Proxy Statement (definitive) (def 14a)

Date : 05/08/2019 @ 9:14PM
Source : Edgar (US Regulatory)
Stock : Box Class A (BOX)
Quote : 17.39  0.0 (0.00%) @ 11:59AM

Proxy Statement (definitive) (def 14a)

Table of Contents

 

 

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

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 Pursuant to §240.14a-11(c) or §240.14a-2

BOX, INC.

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

     

  (2)  

Aggregate number of securities to which transaction applies:

 

     

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11(Set forth the amount on which the filing fee is calculated and state how it was determined):

 

     

  (4)  

Proposed maximum aggregate value of transaction:

 

     

  (5)  

Total fee paid:

 

     

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

     

  (2)  

Form, Schedule or Registration Statement No.:

 

     

  (3)  

Filing Party:

 

     

  (4)  

Date Filed:

 

     

 

 

 


Table of Contents

Dear Fellow Stockholders,

At Box, our mission is to power how the world works together. And in FY19, we continued to help our customers transform their businesses with Cloud Content Management. Today, 70 percent of the Fortune 500, including AstraZeneca, Coca-Cola, General Electric, and Nationwide use Box to accelerate business processes, power workplace collaboration, and protect their most valuable information.

When we look around the world, business is fundamentally transforming in the digital age. Markets are constantly in flux, as digital disruptors – Netflix, Uber, Airbnb, Amazon – challenge every industry from media to travel and transportation to retail. Hypercompetitive markets demand getting products to market faster and customers expect frictionless, responsive experiences. The speed of business forces companies to collaborate across a growing network of partners, suppliers and contractors. Employees want to use the best technology to stay productive and work with anyone, from anywhere. And simultaneously, companies are dealing with an onslaught of security threats and compliance requirements.

Content is at the center of all of these challenges. In banking, clients expect to execute all of their once in-person and paper-based transactions digitally, while interacting with more informed financial advisors with better insights. In life sciences, the speed at which you can collaborate and leverage data to discover, test and deliver new medicines to market drives increased profits and saves lives. Consumer brands must rapidly respond to market trends by collaborating on products and marketing through a globally-integrated supply chain. And across all industries, employees must be enabled to work with virtual teams, get to the data they need to make better decisions, faster, and work from anywhere.

Ultimately, how we manage, secure, leverage and collaborate on content – product specs, campaign assets, financial records, drug research – both inside and outside of our organization is at the heart of digital transformation. Companies that get the most value from their data bring products to market faster, generate better insights, deliver better customer experiences, and are more competitive.

Yet today’s technologies are holding enterprises back.

Legacy Enterprise Content Management (ECM) systems like OpenText, Documentum, and SharePoint were designed to manage content using legacy, on-premises systems. They make it nearly impossible to share content across the extended enterprise, and are far too complex, rigid, and costly for today’s digital environment. Conversely, Enterprise File Sync and Share (EFSS) tools like OneDrive, Dropbox or Google Drive, were designed for simple cloud storage and sharing, and don’t support the advanced workflow, security and compliance needs of large or regulated enterprises.

Because no single technology can solve an enterprise’s broad set of content needs, organizations have been forced to use multiple, disconnected solutions to manage information. The resulting data siloes drive up untold extra costs, slow down or outright break important workflows, and dramatically increase the risk of security failures with a business’s critical, proprietary data.

This status quo is untenable in today’s digital age.

To drive digital transformation, enterprises must not only enable employees to work in the cloud, but ultimately digitize end-to-end business processes across their supply chain, product development and delivery, customer service, and operations.

Enterprises need Cloud Content Management from Box: a single content platform that accelerates business processes, improves employee productivity, and protects a company’s most valuable data.


Table of Contents

And over this past year, our leadership in Cloud Content Management has only accelerated. We landed wins and expansions with leading enterprises globally – including Canon U.S.A., DARPA, Intuit, JLL, Mitsubishi Motors Corporation, Société Générale U.S., Shiseido Company, and World Fuel Services – who are leveraging Box to power their critical business processes across their organizations.

In FY19, we grew revenue 20% year-over-year to more than $600 million, delivered another year of positive free cash flow, and ended the year with our first quarter of non-GAAP profitability in Q4. At Box, we constantly set high expectations for ourselves. Despite a challenging Q4 in FY19, we are seeing momentum in the solution selling strategy that we started to implement earlier in the year, and we are encouraged by overall customer momentum and demand for cloud content management. Our customers are using Box for more strategic and complex use cases as demonstrated by our large deal growth and add-on product attach rates. In FY19, the number of deals we closed over $100,000 was up 28%, compared to a year ago. And we grew the value of our add-on product portfolio by more than 60%, now at roughly 14% of our revenue run rate in Q4 versus roughly 10% a year ago.

But we’re just getting started.

When we look at the impact we’ve had thus far compared to the potential going forward, we know that our most exciting days are ahead. As more businesses recognize they must modernize their technology to support content-centric processes in the cloud, we’re aiming to disrupt the $40B+ market for content management and collaboration. And entering FY20, we have the most exciting product roadmap in our company’s history focused entirely on enabling our customers to power their digital business processes and to retire legacy content systems.

This fiscal year, we will be launching and enhancing critical Box products to enable workflow automation with an all new Box Relay, smarter content management with new Metadata solutions and Box Platform, and advanced security, classification, and threat detection with Box Shield. Combined, these capabilities will dramatically enable how customers leverage Box to transform their businesses while also driving net-new revenue streams and, conversely, driving further stickiness for Box within new and existing enterprises.

To bring these new products and capabilities to market, we are focused on refining our solution selling motion to ensure customers see the full power of our platform, while moving them through a journey of leveraging Box for full digital transformation. With these investments, and building on the progress we saw in FY19, we remain more confident than ever in the Cloud Content Management opportunity.

Finally, it’s important to recognize the amazing talent and work of nearly 2,000 amazing Boxers globally that have gotten us to where we are and will be fundamental to our future success. We take pride in the incredibly talented and dedicated employees who work at Box and the impact they make for our customers and communities through Box.org. This year, we’re proud that Box debuted in Fortune’s list of 100 Best Companies to Work For and was ranked in the Top 50 Companies by LinkedIn, and we will continue to focus on building a diverse and inclusive culture where Boxers can do their best work.

Thanks,

Aaron Levie


Table of Contents

BOX, INC.

900 JEFFERSON AVE.

REDWOOD CITY, CALIFORNIA 94063

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 1:30 p.m. Pacific Time on Wednesday, June 19, 2019

Dear Stockholders of Box, Inc.:

We cordially invite you to attend the 2019 annual meeting of stockholders (the “Annual Meeting”) of Box, Inc., a Delaware corporation, which will be held on Wednesday, June  19, 2019 at 1:30 p.m. Pacific Time . This year’s Annual Meeting will be a completely virtual meeting of stockholders. You can attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/BOX2019 where you will be able to listen to the meeting live, submit questions and vote online.

We are holding the Annual Meeting for the following purposes, as more fully described in the accompanying proxy statement:

1. To elect three Class II directors to serve until the 2022 annual meeting of stockholders and until their successors are duly elected and qualified;

2. To approve, on an advisory basis, the compensation of our named executive officers;

3. To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending January 31, 2020; and

4. To transact such other business that may properly come before the Annual Meeting or any adjournments or postponements thereof.

Our board of directors has fixed the close of business on April 26, 2019 as the record date for the Annual Meeting (the “Record Date”). Only stockholders of record on April 26, 2019 are entitled to notice of and to vote at the Annual Meeting. Further information regarding voting rights and the matters to be voted upon is presented in the accompanying proxy statement.

On or about May 8, 2019, we expect to mail to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy statement and annual report. The Notice provides instructions on how to vote via the Internet or by telephone and includes instructions on how to receive a paper copy of our proxy materials by mail. The accompanying proxy statement and our annual report can be accessed directly at the following Internet address: https://materials.proxyvote.com/10316T. You will be asked to enter the sixteen-digit control number located on your Notice or proxy card.

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to submit your vote via the Internet, telephone or mail as soon as possible to ensure your shares are represented. For additional instructions on voting by telephone or the Internet, please refer to your proxy card. Returning the proxy does not deprive you of your right to attend the Annual Meeting and to vote your shares at the Annual Meeting.

We appreciate your continued support of Box.

 

By order of the Board of Directors,
LOGO
Aaron Levie
Chairman and Chief Executive Officer
Redwood City, California
May 8, 2019


Table of Contents

TABLE OF CONTENTS

 

     Page  

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING

     1  

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

     7  

Nominees for Director

     7  

Continuing Directors

     8  

Director Independence

     10  

Board Leadership Structure

     10  

Lead Independent Director

     11  

Board Meetings and Committees

     11  

Compensation Committee Interlocks and Insider Participation

     13  

Considerations in Evaluating Director Nominees

     13  

Stockholder Recommendations for Nominations to the Board of Directors

     13  

Communications with the Board of Directors

     14  

Corporate Governance Guidelines and Code of Business Conduct and Ethics

     14  

Risk Management

     14  

Director Compensation

     15  

PROPOSAL NO. 1 ELECTION OF DIRECTORS

     17  

Nominees

     17  

Vote Required

     17  

PROPOSAL NO. 2 ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

     18  

Vote Required

     18  

PROPOSAL NO. 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     19  

Fees Paid to the Independent Registered Public Accounting Firm

     19  

Auditor Independence

     19  

Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

     20  

Vote Required

     20  

REPORT OF THE AUDIT COMMITTEE

     21  

EXECUTIVE OFFICERS

     22  

EXECUTIVE COMPENSATION

     23  

Compensation Discussion and Analysis

     23  

Executive Summary

     23  

Processes and Procedures for Compensation Decisions

     25  

Peer Group Compensation Data

     26  

Executive Compensation Program Elements

     27  

Other Compensation Policies

     31  

Tax and Accounting Considerations

     32  

Summary Compensation Table for Fiscal Year 2019

     33  

Grants of Plan-Based Awards in Fiscal Year 2019

     34  

Outstanding Equity Awards at 2019 Fiscal Year-End

     35  

Option Exercises and Stock Vested in Fiscal Year 2019

     36  

Pension Benefits & Nonqualified Deferred Compensation

     36  

Potential Payments upon Termination or Change of Control

     36  

CEO Pay Ratio

     40  

 

-i-


Table of Contents


Table of Contents

BOX, INC.

PROXY STATEMENT

FOR 2019 ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 1:30 p.m. Pacific Time on Wednesday, June 19, 2019

This proxy statement and the enclosed form of proxy are being provided to you in connection with the solicitation of proxies by our board of directors (the “Board of Directors”) for use at the 2019 annual meeting of stockholders of Box, Inc., a Delaware corporation, and any postponements, adjournments or continuations thereof (the “Annual Meeting”). The Annual Meeting will be held virtually on Wednesday, June 19, 2019 at 1:30 p.m. Pacific Time. You can attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/BOX2019, where you will be able to listen to the meeting live, submit questions and vote online. The Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access this proxy statement and our annual report is first being mailed on or about May 8, 2019 to all stockholders entitled to vote at the Annual Meeting.

The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this proxy statement. You should read this entire proxy statement carefully. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this proxy statement and references to our website address in this proxy statement are inactive textual references only.

Why are we holding a virtual Annual Meeting?

Similar to previous years, this year we have implemented a virtual format for our Annual Meeting, which will be conducted via live audio webcast and online stockholder tools. We believe a virtual format helps to facilitate stockholder attendance and participation by enabling stockholders to participate fully, and equally, from any location around the world, at no cost (other than any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies). A virtual Annual Meeting makes it possible for more stockholders (regardless of size, resources or physical location) to have direct access to information more quickly, while saving the company and our stockholders time and money, especially as physical attendance at meetings has dwindled. We also believe that the online tools we have selected will increase stockholder communication. For example, the virtual format allows stockholders to communicate with us in advance of, and during, the Annual Meeting so they can ask questions of our board of directors or management. During the Annual Meeting, we may answer questions submitted during the Annual Meeting and address those asked in advance, to the extent relevant to the business of the Annual Meeting, as time permits.

What matters am I voting on?

You will be voting on:

 

   

the election of three Class II directors to serve until our 2022 annual meeting of stockholders and until their successors are duly elected and qualified;

 

   

a proposal to approve, on an advisory basis, the compensation of our named executive officers;

 

   

a proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending January 31, 2020; and

 

   

any other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

How does the Board of Directors recommend I vote on these proposals?

Our Board of Directors recommends a vote:

 

   

“FOR” the election of Kim Hammonds, Dan Levin and Josh Stein as Class II directors;

 

-1-


Table of Contents
   

“FOR” the approval, on an advisory basis, of the compensation of our named executive officers; and

 

   

“FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending January 31, 2020.

Who is entitled to vote?

Holders of our Class A common stock as of the close of business on April 26, 2019 (the “Record Date”) may vote at the Annual Meeting. As of the Record Date, there were 146,493,501 shares of our Class A common stock outstanding and entitled to vote. Each stockholder will be entitled to one vote on each proposal for each share of our Class A common stock held by them on the Record Date. Stockholders are not permitted to cumulate votes with respect to the election of directors. Our Class A common stock is referred to in this proxy statement as our common stock.

Registered Stockholders . If shares of our common stock are registered directly in your name with our transfer agent, you are considered the stockholder of record with respect to those shares and the Notice was provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote live at the Annual Meeting. Throughout this proxy statement, we refer to these registered stockholders as “stockholders of record.”

Street Name Stockholders . If shares of our common stock are held on your behalf in a brokerage account or by a bank or other nominee, you are considered to be the beneficial owner of shares that are held in “street name,” and the Notice was forwarded to you by your broker, bank or other nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee as to how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting. However, since a beneficial owner is not the stockholder of record, you may not vote your shares of our common stock live at the Annual Meeting unless you follow your broker, bank or other nominee’s procedures for obtaining a legal proxy. If you request a printed copy of our proxy materials by mail, your broker, bank or other nominee will provide a voting instruction form for you to use. Throughout this proxy statement, we refer to stockholders who hold their shares through a broker, bank or other nominee as “street name stockholders.”

How many votes are needed for approval of each proposal?

 

   

Proposal No.  1 : The election of directors requires a plurality of the voting power of the shares of our common stock present virtually or by proxy at the Annual Meeting and entitled to vote thereon to be approved. “Plurality” means that the nominees who receive the largest number of votes cast “For” such nominees are elected as directors. As a result, any shares not voted “For” a particular nominee (whether as a result of stockholder abstention or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election. You may vote “For” or “Withhold” on each of the nominees for election as a director. Withheld votes and broker non-votes will have no effect on the outcome of this proposal.

 

   

Proposal No.  2 : The approval, on an advisory basis, of the compensation of our named executive officers, requires the affirmative vote of at least a majority of the voting power of our common stock present virtually or by proxy at the Annual Meeting and entitled to vote thereon to be approved. You may vote “For,” “Against,” or “Abstain” with respect to this proposal. Abstentions are considered votes present and entitled to vote on this proposal, and thus, will have the same effect as a vote “Against” this proposal. Broker non-votes will have no effect on the outcome of this proposal. However, because this proposal is an advisory vote, the result will not be binding on our Board of Directors or our company. Our Board of Directors and our Compensation Committee will consider the outcome of the vote when determining named executive officer compensation in the future.

 

   

Proposal No.  3 : The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending January 31, 2020, requires the affirmative

 

-2-


Table of Contents
 

vote of a majority of the voting power of the shares of our common stock present virtually or by proxy at the Annual Meeting and entitled to vote thereon to be approved. Abstentions are considered votes present and entitled to vote on this proposal, and thus, will have the same effect as a vote “Against” this proposal. Broker non-votes will have no effect on the outcome of this proposal.

What is a quorum?

A quorum is the minimum number of shares required to be present at the Annual Meeting to properly hold an annual meeting of stockholders and conduct business under our amended and restated bylaws and Delaware law. The presence, virtually or by proxy, of a majority of the voting power of all issued and outstanding shares of our common stock entitled to vote at the Annual Meeting will constitute a quorum at the Annual Meeting. Abstentions, withhold votes and broker non-votes are counted as shares present and entitled to vote for purposes of determining a quorum.

