of both fixed and variable components. The fixed portion (i.e., base salary) and variable portion (i.e., performance-based bonus and equity awards) provide a mix of compensation intended to produce corporate performance without encouraging excessive risk.
We set performance goals that we believe are strategically focused and consistent with building long-term stockholder value.
We use consistent corporate performance metrics from year-to-year rather than changing the metric to take advantage of changing market conditions.
Our short-term incentive plans are capped as to the maximum potential payout, which we believe mitigates excessive risk taking by limiting bonus payments even if we dramatically exceed the performance targets.
We modify the short-term and long-term incentive plans to reflect acquisitions consistent with our internal acquisition model, five-year strategic plan and publicly announced expectations.
The time-based vesting for RSUs and stock options ensures that our executives’ interests align with those of our shareholders for the long-term performance of our company.
Assuming achievement of at least a minimum level of performance, payouts under our performance-based plans result in some compensation at levels below full target achievement, rather than an “all-or-nothing” approach.
Our long-term performance-based equity awards are based on multi-year criteria that align with our shareholders’ interests that we grow our company in a highly profitable and disciplined manner.
In accordance with our written stock option grant policy, all equity grants must occur at a meeting of the Compensation Committee and management has no authority to issue equity.
The Compensation Committee retains and does not delegate any of its power to determine matters of executive compensation.
We maintain a system of controls and procedures designed to ensure that amounts are earned and paid in accordance with our plans and programs.
We do not allow our executives and directors to hedge their exposure to ownership of, or interest in, our stock. We also do not allow them to engage in speculative transactions with respect to our stock.

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Summary of Executive Compensation

The following table sets forth certain information with respect to compensation for the fiscal years ended November 30, 2022, 2021 and 2020 earned by:

Mr. Gupta;
Mr. Folger; and
Ms. Jarrett, Mr. Ainsworth and Mr. Segal, our three other named executive officers.

Summary Compensation Table

Summary Compensation Table – Fiscal Years 2022, 2021 and 2020

Name and
Principal Position
      Year      Salary
($)
     Stock
Awards
($)(1)
    
Option
Awards(2)
     Non-Equity
Incentive Plan
Compensation
($)(3)
     All Other
Compensation
($)(4)
     Total
($)
 
Yogesh Gupta,
Chief Executive Officer

  2022   575,000   4,542,957   1,100,007   644,000   38,249   6,900,213  
  2021   575,000   3,657,400   900,007   862,500   24,122   6,019,029  
  2020   575,000   3,305,184   770,010   540,500   15,183   5,205,877  
Anthony Folger,
Chief Financial Officer(5)

  2022   414,423   1,652,016   400,004   302,120   23,055   2,791,618  
  2021   400,000   1,381,718   340,002   390,000   18,149   2,529,869  
  2020   316,923   1,314,556   320,002   203,667   9,722   2,164,870  
John Ainsworth
EVP and General Manager,
Application and Data Platform(6)
  2022   389,231   826,054   200,007   218,400   15,195   1,648,887  
  2021   370,000   650,220   160,007   277,500   14,586   1,472,313  
  2020   365,192   600,957   140,010   173,900   20,830   1,300,889  
               
Loren Jarrett,
EVP and General Manager,
Digital Experience
  2022   389,231   826,054   200,007   218,400   56,492   1,690,184  
  2021   367,115   650,220   160,007   277,500   53,290   1,508,132  
  2020   353,077   600,957   140,010   166,850   40,940   1,301,834  
Jeremy Segal
EVP, Corporate Development(7)
  2022   349,423   826,054   200,007   196,000   15,822   1,587,306  
                             
                             

