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Notice of Annual Meeting of Shareholders
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The meeting will be held for the following purposes:
1.
To elect as directors the three nominees named in the attached Proxy Statement for a three-year term expiring in 2026;
2.
To approve an increase in the number of shares available for issuance under
the Company’s Amended and Restated 2005 Equity Compensation Plan (the
“2005 Plan”);
3.
To approve, on an advisory (non-binding) basis, the compensation of our named executive officers;
4.
To select, in an advisory (non-binding) vote, the frequency of future advisory votes on executive compensation;
5.
To ratify the selection of KPMG LLP as
the Company’s independent registered public accountant for fiscal year 2024; and
6.
To transact any other business that may properly come before the 2023 Annual Meeting or any postponement or adjournment thereof.
Only holders of
the Company’s common stock of record at the close of business on
June 20, 2023 are entitled to notice of and to vote during the 2023 Annual Meeting or any postponement or adjournment thereof. Details regarding the business to be conducted during the 2023 Annual Meeting are more fully described in the accompanying Proxy Statement.
As in previous years, we will again take advantage of the rules of the Securities and Exchange Commission that allow us to furnish our proxy materials electronically over the Internet. As a result, we are sending a notice of Internet availability of the proxy materials, rather than a full paper set of the proxy materials, to many of our shareholders. The notice of availability contains instructions on how to access our proxy materials on the Internet, as well as instructions on how shareholders may obtain a paper copy of the proxy materials. This distribution process will contribute to our sustainability efforts and will reduce the costs of printing and distributing our proxy materials.
By Order of the Board of Directors
Jerry C. Jones
Executive Vice President, Chief Ethics and Legal Officer and Secretary
June 30, 2023
WHETHER OR NOT YOU PLAN TO ATTEND THE 2023 ANNUAL MEETING, PLEASE VOTE AS SOON AS POSSIBLE TO RECORD YOUR VOTE PROMPTLY. PRIOR TO THE 2023 ANNUAL MEETING YOU MAY VOTE ON THE INTERNET, BY TELEPHONE OR BY MAIL.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting To Be Held on
August 15, 2023:
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement
street name through a stockbroker or bank, and shares purchased through LiveRamp’s 401(k) Retirement Savings Plan and/or employee stock purchase plan.
Q:
How can I attend the 2023 Annual Meeting?
A:
You may attend the 2023 Annual Meeting virtually via the Internet. The meeting will be held on
August 15, 2023, at 11:30 a.m. PDT. To attend virtually, log on to
www.virtualshareholdermeeting.com/RAMP2023. While all LiveRamp shareholders will be permitted to listen online to the 2023 Annual Meeting, only shareholders of record and beneficial owners as of the close of business on the record date,
June 20, 2023, may vote and ask questions during the meeting. In order to vote or submit a question during the meeting, you will need to follow the instructions posted at
www.proxyvote.com
and
www.virtualshareholdermeeting.com/RAMP2023 and will need the control number included on your notice of Internet availability of the proxy materials, voting instruction form or proxy card. Broadridge Financial Solutions, Inc. is hosting the webcast of the 2023 Annual Meeting. Broadridge will have technicians ready to assist you with any technical difficulties you may have accessing the meeting. If you encounter any difficulties accessing the virtual meeting during check-in or the meeting, please call Broadridge’s technical support number that will be posted on the virtual meeting platform log-in page.
Q:
What is the difference between a shareholder of record and a beneficial owner of shares held in street name?
A:
Beneficial owners. Most LiveRamp shareholders hold their shares through a broker, bank or other nominee (that is, in “street name”) rather than directly in their own name. If you hold your shares in street name, you are a “beneficial owner,” and a notice of Internet availability of proxy materials, or a full set of the proxy materials together with a voting instruction form, have been forwarded to you by your broker, bank or other nominee.
Shareholders of record. If your shares are registered directly in your name with our transfer agent, Computershare Investor Services, you are considered the “shareholder of record” with respect to those shares, and a notice of Internet availability of proxy materials, or a full set of the proxy materials together with a proxy card, has been sent directly to you by LiveRamp.
Q:
How can I vote my shares?
A:
There are four ways to vote:
•
By Internet. You can submit a proxy over the Internet to vote your shares by following the instructions provided either in the notice of Internet availability of proxy materials or on the proxy card or voting instruction form accompanying the proxy materials you received.
•
By telephone. You can submit a proxy over the telephone following the instructions provided on the proxy card or voting instruction form accompanying the proxy materials you received. If you received a notice of Internet availability of proxy materials only, you can submit a proxy over the telephone to vote your shares by following the instructions at the Internet
website address referred to in the notice.
•
By mail. If you received paper proxy materials in the mail, you can submit a proxy by mail to vote your shares by completing, signing and returning the proxy card or voting instruction form accompanying the proxy materials you received. If you received a notice of Internet availability of proxy materials, to receive a proxy card or voting instruction form, you must request a paper copy of our proxy materials by following the instructions in your notice.
•
During the meeting. If you are a shareholder of record or a beneficial owner as of the
June 20, 2023 record date, you may vote virtually via the Internet during the 2023 Annual Meeting. If you desire to vote virtually via the Internet at the meeting, please follow the instructions for attending and voting during the 2023 Annual Meeting posted at
www.virtualshareholdermeeting.com/RAMP2023. Beneficial owners must obtain a legal proxy from their broker, bank or other nominee to vote during the meeting. Follow the instructions from your broker, bank or other nominee included with your proxy materials, or contact your broker, bank or other nominee to request a legal proxy. All votes must be received by the independent inspector
of election before the polls close during the meeting.
Please note that telephone and Internet voting will close at 8:59 p.m. PDT on
August 14, 2023.
Q:
How do I vote if I hold my shares as a participant in LiveRamp’s 401(k) Retirement Savings Plan?
A:
If you hold shares as a participant in LiveRamp’s 401(k) Retirement Savings Plan, you can vote your shares by Internet, telephone or mail by following the instructions provided in the voting instruction form accompanying the
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Questions and Answers about the Proxy Materials and the 2023 Annual Meeting
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proxy materials you received. Your completed voting instructions, whether submitted by Internet, by telephone or by mail, must be received by 8:59 p.m. PDT on
August 10, 2023, in order to allow sufficient time for your vote to be tabulated by the plan’s trustee. You also may revoke or change your voting instruction at any time prior to the cut-off time. Due to the tabulation requirements of the plan administrator, participants in LiveRamp’s 401(k) Retirement Savings Plan may not vote their shares during the meeting.
Q:
Can I change my vote?
A:
Any shareholder executing a proxy retains the right to revoke it at any time prior to the final vote at the 2023 Annual Meeting, except that participants in LiveRamp’s 401(k) Retirement Savings Plan may not revoke or change their voting instructions after 8:59 p.m. PDT on
August 10, 2023. You may revoke your proxy and vote again by (i) delivering a notice of revocation or delivering a later-dated proxy to LiveRamp’s Corporate Secretary at LiveRamp Holdings, Inc., 301 Main Street, 2nd Floor,
Little Rock,
AR 72201; (ii) submitting another vote over the Internet or by telephone; or (iii) by attending and voting virtually via the Internet during the
2023 Annual Meeting. However, your attendance during the 2023 Annual Meeting will not automatically revoke your proxy unless you specifically so request. A shareholder’s last vote is the vote that will be counted.
Q:
Who will count the votes?
A:
A representative of Broadridge Financial Solutions, Inc. will count the votes and will serve as the inspector of election.
Q:
What does it mean if I receive more than one proxy card or voting instruction form?
A:
If your shares are registered differently, or if they are held in more than one account, you will receive more than one proxy card or voting instruction form. Please follow the instructions on each proxy card or voting instruction form to ensure that all of your shares are voted. Please sign each proxy card exactly as your name appears on the card. For joint accounts, each owner should sign the proxy card. When signing as executor, administrator, attorney, trustee, guardian, etc., please print your full title on the proxy card.
Q:
What is the quorum requirement for the 2023 Annual Meeting?
A:
The presence virtually via the Internet or by proxy of the holders of a majority of the shares of common stock issued and outstanding as of the record date is required to establish a quorum at the 2023 Annual Meeting. If a quorum is established, each holder of common stock shall be entitled to one vote on each of the matters presented at the 2023 Annual Meeting for each share of common stock outstanding in his or her name on the record date.
Q:
What items of business will be presented at the 2023 Annual Meeting?
A:
The following matters will be presented for shareholder consideration and voting at the 2023 Annual Meeting:
1.
The election of three director nominees named in this Proxy Statement for a three-year term expiring in 2026;
2.
A proposal to increase the number of shares available for issuance under the 2005 Plan;
3.
An advisory vote on the compensation of our named executive officers;
4.
An advisory vote to select the frequency of future advisory votes on executive compensation; and
5.
The ratification of the selection of KPMG LLP as
the Company’s independent registered public accountant for fiscal year 2024.
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 3
Q:
What vote is required to pass each item of business?
A:
The shareholder vote required to approve each proposal is set forth below:
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Proposal
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Votes Required for Approval
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1.
Election of directors
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Majority of votes cast for each nominee*
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2.
Increase in the number of shares available for issuance under the 2005 Plan
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Majority of votes cast*
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3.
Advisory vote to approve executive compensation
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Majority of votes cast*
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4.
Advisory vote to select the frequency of future advisory votes on executive compensation
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Majority of votes cast*
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5.
Ratification of the selection of the independent registered public accountant
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Majority of votes cast*
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*
A majority of votes cast means that the number of votes cast “for” a director nominee’s election or a proposal must exceed the number of votes cast “against” it.
Director Resignation Policy. In an uncontested election, a nominee who does not receive a majority of the votes cast will not be elected, and the Board of Directors has established procedures under which any incumbent director who fails to receive a majority of the votes cast in his or her election will tender his or her resignation to the Board. The Board will act upon a tendered resignation within 90 days of the date on which the election results were certified and will promptly make public disclosure of the results of its actions.