How do I vote?

If you are a stockholder of record, there are four ways to vote:

 

   

by Internet at www.proxyvote.com, 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on June 18, 2019 (have your Notice or proxy card in hand when you visit the website);

 

   

by toll-free telephone until 11:59 p.m. Eastern Time on June 18, 2019 at 1-800-690-6903 if you are a “registered” stockholder or 1-800-454-8683 if you are a “beneficial” stockholder (be sure to have your Notice or proxy card in hand when you call);

 

   

by completing and mailing your proxy card so it is received prior to the Annual Meeting (if you received printed proxy materials); or

 

   

by attending the Annual Meeting by visiting www.virtualshareholdermeeting.com/BOX2019, where stockholders may vote and submit questions during the meeting (have your Notice or proxy card in hand when you visit the website).

Even if you plan to attend the Annual Meeting, we recommend that you also vote by proxy so that your vote will be counted if you later decide not to attend the Annual Meeting.

If you are a street name stockholder, you will receive voting instructions from your broker, bank or other nominee. You must follow the voting instructions provided by your broker, bank or other nominee in order to direct your broker, bank or other nominee on how to vote your shares. Street name stockholders should generally be able to vote by returning a voting instruction form, or by telephone or on the Internet. However, the availability of telephone and Internet voting will depend on the voting process of your broker, bank or other nominee. As discussed above, if you are a street name stockholder, you may not vote your shares live at the Annual Meeting unless you obtain a legal proxy from your broker, bank or other nominee.

Can I change my vote?

Yes. If you are a stockholder of record, you can change your vote or revoke your proxy any time before the Annual Meeting by:

 

   

entering a new vote by Internet or by telephone;

 

   

completing and returning a later-dated proxy card;

 

   

notifying the Secretary of Box, Inc., in writing, at Box, Inc., 900 Jefferson Ave., Redwood City, California 94063; or

 

   

attending and voting at the Annual Meeting (although attendance at the Annual Meeting will not, by itself, revoke a proxy).

 

-3-


Table of Contents

If you are a street name stockholder, your broker, bank or other nominee can provide you with instructions on how to change your vote.

What do I need to do to attend the Annual Meeting?

You will be able to attend the Annual Meeting online, submit your questions during the meeting and vote your shares electronically at the meeting by visiting www.virtualshareholdermeeting.com/BOX2019. To participate in the Annual Meeting, you will need the control number included on your Notice or proxy card. The Annual Meeting webcast will begin promptly at 1:30 p.m. Pacific Time on June 19, 2019. We encourage you to access the meeting prior to the start time. Online check-in will begin at 1:15 p.m. Pacific Time, and you should allow ample time for the check-in procedures.

What is the effect of giving a proxy?

Proxies are solicited by and on behalf of our Board of Directors. Aaron Levie, Dylan Smith, and David Leeb have been designated as proxy holders by our Board of Directors. When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions are given, however, the shares will be voted in accordance with the recommendations of our Board of Directors as described above. If any matters not described in this proxy statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote the shares. If the Annual Meeting is adjourned, the proxy holders can vote the shares on the new Annual Meeting date as well, unless you have properly revoked your proxy instructions, as described above.

Why did I receive a Notice of Internet Availability of Proxy Materials instead of a full set of proxy materials?

In accordance with the rules of the Securities and Exchange Commission (“SEC”), we have elected to furnish our proxy materials, including this proxy statement and our annual report, primarily via the Internet. The Notice containing instructions on how to access our proxy materials is first being mailed on or about May 8, 2019 to all stockholders entitled to vote at the Annual Meeting. Stockholders may request to receive all future proxy materials in printed form by mail or electronically by e-mail by following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the environmental impact and cost of our annual meetings of stockholders.

How are proxies solicited for the Annual Meeting?

Our Board of Directors is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by us. We will reimburse brokers, banks or other nominees for reasonable expenses that they incur in sending our proxy materials to you if a broker, bank or other nominee holds shares of our common stock on your behalf. In addition, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Our directors and employees will not be paid any additional compensation for soliciting proxies.

How may my brokerage firm or other intermediary vote my shares if I fail to provide timely directions?

Brokerage firms and other intermediaries holding shares of our common stock in street name for their customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker will have discretion to vote your shares on our sole “routine” matter: the proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending January 31, 2020. Your broker will not have discretion to vote on any other proposals, which are “non-routine” matters, absent direction from you.

 

-4-


Table of Contents

Where can I find the voting results of the Annual Meeting?

We will announce preliminary voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K that we will file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Current Report on Form 8-K within four business days after the Annual Meeting, we will file a Current Report on Form 8-K to publish preliminary results and will provide the final results in an amendment to the Current Report on Form 8-K as soon as they become available.

I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?

We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we deliver a single copy of the Notice and, if applicable, our proxy materials to multiple stockholders who share the same address unless we have received contrary instructions from one or more of such stockholders. This procedure reduces our printing costs, mailing costs, and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, we will deliver promptly a separate copy of the Notice and, if applicable, our proxy materials to any stockholder at a shared address to which we delivered a single copy of any of these materials. To receive a separate copy, or, if a stockholder is receiving multiple copies, to request that we only send a single copy of the Notice and, if applicable, our proxy materials, such stockholder may contact us at the following address:

Box, Inc.

Attention: Investor Relations

900 Jefferson Ave.

Redwood City, California 94063

Tel: (877) 729-4269

Street name stockholders may contact their broker, bank or other nominee to request information about householding.

What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?

Stockholder Proposals

Stockholders may present proper proposals for inclusion in our proxy statement and for consideration at next year’s annual meeting of stockholders by submitting their proposals in writing to our Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for the 2020 annual meeting of stockholders, our Secretary must receive the written proposal at our principal executive offices not later than January 9, 2020. In addition, stockholder proposals must comply with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals should be addressed to:

Box, Inc.

Attention: Secretary

900 Jefferson Ave.

Redwood City, California 94063

Our amended and restated bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Our amended and restated bylaws provide that the only business that may be conducted at an annual meeting of stockholders is business that is (i) specified in our proxy materials with respect to such annual meeting, (ii) otherwise properly brought before such annual meeting by or at the direction of our Board of

 

-5-


Table of Contents

Directors, or (iii) properly brought before such meeting by a stockholder of record entitled to vote at such annual meeting who has delivered timely written notice to our Secretary, which notice must contain the information specified in our amended and restated bylaws. To be timely for our 2020 annual meeting of stockholders, our Secretary must receive the written notice at our principal executive offices:

 

   

not earlier than February 23, 2020; and

 

   

not later than the end of the day on March 24, 2020.

In the event that we hold the 2020 annual meeting of stockholders more than 30 days before or more than 60 days after the one-year anniversary of the Annual Meeting, notice of a stockholder proposal that is not intended to be included in our proxy statement must be received no earlier than the close of business on the 120th day before the 2020 annual meeting of stockholders and no later than the close of business on the later of the following two dates:

 

   

the 90th day prior to the 2020 annual meeting of stockholders; or

 

   

the 10th day following the day on which public announcement of the date of our 2020 annual meeting of stockholders is first made.

If a stockholder who has notified us of his, her or its intention to present a proposal at an annual meeting of stockholders does not appear to present his, her or its proposal at such annual meeting, we are not required to present the proposal for a vote at such annual meeting.

Nomination of Director Candidates

Holders of our common stock may propose director candidates for consideration by our Nominating and Corporate Governance Committee. Any such recommendations should include the nominee’s name and qualifications for membership on our Board of Directors and should be directed to our Secretary at the address set forth above. For additional information regarding stockholder recommendations for director candidates, see the section titled “Board of Directors and Corporate Governance—Stockholder Recommendations for Nominations to the Board of Directors.”

In addition, our amended and restated bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by our amended and restated bylaws. In addition, the stockholder must give timely notice to our Secretary in accordance with our amended and restated bylaws, which, in general, require that the notice be received by our Secretary within the time periods described above under the section titled “Stockholder Proposals” for stockholder proposals that are not intended to be included in a proxy statement.

Availability of Bylaws

A copy of our amended and restated bylaws is available on our website at http://www.box.com/investors. You may also contact our Secretary at the address set forth above for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

 

-6-


Table of Contents

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Our business affairs are managed under the direction of our Board of Directors, which is currently composed of nine members. Six of our directors are independent within the meaning of the listing standards of the New York Stock Exchange. Our Board of Directors is divided into three staggered classes of directors. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the same class whose term is then expiring.

The following table sets forth the names, ages as of March 31, 2019, and certain other information for each of the members of our Board of Directors with terms expiring at the Annual Meeting (who are also nominees for election as a director at the Annual Meeting) and for each of the continuing members of our Board of Directors:

 

    Class     Age    

Position

  Director
Since
    Current
Term
Expires
    Expiration
of Term
For Which
Nominated
 

Directors with Terms Expiring at the Annual Meeting/Nominees

           

Kim Hammonds (1)

    II       51     Director     2018       2019       2022  

Dan Levin

    II       55     Director     2010       2019       2022  

Josh Stein (2) (3)

    II       45     Director     2006       2019       2022  

Continuing Directors

           

Sue Barsamian (2) (3)

    III       59     Director     2018       2020       —    

Rory O’Driscoll (1)

    III       54     Director     2010       2020       —    

Dylan Smith

    III       33     Chief Financial Officer and Director     2005       2020       —    

Dana Evan (1) (2) (3)

    I       59     Director     2011       2021       —    

Peter Leav (4)

    I       48     Director     2019       2021       —    

Aaron Levie

    I       34     Chairman and Chief Executive Officer     2005       2021       —    

Non- Continuing Directors

           

Steven Krausz (1) (5)

    I       64     Director     2013       —         —    

 

(1)  

Member of our Audit Committee

(2)  

Member of our Compensation Committee

(3)  

Member of our Nominating and Corporate Governance Committee

(4)  

Mr. Leav will be appointed to our Board of Directors, effective immediately following the Annual Meeting.

(5)  

Mr. Krausz will resign from our Board of Directors, effective immediately following the Annual Meeting.

Nominees for Director

Kim Hammonds  has served as a member of our Board of Directors since October 2018. Ms. Hammonds served as the Group Chief Operating Officer at Deutsche Bank AG, a global financial services company, from January 2016 to May 2018 and as a member of the Deutsche Bank Management Board from August 2016 to May 2018. She joined Deutsche Bank as Chief Information Officer and Global Co-Head Technology and Operations in November 2013 from The Boeing Company, a global aerospace company. Ms. Hammonds joined Boeing in 2008 and served in a number of capacities, including most recently as Chief Information Officer/Vice President, Global Infrastructure, Global Business Systems from January 2011 to November 2013. Ms. Hammonds joined Boeing from Dell Inc., where she led IT systems development for manufacturing operations in the Americas, and directed global IT reliability and factory systems. Ms. Hammonds currently serves on the board of directors of Cloudera, Inc. a data management, machine learning and advance analytics platform provider, Tenable Holdings, Inc., a provider of cybersecurity solutions, Red Hat, Inc., a provider of open source solutions, Zoom Video Communications, Inc., an enterprise video communications company, and Cumulus Networks, Inc., an open source networking company.

 

-7-


Table of Contents

Ms. Hammonds holds a B.S. in Mechanical Engineering from University of Michigan and an MBA in Marketing from Western Michigan University.

Ms. Hammonds was selected to serve on our Board of Directors because of her enterprise IT and global go-to-market strategy experience.

Dan Levin served as our President and Chief Operating Officer from December 2013 until July 2017, and as our Chief Operating Officer from July 2010 until July 2017. Mr. Levin has served as a member of our Board of Directors since January 2010. From March 2009 to July 2010, Mr. Levin served as an advisor to various technology start-ups, including our company since September 2009. From July 2008 to March 2009, Mr. Levin served as the interim Chief Executive Officer of Picateers Inc., an online photo sales company. Previously, Mr. Levin served in various executive roles at Intuit Inc., a business and financial management solutions company, most recently as Vice President and General Manager, Healthcare. Mr. Levin holds a B.A. in the independent concentration of Applications of Computer Graphics to Statistical Data Analysis from Princeton University.

Mr. Levin was selected to serve on our Board of Directors because of his extensive experience with technology companies.

Josh Stein has served as a member of our Board of Directors since July 2006. Since December 2006, Mr. Stein has been a Managing Director of several funds affiliated with Draper Fisher Jurvetson, a venture capital firm he joined in May 2004. Mr. Stein currently serves on the boards of directors of several privately held companies. Mr. Stein holds a B.A. in Psychology from Dartmouth College and an M.B.A. from the Stanford Graduate School of Business.

Mr. Stein was selected to serve on our Board of Directors because of his knowledge of technology companies and his experience as a director of privately held technology companies.

Continuing Directors

Sue Barsamian has served on our Board of Directors since May 2018. Ms. Barsamian served as the Senior Vice President, Chief Sales and Marketing Officer for HPE Software of Hewlett Packard Enterprise from November 2016 to September 2017 and transitioned this business through its merger with Micro Focus in September 2017. From August 2015 to November 2016, she served as Senior Vice President and General Manager of Enterprise Security Products at Hewlett Packard Enterprise. From 2006 to 2015, she served in various roles at Hewlett Packard. From 2012 to 2017, Ms. Barsamian served on the Board of the National Action Council for Minorities in Engineering (NACME), and she served as Chairman of the Board of NACME from 2016 to 2017. From 2011 to 2017, Ms. Barsamian served as an advisory council member of the Kansas State University College of Engineering Advisory Board. Ms. Barsamian currently serves on the Board of Directors of Symantec Corporation, a cybersecurity software and services company. Ms. Barsamian holds a Bachelor of Science degree with honors in electrical engineering from Kansas State University. She completed her post-graduate studies at the Swiss Federal Institute of Technology in Zurich, Switzerland.

Ms. Barsamian was selected to serve on our Board of Directors because of her enterprise software sales and global go-to-market strategy experience.

Rory O’Driscoll has served as a member of our Board of Directors since April 2010. Mr. O’Driscoll has worked in venture capital since 1994 as a senior member of the Bank of America investment team, which became Scale Venture Partners in 2007. Since 2007, Mr. O’Driscoll has been a Managing Partner at Scale Venture Partners, a venture capital firm. Mr. O’Driscoll currently serves on the boards of directors of several privately held companies. Mr. O’Driscoll holds a B.Sc. from the London School of Economics.

 

-8-


Table of Contents

Mr. O’Driscoll was selected to serve on our Board of Directors because of his experience as a director of both publicly and privately held technology companies.

Dylan Smith co-founded our company and has served as our Chief Financial Officer and as a member of our Board of Directors since April 2005. Mr. Smith holds a B.A. in Economics from Duke University.

Mr. Smith was selected to serve on our Board of Directors because of the perspective and experience he brings as one of our founders.

Dana Evan has served as a member of our Board of Directors since December 2011. Since 2013, Ms. Evan has served as a Venture Partner at Icon Ventures, a venture capital firm, and since July 2007 has invested in and served on the boards of directors of companies in the internet, technology and media sectors. From May 1996 until July 2007, Ms. Evan served as Chief Financial Officer of VeriSign, Inc., a provider of intelligent infrastructure services for the internet and telecommunications networks. Ms. Evan currently serves on the board of directors of Farfetch Limited, a global technology platform for the luxury fashion industry, SVMK Inc. (Survey Monkey), an online survey development cloud-based software, Domo, Inc., a business intelligence tools and data visualization company, Proofpoint, Inc., a security-as-a-service provider, and a number of privately held companies, and previously served on the Board of Directors of Criteo S.A., a performance display advertising company, and Fusion-io, Inc., a flash memory technology company. Ms. Evan previously served on the Boards of Directors of Omniture, Inc., an online marketing and web analytics company, until it was acquired by Adobe Systems Incorporated in October 2009 and Everyday Health, Inc., a provider of digital health and wellness solutions, until it was acquired by Ziff Davis, LLC in December 2016. On April 4, 2019, it was announced that Ms. Evan was selected as Director of the Year by the National Association of Corporate Directors (NACD). Ms. Evan holds a B.S. in Commerce from Santa Clara University and is a certified public accountant (inactive).