(1) These amounts do not reflect the actual economic value realized by the named executive officer. In accordance with FASB ASC Topic 718, we estimate the fair value of each stock-based award on the measurement date, using either the current market price of the stock or the Monte Carlo Simulation valuation model, assuming the probable outcome of related performance conditions at target levels. See the description of our 2022 Annual Equity Program described in “Compensation Discussion and Analysis” in this Proxy Statement and Note 13 of the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended November 30, 2022. The value at grant date of the LTIP PSUs included in the amounts shown in this column, assuming the highest level of performance conditions achieved (payout at 200% of target) are $5,500,032, $4,501,065 and $4,300,282, for Mr. Gupta for fiscal 2022, 2021 and 2020 respectively; $2,000,003, $1,700,480 and $2,676,417 for Mr. Folger for fiscal 2022, 2021 and 2020, respectively; $1,000,046, $800,216 and $781,908, for Ms. Jarrett and Mr. Ainsworth for fiscal 2022, 2021 and 2020, respectively; and, $1,000,046 for Mr. Segal for fiscal 2022.
(2) Represents the grant date fair value of options on the date of grant. The grant date fair value of our options is equal to the number of shares subject to the option multiplied by the fair value of our options on the date of grant determined using the Black-Scholes option valuation model. The methodology and assumptions used to calculate the Black-Scholes value of our options are described in Note 13 of the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended November 30, 2022.

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(3) The amounts listed reflect the amounts earned under our Corporate Bonus Plan and individual business unit performance plan for Loren Jarrett as explained on page 62 in footnote (1) under the amounts earned in the Corporate Bonus Plan table as described in “Compensation Discussion and Analysis” in this Proxy Statement. For all individuals, bonus payments were accrued and earned in the year indicated and paid in the succeeding fiscal year.
(4) Amounts listed in this column for 2022 and prior years include:
                       
  Name,       Company
Contributions
(401(k))
($)
      Insurance
Premiums
($)
      Sales Leader
Plan
($)
      Taxable/
Fringe
Benefit
Expenses
($)
      Dividend
Equivalents
($)
  Mr. Gupta                  
  2022   9,150   720           28,379
  2021   12,161   720       141   11,100
  2020   12,442   720           2,021
  Mr. Folger                    
  2022   9,150   633           13,272
  2021   12,182   576         5,391
  2020   8,308   576           838
  Mr. Ainsworth                    
  2022   9,150   612       318   5,115
  2021   11,940   533       106   2,007
  2020   12,442   533       7,488   367
  Ms. Jarrett                    
  2022   9,150   612   41,120   495   5,115
  2021   11,940   511   38,479   356   2,007
  2020   12,442   511   27,620       367
  Mr. Segal                    
  2022   9,150   540           6,132
(5) Mr. Folger became our Chief Financial Officer in January 2020.
(6) Mr. Ainsworth was not a named executive officer in fiscal 2021.
(7) Mr. Segal was not a named executive officer in fiscal 2021 or fiscal 2020.

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Summary of Executive Compensation

Grants of Plan-Based Awards

Grants of Plan-Based Awards Table – 2022

      Estimated Future Pay-outs
Under Non-Equity Incentive
Plan Awards
  Estimated Future Pay-outs
Under Equity Incentive
Plan Awards
  All Other
Stock
Awards:
Number of
Shares of
Stock
or Units
  All Other
Option
Awards:
Number
Securities
Underlying
Options
  Exercise
of or
Base
Price of
Option
Awards
  Grant
Date Fair
Value of
Stock and
Option
Awards
Name    Grant
Date(1)
    Threshold
($)(2)
    Target
($)(2)
    Maximum
($)(2)
    Threshold
(#)(3)
    Target
(#)(3)
    Maximum
(#)(3)
    (#)(4)    (#)(5)    ($/Sh)    ($)(6)
Yogesh Gupta    143,750  575,000  862,500             
   1/20/2022        7,727  61,812  123,624        2,750,016
   1/20/2022              37,087      1,650,001
   1/20/2022                102,517  44.49  1,100,007
Anthony Folger    67,437  269,750  404,625             
   1/20/2022        2,810  22,477  44,954        1,000,002
   1/20/2022              13,487      600,037
   1/20/2022                37,279  44.49  400,004
John Ainsworth    48,750  195,000  292,500               
   1/20/2022        1,405  11,239  22,478        500,023
   1/20/2022              6,744      300,041
   1/20/2022