Q:
How are proxies voted?
A:
All shares represented by valid proxies will be voted, and where a shareholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the shareholder’s instructions.
Q:
What happens if I do not give specific voting instructions?
A:
Shareholders of record. If you are a shareholder of record and you sign and return a proxy card without giving specific voting instructions, or you indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board, then the proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the 2023 Annual Meeting.
Beneficial owners. If you are a beneficial owner of shares held in street name and do not vote at the 2023 Annual Meeting or provide the broker, bank or other nominee that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the broker, bank or other nominee that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If the broker, bank or other nominee that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the broker, bank or other nominee that holds your shares will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.”
Q:
Which items of business are considered “routine” and “non-routine”?
A:
The election of directors (Proposal No. 1), approval of an increase in the number of shares available for issuance under the 2005 Plan (Proposal No. 2), the advisory vote regarding
the Company’s executive compensation (Proposal No. 3), and the advisory vote to select the frequency of future advisory votes on executive compensation (Proposal No. 4) are considered non-routine matters under applicable rules, and therefore a broker or other nominee may not vote on these matters without instructions from the beneficial owner. Consequently, there may be broker non-votes with respect to these proposals. On the other hand, the ratification of KPMG LLP (Proposal No. 5) is considered a routine matter, and a broker or other nominee may vote without instructions, and broker non-votes are not expected to occur with respect to this proposal.
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Approval of the Increase in the Number of Shares Available for Issuance under the 2005 Plan
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Over the past three fiscal years, the Compensation Committee has continued to manage the expense of our core broad-based equity program (“Core Stock Plan Expense”), which is used to grant equity awards to employees, including the NEOs. Core Stock Plan Expense was $85.7 million for fiscal 2023, or 14.4% of revenue, representing 68.1% of our total SBC expense.
In addition to our Core Stock Plan Expense, the Compensation Committee also believes that stock is an essential tool to use in acquisitions. Acquisition-related SBC expense was $17.5 million in fiscal 2023, or 13.9% of our total SBC expense for fiscal 2023. Also, in March 2023 the Compensation Committee approved an action to accelerate the vesting of certain time-vesting RSUs covering 1.5 million shares of common stock that would have otherwise vested over the following six months to take advantage of cash tax savings opportunities for fiscal 2023. The fiscal 2023 acceleration-related SBC expense was $22.6 million, or 3.8% of revenue, representing 18.0% of our total SBC expense.
The table below shows a breakdown of the types of SBC as a percent of revenue and of our total stock-based compensation expense:
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FY21 Revenue $443M
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FY22 Revenue $529M
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FY23 Revenue $597M
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Expense Type
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Expense Amount
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% of Revenue
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% of Total SBC Expense
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Expense Amount
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% of Revenue
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% of Total SBC Expense
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Expense Amount
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% of Revenue
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% of Total SBC Expense
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Core Stock Plan
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$ |
56M |
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12% |
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50% |
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$ |
54M |
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10% |
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62% |
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$ |
86M |
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14% |
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68% |
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Acquisition-Related SBC
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$ |
35M |
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8% |
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31% |
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$ |
33M |
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6% |
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38% |
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$ |
17M |
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3% |
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14% |
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One-Time Accelerations SBC
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$ |
21M |
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5% |
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19% |
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$ |
0M |
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0% |
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0% |
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$ |
23M |
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4% |
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18% |
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Total SBC |
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$ |
112M |
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25% |
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100% |
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$ |
87M |
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16% |
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100% |
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$ |
126M |
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21% |
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100% |
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New Plan Benefits
Future awards under the 2005 Plan will be made at the discretion of the Compensation Committee and/or the Board. Therefore, at this time, the benefits that may be received by any participant or group of participants under the 2005 Plan if our shareholders approve this proposal, cannot be precisely determined. Please refer to the “Grants of Plan-Based Awards for Fiscal Year 2023” table on page 59 below, however, which provides information on the grants made to the named executive officers in fiscal 2023 pursuant to the 2005 Plan and to the “Non-Employee Director Compensation” table on page 74 below, which provides information on grants made to our non-employee directors in the last fiscal year pursuant to the 2005 Plan. In addition, the table immediately below reflects equity-based awards granted to all executive officers that served in fiscal 2023, as a group, all current directors who are not executive
officers, as a group, and all employees, including all current officers who are not executive officers, as a group in fiscal 2023 pursuant to the 2005 Plan. Only RSUs, PSUs and common stock were issued under the 2005 Plan in fiscal 2023.
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Group
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Number of RSUs
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Dollar Value of RSUs ($)2
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Number of PSUs
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Dollar Value of PSUs ($)1
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Number of Common Shares
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Grant Date Common Share Value
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All Executive Officers, as a Group (4 total)
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201,300
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$ 4,468,860
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244,676
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$ 5,685,048
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—
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—
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All Non-Executive Directors, as a Group (8 total)
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—
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—
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—
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—
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52,374
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$ 1,255,357
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All Non-Executive Officer Employees, as a Group (1125 total)
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4,150,778
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$ 102,723,879
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161,825
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$ 3,760,006
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—
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—
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1.
The amounts reflect the grant date fair value of RSUs and PSUs.
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 21
Equity Compensation Plan Not Approved by Security Holders
The Company adopted the 2011 Non-Qualified Equity Compensation Plan of LiveRamp Holdings, Inc. (the
“2011 Plan”) for the purpose of making equity grants to induce new key executives to join
the Company. The awards that may be made under the 2011 Plan include stock options, stock appreciation rights, restricted stock awards, RSU awards, performance awards, or other stock unit awards. To receive such an award, a person must be newly employed with
the Company with the award being provided as an inducement material to their employment, provided the award is first properly approved by the Board or an independent committee of the Board. The Board and the Compensation Committee are the administrators
of the 2011 Plan, and as such, determine all matters relating to awards granted under the 2011 Plan, including the eligible recipients, whether and to what extent awards are to be granted, the number of shares to be covered by each grant and the terms and conditions of the awards. The 2011 Plan has not been approved by
the Company’s shareholders.
2005 Plan Summary
Purpose of the 2005 Plan
The purpose of the 2005 Plan is to align long-term incentive compensation with
the Company’s business strategies and with shareholder interests, and to recruit and retain key individuals. The Compensation Committee believes that providing employees with a proprietary interest in LiveRamp’s business and, therefore, a more direct stake in its continuing welfare, will better align their interests with those of our shareholders.
Description of the 2005 Plan
The 2005 Plan was first approved by shareholders at the 2000 Annual Meeting of Shareholders and has been amended from time to time. The following description of the 2005 Plan is qualified in its entirety by reference to the applicable provisions of the 2005 Plan in Appendix A to this Proxy Statement.
Administration. The 2005 Plan specifies that it will be administered by the Board or the Compensation Committee, and their lawful designees. The administrator makes determinations such as to whom awards will be made, what type of awards will be made, how many shares will be subject to each grant, the duration and exercise price of stock options, vesting schedules, performance criteria, conditions upon which a grant may be forfeited, the effect of termination of service, and any restriction, limitation, procedure or deferral related to a grant. The Compensation Committee or the Board may establish any rules and regulations it considers necessary to administer the 2005 Plan. All determinations of the Compensation Committee or Board are final and conclusive for all purposes. The administrator may delegate to one or more officers of
the Company the right to grant
awards under the 2005 Plan, provided such delegation is made in accordance with applicable law.
Eligible Participants. Employees, directors, affiliates, independent contractors and consultants of LiveRamp or any subsidiary or affiliated company are eligible to participate in the 2005 Plan. As of
June 1, 2023, there were approximately 1,388 employees, seven non-executive directors and 347 contractors eligible to (but do not necessarily) participate in the 2005 Plan. Participants are selected in the discretion of the Compensation Committee and during the last fiscal year (fiscal 2023), a total of 1,137 individuals were selected by the Compensation Committee to receive awards under the 2005 Plan. In the current fiscal year (fiscal 2024), we benchmarked our equity granting practices and have reduced the total pool of individuals eligible for broad-based grants to align with market practices for both new hires and annual equity refresh grants. For example, in fiscal 2024 to date, only 399 individuals
(including officers and directors) have received grants under the 2005 Plan.
Types of Awards. The 2005 Plan permits awards of a variety of equity-based incentives, including stock options, stock appreciation rights (“SARs”), restricted stock, RSUs, PSUs and other stock unit awards.
Stock Options. Under the 2005 Plan, either incentive stock options or stock options that do not qualify as incentive options (non-qualified stock options) may be granted. See the discussion regarding options below under “Federal Income Tax Treatment.”
The exercise price for stock options may not be less than 100% of the fair market value, based on the closing price, of LiveRamp common stock on the date of the grant. Without the further approval of the shareholders, no outstanding stock option granted under the 2005 Plan may be amended to reduce the exercise price or canceled in consideration for an award having a lower exercise price. This will not, however, prohibit adjustments related to stock splits, stock
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Approval of the Increase in the Number of Shares Available for Issuance under the 2005 Plan
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dividends, recapitalizations and other changes in the corporate structure or shares of LiveRamp. The duration of options granted under the 2005 Plan, including the duration of options following a participant’s termination of employment, death or disability, is determined by the Compensation Committee or the Board in its sole discretion. Both non-qualified and incentive stock options granted under the 2005 Plan may not be exercised more than 10 years after the date of grant, although each may be granted for a lesser duration. Incentive stock options granted to a participant owning more than 10% of the total combined voting power of all classes of LiveRamp stock may not be exercised more than five years from the date of grant. At the time of exercise of an option, a participant must pay the full exercise price of the option in cash, by check or electronic funds transfer. Additionally, a participant may pay the exercise price by one of the following additional
forms of payment, as may be approved by the Compensation Committee or Board:
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via a “broker’s cashless exercise” (i.e., through the sale of shares, by way of a broker, acquired upon exercise of the option having a fair market value equal to the exercise price pursuant to procedures approved by LiveRamp);
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by delivering shares of LiveRamp common stock previously owned by the participant for at least six months and having a fair market value equal to the exercise price;
•
by authorizing LiveRamp to withhold a number of shares of LiveRamp common stock otherwise issuable to the participant upon exercise of an option having a fair market value equal to the exercise price; or
•
by any combination of the above.