Ms. Evan was selected to serve on our Board of Directors because of her experience in operations, strategy, accounting, financial management and investor relations at both publicly and privately held technology companies.

Steven Krausz has served as a member of our Board of Directors since August 2013 until his resignation effective immediately following the Annual Meeting. Since 1985, Mr. Krausz has served in various roles at U.S. Venture Partners, a venture capital firm, where he currently serves as a Managing Member. Mr. Krausz currently serves on the boards of directors of a number of privately held companies. Mr. Krausz holds a B.S. in Electrical Engineering from Stanford University and an M.B.A. from the Stanford Graduate School of Business.

Mr. Krausz was selected to serve on our Board of Directors because of his experience as a director of both publicly and privately held technology companies.

Peter Leav will serve as a member of our Board of Directors, effective following the conclusion of the Annual Meeting. Mr. Leav served as President, Chief Executive Officer, and Director of BMC Software, Inc., a management solutions software company, from December 2016 to April 2019. Prior to joining BMC, Mr. Leav served as President, Chief Executive Officer, and Director of Polycom, Inc., a video, voice, and content solution company, from December 2013 through September 2016. Prior to joining Polycom, Mr. Leav served as Executive Vice President and President, Industry and Field Operations of NCR Corporation, a global technology company, from June 2012 to November 2013, as Executive Vice President, Global Sales, Professional Services and Consumables of NCR from November 2011 to June 2012, and as Senior Vice President, Worldwide Sales of NCR from January 2009 to October 2011. Prior to joining NCR, he served as Corporate Vice President and General Manager of Motorola, Inc., a provider of mobility products and solutions across broadband and wireless networks, from November 2008 to January 2009, as Vice President and General Manager from December 2007 to November 2008, and as Vice President of Sales from December 2006 to December 2007. From November 2004 to December 2006, Mr. Leav was Director of Sales for Symbol Technologies, Inc., an information technology company. Prior to this position, Mr. Leav was regional sales manager at Cisco Systems, Inc., a

 

-9-


Table of Contents

manufacturer of communications and information technology networking products, from July 2000 to November 2004. Mr. Leav served on the board of directors of HD Supply, Inc., an industrial distributor company, from October 2014 to July 2017. Mr. Leav holds a bachelor’s degree from Lehigh University.

Mr. Leav was selected to serve on our Board of Directors because of his general management, technology, communications and global go-to-market strategy and operations experience.

Aaron Levie co-founded our company and has served as our Chairman since December 2013 and as our Chief Executive Officer and a member of our Board of Directors since April 2005. Mr. Levie attended the University of Southern California from 2003 to 2005.

Mr. Levie was selected to serve on our Board of Directors because of the perspective and experience he brings as one of our founders.

Director Independence

Our Class A common stock is listed on the New York Stock Exchange. Under the listing standards of the New York Stock Exchange, independent directors must comprise a majority of a listed company’s board of directors. In addition, the listing standards of the New York Stock Exchange require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees be independent. Under the listing standards of the New York Stock Exchange, a director will only qualify as an “independent director” if, in the opinion of that listed company’s board of directors, that director does not have a material relationship with the company (either directly or as a partner, shareholder or officer of an organization that has a relationship within the company). Audit committee members must also satisfy the additional independence criteria set forth in Rule 10A-3 under the Exchange Act, and the listing standards of the New York Stock Exchange. Compensation committee members must also satisfy the additional independence criteria set forth in Rule 10C-1 under the Exchange Act and the listing standards of the New York Stock Exchange.

Our Board of Directors has undertaken a review of the independence of each of our directors. Based on information provided by each director concerning his or her background, employment and affiliations, our Board of Directors has determined that none of Mses. Evan, Barsamian and Hammonds or Messrs. Krausz, Leav, O’Driscoll and Stein has a material relationship with the company (either directly or as a partner, shareholder or officer of an organization that has a relationship within the company) and that each of these directors is “independent” as that term is defined under the applicable rules and regulations of the SEC and the listing standards of the New York Stock Exchange. In making these determinations, our Board of Directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions involving them described in the section titled “Related Person Transactions.”

Board Leadership Structure

Aaron Levie currently serves as both the Chairman of our Board of Directors and as our Chief Executive Officer. Our independent directors bring experience, oversight and expertise from outside of our company, while Mr. Levie brings company-specific experience and expertise. As one of our founders, Mr. Levie is best positioned to identify strategic priorities, lead critical discussion and execute our business plans. We believe that the structure of our Board of Directors and its committees provides effective independent oversight of management while Mr. Levie’s combined role enables strong leadership, creates clear accountability and enhances our ability to communicate our message and strategy clearly and consistently to stockholders.

 

-10-


Table of Contents

Lead Independent Director

Our Corporate Governance Guidelines provide that if our Chief Executive Officer serves as Chairman of our Board of Directors or if the Chairman is not otherwise independent, our Board of Directors will appoint a Lead Independent Director. Because Mr. Levie is our Chairman and Chief Executive Officer, our Board of Directors has appointed Mr. O’Driscoll to serve as our Lead Independent Director. As Lead Independent Director, Mr. O’Driscoll presides over regularly scheduled executive sessions of our independent directors, serves as a liaison between our Chairman and our independent directors and performs such additional duties as our Board of Directors otherwise determines and delegates.

Board and Stockholder Meetings and Committees

During our fiscal year ended January 31, 2019, our Board of Directors held seven meetings (including regularly scheduled and special meetings), and each incumbent director attended at least 75% of the aggregate of (i) the total number of meetings of our Board of Directors held during the period for which he or she has been a director and (ii) the total number of meetings held by all committees of our Board of Directors on which he or she served during the periods that he or she served.

Although we do not have a formal policy regarding attendance by members of our Board of Directors at annual meetings of stockholders, we encourage, but do not require, our directors to attend. Five directors attended our 2018 annual meeting of stockholders.

Our Board of Directors has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The composition and responsibilities of each of the committees of our Board of Directors is described below. Members will serve on these committees until their resignation or until otherwise determined by our Board of Directors.

Audit Committee

Our Audit Committee consists of Mses. Evan and Hammonds and Mr. O’Driscoll, with Ms. Evan serving as the chair. Ms. Hammonds joined the Audit Committee in October 2018. Mr. Krausz will resign from our Board of Directors and the Audit Committee effective immediately following the Annual Meeting. Following his appointment to the Board of Directors after the conclusion of the Annual Meeting, Mr. Leav will join the Audit Committee. Each member of our Audit Committee meets the requirements for independence for audit committee members under the listing standards of the New York Stock Exchange and SEC rules and regulations. Each member of our Audit Committee also meets the financial literacy and sophistication requirements of the listing standards of the New York Stock Exchange. In addition, our Board of Directors has determined that Ms. Evan is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended and that simultaneous service by Ms. Evan on the audit committee of more than three public companies does not impair her ability to effectively serve on our Audit Committee. Our Audit Committee is, among other things, responsible for the following:

 

   

selecting and hiring our independent registered public accounting firm;

 

   

evaluating the performance and independence of our independent registered public accounting firm;

 

   

pre-approving the audit services and any non-audit services to be performed by our independent registered public accounting firm;

 

   

reviewing our financial statements and related disclosures and reviewing our critical accounting policies and practices;

 

   

reviewing the adequacy and effectiveness of our internal control policies and procedures and our disclosure controls and procedures;

 

   

overseeing procedures for the treatment of complaints on accounting, internal accounting controls, or audit matters;

 

-11-


Table of Contents
   

reviewing and discussing with management and the independent registered public accounting firm the results of our annual audit and the financial statements included in our publicly filed reports;

 

   

reviewing and approving any proposed related person transactions; and

 

   

preparing the Audit Committee report included in our annual proxy statement.

Our Audit Committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the New York Stock Exchange. A copy of the charter of our Audit Committee is available on our website at http://www.box.com/investors. During our fiscal year ended January 31, 2019, our Audit Committee held five meetings.

Compensation Committee

During our fiscal year ended January 31, 2019, our Compensation Committee consisted of Messrs. O’Driscoll, Stein and Ms. Evan, with Mr. Stein serving as the chair. In April 2018, Ms. Evan joined our Compensation Committee and in May 2019, subsequent to the end of fiscal year 2019, Ms. Barsamian joined our Compensation Committee, replacing Mr. O’Driscoll. Each member of our Compensation Committee meets the requirements for independence for compensation committee members under the listing standards of the New York Stock Exchange and SEC rules and regulations, including Rule 10C-1 under the Exchange Act. Each member of our Compensation Committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act. Our Compensation Committee is, among other things, responsible for the following:

 

   

reviewing and approving our Chief Executive Officer’s and other executive officers’ annual base salaries, incentive compensation plans, including the specific goals and amounts, equity compensation, employment agreements, severance arrangements and change in control agreements, and any other benefits, compensation or arrangements;

 

   

administering our equity compensation plans;

 

   

overseeing our overall compensation philosophy, compensation plans and benefits programs; and

 

   

preparing the Compensation Committee report included in our annual proxy statement.

Our Compensation Committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of the New York Stock Exchange. A copy of the charter of our Compensation Committee is available on our website at http://www.box.com/investors. During our fiscal year ended January 31, 2019, our Compensation Committee held five meetings.

Nominating and Corporate Governance Committee

During our fiscal year ended January 31, 2019, our Nominating and Corporate Governance Committee consisted of Mses. Evan and Barsamian and Mr. Stein, with Ms. Evan serving as the chair. In April 2018, Ms. Evan was appointed chair of the committee, and in June 2018, Ms. Barsamian joined our Nominating and Corporate Governance Committee. Each member of our Nominating and Corporate Governance Committee meets the requirements for independence under the listing standards of the New York Stock Exchange and SEC rules and regulations. Our Nominating and Corporate Governance Committee is, among other things, responsible for the following:

 

   

evaluating and making recommendations regarding the composition, organization and governance of our Board of Directors and its committees;

 

   

overseeing annual performance evaluations of the Board of Directors and its committees;

 

   

evaluating and making recommendations regarding the creation of additional committees or the change in mandate or dissolution of committees;

 

-12-


Table of Contents
   

reviewing and making recommendations with regard to our corporate governance guidelines; and

 

   

reviewing and approving conflicts of interest of our directors and corporate officers, other than related person transactions reviewed by our Audit Committee.

Our Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable listing standards of the New York Stock Exchange. A copy of the charter of our Nominating and Corporate Governance Committee is available on our website at http://www.box.com/investors. During our fiscal year ended January 31, 2019, our Nominating and Corporate Governance Committee held three meetings.

Compensation Committee Interlocks and Insider Participation

None of the members of our Compensation Committee is or has been an officer or employee of our company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our Board of Directors or Compensation Committee.

Considerations in Evaluating Director Nominees

Our Nominating and Corporate Governance Committee uses a variety of methods for identifying and evaluating director nominees. In its evaluation of director candidates, our Nominating and Corporate Governance Committee will consider the current size and composition of our Board of Directors and the needs of our Board of Directors and the respective committees of our Board of Directors. Some of the qualifications that our Nominating and Corporate Governance Committee considers include, without limitation, issues of character, integrity, judgment, diversity of experience, independence, area of expertise, corporate experience, length of service, potential conflicts of interest and other commitments. Nominees must also have the ability to offer advice and guidance to our Chief Executive Officer based on past experience in positions with a high degree of responsibility and be leaders in the companies or institutions with which they are affiliated. Director candidates must have sufficient time available in the judgment of our Nominating and Corporate Governance Committee to perform all Board of Directors and committee responsibilities. Members of our Board of Directors are expected to prepare for, attend, and participate in all Board of Directors and applicable committee meetings. Other than the foregoing, there are no stated minimum criteria for director nominees, although our Nominating and Corporate Governance Committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests.

Although our Board of Directors does not maintain a specific policy with respect to board diversity, our Board of Directors believes that our Board of Directors should be a diverse body, and our Nominating and Corporate Governance Committee considers a broad range of backgrounds and experiences. In making determinations regarding nominations of directors, our Nominating and Corporate Governance Committee may take into account the benefits of diverse viewpoints. Our Nominating and Corporate Governance Committee also considers these and other factors as it oversees the annual Board of Directors and committee evaluations. After completing its review and evaluation of director candidates, our Nominating and Corporate Governance Committee recommends to our full Board of Directors the director nominees for selection.

Stockholder Recommendations for Nominations to the Board of Directors

Our Nominating and Corporate Governance Committee will consider candidates for director recommended by stockholders holding at least one percent (1%) of the fully diluted capitalization of our company continuously for at least twelve (12) months prior to the date of the submission of the recommendation, so long as such recommendations comply with our amended and restated certificate of incorporation and amended and restated bylaws and applicable laws, rules and regulations, including those promulgated by the SEC. Our Nominating and

 

-13-


Table of Contents

Corporate Governance Committee will evaluate such recommendations in accordance with its charter, our amended and restated bylaws, our policies and procedures for director candidates, as well as the regular director nominee criteria described above. This process is designed to ensure that our Board of Directors includes members with diverse backgrounds, skills and experience, including appropriate financial and other expertise relevant to our business. Eligible stockholders wishing to recommend a candidate for nomination should contact our General Counsel or our Legal Department in writing. Such recommendations must include information about the candidate, a statement of support by the recommending stockholder, evidence of the recommending stockholder’s ownership of our common stock and a signed letter from the candidate confirming willingness to serve on our Board of Directors. Our Nominating and Corporate Governance Committee has discretion to decide which individuals to recommend for nomination as directors.

Under our amended and restated bylaws, stockholders may also nominate persons for our Board of Directors. Any nomination must comply with the requirements set forth in our amended and restated bylaws and should be sent in writing to our General Counsel or our Legal Department at Box, Inc., 900 Jefferson Ave., Redwood City, California 94063. To be timely for our 2020 annual meeting of stockholders, our General Counsel or Legal Department must receive the nomination no earlier than February 23, 2020 and no later than March 24, 2020.

Communications with the Board of Directors

Interested parties wishing to communicate with our Board of Directors or with an individual member or members of our Board of Directors may do so by writing to our Board of Directors or to the particular member or members of our Board of Directors, and mailing the correspondence to our General Counsel at Box, Inc., 900 Jefferson Ave., Redwood City, California 94063. If an interested party wishes to contact the independent members of our Board of Directors, the interested party should address such communication to the attention of the Lead Independent Director at the address above. Our General Counsel, in consultation with appropriate members of our Board of Directors as necessary, will review all incoming communications and, if appropriate, all such communications will be forwarded to the appropriate member or members of our Board of Directors, or if none is specified, to the Chairman of our Board of Directors.

Corporate Governance Guidelines and Code of Business Conduct and Ethics

Our Board of Directors has adopted Corporate Governance Guidelines that address items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, our Board of Directors has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer, and other executive and senior financial officers. The full text of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics is posted on the Corporate Governance portion of our website at http://www.box.com/investors. We will post amendments to our Code of Business Conduct and Ethics or waivers of our Code of Business Conduct and Ethics for directors and executive officers on the same website.

Risk Management

Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, cyber security, legal and compliance, and reputational. We have designed and implemented processes to manage risk in our operations. Management is responsible for the day-to-day management of risks the company faces, while our Board of Directors, as a whole and assisted by its committees, has responsibility for the oversight of risk management. In its risk oversight role, our Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are appropriate and functioning as designed.

 

-14-


Table of Contents

Our Board of Directors believes that open communication between management and our Board of Directors is essential for effective risk management and oversight. Our Board of Directors meets with our Chief Executive Officer and other members of our senior management team at quarterly meetings of our Board of Directors, where, among other topics, they discuss strategy and risks facing the company, as well at such other times as they deem appropriate.

