false0001410384 0001410384 2020-06-09 2020-06-09


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): June 9, 2020
Q2 HOLDINGS, INC.
(Exact Name of Registrant as Specified in Charter) 

Delaware
 
001-36350
 
20-2706637
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
                
13785 Research Blvd, Suite 150
Austin, Texas 78750
(Address of Principal Executive Offices, and Zip Code)

(512) 275-0072
Registrant's Telephone Number, Including Area Code

Not Applicable
(Former Name or Former Address, if Changed Since Last Report) 
Securities registered pursuant to Section 12(b) of the Act:
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): 
☐
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.0001 par value
QTWO
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐





Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e)    
On June 9, 2020, the Compensation Committee (the "Committee") of the Board of Directors of Q2 Holdings, Inc. (the "Company") approved an Executive Incentive Compensation Plan (the "Bonus Plan") for the Company's executive officers to be effective for fiscal 2020 and beyond. All executive officers who are not on any other sales or commission-based cash bonus plan are eligible to participate in the Bonus Plan. Participants in the Bonus Plan will be eligible to earn periodic bonuses through achievement of performance targets to be established by the Committee each fiscal year, with the degree of performance achievement determining the bonus amount earned relative to the participant's target bonus amount. Each participant in the Bonus Plan is assigned a target bonus amount, either as a percentage of base salary or as a specified dollar amount. Participants in the Bonus Plan generally must be employed on the date the bonuses are actually paid in order to receive payment. The Company expects to adopt bonus plans under the Bonus Plan for each fiscal year consistent with the terms of the Bonus Plan as described above.
 
A copy of the Bonus Plan is furnished as Exhibit 10.1 hereto and is incorporated herein by reference. The foregoing description of the Bonus Plan does not purport to be complete and is qualified in its entirety by reference to such exhibit.

On June 9, 2020, pursuant to the Bonus Plan, the Committee also approved the 2020 Bonus Plan (the "2020 Bonus Plan") for the Company's named executive officers to be effective for the fiscal year ending December 31, 2020.

The 2020 base salaries and target bonus payments as a percentage of the base salary for each of the Company's named executive officers are set forth in the following table:
Named Executive Officer
 
2020 Base Salary(1)
 
Target Bonus as % of Base Salary
Matthew P. Flake
   President and Chief Executive Officer
 
$
520,000

 
57%
Jennifer N. Harris
   Chief Financial Officer
 
368,400

 
55%
Adam D. Blue
   Executive Vice President and Chief Technology Officer
 
300,000

 
55%
William M. Furrer
   Chief Strategy and Marketing Officer
 
290,000

 
55%
        
(1) Base salary amounts reflect no change from 2019.

The 2020 Bonus Plan provides for the payment of cash bonuses based upon achievement of established performance measures and payout formulas determined by the Committee. To the extent earned, bonuses under the 2020 Bonus Plan will be paid in a single annual payout following completion of the 2020 fiscal year.

The 2020 Bonus Plan provides for the bonus amounts to be determined based on the following metrics:

Weighting of Performance Measure as % of Potential Bonus Payment
Non-GAAP Revenue
 
Adjusted EBITDA
50%
 
50%

The non-GAAP revenue performance measure ("revenue performance measure") consists of GAAP revenue, adjusted to exclude the impact to deferred revenue from purchase accounting. The adjusted EBITDA performance measure ("EBITDA performance measure") consists of adjusted EBITDA, determined by the Company by adjusting GAAP net loss for such items as interest, taxes, depreciation and amortization, stock-based compensation, acquisition-related costs, amortization of technology and intangibles, unoccupied lease charges and the impact to deferred revenue from purchase accounting. The 2020 Bonus Plan provides that the revenue and EBITDA performance measures are to be measured against non-GAAP revenue and adjusted EBITDA targets based on the Company's 2020 internal operating plan.





Potential payouts under the 2020 Bonus Plan with respect to the revenue and EBITDA performance measures are based on performance within a range of each performance measure's target. The targeted range of attainment opportunities for each performance measure are set forth in the following table:
Achievement Level
 
Percentage of Revenue Performance Measure Attained
 
Percentage of EBITDA Performance Measure Attained
 
Corresponding Weighted Potential Payout Percentage Per Performance Measure
Minimum
 
90%
 
80%
 
50%
Target
 
100% to 105%
 
95% to 105%
 
100%
Maximum
 
110%
 
110%
 
120%

Item 5.07                   Submission of Matters to a Vote of Security Holders.
 
The Company held its 2020 annual meeting of stockholders on June 9, 2020. Holders of an aggregate of 48,963,069 shares of the Company’s common stock at the close of business on April 22, 2020 were entitled to vote at the meeting, of which 46,797,900, or 95.6%, of the eligible shares were represented in person or by proxy. The matters voted upon at the meeting and the results of those votes are as follows:
 
Proposal 1: Election of Directors to hold office for one-year terms or until their respective successors are elected and qualified, or their earlier death, resignation or removal.
 
 
 
For
 
Withheld
 
Broker Non-votes
R. Lynn Atchison
 
44,593,284

 
375,104

 
1,829,512

Charles T. Doyle
 
40,153,951

 
4,814,437

 
1,829,512

Carl James Schaper
 
39,926,910

 
5,041,478

 
1,829,512

 
Based on the votes set forth above, all of the director nominees were duly elected.

Proposal 2: Ratification of the appointment of Ernst & Young LLP as independent registered public accounting firm for the fiscal year ending December 31, 2020.
 
For
 
Against
 
Abstaining
46,537,758

 
109,726

 
150,416


Based on the votes set forth above, the selection of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2020 was ratified.

Proposal 3: Advisory vote to approve the compensation of the Company's named executive officers.
 
For
 
Against
 
Abstaining
 
Broker Non-votes
39,616,509

 
5,196,093

 
155,786

 
1,829,512


Based on the votes set forth above, the stockholders approved on an advisory basis the compensation of the Company's named executive officers.





Item 9.01.     Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
 
Description
 
Executive Incentive Compensation Plan

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
Q2 HOLDINGS, INC.
 
 
June 15, 2020
/s/ Jennifer N. Harris
Jennifer N. Harris
Chief Financial Officer


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