Stock Appreciation Rights. SARs may, but need not be, identified with a specific stock option. The exercise price for any SAR shall (i) for any SAR identified with a stock option, equal the exercise price of such option, or (ii) for any other SAR, not be less than 100% of the fair market value of LiveRamp common stock on the date of the grant. The duration of any SAR may not exceed ten years.
Restricted Stock and RSUs. Restricted stock awards comprise shares of LiveRamp common stock that are forfeitable until the restrictions imposed by the Compensation Committee or Board lapse. Awards of RSUs provide the right to receive shares, cash or a combination thereof upon the lapse of the restrictions imposed by the Compensation Committee or Board. Awards of restricted stock and RSUs may be subject to time-based restrictions, performance-based restrictions, or both. Holders of restricted stock awards are entitled to vote the shares of restricted stock during the restriction period. Conversely, holders of RSUs are not entitled to voting rights prior to the time the applicable restrictions lapse and shares of LiveRamp common stock are delivered pursuant to the award. The minimum restriction period applicable to any award of restricted stock that is not subject to performance conditions restricting the grant size, the transfer of the shares,
or the vesting of the award is two years from the date of grant; provided, however, that a restriction period of less than two years may be approved under the 2005 Plan for such awards with respect to up to a total of 100,000 shares. No dividends, dividend equivalents or similar payments will be payable in respect of restricted stock or RSUs and there will be a minimum restriction period for RSUs of one year from the date of grant; provided, however, that a restriction period of less than one year may be approved under the 2005 Plan for such awards with respect to up to a total of 100,000 shares.
Performance Awards. The 2005 Plan also authorizes the award of performance awards, in the form of either performance shares or performance share units, on any terms and conditions that the Compensation Committee or the Board deems desirable. Performance awards may be paid in cash, shares, or a combination thereof, as determined by the Compensation Committee or Board.
The Compensation Committee or Board may set performance goals that, depending on the extent to which they are met during a performance period applicable to an award, will determine the number of performance shares or units that will be delivered to a participant at the end of the performance period. The performance goals may be set at threshold, target and maximum performance levels, and the number of performance shares or units to be delivered may be tied to the degree of attainment of the various performance levels specified under the various performance goals during the performance period, which may not be less than one year. No payment may be made with respect to a performance award if any specified threshold performance level is not attained. No dividends, dividend equivalents or similar payments will be payable in respect of performance awards.
Other Awards. Other awards of shares and other awards that are valued in whole or in part by reference to, or are otherwise based on, shares of LiveRamp common stock or other property may be granted under the 2005 Plan to participants, either alone or in addition to other awards under the 2005 Plan. Other stock awards may be paid in
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 23
shares, cash or any other form of property as the Compensation Committee or the Board may determine. Subject to the provisions of the 2005 Plan, the Compensation Committee or Board has sole and complete authority to determine who will receive such an award, the times at which such awards will be made, the number of shares to be granted, and all other terms and conditions of such awards. For any such award, the vesting of which is conditioned only on the passage of time, the restriction period is a minimum of two years for full vesting.
There are limits (the
“Limits”) as to how many shares may be granted to a participant. The Limits apply separately to two different categories of awards. With respect to stock options and/or SARs, the maximum number of shares of our common stock that may be granted to any one person in any 12-month period is 400,000 shares; likewise, with respect to restricted stock awards, RSUs, performance awards and any other stock unit awards, the maximum number of shares of our common stock that may be granted to any one person in any 12-month period is 400,000 shares. The Limits apply to each of these two groups of award types, not to each type of award, nor to all awards as a single group for any one year. As a result, a participant could receive awards totaling up to 800,000 shares in any one year under the 2005 Plan. For example, a participant could receive under the 2005 Plan stock options covering 400,000 shares and 400,000 RSUs.
The
Company has not previously issued awards to any one participant under the 2005 Plan in one 12-month period in excess of the Limits under the 2005 Plan, and it does not have any plans to do so.
In addition to the foregoing, the 2005 Plan provides that no non-employee director of
the Company may be granted in any 12-month period an aggregate amount of equity having a value of more than $400,000 on the date of grant, under the 2005 Plan or any other equity compensation plan sponsored by
the Company.
Performance Measures. Performance goals established by the Compensation Committee for performance awards may contain one or more performance measures set forth in the 2005 Plan. Performance goals may be applied to LiveRamp as a whole (or a division, organization, or other business unit thereof), a subsidiary, an affiliated company, or an individual participant, and they may be set at a specific level or expressed as a relative percentage to the comparable measure at comparison companies or a defined index. Performance goals, to the extent applicable, must be based upon generally accepted accounting principles, but may be adjusted by the Compensation Committee to take into account the effect of the following: (a) changes in accounting standards that may be required by the Financial Accounting Standards Board (or any applicable successor entity) after the performance goal is established; (b) realized investment gains and losses; (c) extraordinary,
unusual, non-recurring, or infrequent items; (d) “non-GAAP financial measures” that have been included in LiveRamp’s quarterly earnings releases and disclosed to investors in accordance with SEC regulations; and (e) any other items as the Compensation Committee determines to be required, so that the operating results are computed on a comparative basis from period to period. Determinations made by the Compensation Committee must be based on relevant objective information and/or financial data and will be final and conclusive with respect to all affected parties.
Shares Reserved for Issuance. If the shareholders approve the Share Increase Amendment, the approximate number of shares available for future awards under the 2005 Plan as of the date of the annual meeting would be the sum of (1) 4,000,000 and (2) the number of shares available for future awards under the 2005 Plan immediately before such approval (as of
June 1, 2023, 2,219,795 shares were available for future awards under the 2005 Plan).
If any award is forfeited, any option or SAR terminates, expires or lapses without being exercised within the exercise period, or any SAR is exercised for cash, the shares underlying such awards will be available for re-issuance under the 2005 Plan. To the extent any shares of LiveRamp common stock subject to an award are not delivered to a participant because the shares are used to satisfy an applicable tax withholding obligation or the exercise price of an option, those shares will be deemed delivered and will no longer be available for delivery under the 2005 Plan.
Adjustment. Notwithstanding any other provision of the 2005 Plan to the contrary, in the event of any change affecting the shares subject to the 2005 Plan or any award (through merger, consolidation, reorganization, recapitalization, dividend or other distribution (whether in the form of cash, shares, other securities or other property), stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, issuance of rights to subscribe, or other change in capital structure of
the Company), appropriate adjustments or substitutions shall be made by the Compensation Committee or the Board as to:
i.
total shares subject to the 2005 Plan;
ii.
maximum number of shares for which awards may be granted to any one service provider of
the Company or its affiliates (e.g., the Limits);
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Approval of the Increase in the Number of Shares Available for Issuance under the 2005 Plan
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iii.
number of shares and price per share subject to outstanding awards; and
iv.
class of shares of stock that may be delivered under the 2005 Plan and/or each outstanding award, as shall be equitable to prevent dilution or enlargement of rights under previously granted awards.
The determination of the Compensation Committee or Board as to these matters shall be conclusive; provided, however, that (i) any such adjustment with respect to an incentive stock option and any related SAR shall comply with the rules of Section 424(a) of the Code; and (ii) in no event shall any adjustment be made which would disqualify any Incentive Stock Option granted hereunder as an incentive stock option for purposes of Section 422 of the Code.
Amendment and Termination. The Compensation Committee or the Board may amend the 2005 Plan and/or the terms of outstanding awards or grants; provided, however, that if an amendment would (i) materially increase the benefits to participants under the 2005 Plan, (ii) increase the aggregate number of shares that may be issued under the 2005 Plan, or (iii) materially modify the requirements for participation in the 2005 Plan by materially increasing the class or number of persons eligible to participate, then shareholder approval must be obtained. To the extent necessary to comply with applicable laws and regulations, certain other amendments to the 2005 Plan or to any outstanding grant may require shareholder approval. Any amendment that would impair the rights of a participant may not be made without the participant’s consent. The 2005 Plan may be terminated at any time by the Board. No termination, however, will adversely affect the terms of
any outstanding awards under the 2005 Plan.
Change in Control. Upon the occurrence of a “Change in Control Event,” as defined in the 2005 Plan, each outstanding award under the 2005 Plan will be treated as the Compensation Committee or the Board may determine (subject to the provisions of the 2005 Plan), without a participant’s consent, including, without limitation, that:
A.
awards will be assumed, or substantially equivalent awards will be substituted, by the acquiring or succeeding corporation (or affiliate thereof), with appropriate adjustments as to the number and kind of shares and prices;
B.
upon written or electronic notice to a participant, that the participant’s awards will terminate upon or immediately prior to the consummation of such Change in Control Event;
C.
that, to the extent the Compensation Committee or Board may determine, in whole or in part prior to or upon consummation of such Change in Control Event:
i.
options and SARs may become immediately exercisable;
ii.
restrictions and deferral limitations applicable to any restricted stock or RSUs may become free of all restrictions and limitations and become fully vested and transferable;
iii.
all performance awards may be considered to be prorated, and any deferral or other restriction may lapse and such performance awards may be immediately settled or distributed (provided, for purposes of clarification, that any performance award converted into an award that provides for service-based vesting will be treated in accordance with the terms of the 2005 Plan); and
iv.
the restrictions and deferral limitations and other conditions applicable to any other awards granted under the 2005 Plan may lapse and such awards may become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the award not previously forfeited or vested;
D.
the termination of an award in exchange for an amount equal to the excess of the fair market value of the shares subject to the award immediately prior to the occurrence of the Change in Control Event (which shall be no less than the value being paid for such shares pursuant to such transaction as determined by the Compensation Committee or Board) over the exercise price or strike price, if applicable, of such award, with such amount payable in cash, in one or more of the kinds of property payable in such transaction, or in a combination thereof, as the Compensation Committee or Board in their discretion shall determine; or
E.
any combination of the foregoing.