While our Board of Directors is ultimately responsible for risk oversight, our board committees assist our Board of Directors in fulfilling its oversight responsibilities in certain areas of risk. Our Audit Committee assists our Board of Directors in fulfilling its oversight responsibilities with respect to risk management in the areas of internal control over financial reporting and disclosure controls and procedures, legal and regulatory compliance, and discusses with management and the independent auditor guidelines and policies with respect to risk assessment and risk management. Our Audit Committee also reviews our major financial risk exposures and the steps management has taken to monitor and control these exposures. Our Audit Committee also monitors certain key risks on a regular basis throughout the fiscal year, such as risk associated with internal control over financial reporting and liquidity risk. Our Nominating and Corporate Governance Committee assists our Board of Directors in fulfilling its oversight responsibilities with respect to the management of risk associated with board organization, membership and structure, and corporate governance. Our Compensation Committee assesses risks created by the incentives inherent in our compensation policies. Finally, our full Board of Directors reviews strategic and operational risk in the context of reports from the management team, receives reports on all significant committee activities at each regular meeting, and evaluates the risks inherent in significant transactions.

Director Compensation

Under our Outside Director Compensation Policy, members of our Board of Directors who are not employees of Box (“outside directors”) receive compensation in the form of equity and cash, as described below:

Cash Compensation

Each year, each outside director will be eligible to receive a cash retainer of $30,000 for serving on our Board of Directors. In addition, each year, outside directors will also be eligible to receive the following cash fees for service on the committees of our Board of Directors:

 

Committee

   Committee Member
Annual Retainer
     Committee Chair
Annual Retainer
 

Audit Committee

   $ 8,000      $ 20,000  

Compensation Committee

   $ 8,000      $ 12,000  

Nominating and Corporate Governance Committee

   $ 4,000      $ 8,000  

In addition, each year our Lead Independent Director will be eligible to receive a cash retainer of $12,000 for service as our Lead Independent Director.

Equity Compensation

Upon joining our Board of Directors, each newly-elected outside director will receive an equity award with a value of $450,000 (“Initial Award”). The Initial Award will be comprised of stock options and restricted stock units, each having a value of 50% of the aggregate Initial Award. The Initial Award will vest generally over a three-year period, subject to continued service through each vesting date.

On the date of each annual meeting of our stockholders, each outside director will receive an equity award with a value of $200,000 (“Annual Award”). The Annual Award will be comprised of stock options and restricted stock units, each having a value of 50% of the aggregate Annual Award. The Annual Award will fully

 

-15-


Table of Contents

vest upon the earlier of the 12-month anniversary of the grant date or the next annual meeting, in each case, subject to continued service through the vesting date. An outside director will not be eligible for an Annual Award unless the outside director has been a director for at least one full calendar year or since the previous year’s annual meeting.

Notwithstanding the vesting schedules described above, the vesting of each equity award will accelerate in full upon a change in control.

The number of restricted stock units subject to an Initial Award or Annual Award will be determined by dividing the specified value of the restricted stock units by the average closing price of a share of our Class A common stock for the 30-trading day period ending the trading day before the grant date. The number of stock options subject to an Initial Award or Annual Award will be determined by multiplying the number of shares of our Class A common stock determined in the preceding sentence by two.

Compensation for Fiscal Year 2019

The following table provides information regarding the total compensation that was earned by each of our non-employee directors in our fiscal year ended January 31, 2019.

 

Director (1)

   Fees Earned
or Paid in
Cash ($)
     Option
Awards($) (2)
     Stock
Awards($) (2)
     Total($)  

Sue Barsamian

     22,690        225,639        247,978        496,308  

Dana Evan (3)

     63,708        95,539        107,308        266,555  

Kim Hammonds

     10,946        174,308        189,634        374,887  

Steven Krausz (3)(4)

     38,000        95,539        107,308        240,847  

Dan Levin (5)

     —          —          —          —    

Rory O’Driscoll (3)

     58,000        95,539        107,308        260,847  

Gary Reiner (6)

     —          —          —          —    

Josh Stein (3)

     46,000        95,539        107,308        248,847  

 

(1)

Peter Leav will join our Board of Directors following the conclusion of the Annual Meeting, subsequent to the end of fiscal year 2019, and is therefore not included in the table above.

(2)

The amounts reported represent the aggregate grant-date fair value of the stock options and restricted stock units awarded to the director, calculated in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant-date fair value of the stock options and restricted stock units reported in this column are set forth in Note 11 to our audited consolidated financial statements included in our Annual Report on Form 10-K, as filed with the SEC on March 20, 2019.

(3)

As of January 31, 2019, each of Ms. Evan and Messrs. Krausz, O’Driscoll and Stein held an option to purchase 7,398 shares of our Class A common stock and 3,699 RSUs. 100% of the shares of our Class A common stock subject to these options and underlying the RSUs vest on June 19, 2019.

(4)

Mr. Krausz will resign from our Board of Directors effective immediately following the Annual Meeting.

(5)

Per Mr. Levin’s Transition Employment Letter dated July 11, 2017, Mr. Levin will not receive or accrue any compensation under the Company’s Outside Director Compensation Policy until the first annual meeting of stockholders at which he is reelected after his resignation as an employee.

(6)

Mr. Reiner resigned from our Board of Directors on October 15, 2018. He had also waived his cash and equity fees throughout his service on our Board of Directors.

Our directors who are also our employees receive no additional compensation for their service as directors. During our fiscal year ended January 31, 2019, Messrs. Levie and Smith were our employees. See the section titled “Executive Compensation” for additional information about the compensation paid to Messrs. Levie and Smith.

 

-16-


Table of Contents

PROPOSAL NO. 1

ELECTION OF DIRECTORS

Our Board of Directors is currently comprised of nine members. In accordance with our amended and restated certificate of incorporation, our Board of Directors is divided into three staggered classes of directors. At the Annual Meeting, three Class II directors will be elected for a three-year term to succeed the same class whose term is then expiring.

Each director’s term continues until the election and qualification of his or her successor, or such director’s earlier death, resignation, or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of our directors. This classification of our Board of Directors may have the effect of delaying or preventing changes in control of our company.

Nominees

Our Nominating and Corporate Governance Committee has recommended, and our Board of Directors has approved, Kim Hammonds, Dan Levin and Josh Stein, as nominees for election as Class II directors at the Annual Meeting. If elected, each of Ms. Hammonds and Messrs. Levin and Stein will serve as Class II directors until our 2022 annual meeting of stockholders and until their successors are duly elected and qualified. Each of the nominees is currently a director of our company. For information concerning the nominees, please see the section titled “Board of Directors and Corporate Governance.”

If you are a stockholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with respect to the voting of directors, your shares will be voted “For” the election of Ms. Hammonds and Messrs. Levin and Stein. We expect that each of Ms. Hammonds and Messrs. Levin and Stein will accept such nomination; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by our Board of Directors to fill such vacancy. If you are a street name stockholder and you do not give voting instructions to your broker, bank or other nominee, your broker, bank or other nominee will leave your shares unvoted on this matter.

Vote Required

The election of directors requires a plurality of the voting power of the shares of our common stock present virtually or by proxy and entitled to vote at the Annual Meeting to be approved. Broker non-votes will have no effect on this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”

EACH OF THE NOMINEES NAMED ABOVE.

 

-17-


Table of Contents

PROPOSAL NO. 2

ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), enables stockholders to approve, on an advisory or non-binding basis, the compensation of our named executive officers as disclosed pursuant to Section 14A of the Exchange Act. This proposal, commonly known as a “Say-on-Pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this proxy statement. The Say-on-Pay vote is advisory, and therefore is not binding on us, our Compensation Committee or our Board of Directors. The Say-on-Pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which our compensation committee will be able to consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our Board of Directors and our Compensation Committee value the opinions of our stockholders and to the extent there is any significant vote against the compensation of our named executive officers as disclosed in this proxy statement, we will endeavor to communicate with stockholders to better understand the concerns that influenced the vote and consider our stockholders’ concerns, and our compensation committee will evaluate whether any actions are necessary to address those concerns.

At our 2016 annual meeting of stockholders, our stockholders recommended that we hold a Say-on-Pay vote each year. Accordingly, we expect that the next Say-on-Pay vote after this year’s vote will take place at our 2020 annual meeting of stockholders.

We believe that the information provided in the section titled “Executive Compensation,” and in particular the information discussed in the section titled “Executive Compensation—Compensation Discussion and Analysis—Compensation Philosophy,” demonstrates that our executive compensation program was designed appropriately and is working to ensure management’s interests are aligned with our stockholders’ interests to support long-term value creation. Accordingly, we ask our stockholders to vote “For” the following resolution at the Annual Meeting:

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to the named executive officers, as disclosed in the proxy statement for the Annual Meeting pursuant to the compensation disclosure rules of the SEC, including the compensation discussion and analysis, compensation tables and narrative discussion, and other related disclosure.”

Vote Required

Approval of the advisory vote on the compensation of our named executive officers requires the approval of a majority of the voting power of the shares of our common stock present virtually or by proxy and entitled to vote at the Annual Meeting. Abstentions are treated as shares present virtually or by proxy and entitled to vote at the Annual Meeting and, therefore, will have the same effect as a vote “Against” this proposal. Broker non-votes will have no effect on the outcome of the vote.

As an advisory vote, this proposal is non-binding. Although the vote is non-binding, our Board of Directors and our Compensation Committee value the opinions of our stockholders, and will consider the outcome of the vote when making future compensation decisions for our named executive officers.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

 

-18-


Table of Contents

PROPOSAL NO. 3

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our Audit Committee has appointed Ernst & Young LLP (“EY”), independent registered public accountants, to audit our consolidated financial statements for our fiscal year ending January 31, 2020. During our fiscal year ended January 31, 2019, E&Y served as our independent registered public accounting firm.

Notwithstanding the appointment of EY and even if our stockholders ratify the appointment, our Audit Committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our Audit Committee believes that such a change would be in the best interests of our company and our stockholders. At the Annual Meeting, our stockholders are being asked to ratify the appointment of EY as our independent registered public accounting firm for our fiscal year ending January 31, 2020. Our Audit Committee is submitting the appointment of EY to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Representatives of EY will be present at the Annual Meeting, and they will have an opportunity to make a statement and will be available to respond to appropriate questions from our stockholders.

If our stockholders do not ratify the appointment of EY, our Board of Directors may reconsider the appointment.

Fees Paid to the Independent Registered Public Accounting Firm

The following table presents fees for professional audit services and other services rendered to our company by EY for our fiscal years ended January 31, 2018 and 2019.

 

     2018      2019  

Audit Fees (1)

   $ 2,782,241      $ 2,840,475  

Audit-Related Fees (2)

   $ 361,355      $ 230,838  

Tax Fees (3)

   $ 231,713      $ 210,967  
  

 

 

    

 

 

 

Total Fees

   $ 3,375,309      $ 3,282,280  
  

 

 

    

 

 

 

 

(1)

Audit Fees consist of professional services provided in connection with the audit of our annual consolidated financial statements and the audit of internal control over financial reporting, including adoption of Financial Accounting Standards Board, Accounting Standards Codification Sections (“ASC Topic”) 606 and 842, the review of our unaudited quarterly consolidated financial statements, and audit services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements for those fiscal years. In addition, fees consist of professional services rendered in connection with our Registration Statements on Form S-8.

(2)

Audit-Related Fees consist of fees related to the performance of the audit or review of our consolidated financial statements that are not reported under “Audit Fees”. This primarily consists of fees for professional services with respect to service organization controls (“SOC”) audits under Statement of Standards for Attestation Engagements (SSAE) No. 18.

(3)

Tax Fees consist of fees for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and international tax compliance.

Auditor Independence

Pursuant to its charter and the policy described further below, our Audit Committee pre-approves audit and non-audit services rendered by our independent registered public accounting firm, EY. Our Audit Committee has determined that the rendering of non-audit services for tax compliance, tax planning and tax consulting advice by EY is compatible with maintaining the independence of EY.

 

-19-


Table of Contents

Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Our Audit Committee has established a policy governing our use of the services of our independent registered public accounting firm. Under this policy, our Audit Committee is required to pre-approve all audit and non-audit services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair the public accountants’ independence. All fees paid to EY for our fiscal years ended January 31, 2018 and 2019 were pre-approved by our Audit Committee.

Vote Required

The ratification of the appointment of EY as our independent registered public accounting firm requires the affirmative vote of a majority of the voting power of the shares of our common stock present virtually or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote “Against” the proposal and broker non-votes will have no effect.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”

THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP.

 

-20-


Table of Contents

REPORT OF THE AUDIT COMMITTEE

The Audit Committee is a committee of the Board of Directors comprised solely of independent directors as required by the listing standards of the New York Stock Exchange and rules and regulations of the Securities and Exchange Commission (“SEC”). The Audit Committee operates under a written charter approved by the Board of Directors, which is available on the company’s website at http://www.box.com/investors. The composition of the Audit Committee, the attributes of its members and the responsibilities of the Audit Committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The Audit Committee reviews and assesses the adequacy of its charter and the Audit Committee’s performance on an annual basis.

With respect to the company’s financial reporting process, the management of the company is responsible for (1) establishing and maintaining internal controls and (2) preparing the company’s consolidated financial statements. The company’s independent registered public accounting firm, Ernst & Young LLP (“EY”), is responsible for performing an independent audit of the company’s consolidated financial statements and of the company’s internal control over financial reporting in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States) and to issue a report thereon. It is the responsibility of the Audit Committee to oversee these activities. It is not the responsibility of the Audit Committee to prepare the company’s financial statements. These are the fundamental responsibilities of management. In the performance of its oversight function, the Audit Committee has:

 

   

reviewed and discussed the audited financial statements with management and EY;

 

   

discussed with EY the matters required to be discussed by the statement on Auditing Standards No. 1301, Communications with Audit Committees , as adopted by the Public Company Accounting Oversight Board; and

 

   

received the written disclosures and the letter from EY required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with EY its independence.

Based on the Audit Committee’s review and discussions with management and EY, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended January 31, 2019 for filing with the Securities and Exchange Commission.

Respectfully submitted by the members of the Audit Committee of the Board of Directors:

Dana Evan (Chair)

Kim Hammonds

Steven Krausz

Rory O’Driscoll

This report of the Audit Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended (“Securities Act”), or under the Securities Exchange Act of 1934, as amended (“Exchange Act”), except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.

 

-21-


Table of Contents

EXECUTIVE OFFICERS

The following table identifies certain information about our executive officers as of March 31, 2019. Our executive officers are appointed by, and serve at the discretion of, our Board of Directors. There are no family relationships among any of our directors or executive officers.

 

Name

   Age     

Position

Aaron Levie

     34      Chairman and Chief Executive Officer

Dylan Smith

     33      Chief Financial Officer and Director

Stephanie Carullo

     50      Chief Operating Officer

Aaron Levie co-founded our company and has served as our Chairman since December 2013 and as our Chief Executive Officer and a member of our Board of Directors since April 2005. Mr. Levie attended the University of Southern California from 2003 to 2005.

Dylan Smith co-founded our company and has served as our Chief Financial Officer and as a member of our Board of Directors since April 2005. Mr. Smith holds a B.A. in Economics from Duke University.

Stephanie Carullo has served as our Chief Operating Officer since August 2017. Prior to joining Box, from June 2016 to August 2017, Ms. Carullo served as an advisor at several privately held companies. From September 2015 to May 2016, Ms. Carullo was Head of Partnerships at Hampton Creek Inc., a food company. From September 2011 to August 2015, Ms. Carullo served as Vice President of U.S. Education Sales at Apple, Inc. Previously, Ms. Carullo served in various go-to-market leadership roles, including Vice President of Data Center and Virtualization Sales at Cisco, and sales leadership, general management, and consulting positions at IBM in Asia. Ms. Carullo holds a Bachelor of Arts Degree with Honors in Economic History from Monash University, Australia.

 

-22-


Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis describes the material elements of our executive compensation program for our named executive officers. For our fiscal year ended January 31, 2019, our named executive officers were:

 

   

Aaron Levie, our Chairman and Chief Executive Officer;

 

   

Dylan Smith, our Chief Financial Officer;

 

   

Stephanie Carullo, our Chief Operating Officer; and

 

   

Pete McGoff, who served as our Chief Legal Officer until his resignation, effective June 1, 2018.