In taking any of the actions permitted under the 2005 Plan, the Compensation Committee or Board will not be obligated to treat all awards, all awards held by a single participant, or all awards of the same type, similarly.
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 25
In the event that the successor corporation does not assume or substitute for the award (or portion thereof):
i.
options and SARs will vest and become immediately exercisable;
ii.
restrictions and deferral limitations applicable to any restricted stock or RSUs will become free of all restrictions and limitations and become fully vested and transferable;
iii.
all performance awards will be considered to be prorated, and any deferral or other restriction will lapse and such performance awards will be immediately settled or distributed; and
iv.
the restrictions and deferral limitations and other conditions applicable to any other awards granted under the 2005 Plan will lapse and such other awards will become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent the award was not previously forfeited or vested.
In addition, if an option or SAR is not assumed or substituted in the event of a Change in Control Event, the Compensation Committee or Board will notify the participant in writing or electronically that the option or SAR will be exercisable for a period of time determined by the Compensation Committee or Board in its sole discretion, and the option or SAR will terminate upon the expiration of such period.
Under the 2005 Plan, a
“Change-in-Control Event” generally includes specified mergers, a sale of all or substantially all of
the Company’s assets and the acquisition of a significant percentage of the voting power of
the Company.
Retirement Eligibility. In the event of a participant’s retirement on or after age 65 with at least five years of service, awards held by the participant at retirement will continue to vest in accordance with their terms.
Clawback. Awards granted under the 2005 Plan are subject to
the Company’s
“clawback policy” as may be in effect from time to time.
Summary of U.S. Federal Income Tax Consequences
The following summary is intended only as a general guide to the U.S. federal income tax consequences of participation in the 2005 Plan. The summary is based on existing U.S. laws and regulations as of
June 20, 2023, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the income tax laws of any municipality, state or foreign country in which the participant may reside. As a result, tax consequences for any particular participant may vary based on individual circumstances.
Incentive Stock Options. A participant recognizes no taxable income for regular income tax purposes as a result of the grant or exercise of an option that qualifies as an incentive stock option under Section 422 of the Code. If a participant exercises the option and then later sells or otherwise disposes of the shares acquired through the exercise of the option after both the two-year anniversary of the date the option was granted and the one-year anniversary of the exercise, the participant will recognize a capital gain or loss equal to the difference between the sale price of the shares and the exercise price, and we will not be entitled to any deduction for federal income tax purposes.
However, if the participant disposes of such shares either on or before the two-year anniversary of the date of grant or on or before the one-year anniversary of the date of exercise (a “disqualifying disposition”), any gain up to the excess of the fair market value of the shares on the date of exercise over the exercise price generally will be taxed as ordinary income, unless the shares are disposed of in a transaction in which the participant would not recognize a loss (such as a gift). Any gain in excess of that amount will be a capital gain. If a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. Any ordinary income recognized by the participant upon the disqualifying disposition of the shares generally should be deductible by us for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Internal Revenue Code.
For purposes of the alternative minimum tax, the difference between the option exercise price and the fair market value of the shares on the exercise date is treated as an adjustment item in computing the participant’s alternative minimum taxable income in the year of exercise. In addition, special alternative minimum tax rules may apply to certain subsequent disqualifying dispositions of the shares or provide certain basis adjustments or tax credits.
Nonstatutory Stock Options. A participant generally recognizes no taxable income as the result of the grant of such an option. However, upon exercising the option, the participant normally recognizes ordinary income equal to the
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Approval of the Increase in the Number of Shares Available for Issuance under the 2005 Plan
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amount that the fair market value of the shares on such date exceeds the exercise price. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of the shares acquired by the exercise of a nonstatutory stock option, any gain or loss (based on the difference between the sale price and the fair market value on the exercise date) will be taxed as capital gain or loss. No tax deduction is available to us with respect to the grant of a nonstatutory stock option or the sale of the shares acquired through the exercise of the nonstatutory stock option.
Stock Appreciation Rights. In general, no taxable income is reportable when a stock appreciation right is granted to a participant. Upon exercise, the participant generally will recognize ordinary income in an amount equal to the fair market value of any cash or shares received. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss.
Restricted Stock Awards. A participant acquiring shares of restricted stock generally will recognize ordinary income equal to the fair market value of the shares on the vesting date. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. The participant may elect, pursuant to Section 83(b) of the Internal Revenue Code to accelerate the ordinary income tax event to the date of acquisition by filing an election with the Internal Revenue Service no later than thirty days after the date the shares are acquired. Upon the sale of shares acquired pursuant to a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.
Restricted Stock Unit Awards. There are no immediate tax consequences of receiving an award of restricted stock units. A participant who is awarded restricted stock units generally will be required to recognize ordinary income in an amount equal to the fair market value of any cash or shares issued to such participant at the end of the applicable vesting period or, if later, the settlement date elected by the administrator or a participant. Any additional gain or loss recognized upon any later disposition of any shares received would be capital gain or loss.
Performance Shares and Performance Unit Awards. A participant generally will recognize no income upon the grant of a performance share or a PSU award. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of receipt in an amount equal to the cash received and the fair market value of any cash or unrestricted shares received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.
Section 409A. Section 409A of the Code provides certain requirements for non-qualified deferred compensation arrangements with respect to an individual’s deferral and distribution elections and permissible distribution events. Awards granted with a deferral feature will be subject to the requirements of Section 409A. If an award is subject to and fails to satisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A fails to comply with Section 409A’s provisions, Section 409A imposes an additional 20% federal income tax on compensation recognized as ordinary income, as well as interest on such deferred compensation.
Tax Effect for the Company. We generally will be entitled to a tax deduction in connection with an award under the 2005 Plan in an amount equal to the ordinary income realized by a participant and at the time the participant recognizes such income (for example, the exercise of a nonstatutory stock option) except to the extent such deduction is limited by applicable provisions of the Internal Revenue Code.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF U.S. FEDERAL INCOME TAXATION UPON PARTICIPANTS AND LIVERAMP WITH RESPECT TO AWARDS UNDER THE 2005 PLAN. IT DOES NOT PURPORT TO BE COMPLETE AND DOES NOT DISCUSS THE IMPACT OF EMPLOYMENT OR OTHER TAX REQUIREMENTS, THE TAX CONSEQUENCES OF A PARTICIPANT’S DEATH, OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE, OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.
Vote Required
The approval of the amendment and restatement of the 2005 Plan to increase the number of shares available thereunder requires the affirmative vote of a majority of votes cast.
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 27
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Advisory Vote to Approve Named Executive Officer Compensation
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(Proposal No. 3)
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Proposal Overview
In accordance with Rule 14a-21 under the Securities Exchange Act of 1934,
the Company requests that our shareholders approve on a non-binding, advisory basis the compensation of
the Company’s
“Named Executive Officers” identified in the section titled
“Compensation Discussion and Analysis” set forth below in this Proxy Statement.
In accordance with
the Company’s compensation philosophy, our compensation programs are designed to attract, retain and motivate the management team to achieve
the Company’s business goals on an annual and a long-term basis. Key objectives of our compensation programs are to:
•
Align the interests of our executive officers, including our Named Executive Officers, with those of our shareholders;
•
Consider shareholder feedback when making compensation decisions;
•
Maintain transparent compensation arrangements that provide a strong link between compensation and performance and motivate our executive officers, including our Named Executive Officers, to achieve the highest level of performance; and
•
Attract and retain exceptional executive officers, including our Named Executive Officers, through clear, market-based compensation plans and arrangements.
Details concerning how we implement our compensation philosophy, and how we structure our compensation programs to meet the objectives listed above, are provided in the “Compensation Discussion and Analysis” below. In particular, we discuss how we design performance-based compensation programs and set compensation targets and other objectives to maintain a close correlation between executive pay and Company performance.
In light of the foregoing, we ask that shareholders vote FOR the following resolution:
“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in the Company’s Proxy Statement for the 2023 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the other related tables and disclosures.”
While this vote is advisory and therefore not binding on
the Company, the Compensation Committee or the Board, we value the opinions of our shareholders. Accordingly, the Compensation Committee or the Board will take the results of this vote under advisement and will consider our shareholders’ concerns when making future decisions regarding
the Company’s executive compensation programs.
The Company’s current policy is to provide shareholders with an opportunity to approve the compensation of the Named Executive Officers each year at the Annual Meeting of Shareholders. Accordingly, the next such vote is expected to occur at the 2024 Annual Meeting of Shareholders.
Board of Directors’ Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RESOLUTION TO APPROVE, ON AN ADVISORY, NON-BINDING BASIS, THE COMPENSATION OF
THE COMPANY’S NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 29
In building our business, we do not aspire to be mediocre, good, or even great — we intend to be the absolute best in everything we do. We attract and employ exceptional people, challenge them to accomplish exceptional things, and achieve exceptional results for our clients and shareholders. We will do this through six guiding principles:
1.
Above all, we do what is right;
2.
We love our customers;
3.
We say what we mean and do what we say;
4.
We empower people;
5.
We respect people and time; and
6.
We get stuff done.
Executive Compensation Relative to Company Performance
In fiscal 2023,
the Company grew revenue 13% year over year and achieved a number of strategic objectives we believe are important for long-term shareholder value creation. Subscription revenue was $483 million, up 13%, and contributed 81% of total revenue, and Marketplace & Other revenue was $114 million, up 14%. GAAP gross profit was $426 million, up 12%, and net cash provided by operating activities was $34 million compared to $78 million in the prior fiscal year. We also returned $150 million in capital to our shareholders through our share repurchase program. Despite such performance, our share price declined 41% from $37.39 at the start of the fiscal year to $21.93 at the end of the fiscal year.
As discussed in “Fiscal 2023 Executive Compensation Highlights” and “Individual Compensation Elements” below, our executive compensation program provides a strong relationship between pay and Company performance. We believe the payouts under our fiscal 2023 executive compensation program evidence LiveRamp’s ongoing commitment to align executive pay with performance and shareholder interests during this time of continued pressure on our stock price.
Fiscal 2023 Executive Compensation Highlights
Performance-Based Compensation Aligned to Declining Shareholder Returns
A large portion of our executive pay opportunity was tied to long-term and short-term performance metrics aligned to shareholder interests. Specifically, our executive officers receive performance-based pay through our long-term performance award shares and Annual Cash Incentive Programs (“Annual CIP”) that directly align to internal growth and profitability measures and total shareholder return relative to benchmarks.
As reflected below, due to the underachievement of performance metrics, performance-related payouts resulted in a significant reduction in realized performance-based compensation compared to target performance-based compensation in 2023.
Long-Term Awards
•
In fiscal 2023, all of our Relative Total Shareholder Return (TSR) PSUs granted in fiscal 2021 were forfeited because they did not meet the minimum thresholds for performance, which is directly tied to declines in shareholder returns over the 3-year measurement period.
•
In addition to the Relative TSR PSUs granted in fiscal 2021,
the Company granted Rule of 40 PSUs to the executive officers. As disclosed in the proxy statement for our 2021 annual meeting of shareholders, the Rule of 40 PSUs granted in fiscal 2021 awards could vest in a number of shares ranging from 0% to 200% of the target award, based on the attainment of trailing twelve-month revenue growth and EBITDA margin targets for the period from
April 1, 2020 to
March 31, 2023. Performance was measured and vesting evaluated on a quarterly basis beginning with the period ended
June 30, 2021 and continuing through
March 31, 2023. Through
March 31, 2022,
the Compensation Committee had certified cumulative attainment of 50% under Rule of 40 PSUs granted in fiscal 2021. The final four measurement periods occurred in fiscal 2023. Based on performance in fiscal 2023, no additional attainment was achieved and all remaining fiscal 2021 Rule of 40 awards were forfeited.
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Compensation Discussion and Analysis
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Short-Term Awards
•
In fiscal 2023, our Annual CIP was based on Adjusted Revenue and Non-GAAP EBIT metrics. As discussed further in “Individual Compensation Elements — Annual Cash Incentive Plan,” Adjusted Revenue was below threshold performance, while non-GAAP EBIT exceeded target performance, resulting in attainment of 54.6% of target.
Executive Officer Turnover and Retention
The labor market in our industry has historically been very competitive due to the limited number of candidates available with the necessary technical skills and experience. Competition for talent has intensified in recent years and, like many companies, we are experiencing increased turnover in our employee population, including with our executive officers. Our growth strategy and future success are highly dependent on the talent we have in our organization, and the complexity of the products and services we provide to our customers requires highly-trained professionals. Equity compensation awards are an important tool in recruiting, retaining and motivating these highly skilled individuals that are critical to our success. To maintain the competitiveness of our total compensation package, we are strongly recommending that shareholders approve an increase in the number of shares available for issuance under our 2005 Plan (Proposal No. 2).
Redesign of our “Rule of 40” PSU Awards
Based on shareholder feedback related to our Rule of 40 PSU plan design, the Compensation Committee took action to simplify the design of the fiscal 2023 Rule of 40 awards and to ensure a long-term strategic outlook by eliminating the quarterly performance periods and replacing them with three discrete, non-overlapping annual performance periods over the full three-year period. Final attainment of these awards is based on the average annual results over the three-year performance period. For additional information on the re-designed Rule of 40 awards, see “Individual Compensation Elements — Long-Term Incentive Compensation” below.
Say-on-Pay Results and Shareholder Engagement
Each year at the annual meeting of shareholders, we conduct a non-binding, shareholder advisory vote to approve the compensation of our NEOs (commonly known as a “Say-on-Pay” vote). The Compensation Committee considers the results of our annual Say-on-Pay votes in determining our subsequent compensation policies and decisions and engages with our shareholders to obtain additional feedback on our executive compensation program and related pay decisions. At our 2022 annual meeting of shareholders, approximately 85% of the votes cast on the Say-on-Pay proposal were voted in favor of our executive compensation program.
Our shareholders’ opinions on how we operate our business are very important to us. In fiscal 2022 we continued our ongoing shareholder engagement efforts. As part of these efforts, we reached out to many of our large shareholders to discuss our business and our executive compensation and governance policies and practices. The Compensation Committee gave careful consideration to the feedback received from these shareholders and as part of our ongoing governance process, incorporated the feedback into its decisions regarding the design of our executive compensation program in fiscal 2022 and beyond. Common themes we heard from our shareholder engagement in fiscal 2023 and the resulting actions include the following:
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 39
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Key Themes from Shareholder Engagement
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Response of Compensation Committee
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Shareholders expressed interest in understanding our actions to control stock-based compensation expense.
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To better manage the expense and maintain it at acceptable levels compared to our peers, the Compensation Committee has reduced the pool of employees eligible to participate in the Company’s equity-based compensation programs and revised our practices for recruiting, annual refresh, and promotion/retention grants while maintaining the goals of our equity-compensation program to align employees’ compensation to shareholder interest and attract, motivate and retain talent.
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Shareholders encouraged us to continue to emphasize shareholder-friendly performance metrics to ensure alignment of executive compensation payouts with driving shareholder return.
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The Compensation Committee did not adjust the final attainment of any PSUs granted in fiscal 2021. This resulted in no incremental attainment of the Rule of 40 PSUs in fiscal 2023 and the Relative TSR PSUs being forfeited with no attainment because our three-year stock price performance relative to the Russell 2000 was below the 25th percentile.
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Say-on-Pay Frequency
At our 2017 Annual Meeting of Shareholders, our shareholders were asked to cast a non-binding, advisory vote on the frequency with which we should hold future Say-on-Pay votes (commonly known as a “Say-When-on-Pay” vote). With regard to this vote, our shareholders cast the highest number of votes for an annual Say-on-Pay vote, and we have held annual Say-on-Pay votes since 2017. At the Annual Meeting, shareholders are once again being asked to vote on the frequency with which we should hold future Say-on-Pay votes (Proposal No. 4), and the Board is recommending that we continue to hold annual Say-on-Pay votes. If approved, the next Say-on-Pay vote would be therefore held at our 2024 annual meeting of shareholders. Further, following the upcoming Annual Meeting, the next Say-When-on-Pay vote will be held at our 2029 annual meeting of shareholders.
Executive Compensation Program
Program Objectives
Our objective is to attract, motivate, reward, and retain our executive officers, including our NEOs, in a manner that is transparent, comparable to our peers, and importantly, aligned with shareholder interests. We do so by putting the majority of our NEOs’ annual target total direct compensation “at-risk,” thereby providing rewards only when our performance warrants. Our executive compensation objectives are to:
•
Align the interests of our executive officers, including our NEOs, with those of our shareholders;
•
Consider shareholder feedback when making compensation decisions;
•
Maintain transparent compensation arrangements that provide a strong link between compensation and performance and motivate our executive officers, including our NEOs, to achieve the highest level of performance; and
•
Attract and retain exceptional executive officers, including our NEOs, through clear, market-based compensation plans and arrangements.
We believe these objectives enable us to reward the performance and contributions of our executive officers, including our NEOs, while maintaining a strong link between executive compensation and company performance, including the execution of our long-term business strategy. The following discussion explains how our executive compensation program achieves these objectives.
Program Framework
The Compensation Committee applied the framework reflected in the following chart to achieve our executive compensation program objectives in fiscal 2023. The four compensation elements were allocated so that the majority
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Compensation Discussion and Analysis
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of each NEO’s annual target total direct compensation opportunity was “at-risk” and subject to performance-based requirements. While the exact compensation mix may vary from year to year, the goal is to achieve our compensation objectives as described above.
Base Salary
Base salary represents the only “fixed” portion of compensation our executive officers, including our NEOs, receive and is intended to attract and retain highly talented individuals by considering their position, qualifications/experience, performance, market comparators and internal equity. The Compensation Committee reviews the base salaries of our executive officers as part of its annual compensation review and adjusts base salaries as it determines necessary or appropriate.
Annual Cash Incentives
Annual cash incentives represent the short-term variable portion of the cash compensation (“STI”) of our executive officers, including our NEOs, and are intended to motivate them by providing opportunities for earning compensation by meeting or exceeding our short-term financial and operational goals essential to company growth. Target annual cash incentive award opportunities are set as a percentage of base salary and are determined by considering market competitiveness, individual performance, and company performance. The Compensation Committee may, from time to time, adjust the target annual cash incentive award opportunities of our executive officers, including our NEOs, to better align to competitive market positioning or to reward personal performance or reflect future potential.
Long-Term Incentive Compensation
Long-term incentive compensation represents the long-term variable portion of the annual target total direct compensation of our executive officers, including our NEOs, that rewards growth in shareholder value. We use time-based restricted stock unit (“RSU”) awards and performance-based stock unit (“PSU”) awards in our long-term incentive compensation program to directly align most of the compensation of our executive officers to shareholder interests. Long-term incentive compensation can also serve to discourage short-term risky behaviors. Awards are generally based on a combination of factors, including role, skills, experience level, company and individual performance, future potential and, in some cases, the current unrealized value of an NEO’s outstanding equity awards. When granting equity awards, the Compensation Committee also takes into consideration (a) the projected impact of the proposed awards on our earnings, (b) the proportion
of our total shares outstanding used for annual employee equity awards (our “burn rate”) in relation to comparable companies, and (c) the potential voting power dilution to our shareholders (our “overhang”).
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 41
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Compensation Discussion and Analysis
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Variable Pay Mix
The target total direct compensation opportunities for our CEO and other our other NEOs reflect our variable “pay for performance” compensation philosophy: 91% of our CEO’s annual target total direct compensation was variable or “at risk,” as well as, on average, 85% of our other NEOs’ annual target total direct compensation, as described below:
1.