Executive Summary

Fiscal 2019 Performance

Box provides a leading cloud content management platform that enables organizations of all sizes to securely manage their content while allowing easy, secure access and sharing of this content from anywhere, on any device. With our Software-as-a-Service (SaaS) cloud content management platform, users can collaborate on content both internally and with external parties, automate content-driven business processes, develop custom applications, and implement data protection, security and compliance features to comply with legal and regulatory requirements, internal policies and industry standards and regulations. Box provides a single content platform that accelerates business processes, improves employee productivity and protects an organization’s most valuable data. Our platform enables a broad set of business use cases across an enterprise, across multiple file formats and media types, and user experiences. Our platform integrates with leading enterprise business applications, and is compatible with multiple application environments, operating systems and devices, ensuring that workers have access to their critical business content whenever and wherever they need it.

In our fiscal year ended January 31, 2019, we achieved strong top- and bottom-line business results that provide context for stockholders reviewing our executive compensation disclosures, including:

 

   

Revenue : Our revenue in fiscal year 2019 was a record $608.4 million, an increase of 20% from fiscal year 2018.

 

   

Non-GAAP Operating Loss : Our non-GAAP operating loss in fiscal year 2019 was $14.9 million, or 2% of revenue, which was a significant improvement over our prior fiscal year non-GAAP operating loss of $56.0 million, or 11% of revenue.

 

   

Billings: Our billings for fiscal year 2019 were $672.9 million, an increase of 15% from fiscal year 2018.

 

   

Cash flow from operating activities: Our net cash provided by operating activities in fiscal year 2019 totaled $55.3 million. This is compared to net cash provided by operating activities of $35.4 million in fiscal year 2018, which was adjusted as a result of our adoption of Accounting Standards Update 2016-18, Statement of Cash Flows: Restricted Cash , in fiscal year 2019.

 

   

Free cash flow : Our free cash flow in fiscal year 2019 was $13.8 million, an increase of $6.3 million from $7.5 million in fiscal year 2018. As a result, we delivered on our commitment to achieve positive free cash flow for the full year of fiscal year 2019.

 

-23-


Table of Contents

Revenue and non-GAAP operating loss were elements of our incentive compensation plan for fiscal year 2019. Please see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on March 20, 2019, for a more detailed discussion of our fiscal year 2019 financial results and, beginning on page 62 of that Annual Report on Form 10-K, a discussion regarding, and reconciliation of, our non-GAAP to GAAP financial measures.

Fiscal 2019 Executive Compensation Highlights

For our fiscal year ended January 31, 2019, the key highlights of our executive compensation program included:

 

   

Below Market Short-Term CEO Compensation . Throughout his tenure as our Chief Executive Officer, Mr. Levie has expressed a preference to our Compensation Committee that his short-term compensation be modest so we could invest in other areas of the business. Mr. Levie maintained this preference in fiscal year 2019 and as such, his base salary and target total short-term compensation is well below the 25th percentile in our compensation peer group.

 

   

Pay for Performance – Annual Incentive Compensation Payouts . A significant portion of our named executive officers’ compensation was in variable incentive compensation to promote our pay for performance philosophy. Awards earned under this incentive compensation plan were calculated in dollar amounts (based on the average closing price of a share of our Class A common stock for the 30-trading day period ending the trading day before the grant date) and were then converted and paid out in immediately-vested restricted stock units having an equivalent cash value to the award earned. While we exceeded each of the corporate goals linked to our incentive compensation plan for fiscal year 2019, our Compensation Committee elected to reduce the payout amounts in light of our performance in the quarter ended January 31, 2019.

 

   

Peer Group . We modified our compensation peer group to add three new companies and remove three former members of the compensation peer group that had been acquired and were no longer relevant. Consistent with best practices, the three new companies were selected based on their revenue, market capitalization and growth trajectory when the compensation peer group was determined.

 

   

Increases to Target Short-Term Compensation . In fiscal year 2019, we maintained the target bonus percentages of our named executive officers. We increased Mr. Smith’s base salary, raising his overall target short-term compensation, to be more competitive with similarly situated executives of our compensation peer group. Although Mr. Levie’s short-term compensation was well below comparable compensation for the CEOs of our peer group in fiscal year 2019, Mr. Levie continued to prefer to receive modest short-term compensation and declined our Compensation Committee’s recommendation to increase his target bonus percentage and base salary.

 

   

Performance-based Stock Options . In prior years, Mr. Levie requested that any equity awards he would have otherwise been granted be re-allocated to the overall equity budget used for issuance to our employees. In fiscal year 2019, Mr. Levie agreed to accept an equity award provided the performance conditions were sufficiently challenging to ensure vesting would coincide with increased stockholder value. To further align our stockholders’ interests with Messrs. Levie’s and Smith’s interests, stock options were granted in the form of performance-based stock options to Messrs. Levie and Smith in fiscal year 2019. The awards increased Messrs. Levie’s and Smith’s total unvested equity to a level competitive with that provided by companies in our compensation peer group. These performance-based stock options vest only to the extent that both the performance-based and time-based conditions are satisfied. The performance-based vesting condition will be satisfied if, before the four-year anniversary of the grant date, the closing price of our Class A common stock is maintained at or above $28.00 per share for a period of 30 consecutive trading days. The time-based vesting condition will be satisfied over the following four-year schedule: 1/4th of the vesting condition is satisfied on March 20, 2019, and the remaining 1/48th of the option’s time-based vesting condition is satisfied monthly thereafter, subject to continued employment through each such date. Because she joined the Company

 

-24-


Table of Contents
 

in August 2017, Ms. Carullo did not receive additional equity award grants as part of our annual focal review as she had not yet satisfied our requirement that an employee must have provided services to the Company for at least 12 months in order to be eligible to receive an annual equity award.

Compensation Philosophy

Our executive compensation program is structured to provide compensation plans, policies, and programs that attract and retain the best talent for positions of substantial responsibility, provide incentives for such persons to perform to the best of their abilities, and to promote the success of our business. The following table identifies the main elements of our executive compensation program and the reasons for each:

 

Element

 

  

Reasons for Providing Element

Base Salary

   Provide our named executive officers compensation for their services based on their knowledge, skills, past performance, and experience

Variable Incentive Compensation

   Encourage our named executive officers to achieve short-term individual and company goals that drive our growth

Equity

   Provide long-term retention and incentives to our named executive officers that align their interests with our stockholders’ interests

Welfare and Other Employee Benefits

   Provide for our named executive officers’ health and well-being

Change in Control and Severance Benefits

   Provide our named executive officers with a measure of security in order to minimize any distractions related to termination of employment and/or change in control and allow our named executive officers to focus on their duties and responsibilities to maximize stockholder value

Impact of 2018 Stockholder Advisory Vote on Compensation of Named Executive Officers

We conducted a Say-on-Pay vote at our 2018 annual meeting of stockholders. 99.1% of the votes cast by stockholders were in favor of approving the compensation of our named executive officers. While evaluating our executive compensation program in 2019, our Compensation Committee considered the results and maintained the compensation philosophy and objectives and general approach to executive compensation from the prior year.

Processes and Procedures for Compensation Decisions

Our Compensation Committee is responsible for the compensation program for our executive officers and reports to our Board of Directors on its discussions, decisions and other actions.

Involvement of Management

In fiscal year 2019, typically, our Chief Executive Officer, Chief Financial Officer, Chief People Officer and our General Counsel, and certain other management team members, attended Compensation Committee meetings and were involved in the determination of compensation for our other executive officers. These senior executive officers made recommendations to our Compensation Committee regarding short-term and long-term compensation for all executive officers (other than with respect to their own compensation) based on our results, an individual executive officer’s contribution toward these results, and each individual’s performance against

 

-25-


Table of Contents

their individual goals. Our Compensation Committee then reviewed the recommendations and other data provided by outside compensation advisors and management, and made decisions as to compensation for each executive officer.

Use of Outside Advisors

Our Compensation Committee is authorized to retain the services of executive compensation advisors, as it sees fit, for the establishment of our compensation programs and related policies. For our fiscal year ended January 31, 2019, our Compensation Committee retained Compensia, a national compensation consulting firm, to provide it with information, recommendations, and other advice relating to executive compensation on an ongoing basis. Compensia now serves at the discretion of our Compensation Committee. Among other things, our Compensation Committee engaged Compensia to assist in developing and updating an appropriate group of peer companies to help us determine the level of overall compensation for our executive officers and assess each separate element of compensation, with a goal of ensuring that the compensation we offer to our executive officers is competitive, fair, motivating and retentive.

Peer Group Compensation Data

With Compensia’s assistance, our Compensation Committee approved a group of public companies to be included when conducting a competitive market analysis of executive officer compensation. For our compensation decisions made prior to June 2018, which included the target total short-term compensation increases and equity awards approved in April 2018, our compensation peer group was made up of publicly-traded companies in the software & services industry that generally had revenues between $100 million and $1.1 billion, experienced strong year-over-year growth in revenue, and had a market capitalization between $1 billion and $9 billion.

In June 2018, our Compensation Committee re-analyzed our compensation peer group to inform its executive compensation review and, in light of the growth in size of one company and the acquisition of two companies in our peer group, removed three companies from and added three new companies to our compensation peer group. This modified compensation peer group is made up of publicly-traded companies in the software & services industry that generally had revenues between $200 million and $1.1 billion, experienced strong year-over-year growth in revenue, and had a market capitalization between $1 billion and $9 billion. The two compensation peer groups used in fiscal year 2019 were:

 

Compensation Peer Group

Entering Fiscal Year 2019

      

Compensation Peer Group Revised in

Fiscal Year 2019 for Decisions after June 2018

Barracuda Networks, Inc.   Removed   
Benefitfocus, Inc .      Benefitfocus, Inc .
Cloudera, Inc.      Cloudera, Inc.
Cornerstone OnDemand Inc.      Cornerstone OnDemand Inc.
  Added    DocuSign, Inc.
FireEye, Inc.      FireEye, Inc.
Gigamon Inc.   Removed   
Guidewire Software, Inc.      Guidewire Software, Inc.
  Added    Hortonworks, Inc.
HubSpot, Inc.      HubSpot, Inc.
Imperva Inc.      Imperva Inc.
LogMeIn, Inc.      LogMeIn, Inc.
New Relic, Inc.      New Relic, Inc.
Nutanix, Inc.      Nutanix, Inc.
Okta, Inc.      Okta, Inc.

 

-26-


Table of Contents

Compensation Peer Group

Entering Fiscal Year 2019

      

Compensation Peer Group Revised in

Fiscal Year 2019 for Decisions after June 2018

  Added    Pivotal Software, Inc.
Proofpoint Inc.      Proofpoint Inc.
RingCentral, Inc.      RingCentral, Inc.
Splunk Inc.   Removed   
Tableau Software Inc.      Tableau Software Inc.
Twilio Inc.      Twilio Inc.
Yelp Inc.      Yelp Inc.
Zendesk, Inc.      Zendesk, Inc.

Our Compensation Committee believed these companies were appropriate for our compensation peer group because they were similarly sized, operated in the same or similar industries as us, had similar growth trajectories, and reflected our competitive market for senior executives.

In setting the elements of compensation for our named executive officers, our Compensation Committee reviewed base salary, target annual incentive compensation opportunity, target total short-term compensation ( i.e., base salary plus target incentive opportunity), annual long-term incentive, and total direct compensation values for our named executive officers and those of similarly situated executives of our compensation peer group. Compensia provided data at the 25th, 50th, 60th, and 75th percentiles for such compensation, and our Compensation Committee used this data as a reference. Our Compensation Committee did not benchmark any compensation element to a specific percentile, and our Compensation Committee instead set our named executive officers’ compensation at levels it deemed appropriate after considering such other factors as each of our named executive officers’ contributions, our short-term and long-term objectives, and prevailing market conditions.

Executive Compensation Program Elements

The following sections describe each element of our executive compensation program, provide the rationale for each such element, and explain how our Compensation Committee determined compensation amounts and awards for our fiscal year ended January 31, 2019.

Base Salary

Base salary is the main fixed element of our named executive officers’ short-term compensation. Base salary compensates our named executive officers for services they provide to us during the fiscal year. Our Compensation Committee typically performs an annual review during which it considers adjustments to our named executive officers’ base salaries after considering such factors as the prevailing market conditions and the named executive officer’s responsibilities, knowledge, skills, experience, and performance. These adjustments allow us to remain competitive in attracting and retaining executive talent.

In April 2018, Mr. Smith received an increase in base salary from $340,000 to $350,000 to be more competitive with similarly situated executives at the companies in our compensation peer group. Our Compensation Committee did not make any adjustments to the base salaries of our other named executive officers.

The base salaries of our named executive officers who remain with us as executive officers are listed in the table below.

 

Named Executive Officer

   Base Salary
Entering
Fiscal 2019
     Base Salary
Effective
April 1, 2018
 

Mr. Levie

   $ 180,000      $ 180,000  

Ms. Carullo

   $ 370,000      $ 370,000  

Mr. Smith

   $ 340,000      $ 350,000  

 

-27-


Table of Contents

The total base salaries paid to our named executive officers during our fiscal year ended January 31, 2019 are listed in the “ Summary Compensation Table ” below.

Non-Equity Incentive Plan Compensation

We use performance-based incentives to motivate our named executive officers to achieve our annual financial and operational objectives, while making progress towards our longer-term strategic and growth goals. Typically, near the beginning of each fiscal year, our Compensation Committee adopts the performance criteria and targets for the incentive compensation plan for that fiscal year, which identifies the plan participants and establishes the target incentive opportunity for each participant, the performance measures and the associated target levels for each measure, and the potential payouts based on actual performance for the fiscal year. Payments under our incentive compensation plan may be made in cash or cash equivalents at the discretion of our Compensation Committee.

Fiscal Year 2019 Bonus Plan.

 

   

Overview  & Structure . In April 2018, our Compensation Committee adopted and approved the performance criteria and targets for fiscal year 2019 under our omnibus Executive Incentive Plan (the “Fiscal 2019 Executive Bonus Plan”). Effective April 2018, the Fiscal 2019 Executive Bonus Plan provided for potential performance-based incentive payouts to all non-sales employees at the grade of director or higher, including our named executive officers.

The Fiscal 2019 Executive Bonus Plan provided opportunities for incentive compensation payouts based on our actual achievement of pre-established corporate financial objectives. The target levels for the financial objectives were set at levels determined to be challenging and requiring substantial skill and effort by senior management. The Fiscal 2019 Executive Bonus Plan provided for an annual performance period with annual payouts and was designed this way because it gave our Compensation Committee a full year to assess performance against our annual operating plan.

 

   

Target Annual Incentive Compensation Opportunities . In April 2018, in connection with its review of our executive compensation program, our Compensation Committee approved the target annual incentive compensation opportunities of our named executive officers, as set forth in the table below. In setting the target annual incentive compensation opportunities, our Compensation Committee considered each named executive officer’s performance, individual contributions, responsibilities, experience, prior annual incentive compensation amount, and peer group market data. Our Compensation Committee has set the target annual incentive compensation opportunities for our named executive officers as percentages of their base salaries paid throughout the year.

For fiscal year 2019, our Compensation Committee maintained the percentages for our named executive officers from those determined for fiscal year 2018.

The target annual incentive compensation opportunities established for fiscal year 2019 for our named executive officers who remain with us (Mr. McGoff was not paid an annual incentive for fiscal year 2019) were:

 

Named Executive Officer

   Fiscal Year 2019
Target Annual
Incentive
Compensation
Opportunity

(as a % of base
salary for Fiscal 2019)
  Fiscal Year 2019
Target

Annual
Incentive
Compensation
Opportunity

Mr. Levie

       55 %     $ 99,000

Ms. Carullo

       55 %     $ 203,500

Mr. Smith

       55 %     $ 191,596

 

-28-


Table of Contents
   

Corporate Performance Measures . To measure performance for the Fiscal 2019 Executive Bonus Plan, our Compensation Committee selected revenue and non-GAAP operating loss as the corporate performance measures that best supported our annual operating plan and enhanced long-term value creation. We define (i) “revenue” as GAAP revenue as reflected in our quarterly and annual financial statements; and (ii) non-GAAP operating loss as GAAP operating loss as reflected in our quarterly and annual financial statements adjusted to exclude expenses related to stock-based compensation, intangible assets amortization, and other special items. Each element was weighted equally under the Fiscal 2019 Executive Bonus Plan.