Target total direct compensation is the sum of base salary, target annual cash incentive opportunity and target long-term incentive. The actual payouts may differ from the incentive opportunities provided. Numbers above may not foot due to rounding.
As reflected in the charts above, we believe that our executive compensation program design incents our NEOs to drive both short-term and long-term growth. To ensure that our executive compensation program remains aligned with shareholder interests, the Compensation Committee regularly evaluates the relationship between the reported values of the equity awards granted to our NEOs, the amount of compensation realizable (and, ultimately, realized) from such awards in subsequent years, and our TSR over the relevant period.
While we disclose the estimated values of these equity awards in our Summary Compensation Table at the time of grant for each covered fiscal year, the actual economic value of these awards that may be realizable by our NEOs will vary, often significantly, based on the performance of our common stock.
We believe our executive compensation program holds our executive officers accountable for delivering on the financial objectives we have communicated to our shareholders, and appropriately balances the goals of attracting, motivating, rewarding, and retaining our NEOs and other executive officers, and that it therefore promotes stability in our leadership team.
Compensation Policies and Practices
We endeavor to maintain sound executive compensation policies and practices, including compensation-related corporate governance standards, consistent with our executive compensation philosophy. During fiscal 2023, we maintained the following executive compensation policies and practices, including those designed to drive performance and others to prohibit or discourage behaviors that we do not believe serve shareholders’ long-term interests:
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 43
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Compensation Discussion and Analysis
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Process for Determining CEO Compensation
Each year, the Board evaluates our CEO’s performance relative to our strategic plan, operating goals, compensation philosophy, and key performance indicators relating to executive compensation. Our executive compensation objectives include maintaining competitive pay, linking pay to performance, promoting the creation of shareholder value, and encouraging retention. The Compensation Committee considers the results of this evaluation. In consultation with its compensation consultant, the Compensation Committee also considers general market conditions and specific industry trends. The Compensation Committee reviews each element of our CEO’s compensation, his employment agreement, and his historical compensation levels to evaluate his target total direct compensation opportunity and assists our Board in assessing our CEO’s total compensation. The Compensation Committee also considers our business results and the other factors described above. In fiscal
2023, recommendations from the Compensation Committee with respect to the compensation of our CEO were submitted to the independent members of our Board for approval. Our CEO does not participate in decisions regarding his own compensation.
Process for Determining Compensation of Other NEOs
Each year, our CEO evaluates the performance of each of our other NEOs. Our CEO makes a recommendation for the compensation of each NEO to the Compensation Committee based upon his evaluation and a market analysis supplied by the Compensation Committee’s compensation consultant. The Compensation Committee considers our CEO’s recommendation relative to our strategic plan, operating goals, compensation philosophy, and performance against key strategic performance indicators. In consultation with its compensation consultant, the Compensation Committee also considers general market conditions and specific industry trends.
Peer Group Philosophy
The Compensation Committee annually reviews compensation levels and practices against our peer set of Software and Services companies and makes adjustments to its composition as appropriate, taking into account changes in both our business and the businesses of the companies in the peer group. In November 2021, with the assistance of its compensation consultant, the Compensation Committee re-examined the then-existing compensation peer group to reflect the changes in our business, revenue and market capitalization. Based on this exercise, the Compensation Committee approved a revised compensation peer group consisting of the following companies for use in fiscal 2023:
|
Peer Group
|
|
|
8x8
|
|
|
Guidewire Software
|
|
|
Sailpoint Technologies
|
|
|
Alteryx
|
|
|
LivePerson
|
|
|
Workiva
|
|
|
AppFolio
|
|
|
Momentive Global
|
|
|
Yext
|
|
|
BlackLine
|
|
|
New Relic
|
|
|
Zendesk
|
|
|
Bottomline Technologies
|
|
|
Q2 Holdings
|
|
|
Zuora
|
|
|
Box
|
|
|
Qualys
|
|
|
|
|
|
Five9
|
|
|
Rapid7
|
|
|
|
|
The companies in this revised compensation peer group were selected on the basis of their similarity to us, as determined using the following criteria:
•
Similar revenue size — approximately 0.5x to 2.5x our last four fiscal quarters’ revenue (approximately $231 million to $1.2 billion)
•
Similar market capitalization — approximately 0.3x to 3.0x our market capitalization (approximately $999 million to $10 billion)
•
Industry affiliation — application software, internet services and infrastructure, systems software
•
Similar business focus — Cloud/SaaS, Business-to-Business
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 47
To analyze the compensation practices of the companies in our compensation peer group, the compensation consultant gathered data from public filings, as supplemented by the consultant’s internal databases. This market data was then used as a reference point for the Compensation Committee to assess our executive compensation levels in the course of its deliberations on compensation forms and amounts.
The Compensation Committee reviews all compensation elements for each of our executive officers compared to the similarly situated executives of our peer group companies. In determining actual pay levels for our executive officers, the Compensation Committee considers data from the companies in the compensation peer group, as well as the other factors described above, in its collective judgment.
Individual Compensation Elements
Individual Pay Decisions
The Compensation Committee considers the following factors when evaluating and setting the target total direct compensation opportunity for our executive officers, including our NEOs and making recommendations to the independent members of our Board with respect to the target total direct compensation opportunity for our CEO:
•
Our performance against the financial and operational objectives established by the Compensation Committee and our Board;
•
Each individual’s responsibilities, qualifications, and length of service;
•
The scope of each NEO’s role compared to other similarly situated executives at companies in our compensation peer group;
•
The performance of each individual NEO, based on an assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function, and work as part of our broader team, all of which reflect our core values;
•
Compensation parity among our NEOs; and
•
The compensation practices of our compensation peer group and the positioning of each NEO’s compensation in a ranking of peer company compensation levels. The Compensation Committee typically establishes target total direct compensation levels within a reasonable range of market median.
These factors provide the framework for compensation decision making regarding the compensation opportunity for each executive officer, including each of our NEOs (other than our CEO), as well as the recommendations to the independent members of our Board for the compensation opportunity of our CEO. No single factor is determinative in setting pay levels, but key accomplishments help guide the pay decision making process along with other factors.
Base Salary
In May 2022, the Compensation Committee reviewed the NEOs’ annual base salaries. Based on such review, the Compensation Committee approved moderate base salary increases for Mr. Jenson and Mr. Hussain to better align their total target direct compensation with peer company compensation levels and recommended to the independent directors of our Board, who approved this recommendation, that the base salary of Mr. Howe be maintained at its existing level, which has not been increased since fiscal 2019. The following tables set forth the base salaries for the NEOs for fiscal 2022 and fiscal 2023, as applicable:
|
Named Executive Officer
|
|
|
Fiscal 2022 Base Salary
|
|
|
Fiscal 2023 Base Salary
|
|
|
Percentage Adjustment
|
|
|
Mr. Howe |
|
|
|
$ |
690,000 |
|
|
|
|
$ |
690,000 |
|
|
|
0%
|
|
|
Mr. Jenson |
|
|
|
$ |
570,000 |
|
|
|
|
$ |
590,000 |
|
|
|
3.51%
|
|
|
Mr. Hussain |
|
|
|
$ |
410,000 |
|
|
|
|
$ |
425,000 |
|
|
|
3.66%
|
|
|
Mr. Jones |
|
|
|
$ |
445,000 |
|
|
|
|
$ |
445,000 |
|
|
|
0%
|
|
|
Compensation Discussion and Analysis
|
|
|
|
|
Annual Cash Incentive Plan
In May 2022, the Compensation Committee approved the “Fiscal 2023 CIP.” The Fiscal 2023 CIP provided an individual payout modifier ranging from 0 to 200% of the funded payout based on the evaluation of individual performance, with any payment adjustments subject to Compensation Committee approval in its sole discretion. For the Fiscal 2023 CIP, no discretion was exercised in annual cash incentive payment recommendations for all of the NEOs payment amounts.
Corporate Performance Measures
The Compensation Committee selected revenue (weighted 60%) and Non-GAAP EBIT (weighted 40%) as the corporate performance measures for the Fiscal 2023 CIP as follows:
|
Corporate Performance Measures
|
|
|
Definition
|
|
|
Rationale
|
|
|
Adjusted Revenue
|
|
|
Revenue as reported under GAAP adjusted to reflect the impact, if any, of acquisitions and divestitures during the year.1
|
|
|
Revenue growth is important to the creation of long-term shareholder value because it reflects management’s ability to grow our top line through execution of our digital marketing ecosystem strategy.
|
|
|
Non-GAAP EBIT2
|
|
|
Earnings before interest, other, and income tax expense (EBIT) adjusted to exclude certain items such as stock-based compensation expense, amortization of acquired intangibles, one-time transformation expenses, and restructuring charges consistent with the presentation of non-GAAP operating income (loss). Non-GAAP EBIT further excludes bonus expense for this performance metric.
|
|
|
Non-GAAP EBIT is an indicator of our profitability. This measure focuses on the outcome of operating decisions, while excluding the impact of non-operating decisions such as interest and tax rates.
|
|
1.
There were no acquisitions or divestitures in fiscal 2023. Accordingly, there were no adjustments and Adjusted Revenue is equal to revenue as reported under GAAP for purposes of the Fiscal 2023 CIP.
2.
See Schedule 1 on page 57 of this Compensation Discussion and Analysis for a reconciliation of a reconciliation of our GAAP operating loss to non-GAAP EBIT.
In May 2022, management and the Compensation Committee set the threshold, target, and maximum performance levels and the payment percentages for each of the corporate performance measures. Threshold, target and maximum goals were set consistent with our financial plan for fiscal 2023. Payouts percentages are determined using linear interpolation between the performance levels. The performance levels and funding percentages for fiscal 2023 are set forth in the table below:
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Adjusted Revenue |
|
|
|
$ |
610M |
|
|
|
|
$ |
630M |
|
|
|
|
$ |
645M |
|
|
|
Non-GAAP EBIT |
|
|
|
$ |
36M |
|
|
|
|
$ |
63M |
|
|
|
|
$ |
93M |
|
|
|
Funding1 |
|
|
25%
|
|
|
100%
|
|
|
200%
|
|
1.