The targets required for 100% achievement under our Fiscal 2019 Executive Bonus Plan and our results were:

 

Performance Measure

   Target (in
millions)
   Result (in
millions)
   Achievement of
Target

Revenue

     $ 605.0      $ 608.4        100.6 %

Non-GAAP Operating Loss

     $ 23.6      $ 14.9        136.9 %

 

   

Methodology . Our Compensation Committee assesses performance and determines payouts under either of our bonus plans in a two-part process: (1) first, our Compensation Committee measures actual performance against the pre-established goals for the performance period; and (2) second, after the end of the performance period, our Compensation Committee exercises discretion to determine the actual payout. As a threshold matter, our named executive officers were eligible for annual incentive compensation payouts with respect to a particular performance measure only if we met or exceeded 95% of the applicable performance target for our fiscal year ended January 31, 2019. A high threshold is required to ensure that significant achievement is prerequisite to receive any incentive payment. With respect to the revenue component, achievement percentage equals payment percentage until 103% achievement, and achievement over 103% may be rewarded using an “accelerator” where each point of performance above 103% achievement increases payout percentage by two percentage points. With respect to the non-GAAP operating loss component, achievement percentage equals payment percentage until 100% achievement, and achievement over 100% is increased by 0.5 percentage points for each point of performance above 100%, up to a maximum payout percentage of 110%.

 

   

Caps on Payment . The cap on total payouts of the non-GAAP operating loss component was set to manage potential incentive compensation costs and maintain appropriate incentives for our named executive officers.

 

   

Performance in Fiscal Year 2019 and Related Payout . For fiscal year 2019, we exceeded the Fiscal 2019 Executive Bonus Plan as follows: (1) approximately 100.6% achievement in revenue and (2) approximately 136.9% achievement in non-GAAP operating loss. The revenue measure achievement resulted in a payout percentage of 100.6% of target and the non-GAAP operating loss measure achievement resulted in a payout percentage of 110% of target. As each metric was weighted 50%, this resulted in a calculated payout percentage of approximately 105.3%. In light of corporate performance for the quarter ended January 31, 2019, the Compensation Committee exercised its discretion to adjust the payouts for our named executive officers down to approximately 70% of their bonus targets. Additionally, Mr. Levie declined to receive any payout under the Fiscal 2019 Executive Bonus Plan. The total payouts to our named executive officers under the Fiscal 2019 Executive Bonus Plan were:

 

Named Executive Officer

   Target
Annual
Incentive
Compensation
Opportunity
     Actual
Incentive
Compensation
 

Mr. Levie

   $ 99,000        —    

Ms. Carullo

   $ 203,500      $ 142,000  

Mr. Smith

   $ 191,596      $ 134,000  

 

-29-


Table of Contents

The payouts were made in the form of fully vested restricted stock units. The number of restricted stock units each named executive officer received equaled the dollar value of his or her actual award payment divided by the average closing price of a share of our Class A common stock for the 30-trading day period ending the trading date before the grant date.

The dollar values of the incentive awards earned by our named executive officers under the Fiscal 2019 Executive Bonus Plan are listed in the “ Non-Equity Incentive Compensation ” column of the “ Summary Compensation Table ” below. As described above and in the footnotes to the 2018 Summary Compensation Table, each earned incentive award was paid in the form of fully vested restricted units that are listed in the “ Grants of Plan-Based Awards in Fiscal Year 2019 ” table below.

Equity Awards

The Compensation Committee grants equity awards to all of our employees, including our named executive officers, so their long-term interests are aligned with our stockholders’ interests.

The Compensation Committee determines the size of the equity awards we grant to our named executive officers in connection with their hire through arm’s-length negotiation, considering such factors as the prevailing market conditions, market data for new-hire awards, the named executive officer’s expected short-term compensation, the equity award’s potential incentive and retention value, and the named executive officer’s prospective role and responsibilities.

The Compensation Committee also periodically grants equity awards to our named executive officers for promotions, as additional incentive to continue service with us, or to recognize exceptional corporate and individual performance. The Compensation Committee rarely applies a fixed formula when determining the size of these equity awards because we grant an amount of equity that properly rewards the named executive officer for his or her contribution to the growth in our long-term stockholder value. In doing so, the Compensation Committee considers factors such as the economic value of the named executive officer’s unvested equity awards and the ability of this equity to satisfy our retention objectives; the named executive officer’s performance, contributions, responsibilities, and experience; the equity awards granted by our compensation peer group to similarly situated executives; a compensation analysis performed by Compensia; and internal equity considerations.

In April 2018, after considering the peer group data provided by Compensia, the unvested equity award holding value and the anticipated future contributions of our named executive officers, our Compensation Committee granted annual equity awards to Messrs. Levie, Smith and McGoff at a level competitive with the annual long-term incentives provided by the companies in our compensation peer group to similarly situated executives, as follows: (i) a performance-based stock option covering 400,000 shares to Mr. Levie, (ii) a performance-based stock option covering 250,000 shares to Mr. Smith and (iii) an award of 40,000 restricted stock units to Mr. McGoff.

Messrs. Levie and Smith received performance-based stock options (instead of receiving awards of restricted stock units) because the Compensation Committee believed it appropriate to more directly tie their incentive opportunity to increases in stockholder value. These performance-based stock options vest only to the extent that both the performance-based and time-based conditions are satisfied. The performance-based vesting condition will be satisfied if, before the four-year anniversary of the grant date, the closing price of our Class A common stock is maintained at or above $28.00 per share for a period of 30 consecutive trading days. The time-based vesting condition will be satisfied over the following four-year schedule: 1/4th of the vesting condition is satisfied on March 20, 2019, and the remaining 1/48th of the option’s time-based vesting condition is satisfied monthly thereafter, subject to continued employment through each such date.

 

-30-


Table of Contents

Mr. McGoff’s award of restricted stock units was scheduled to vest as to 1/4 th of the award on march 20, 2019, and 1/16 th of the award was scheduled to vest each quarter thereafter, subject to his continued service with us through the applicable vesting date. No portion of Mr. McGoff’s award of restricted stock units vested prior to his resignation, effective June 1, 2018, at which time all of the restricted stock units were forfeited.

Employee Benefit Plans

Our named executive officers participate in our employee benefits programs on the same terms as our other U.S.-based, full-time employees with no special executive programs. We have a 401(k) Savings Plan (the “401(k) Plan”) which qualifies as a tax-qualified retirement plan under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, participating employees may elect to contribute up to 100% of their eligible compensation, subject to certain limitations. We have not made any matching contributions to date. As a tax-qualified retirement plan, contributions to the 401(k) Plan and earnings on those contributions are not taxable to our employees until they are distributed from the 401(k) Plan, and any contributions we make are deductible by us when made.

We maintain other welfare benefit plans, including health, dental and vision insurance; medical and dependent care flexible spending accounts; short- and long-term disability insurance; life insurance; and accidental death and dismemberment insurance, which are generally consistent with those offered by companies we compete with for employees. For our fiscal year ended January 31, 2019, we also paid certain amounts on behalf of our named executive officers for basic life insurance, as indicated in the “ Summary Compensation Table ” below.

Perquisites and Other Personal Benefits

We generally do not provide perquisites or other personal benefits to our named executive officers, but we may provide perquisites or other personal benefits in the future for purposes of recruitment, motivation, or retention; to assist an individual named executive officer in the performance of his or her duties; and in other limited circumstances. In fiscal year 2019, certain of our named executive officers received minimal perquisites, and reimbursement for taxes on these perquisites, under programs available to all employees and on the same terms as those provided to other employees. Our Compensation Committee will periodically review and approve all future practices concerning perquisites and other personal benefits.

Change in Control and Severance Arrangements

We have entered into change in control and severance agreements, or change in control agreements, with our named executive officers, which require us to make specific payments and benefits in connection with the termination of such named executive officers’ employment under certain circumstances. We believe that these change in control agreements provide retention value by encouraging our named executive officers to continue service with us and increase stockholder value by reducing any potential distractions caused by the possibility of an involuntary termination of employment or a potential change in control, allowing our named executive officers to focus on their duties and responsibilities. For a summary of the material terms and conditions of these severance and change in control arrangements, see the section titled “Potential Payments upon Termination or Change in Control” contained in this proxy statement.

Other Compensation Policies

Our insider trading policy prohibits all employees including our named executive officers from engaging in the following activities with respect to our common stock: trading in derivative securities, hedging transactions, short sales, pledging stock as collateral, or holding stock in a margin account. From time to time, our officers and directors may elect to enter into 10b5-1 trading plans. As of May 1, 2019, Mr. Smith had an active 10b5-1 trading plan. We have not adopted policies with respect to minimum stock ownership requirements for our

 

-31-


Table of Contents

named executive officers or policies that allow us to recover any cash or equity-based incentive compensation from our named executive officers when the payment of such compensation was based upon financial results that were subsequently the subject of a financial restatement.

Tax and Accounting Considerations

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code of 1986 (“Section 162(m)”), as amended, limits the amount we may deduct from our federal income taxes for compensation paid to any person who has served as our CEO, CFO, and each of our next three most highly compensated executive officers (“covered employees”) to $1 million per executive. Prior to the passage of the Tax Cuts and Jobs Act (“Tax Act”) that was signed into law on December 22, 2017, the deduction limitation provided an exception for amounts that constituted qualified “performance-based compensation,” amounts paid to our CFO or amounts paid to individuals who were no longer named executive officers. The Tax Act eliminated the “performance-based compensation” exception for tax years beginning after December 31, 2017, but provided transition relief for compensation arrangements that existed pursuant to a written binding contract that was in effect on November 2, 2017, and which was not materially modified after that date. Additionally, the Tax Act expanded the group of covered employees to include the CFO and mandated that if an executive was considered a covered employee during any tax year beginning on or after January 1, 2017, the executive will be considered a covered employee for all subsequent years, regardless of employment status. As a result, any amounts paid in excess of $1 million to a named executive during or after the first tax year that the executive becomes a covered employee will not be deductible.

“Parachute Payments” and Deferred Compensation

Certain service providers may be subject to an excise tax under Section 4999 of the Internal Revenue Code if they receive payments or benefits in connection with a change in control that exceeds certain prescribed limits, and we, or a successor, may forfeit a deduction on the amounts subject to this excise tax under Section 280G of the Internal Revenue Code. Section 409A of the Internal Revenue Code (“Section 409A”) imposes significant additional taxes on a service provider if the service provider receives “deferred compensation” that does not meet the requirements of Section 409A.

Except for tax gross-ups for de minimis token gifts offered to employees, in our fiscal year ended January 31, 2019, we did not provide (and had no agreements or obligations to provide) any of our named executive officers with a “gross-up” payment or other reimbursement for any excise tax liability he or she might owe under Section 4999 or for any additional tax he or she might owe under Section 409A.

Accounting Considerations

Authoritative accounting guidance on stock compensation requires measurement of the compensation expense for all share-based awards made to employees (such as our named executive officers) and directors based on the grant date “fair value” of the awards. Our Compensation Committee considers the accounting expense associated with equity awards. Even though our named executive officers and directors may realize no value from their equity awards, these values have been calculated for accounting purposes and reported in the tables below. This guidance also requires us to recognize the compensation cost of share-based awards in our income statements over the period that the named executive officer or director is required to continue service with us in order to vest in the equity award.

Risk Considerations

Our Compensation Committee reviews and discusses with management the risks arising from our compensation philosophy and practices applicable to all employees to determine whether they encourage excessive risk-taking and to evaluate compensation policies and practices that could mitigate such risks. In

 

-32-


Table of Contents

addition, our Compensation Committee has engaged Compensia to independently review our executive compensation program. Based on these reviews, our Compensation Committee structures our executive compensation program to encourage our named executive officers focus on both short-term and long-term success. We do not believe that our executive compensation program creates risks that are reasonably likely to have a material adverse effect on us.

Compensation Committee Report

Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis provided above with management. Based on such review and discussion, our Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and our Annual Report on Form 10-K for our fiscal year ended January 31, 2019.

Respectfully submitted by the members of our Compensation Committee of the Board of Directors:

 

   

Josh Stein (Chair)

 

   

Dana Evan

 

   

Rory O’Driscoll

Summary Compensation Table for Fiscal Year 2019

 

Name and Principal Position

  Year     Salary($)     Bonus($) (1)     Stock
Awards($) (2)
    Option
Awards($) (2)
    Non-Equity
Incentive Plan
Compensation
($) (3)
    All Other
Compensation
($) (4)
    Total
Compensation
($)
 

Aaron Levie

    2019       180,000       —         —         3,168,000       —         231       3,348,231  

Chief Executive Officer

    2018       180,000       —         —         —         95,000       200       275,200  
    2017       180,000       —         —         —         105,000       400       285,400  

Stephanie Carullo

    2019       370,000       —         —         —         142,000       496       512,496  

Chief Operating Officer

    2018       185,000       —         3,802,000       3,074,040       108,000       139       7,169,179  

Dylan Smith

    2019       348,333       —         —         1,980,000       134,000       296       2,462,629  

Chief Financial Officer

    2018       333,333       —         —         3,029,648       175,000       179       3,538,160  
    2017       300,000       —         —         —         174,000       288       474,288  

Peter McGoff (5)

    2019       117,992       —         811,200       —         —         148       929,340  

Former Chief Legal Officer

    2018       332,500       —         2,796,200       —         170,000       213       3,298,913  
    2017       320,000       15,000       2,115,750       —         200,000       968       2,651,718  

 

(1)

The amount reported represents discretionary bonus earned in fiscal year 2017.

(2)

The amounts reported represent the grant date fair value of the awards granted to the named executive officers during fiscal years 2019, 2018 and 2017 as computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in Note 11 to our audited consolidated financial statements included in our Annual Report on Form 10-K for our fiscal year ended January 31, 2019. The performance-based stock options granted to Mr. Smith in fiscal year 2018 and to Messrs. Levie and Smith in fiscal year 2019 provide that the options will become eligible to vest according to the time-based vesting schedule if the applicable performance condition is met; assuming the performance condition is met, the actual level of performance does not otherwise determine the number of shares subject to the options that may vest. For fiscal years 2017 and 2018, Mr. Levie requested that any equity awards he would have otherwise been granted be re-allocated to the overall equity budget for issuance to our employees. Our Compensation Committee honored his request and, as such, he did not receive any equity awards in fiscal years 2017 or 2018:

(3)

The amounts reported represent amounts earned in fiscal years 2019, 2018 and 2017 by the named executive officers under the Executive Incentive Plan. The material terms of the incentive compensation awards are

 

-33-


Table of Contents
  described in the section titled “Executive Compensation Program Elements—Non-Equity Incentive Plan Compensation.” In fiscal year 2019, the amounts reported were paid in the form of fully vested restricted stock units. The number of restricted stock units granted and the grant date fair value of such restricted stock units, as computed in accordance with FASB ASC Topic 718, are set forth in “ Grants of Plan-Based Awards in Fiscal Year 2019 ” table below. For fiscal years 2018 and 2017, the earned amounts were paid in cash. In fiscal year 2019, Mr. Levie declined to receive a payout under the Executive Incentive Plan.
(4)

The amounts reported represent (i) amounts paid on behalf of the named executive officers for basic life insurance and (ii) tax gross-ups for de minimis token gifts offered to employees.

(5)

Mr. McGoff resigned as our Chief Legal Officer, effective June 1, 2018.

Grants of Plan-Based Awards in Fiscal Year 2019

The following table sets forth information regarding grants of plan-based awards made to our named executive officers during fiscal year 2019.