Plan is funded at a maximum of 25% until Non-GAAP EBIT (excluding bonus) threshold of $36M is met. Payouts under the Fiscal 2023 CIP are capped at payouts under
the Company’s broad-based bonus plans for non-executive employees.
Target Annual Cash Incentive Opportunities
In May 2022, the Compensation Committee reviewed the target annual cash incentive opportunities for each of the NEOs and decided to maintain the NEOs’ target annual cash incentive opportunities (expressed as a percentage of
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 49
base salary) at their fiscal 2022 levels. As a result, the target annual cash incentive opportunities of our NEOs for fiscal 2023 were as follows:
|
Named Executive Officer
|
|
|
Target Annual Cash Incentive (% of Base Salary)
|
|
|
Annualized Target Annual Cash Incentive Opportunity ($)
|
|
|
Mr. Howe |
|
|
|
|
110% |
|
|
|
|
$ |
759,000 |
|
|
|
Mr. Jenson |
|
|
|
|
100% |
|
|
|
|
$ |
590,000 |
|
|
|
Mr. Hussain |
|
|
|
|
65% |
|
|
|
|
$ |
276,250 |
|
|
|
Mr. Jones |
|
|
|
|
65% |
|
|
|
|
$ |
289,250 |
|
|
Fiscal 2023 CIP Results
The actual financial results for the Fiscal 2023 CIP were (i) Adjusted Revenue of $597 million; and (ii) Non-GAAP EBIT of $74 million, which resulted in total attainment of 54.6% of target using linear interpolation as set forth in the chart below:
|
Metrics
|
|
|
Weight
|
|
|
Results
|
|
|
Final Payout
|
|
|
Adjusted Revenue |
|
|
|
|
60% |
|
|
|
|
$ |
597M |
|
|
|
|
|
0% |
|
|
|
Non-GAAP EBIT |
|
|
|
|
40% |
|
|
|
|
$ |
74M |
|
|
|
|
|
137% |
|
|
|
Total Attainment (payable in June 2023) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54.6% |
|
|
Individual Payments
For the Fiscal 2023 CIP, our CEO reviewed individual performance to determine if any adjustments to the final payments for each NEO (other than himself) should be recommended to the Compensation Committee. After reviewing the individual performance of each NEO, our CEO decided not to recommend any modification to individual executive officer payments and, instead, worked with the Compensation Committee to determine whether any adjustments were necessary. Based on these discussions, the Compensation Committee decided not to adjust any individual payments. The Compensation Committee also did not make any recommendations to the independent members of our Board regarding adjustment for individual performance for our CEO.
The individual payments made to our NEOs for the Fiscal 2023 CIP were as follows:
|
Named Executive Officer
|
|
|
Target Award ($)
|
|
|
Actual Payment ($)
|
|
|
Actual Payment (% of Target)
|
|
|
Mr. Howe |
|
|
|
$ |
759,000 |
|
|
|
|
$ |
414,414 |
|
|
|
|
|
54.6% |
|
|
|
Mr. Jenson |
|
|
|
$ |
590,000 |
|
|
|
|
$ |
322,140 |
|
|
|
|
|
54.6% |
|
|
|
Mr. Hussain |
|
|
|
$ |
276,250 |
|
|
|
|
$ |
150,833 |
|
|
|
|
|
54.6% |
|
|
|
Mr. Jones |
|
|
|
$ |
289,250 |
|
|
|
|
$ |
157,931 |
|
|
|
|
|
54.6% |
|
|
Long-Term Incentive Compensation
Long-term incentive compensation is an effective tool for focusing our NEOs on shareholder value creation over a multi-year period. Long-term incentives also serve as a core retention tool and can discourage inappropriate short-term risky behaviors.
The Compensation Committee determined the amount of long-term incentive compensation for our NEOs (and, in the case of our CEO, formulated its recommendation to the independent members of the Board for his long-term incentive compensation award) as part of its annual compensation review. In making these awards and recommendations, the Compensation Committee took the following factors into consideration:
•
a competitive market analysis prepared by its compensation consultant;
•
the recommendations of our CEO (except with respect to his own long-term incentive compensation award);
|
Compensation Discussion and Analysis
|
|
|
|
|
•
the outstanding equity holdings of each NEO;
•
the projected impact of the proposed awards on our earnings;
•
the proportion of our total shares outstanding used for annual employee long-term incentive compensation awards (our “burn rate”) in relation to the median proportions of the companies in our compensation peer group; and
•
the potential dilution to our shareholders (our “overhang”) in relation to the median practice of the companies in our compensation peer group after taking into account each of the other factors above.
Annual Equity Award Design
For fiscal 2023, annual
“refresh” long-term incentive compensation awards were granted to our NEOs in May 2022 in the form of PSU awards and time-based RSU awards. The time-based RSUs and the Rule of 40 PSUs (representing 70% of the PSUs granted in fiscal 2023) (such awards, collectively, the
“Contingent Stock Awards”) were contingent upon shareholder approval of an amendment to increase the number of shares available for issuance under the 2005 Plan (the
“2022 Share Increase”) at the 2022 annual meeting of shareholders held on
August 9, 2022 (the
“2022 Annual Meeting”). The Contingent Stock Awards were designed to be automatically forfeited if shareholder approval was not obtained. In light of the nature of the Contingent Stock Awards, the Compensation Committee awarded the recipients of the Contingent Stock Awards long-term cash awards subject to similar terms and conditions
as the Contingent Awards that would only become effective in the event that the shareholders did not approve the 2022 Share Increase (the
“Contingent Cash Awards”).
At the 2022 Annual Meeting, shareholders approved the 2022 Share Increase. As a result, the Contingent Cash Awards were automatically cancelled. All long-term incentive compensation awards were approved by the Compensation Committee in May 2022, but for accounting purposes,
August 9, 2022 (the date of 2022 Annual Meeting) is deemed the grant date of the Contingent Stock Awards and are reported as such in the
“Grants of Plan-Based Awards for Fiscal 2023” table below.
The fiscal 2023 equity grants were weighted more heavily towards PSUs for our CEO, with 60% of his long-term incentive compensation opportunity in the form of PSU awards and 40% in the form of an RSU award. The Compensation Committee believed that weighting our CEO’s long-term compensation opportunity more heavily toward PSUs in comparison to other executives better aligns our CEO’s goals with those of our shareholders. For the other NEOs, their long-term incentive compensation was weighted 50% in the form of PSU awards and 50% in the form of RSU awards. The equity awards granted to our NEOs in May 2022 were as follows:
|
Named Executive Officer
|
|
|
RSU Awards (Shares)
|
|
|
PSU Awards (Shares)
|
|
|
Target Value of RSUs and PSUs ($)1
|
|
|
Mr. Howe |
|
|
|
|
86,753 |
|
|
|
|
|
130,130 |
|
|
|
|
$ |
6,500,000 |
|
|
|
Mr. Jenson |
|
|
|
|
66,733 |
|
|
|
|
|
66,733 |
|
|
|
|
$ |
4,000,000 |
|
|
|
Mr. Hussain |
|
|
|
|
26,693 |
|
|
|
|
|
26,693 |
|
|
|
|
$ |
1,600,000 |
|
|
|
Mr. Jones |
|
|
|
|
21,121 |
|
|
|
|
|
21,120 |
|
|
|
|
$ |
1,266,000 |
|
|
1.
The target number of shares granted in fiscal 2023 as reported in the table above are based on the 20-day trailing average stock price of $29.97 per share on
May 17, 2022.
Fiscal 2023 Time-Based RSU Awards
The fiscal 2023 time-based RSU awards were for shares of our common stock and vest over a three-year period. The RSU awards vest as to one-third of the shares subject to the award after the first year, with the remainder vesting in equal amounts quarterly thereafter, contingent upon such NEO’s continued employment as of each applicable vesting date.
Fiscal 2023 PSU Awards
The fiscal 2023 PSU awards were subject to two performance measures, one an internal measure and the other a relative measure. The first performance measure is based on the “Rule of 40,” which the Compensation Committee believed is a critical metric in driving shareholder value creation. This performance measure represents 70% of the
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 51
Other Compensation Topics
Stock Ownership Guidelines
As one way of ensuring a strong connection between our executive officers and shareholders’ interests, our executive officers are subject to stock ownership guidelines designed to ensure that they have a meaningful stake in LiveRamp, while acknowledging their need for portfolio diversification. These stock ownership guidelines are as follows:
|
Executive Officer
|
|
|
Stock Ownership Requirement
|
|
|
Chief Executive Officer |
|
|
Three times annual base salary |
|
|
Other NEOs |
|
|
One times annual base salary |
|
Generally, each NEO has five years from the date of appointment to attain the required ownership level. In the event of an increase in an executive officer’s base salary, he or she will have one year from the time of the increase to acquire any additional shares needed to meet any increased guidelines resulting from the increased base salary. Under the guidelines, stock ownership includes shares of our common stock purchased on the open market; owned jointly with, or separately by, immediate family members (spouse and dependent children); held in trust for the NEO or an immediate family member; held through any Company-sponsored plan, such as an employee stock purchase plan, a qualified retirement plan, or a supplemental executive retirement plan; obtained through the exercise of stock options; and 50% of the NEO’s unvested RSU awards (after deduction of applicable federal and state taxes).
Failure to meet or, in unique circumstances, to show sustained progress toward meeting the above guidelines may result in a reduction in future equity awards or cash incentive payouts in the form of shares of our common stock. As of
March 31, 2023, each of the NEOs that is currently an executive officer of
the Company was in compliance with the applicable stock ownership requirement or has until the fifth anniversary of the executive officer’s appointment to attain the required ownership level. Please see the section entitled
“Stock Ownership” elsewhere in the Proxy Statement for a presentation of our NEOs’ equity holdings.