 

          Estimated Future
Payouts Under

Non-Equity
Incentive Plan

Awards
    Estimated Future
Payouts Under

Equity Incentive Plan
Awards
    All Other
Stock
Awards:
Number of
Shares of
Stock or

Units (#)
    All Other
Option
Awards:
Number of
Securities
Underlying

Options (#)
    Exercise
or Base
Price of
Option
Awards

($/Sh)
    Grant
Date Fair
Value of
Stock and
Option

Awards
($) (2)
 

Name

  Grant Date     Threshold
($)
    Target
($)
    Maximum
($)
    Threshold
($)
    Target
($) (1)
    Maximum
($)
 

Aaron Levie

    —         —       $ 99,000 (3)       —         —         —         —         —         —         —         —    
    4/10/18       —         —         —         —         400,000       —         —         —         20.28       3,168,000  

Stephanie Carullo

    —         —       $ 203,500 (3)       —         —         —         —         —         —         —         —    
    4/3/19       —         —         —         —         —         —         6,613 (4)       —         —         133,054 (5)  

Dylan Smith

    —         —       $ 191,596 (3)       —         —         —         —         —         —         —         —    
            —           —            
    4/10/18       —         —         —         —         250,000       —         —         —         20.28       1,980,000  
    4/3/19       —         —         —         —         —         —         6,241 (4)       —         —         125,569 (5)  

Peter McGoff

    —         —       $ 175,000 (3)       —         —         —         —         —         —         —         —    
    4/10/18       —         —         —         —         —         —         40,000 ( 6 )       —         —         811,200  

 

(1)

The amounts reported represent the grant date fair value of the performance-based stock options granted to Messrs. Levie and Smith in fiscal year 2019 (as computed in accordance with FASB ASC Topic 718), each of which provides only for a single estimated payout.

(2)

The amounts reported represent the grant date fair value of the awards granted to the named executive officers as computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in Note 11 to our audited consolidated financial statements included in our Annual Report on Form 10-K for our fiscal year ended January 31, 2019.

(3)

There is no threshold amount under our Fiscal 2019 Executive Bonus Plan because our Compensation Committee exercises discretion to determine the actual payouts and, therefore, there is no minimum amount payable for a certain level of performance.

(4)

The amounts reported represent the number of fully vested restricted stock units issued in settlement of the incentive awards earned by Ms. Carullo and Mr. Smith under the Fiscal 2019 Executive Bonus Plan.

(5)

The amounts reported represent the grant date fair value of the fully vested restricted stock units issued in settlement of the incentive awards earned by Ms. Carullo and Mr. Smith under the Fiscal 2019 Executive Bonus Plan, as computed in accordance with FASB ASC Topic 718.

(6)

This amount includes Mr. McGoff’s restricted stock units, which were canceled in connection with his resignation in June 2018.

 

-34-


Table of Contents

Outstanding Equity Awards at 2019 Fiscal Year-End

The following table provides information regarding equity awards held by our named executive officers at January 31, 2019.

 

           Option Awards      Stock Awards  

Name

   Grant Date     Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
     Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
     Option
Exercise
Price
($)
     Option
Expiration
Date
     Number of
Shares of
Stock

that Have Not
Vested

(#)
     Market
Value

of Shares
of Stock
That Have
Not Vested
($) (1)
 

Aaron Levie

     07/15/2010 (2)       588,841        —          0.29        07/14/2020        —          —    
     04/07/2011 (2)       25,000        —          0.59        04/06/2021        —          —    
     04/02/2012 (2)       770,000        —          1.16        04/01/2022        —          —    
     04/02/2012 (2)       410,000        —          4.00        04/01/2022        —          —    
     04/02/2012 (2)       410,000        —          4.00        04/01/2022        —          —    
     04/27/2012 (2)       410,000        —          4.00        04/26/2022        —          —    
     04/10/2018 (3)       —          400,000        20.28        04/10/2028        —          —    

Stephanie Carullo

     08/01/2017 (4)       141,666        258,334        19.01        08/01/2027        —          —    
     08/01/2017 (5)       —          —          —          —          137,500        2,876,500  

Dylan Smith

     04/07/2011 (2)       17,362        —          0.59        04/06/2021        —          —    
     04/01/2012 (2)       140,000        —          1.16        03/31/2022        —          —    
     04/01/2012 (2)       240,000        —          1.16        03/31/2022        —          —    
     02/07/2013 (2)       140,000        —          4.63        02/06/2023        —          —    
     04/03/2014 (2)       140,000        —          17.85        04/02/2024        —          —    
     01/02/2015 (6)       115,000        5,000        14.05        01/02/2025        —          —    
     06/18/2015 (6)       32,583        1,417        17.52        06/18/2025        —          —    
     04/09/2017 (7)       103,125        121,875        16.68        04/09/2027        —          —    
     04/09/2017 (8)       103,125        121,875        16.68        04/09/2027        —          —    
     04/10/2018 (3)       —          250,000        20.28        04/10/2028        —          —    

 

(1)

This column represents the market value of the shares underlying the RSUs or restricted stock as of January 31, 2019, based on the closing price of our Class A common stock, as reported on the NYSE, of $20.92 per share on January 31, 2019.

(2)

The stock option is fully vested and exercisable.

(3)

One fourth of the shares subject to the option vested on March 20, 2019, and one forty-eighth of the shares vest monthly thereafter, subject to both (i) continued service to Box through each applicable vesting date, and (ii) prior to April 11, 2022, the closing stock price of the Company’s Class A common stock having closed at or above $28.00 for 30 consecutive trading days. If the performance condition in clause (ii) is not met prior to April 11, 2022, then no options will vest and all will be forfeited. The performance condition in clause (ii) need only be met one time prior to April 11, 2022 in order for it to be satisfied. If the performance condition is achieved, the options will expire on the 10th anniversary of the grant date.

(4)

One fourth of the shares subject to the option vested on August 1, 2018 and one forty-eighth of the shares vest monthly thereafter, subject to continued service to us.

(5)

One fourth of the shares underlying the RSUs vested on September 20, 2018 and one-sixteenth of the shares vest quarterly thereafter, subject to continued service to us.

(6)

One fourth of the shares subject to the option vested on March 20, 2016 and one forty-eighth of the shares vest monthly thereafter, subject to continued service to us.

(7)

One fourth of the shares subject to the option vested on March 20, 2018 and one forty-eighth of the shares vest monthly thereafter, subject to continued service to us.

(8)

One fourth of the shares subject to the option vested on March 20, 2018 and one forty-eighth of the shares vest monthly thereafter, subject to (i) continued service to us and (ii) prior to the fourth anniversary of the grant date, the closing stock price of our Class A common stock having maintained a level that is 25%

 

-35-


Table of Contents
  higher than the option’s per share exercise price (rounded down to the nearest whole penny) for a period of 30 consecutive trading days. If the performance condition in clause (ii) is not met prior to the fourth anniversary of the grant date, no portion of the option will vest, and the entire option will be forfeited. The performance condition in clause (ii) need only be met one time prior to the fourth anniversary of the grant date in order for it to be satisfied.

Option Exercises and Stock Vested in Fiscal Year 2019

The following table sets forth the number of shares of common stock acquired during our fiscal year 2019 by our named executive officers upon the exercise of stock options and the vesting of restricted stock unit awards and the value realized upon such exercise or vesting.

 

     Options Awards      Stock Awards  

Name

   Number of
Shares
Acquired on
Exercise (#)
     Value
Realized on
Exercise ($) (1)
     Number of
Shares
Acquired on
Vesting (#)
     Value
Realized on
Vesting ($) (2)
 

Aaron Levie

     —          —          —          —    

Stephanie Carullo

     —          —          62,500        1,421,250  

Dylan Smith

     —          —          —          —    

Peter McGoff

     194,530        3,519,263        30,392        659,202  

 

(1)

The value realized on exercise is the difference between the market price of the shares of our common stock underlying the options when exercised and the applicable exercise price.

(2)

Calculated by multiplying (i) the market value of our Class A common stock on the vesting date, which was determined using the closing price on the NYSE of a share of our Class A common stock on the date of vesting, or if such day is a holiday, on the immediately preceding trading day, by (ii) the number of shares of our common stock acquired upon vesting.

Pension Benefits & Nonqualified Deferred Compensation

We do not provide any defined benefit pension plans, and none of our named executive officers participated in a nonqualified deferred compensation plan during our fiscal year ended January 31, 2019.

Potential Payments upon Termination or Change of Control

We have entered into change in control and severance agreements, or change in control agreements, with our named executive officers, which require us to make specific payments and benefits in connection with the termination of such named executive officers’ employment under certain circumstances. These change in control agreements superseded any other agreement or arrangement relating to severance benefits with these named executive officers or any terms of their option agreements related to vesting acceleration or other similar severance-related terms. The descriptions that follow describe such payments and benefits that may be owed by us to each of our named executive officers (other than Mr. McGoff) upon the named executive officer’s termination under certain circumstances, pursuant to the named executive officer’s change in control agreement. Mr. McGoff did not become entitled to receive any payments or benefits under his change in control and severance agreement, or otherwise, in connection with his resignation as Chief Legal Officer effective June 2018 and therefore he is not included in the tabular disclosure below.

The change in control agreements will remain in effect for an initial term of three years. At the end of the initial term, each agreement will automatically renew for an additional one-year period unless either party provides notice of nonrenewal within 90 days prior to the date of the automatic renewal. The change in control agreements also acknowledge that each of these named executive officers is an at-will employee, whose employment can be terminated at any time.

 

-36-


Table of Contents

In order to receive the severance benefits described below, each of these named executive officers is obligated to execute a release of claims against us, provided such release of claims becomes effective and irrevocable no later than 60 days following such named executive officer’s termination date, and to continue to comply with the terms of the named executive officer’s confidential information and intellectual property assignment agreement with us. In the event of a termination of employment without “cause” (as generally defined below) outside of the “change in control period” (as generally defined below), such named executive officer will receive the following:

 

   

continued payments of base salary for six months; and

 

   

paid COBRA benefits for six months.

In the event of a termination of employment without “cause” or a resignation for “good reason” (as generally defined below) during the “change of control period,” Messrs. Levie and Smith will receive the following:

 

   

a lump-sum payment of 12 months of base salary;

 

   

a lump-sum payment equal to 100% of his target bonus;

 

   

paid COBRA benefits for 12 months; and

 

   

100% acceleration of equity awards.

In the event of a termination of employment without “cause” or a resignation for “good reason” (as generally defined below) during the “change of control period,” Ms. Carullo will receive the following:

 

   

a lump-sum payment of 12 months of base salary;

 

   

a lump-sum payment equal to 100% of her target bonus;

 

   

paid COBRA benefits for 12 months; and

 

   

24 months’ acceleration of equity awards.

In the event any payment to one of these named executive officers is subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (as a result of a payment being classified as a “parachute payment” under Section 280G of the Internal Revenue Code), the named executive officer will be entitled to receive such payment as would entitle him to receive the greatest after-tax benefit of either the full payment or a lesser payment which would result in no portion of such severance benefits being subject to excise tax.

For the purpose of the change of control agreements, “cause” means generally the occurrence of any of the following:

 

   

an act of dishonesty by the named executive officer in connection with the named executive officer’s responsibilities as an employee;

 

   

the named executive officer’s conviction of, or entry of a plea of guilty or nolo contendere to, a felony or any crime involving fraud or embezzlement;

 

   

the named executive officer’s gross misconduct;

 

   

the unauthorized use or disclosure by the named executive officer of our proprietary information or trade secrets or those of any other party to whom the named executive officer owes an obligation of nondisclosure as a result of the named executive officer’s relationship with us;

 

   

the named executive officer’s willful breach of any obligations under any written agreement or covenant with us;

 

-37-


Table of Contents
   

the named executive officer’s failure to cooperate with an investigation by a governmental authority; or

 

   

the named executive officer’s continued failure to perform his or her duties after notice and a cure period.

For the purpose of the change in control agreements with Messrs. Levie and Smith, “good reason” means generally the named executive officer’s voluntary termination of employment following the expiration of any cure period following the occurrence of one or more of the following without the named executive officer’s consent:

 

   

a material reduction of the named executive officer’s duties, authorities or responsibilities other than a reduction following a change in control where the named executive officer assumes similar functional duties for a stand-alone business unit due to the company becoming part of a larger entity; provided that a reduction resulting from the company not being a stand-alone business unit following a change in control will affirmatively be grounds for good reason;

 

   

a material reduction of the named executive officer’s base salary; or

 

   

a material change in the geographic location of the named executive officer’s primary work facility or location.

For the purpose of the change in control agreements with Ms. Carullo, “good reason” means generally the named executive officer’s voluntary termination of employment following the expiration of any cure period following the occurrence of one or more of the following without the named executive officer’s consent:

 

   

a material reduction of the named executive officer’s duties, authorities or responsibilities other than a reduction following a change in control due to the company being part of a larger entity where the named executive officer assumes similar functional duties;

 

   

a material reduction of the named executive officer’s base salary; or

 

   

a material change in the geographic location of the named executive officer’s primary work facility or location.

 

-38-


Table of Contents

For the purpose of the change in control agreements, “change in control period” means generally the period beginning three months prior to, and ending 12 months following, a change in control of the company.

The following table provides information concerning the estimated payments and benefits that would be provided in the circumstances described above for each of the named executive officers serving as of the end of fiscal year 2019 pursuant to the change in control agreements in effect at that time. Payments and benefits are estimated assuming that the triggering event took place on the last business day of our fiscal year ended January 31, 2019, and the price per share of our Class A common stock is the closing price of the New York Stock Exchange as of that date. There can be no assurance that a triggering event would produce the same or similar results as those estimated below if such event occurs on any other date or at any other price, or if any other assumption used to estimate potential payments and benefits is not correct. Due to the number of factors that affect the nature and amount of any potential payments of benefits, any actual payments and benefits may be different.

 

Executive

  

Payment Elements

   Termination
Without Cause
or Termination
for Good
Reason Within
Change in
Control Period
($)
     Termination
Without Cause
Outside of
Change in
Control Period
($)
 

Aaron Levie

   Salary      180,000        90,000  
   Bonus      99,000        —    
   Stock Options (1)      256,000        —    
   Stock Awards (2)      —          —    
   Health Coverage (3)      19,307        9,654  
   Total      554,307        99,654  

Stephanie Carullo

   Salary      370,000        185,000  
   Bonus      203,500        —    
   Stock Options (1)      382,000        —    
   Stock Awards (2)      2,092,000        —    
   Health Coverage (3)      19,554        9,777  
   Total      3,067,500        194,777  

Dylan Smith

   Salary      350,000        175,000  
   Bonus      191,596        —    
   Stock Options (1)      1,232,683        —    
   Stock Awards (2)      —          —    
   Health Coverage (3)      28,099        14,049  
   Total      1,802,378        189,049  

 

(1)

Value represents the estimated benefit amount of unvested stock options calculated by multiplying the number of unvested stock options subject to acceleration held by the applicable named executive officer by the difference between the exercise price of the option and the closing price of our Class A common stock on the New York Stock Exchange on January 31, 2019, which was $20.92 per share. Does not reflect any dollar value associated with the acceleration of unvested stock options with exercise prices in excess of $20.92 per share.

(2)

Value represents the estimated benefit amount of unvested RSUs and shares of restricted stock issued upon the early exercise of stock options, in each case calculated by multiplying the number of unvested units or shares subject to acceleration held by the applicable named executive officer by the closing price of our Class A common stock on the New York Stock Exchange on January 31, 2019, which was $20.92 per share.

(3)

Represents 12 months of Box-paid COBRA benefits in the case of termination without cause or a termination of employment for good reason within the change in control period and six months of Box-paid COBRA benefits in the case of a termination of employment without cause outside of the change in control period.

 

-39-


Table of Contents

CEO Pay Ratio

Under SEC rules, we are required to provide the following information regarding the relationship between the annual total compensation of Mr. Levie, our Chairman and Chief Executive Officer, and the median annual total compensation of our employees (other than Mr. Levie) for fiscal year 2019:

 

   

Mr. Levie’s annual total compensation, as reported in the “Summary Compensation Table for Fiscal Year 2019” table included in this proxy statement, was $3,348,231.

 

   

The median of the annual total compensation of all employees (other than Mr. Levie) of the Company (including our consolidated subsidiaries) was $181,000.

 

   

Based on the above, for fiscal year 2019, the ratio of Mr. Levie’s annual total compensation to the median of the annual total compensation of all employees was 18.5 to 1.

This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Act of 1933, as amended.

For purposes of determining the median employee for fiscal year 2018, we determined the median of the annual total compensation of our employees as of January 31, 2018, at which time we had approximately 1,784 full-time and part-time regular employees globally, approximately 1,538 of whom were U.S. employees, and approximately 246 (or approximately 13.8% of our total employee population on that date) of whom were located outside of the United States. We then compared the annualized base salaries, bonuses earned, commissions earned and equity compensation of these employees (other than Mr. Levie) to determine the median employee for fiscal year 2018.

Our median employee used for our fiscal year 2018 analysis is no longer employed by Box. For our fiscal year 2019 analysis, we have substituted an employee whose fiscal year 2018 compensation was the closest in proximity to the fiscal year 2018 median employee. Other than the substitution of our median employee, there have been no changes in our employee population or employee compensation arrangements that we believe would significantly impact the pay ratio. Once we identified our new median employee, we estimated such employee’s annual total compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, yielding the median annual total compensation disclosed above. With respect to the annual total compensation of Mr. Levie, we used the amount reported in the “Total Compensation” column in the “Summary Compensation Table for Fiscal Year 2019” table included in this proxy statement.

 

-40-


Table of Contents

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes our equity compensation plan information as of January 31, 2019. Information is included for equity compensation plans approved by our stockholders. We do not have any equity compensation plans not approved by our stockholders.

 

Plan Category

   Class of
Common Stock
     (a) Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights
     (b) Weighted
Average
Exercise Price
of Outstanding
Options,
Warrants and
Rights (1)
     (c) Number of
Securities
Remaining
Available for
Future
Issuance Under
Equity
Compensation
Plans (Excluding
Securities
Reflected in
Column (a)) (2)
 

Equity compensation plans approved by stockholders

     Class A        9,096,961      $ 9.01        21,517,481  

Equity compensation plans not approved by stockholders

        —          —          —    

Total

     Class A        9,096,961      $ 9.01        21,517,481  

 

(1)

The weighted average exercise price is calculated based solely on outstanding stock options. It does not take into account the shares of our common stock underlying restricted stock units, which have no exercise price.

(2)

Includes: 18,476,185 shares from the Box, Inc. 2015 Equity Incentive Plan (2015 Plan) and 1,957,913 shares from the Box, Inc. 2015 Employee Stock Purchase Plan (ESPP). There were 828,959 shares purchased in our most recent ESPP purchase date on March 15, 2019. Our 2015 Plan provides that on the first day of each fiscal year, the number of shares of Class A common stock available for issuance thereunder is automatically increased by a number equal to the least of (i) 12,200,000 shares, (ii) 5% of the outstanding shares of our capital stock as of the last day of our immediately preceding fiscal year, or (iii) such other amount as our Board of Directors may determine. Our ESPP provides that on the first day of each fiscal year, the number of shares of Class A common stock available for issuance thereunder is automatically increased by a number equal to the least of (i) 2,500,000 shares, (ii) 1% of the outstanding shares of our capital stock on the first day of such fiscal year, or (iii) such other amount as our Board of Directors may determine. On February 1, 2019, the number of shares of Class A common stock available for issuance under our 2015 Plan and our ESPP increased by 7,215,537 shares and 1,443,107, respectively, pursuant to these provisions. These increases are not reflected in the table above.

 

-41-


Table of Contents

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to the beneficial ownership of our capital stock as of March 31, 2019 for:

 

   

each person or group of affiliated persons known by us to be the beneficial owner of more than 5% of our Class A common stock;

 

   

each of our named executive officers;

 

   

each of our directors and nominees for director; and

 

   

all of our current executive officers and directors as a group.

We have determined beneficial ownership in accordance with the rules and regulations of the SEC, and thus it represents sole or shared voting or investment power with respect to our securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that they beneficially owned, subject to applicable community property laws.

Applicable percentage ownership is based on 146,307,119 shares of our Class A common stock outstanding as of March 31, 2019. In computing the number of shares of capital stock beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares of our capital stock subject to options held by the person that are currently exercisable or exercisable within 60 days of March 31, 2019 and issuable upon the vesting of RSUs held by the person within 60 days of March 31, 2019. However, we did not deem such shares of our capital stock outstanding for the purpose of computing the percentage ownership of any other person.

Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Box, Inc., 900 Jefferson Ave., Redwood City, California 94063. The information provided in the table is based on our records, information filed with the SEC and information provided to us, except where otherwise noted.

 

Name of Beneficial Owner

   Number of
Class A Shares
     Percent of Class A
Shares Outstanding
 

5% Stockholders:

     

The Vanguard Group, Inc. (1)

     14,527,603        9.90

Bares Capital Management, Inc. (2)

     9,700,800        6.60

BlackRock, Inc. (3)

     9,820,418        6.70

Named Executive Officers and Directors:

     

Aaron Levie (4)

     5,316,529        3.60

Dylan Smith (5)

     2,363,541        1.60

Stephanie Carullo (6)

     220,134        *  

Sue Barsamian (7)

     9,046        *  

Dana Evan (8)

     146,884        *  

Kim Hammonds (9)

     10,496        *  

Steven Krausz (10)

     44,714        *  

Peter Leav (11)

     —          *  

Dan Levin (12)

     1,471,887        *  

Rory O’Driscoll (13)

     85,043        *  

Josh Stein (14)

     249,219        *  

All current executive officers and directors as a group (12 persons) (15)

     10,121,634        6.70

 

*

Represents beneficial ownership of less than one percent (1%).

 

-42-


Table of Contents
(1)

According to a Schedule 13G/A filed with the SEC on February 11, 2019, The Vanguard Group, Inc. (“Vanguard”), as investment advisor, has sole voting power with respect to 261,762 of the reported shares, shared voting power with respect to 17,175 of the reported shares, sole dispositive with respect to 14,262,098 of the reported shares and shared dispositive power with respect to 265,505 of the reported shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 248,330 shares of the reported shares as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owner of 30,607 shares of the reported shares as a result of its serving as investment manager of Australian investment offerings. The address of Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

(2)

According to a Schedule 13G/A filed with the SEC on February 14, 2019, by a joint filing consisting of Bares Capital Management, Inc. (“Bares Capital”) and Brian Bares (“Bares” and together with Bares Capital, the “Bares Entities”), Bares Capital has beneficial ownership of 9,377,444 shares of Class A common stock and sole voting power and sole dispositive with respect to none of the reported shares and (ii) Bares has beneficial ownership of 9,700,800 shares of the reported shares and sole voting power and sole dispositive power with respect to 323,356 of the reported shares. The Bares Entities share voting and dispositive power with respect to all of the reported shares beneficially owned by Bares Capital. The Bares Entities address is 12600 Hill Country Blvd, Suite R-230, Austin, Texas 78738.

(3)

According to a Schedule 13G filed with the SEC on February 8, 2019, BlackRock, Inc. (“BlackRock”), has sole voting power with respect to 9,473,827 of the reported shares, shared voting power with respect to 0 of the reported shares and sole dispositive power with respect to all of the reported shares. BlackRock’s address is 55 East 52 nd Street, New York, New York, 10055.

(4)

Consists of (i) 2,586,022 shares of Class A common stock held of record by Mr. Levie; and (ii) 2,730,507 shares of Class A common stock subject to options exercisable within 60 days of March 31, 2019.

(5)

Consists of (i) 1,124,274 shares of Class A common stock held of record by Mr. Smith; (ii) 85,000 shares of Class A common stock held of record by Mr. Smith, as Trustee of the DCS GRAT of 2014; (iii) 1,148,026 shares of Class A common stock subject to options exercisable within 60 days of March 31, 2019; and (iv) 6,241 shares of Class A common stock issuable upon the vesting of restricted stock units within 60 days of March 31, 2019.

(6)

Consists of (i) 45,135 shares of Class A common stock held of record by Ms. Carullo; and (ii) 174,999 shares of Class A common stock subject to options exercisable within 60 days of March 31, 2019.

(7)

Consists of 9,046 shares of Class A common stock subject to options exercisable within 60 days of March 31, 2019.

(8)

Consists of (i) 107,552 shares of Class A common stock held of record by Ms. Evan; and (ii) 39,332 shares of Class A common stock held of record by Ms. Evan.

(9)

Consists of (i) 3,883 shares of Class A common stock subject to options exercisable within 60 days of March 31, 2019; and (ii) 6,613 shares of Class A common stock issuable upon the vesting of restricted stock units within 60 days of March 31, 2019.

(10)

Consists of (i) 5,382 shares of Class A common stock held of record by Mr. Krausz; and (ii) 39,332 shares of Class A common stock subject to options exercisable within 60 days of March 31, 2019. Mr. Krausz resigned from our Board of Directors effective immediately following the 2019 Annual Meeting of stockholders.

(11)

Mr. Leav will join our board of directors effective immediately following the 2019 Annual Meeting of stockholders and will receive the standard compensation for non-employee directors in accordance with our Outside Director Compensation Policy, as described in the “Director Compensation section of this proxy statement.

(12)

Consists of (i) 5,790 shares of Class A common stock held of record by Mr. Levin; (ii) 1,337,497 shares of Class A common stock subject to options exercisable within 60 days of March 31, 2019; and (iii) 128,600 shares of Class A common stock held of record by Daniel J. Levin and Naomi J. Andrews, as Trustees of the Levin/Andrews Family Trust dated 9/18/99.

(13)

Consists of (i) 14,284 shares of Class A common stock held of record by Scale Management, LLC (“Scale Management”); (ii) 5,382 shares of Class A common stock held of record by Mr. O’Driscoll, one of the

 

-43-


Table of Contents
  managing members of Scale Management; (iii) 26,045 shares of Class A common stock held of record by The Rory T O’Driscoll & Olive O’Driscoll TR UA 04/24/2003 and (iii) 39,332 shares of Class A common stock subject to options exercisable within 60 days of March 31, 2019, held by Mr. O’Driscoll. Pursuant to the policies of Scale Management, Mr. O’Driscoll is deemed to hold the reported securities for the benefit of Scale Management. Scale Management has sole voting and dispositive power with respect to the shares held by Scale Management and Mr. O’Driscoll. Stacey Bishop, Ariel Tseitlin, Rory O’Driscoll and Andrew Vitus, the managing members of Scale Management, share voting and dispositive power with respect to the shares held by Scale Management and Mr. O’Driscoll. The address of each of these persons is c/o Scale Venture Partners, 950 Tower Lane, Suite 1150, Foster City, California 94404.
(14)

Consists of (i) 209,887 shares of Class A common stock held of record by the Joshua and Jennifer Stein Revocable Trust for which Mr. Stein serves as Trustee and shares voting and dispositive power; and (ii) 39,332 shares of Class A common stock subject to options exercisable within 60 days of March 31, 2019.

(15)

Consists of (i) 4,408,937 shares of Class A common stock; (ii) 5,671,286 shares of Class A common stock subject to options exercisable within 60 days of March 31, 2019; and (iii) 15,366 shares of Class A common stock issuable upon the vesting of restricted stock units within 60 days of March 31, 2019.

 

-44-


Table of Contents

RELATED PERSON TRANSACTIONS

We describe below transactions and series of similar transactions, since the beginning of our last fiscal year, to which we were a party or will be a party, in which:

 

   

the amounts involved exceeded or will exceed $120,000; and

 

   

any of our directors, nominees for director, executive officers or beneficial holders of more than 5% of any class of our outstanding capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities (each, a related person), had or will have a direct or indirect material interest.

Investors’ Rights Agreement

Prior to our initial public offering, we entered into an investors’ rights agreement which provides, among other things, that certain holders of our capital stock, including entities affiliated with Draper Fisher Jurvetson, Scale Venture Partners III, L.P., Aaron Levie, our Chairman and Chief Executive Officer, and Dylan Smith, our Chief Financial Officer, have the right to demand that we file a registration statement or request that their shares of our capital stock be included on a registration statement that we are otherwise filing.

Other Transactions

We have entered into change in control and severance agreements with certain of our executive officers that, among other things, provide for certain severance and change in control benefits. See the section titled and “Executive Compensation—Potential Payments upon Termination or Change of Control.”

We have entered into indemnification agreements with our directors and executive officers. The indemnification agreements and our amended and restated certificate of incorporation and amended and restated bylaws require us to indemnify our directors and executive officers to the fullest extent permitted by Delaware law.

Other than as described above, since February 1, 2018, we have not entered into any transactions, nor are there any currently proposed transactions, between us and a related party where the amount involved exceeds, or would exceed, $120,000, and in which any related person had or will have a direct or indirect material interest. We believe the terms of the transactions described above were comparable to terms we could have obtained in arm’s-length dealings with unrelated third parties.

Policies and Procedures for Related Party Transactions

Our Audit Committee has the primary responsibility for reviewing and approving transactions with related persons. Our Audit Committee charter provides that our Audit Committee shall review any related person transactions. Our Board of Directors has adopted a formal written policy providing that we are not permitted to enter into any transaction that exceeds $120,000 and in which any related person has a direct or indirect material interest without the consent of our Audit Committee. In approving or rejecting any such transaction, our Audit Committee is to consider the relevant facts and circumstances available and deemed relevant to our Audit Committee, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.

 

-45-


Table of Contents

OTHER MATTERS

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires that our executive officers and directors, and persons who own more than 10% of our common stock, file reports of ownership and changes of ownership with the SEC. Such directors, executive officers and 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

SEC regulations require us to identify in this proxy statement anyone who filed a required report late during the most recent fiscal year. Based on our review of forms we received, or written representations from reporting persons stating that they were not required to file these forms, we believe that during our fiscal year ended January 31, 2019, all Section 16(a) filing requirements were satisfied on a timely basis with the exception of a late Form 4 for Dan Levin, filed on October  18, 2018.

Fiscal Year 2019 Annual Report and SEC Filings

Our financial statements for our fiscal year ended January 31, 2019 are included in our Annual Report on Form 10-K, which we will make available to stockholders at the same time as this proxy statement. This proxy statement and our annual report are posted on our website at http://www.box.com/investors and are available from the SEC at its website at www.sec.gov. You may also obtain a copy of our annual report without charge by sending a written request to Box, Inc., Attention: Investor Relations, 900 Jefferson Ave., Redwood City, California 94063.

*        *        *

The Board of Directors does not know of any other matters to be presented at the Annual Meeting. If any additional matters are properly presented at the Annual Meeting, the persons named in the enclosed proxy card will have discretion to vote the shares of our common stock they represent in accordance with their own judgment on such matters.

It is important that your shares of our common stock be represented at the Annual Meeting, regardless of the number of shares that you hold. You are, therefore, urged to vote by telephone or by using the Internet as instructed on the enclosed proxy card or execute and return, at your earliest convenience, the enclosed proxy card in the envelope that has also been provided.

THE BOARD OF DIRECTORS

Redwood City, California

May 8, 2019

 

-46-


Table of Contents

LOGO

BOX, INC. 900 JEFFERSON AVE. REDWOOD CITY, CALIFORNIA 94063 VOTE BY INTERNET Before The Meeting—Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting—Go to www.virtualshareholdermeeting.com/BOX2019 You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E78279-P22810 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY BOX, INC. For Withhold For All The Board of Directors recommends you vote FOR the All All Except following nominees for Class II directors: 1. Election of Directors Nominees: 01) Kim Hammonds 02) Dan Levin 03) Josh Stein The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 2. To approve, on an advisory basis, the compensation of our named executive officers. The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 3. Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending January 31, 2020. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. For address changes and/or comments, please check this box and write them on the back where indicated. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.


Table of Contents

LOGO

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice, Proxy Statement and Annual Report are available at www.proxyvote.com. E78280-P22810 BOX, INC. Annual Meeting of Stockholders June 19, 2019 1:30 PM PT This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Aaron Levie, Dylan Smith, and David Leeb, or any of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of BOX, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 1:30 PM, PT on June 19, 2019 and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations and in the discretion of the proxies upon such other business as may properly come before the meeting or any adjournment or postponement thereof. Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse side

BOX INC (NYSE:BOX)
Historical Stock Chart

1 Year : From Jun 2018 to Jun 2019

Click Here for more BOX INC Charts.

BOX INC (NYSE:BOX)
Intraday Stock Chart

Today : Thursday 27 June 2019

Click Here for more BOX INC Charts.

Latest BOX Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....


No posts yet, be the first! No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts


Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.


NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.