Retirement and Welfare Benefits
Our NEOs are eligible to participate in the same tax-qualified retirement and welfare plans as our other full-time employees. We sponsor a Section 401(k) plan that provides for employer matching contributions which are currently paid in cash. Our NEOs are also eligible to receive retirement benefits through our non-qualified supplemental executive retirement plan described below. In addition, our employees (including our NEOs) are entitled to certain retirement benefits under the 2005 Plan. Specifically, in the event of a 2005 Plan participant’s retirement on or after age 65 with at least five years of service, awards held by the participant at retirement will continue to vest in accordance with their terms. We believe these benefits are important for attracting, motivating, rewarding, and retaining our NEOs, and are comparable to retirement benefits being provided by companies in our compensation peer group.
Defined Benefit Pension Plan
None of our NEOs participate in or have an account balance in a tax-qualified defined benefit pension plan maintained by us.
Nonqualified Deferral Plan or Supplemental Executive Retirement Plan
While we do not maintain a defined benefit pension plan, our highly compensated employees, including our Named Executive Officers, are eligible to participate in our non-qualified Supplemental Executive Retirement Plan (the
“SERP”) which enables them to contribute their pre-tax income into the plan through payroll deductions. The purpose of the SERP is to provide eligible employees with the ability to defer cash compensation in excess of certain limits that apply under
the Company’s Section 401(k) plan. Participants may defer up to 90% of their pre-tax income.
The investment choices for participant contributions under the SERP are similar to those provided under the Section 401(k) plan. A participant’s contributions are deemed to be invested in certain funds in accordance with his or her election, and earnings are calculated based on the performance of the selected funds. The participant does not actually own any shares in the investments.
Health Benefit Plans
We maintain several broad-based employee benefit plans in which our NEOs are permitted to participate on the same terms as other employees who meet applicable eligibility criteria, subject to legal limitations on the amounts
|
Compensation Discussion and Analysis
|
|
|
|
|
that may be contributed or the benefits that may be payable under the plans. These include health benefits, life insurance, and disability benefits. We believe these benefits encourage the overall health, stability and well-being of our NEOs and are comparable to those plans being provided by the companies in our compensation peer group.
Executive Physical Program
Our Executive Physical Program was introduced in fiscal 2021 and is designed to provide our most senior level executives with the opportunity to participate in comprehensive preventive check-ups. The program is a component of our health plan, and participation is voluntary. The program offers an annual comprehensive physical that includes services such as a routine medical examination, blood tests and x-rays. Not included are expenses for the treatment, cure or testing of a known illness, disability, or physical injury or lifestyle behavior change program that are generally provided under the group health plan.
Perquisites and Other Personal Benefits
We do not view perquisites or other personal benefits as a significant component of our executive compensation program. We describe the perquisites and other personal benefits provided to our NEOs in the Summary Compensation Table. In the future, we may provide perquisites or other personal benefits in limited situations, such as where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our NEOs more efficient and effective, and for recruitment and retention purposes. All future practices with respect to perquisites or other personal benefits to NEOs will be approved and subject to periodic review by the Compensation Committee.
Post-Employment Compensation
We believe that having in place reasonable and competitive post-employment compensation arrangements are essential to attracting and retaining highly qualified executive officers. Accordingly, our CEO is eligible to receive certain specified payments and benefits in the event of a termination of employment in connection with a change in control of LiveRamp as provided in his employment agreement. Prior to his resignation, Mr. Jenson also had an employment agreement that provided similar benefits to those provided to our CEO. In addition, our other NEOs currently employed by
the Company are eligible to participate in the LiveRamp Holdings, Inc. Executive Officer Severance Policy. Details regarding the LiveRamp Holdings, Inc. Executive Officer Severance Policy are included in the
“Potential Payments Upon Termination or Change of Control” section below.
Our post-employment compensation arrangements have been designed to provide reasonable compensation to executive officers who leave LiveRamp under certain circumstances to facilitate their transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign and not revoke a general release and waiver of any and all claims against us as a condition to receiving post-employment compensation payments or benefits.
We do not consider specific amounts payable under these post-employment compensation arrangements when establishing annual compensation. We do believe, however, that these arrangements are necessary to offer compensation packages that are competitive.
In determining payment and benefit levels under the various circumstances triggering the post-employment compensation arrangements for the NEOs, the Compensation Committee has drawn a distinction between voluntary terminations of employment, termination of employment for cause, and terminations of employment without cause or as a result of a change in control of LiveRamp. Payment in the latter circumstances has been deemed appropriate in light of the benefits to us described above, as well as the likelihood that the NEO’s departure is due, at least in part, to circumstances not within his or her control. In contrast, we believe that payments are not appropriate in the event of a termination of employment for cause or a voluntary resignation, because such events often reflect either inadequate performance or an affirmative decision by the NEO to end his or her relationship with us.
In the case of the post-employment compensation arrangements in the event of a termination of employment in connection with a change in control of LiveRamp, we believe that these arrangements are designed to align the interests of management and shareholders when considering our long-term future. The primary purpose of these arrangements is to keep our most senior executive officers focused on pursuing all corporate transaction activity that is in the best interests of shareholders regardless of whether those transactions may result in their own job loss. Reasonable post-acquisition payments and benefits should serve the interests of both the executive officer and our shareholders.
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 55
Generally, payments and benefits under the post-employment compensation arrangements in the event of a change in control of LiveRamp are payable only if there is a subsequent loss of employment by an executive officer (a so-called “double-trigger” arrangement). In the case of the acceleration of vesting of outstanding equity awards, we use this double-trigger arrangement to protect against the loss of retention power following a change in control of LiveRamp and to avoid windfalls, both of which could occur if vesting accelerated automatically as a result of the transaction.
We have not provided excise tax payments (“gross-ups”) relating to a change in control of LiveRamp and have no such obligations in place with respect to any of our executive officers, including our NEOs.
Compensation Recovery (“Clawback”) Policy
We maintain a compensation recovery policy (“Clawback Policy”) which provides that if we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the federal securities laws as a result of the intentional misconduct by an executive officer with the title of Senior Vice President or higher, our Board may require reimbursement for any bonus or other incentive compensation (including equity awards) earned above what would have been earned under the restated financial statements, including any profits realized from the sale of our equity securities, that was paid to any such executive officer during the 12-month period preceding the first public issuance or filing with the SEC of the financial document in which the material noncompliance was contained. The independent members of our Board will determine whether material noncompliance with financial reporting requirements is the
result of intentional misconduct of the executive officer. The Clawback Policy will be updated to reflect the NYSE listing standards in light of the final clawback rule recently adopted by the SEC.
Policy Prohibiting Hedging or Pledging of Our Securities
Our insider trading policy prohibits all of our employees, including our executive officers, and the members of our Board from engaging in short sales, as well as hedging or monetization transactions (such as zero-cost collars and forward sales
contracts). In addition, our executive officers, including the Named Executive Officers, are prohibited from holding shares of our common stock in a margin account or otherwise pledging shares of our common stock as collateral for a loan. The prohibitions also apply to spouses, dependent children and others living in the same household.
Tax and Accounting Implications
The Compensation Committee periodically reviews the potential impact of the applicable tax and accounting rules on the material elements of our executive compensation program. These factors are considered by the Compensation Committee along with the other factors described above when making decisions about the annual and long-term incentive compensation awards for our executive officers.
Taxation of “Parachute” Payments
Sections 280G and 4999 of the Internal Revenue Code provide that executive officers and members of our Board who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of
the Company that exceeds certain prescribed limits, and that we (or our successor) may forfeit a deduction on the amounts subject to this additional tax. We did not provide any executive officer, including any Named Executive Officer, with a
“gross-up” or other reimbursement payment for any tax liability that the executive officer may owe as a result of the application of Sections 280G or 4999 during fiscal 2023, and we have not agreed and are not otherwise obligated to provide any executive officer with such a
“gross-up” or other reimbursement.
Accounting for Stock-Based Compensation
We follow the Financial Accounting Standard Board’s Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”) for our stock-based compensation awards. FASB ASC Topic 718 requires us to measure the compensation expense for all share-based payment awards made to our employees and members of our Board, including options to purchase shares of our common stock and other stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the award may never realize any value from their awards.
|
Compensation Tables
|
|
|
|
|
Nonqualified Deferred Compensation During Fiscal 2023
The Company maintains the LiveRamp Holdings Non-Qualified Deferral Plan, or SERP, that includes participation by our NEOs.
|
Name
|
|
|
Executive Contributions in Fiscal 20231
|
|
|
Registrant Contributions in Fiscal 2023
|
|
|
Aggregate Earnings in Fiscal 20233
|
|
|
Aggregate Withdrawals/ Distributions
|
|
|
Aggregate Balance at 3/31/20234
|
|
|
Scott E. Howe |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Warren C. Jenson |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
$ |
95,924 |
|
|
|
Mohsin Hussain |
|
|
|
$ |
215,938 |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
$ |
323,707 |
|
|
|
Jerry C. Jones |
|
|
|
$ |
52,513 |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
$ |
553,828 |
|
|
1.
These amounts are included in the “Salary” or “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table.
2.
The plan does not provide for registrant contributions for fiscal 2023.
3.
None of the earnings are above-market earnings and are therefore not reflected in the Summary Compensation Table.
4.
All amounts contributed by an NEO and LiveRamp in prior years have been reported in the Summary Compensation Tables in our
previously filed proxy statements in the year earned to the extent the NEO was an NEO for purposes of the SEC’s executive compensation disclosure.
Nonqualified Deferral Plan or SERP
The purpose of the SERP is to provide eligible employees with the ability to defer cash compensation in excess of certain limits that apply under
the Company’s 401(k) plan. For calendar year 2022, the plan was revised and no longer includes a matching company contribution. Participants may defer up to 90% of their pre-tax income. The investment choices for participant contributions under the SERP are similar to those provided under the 401(k) plan. A participant’s contributions are deemed to be invested in certain funds in accordance with his or her election, and earnings are calculated based on the performance of the selected funds. The participant does not actually own any shares in the investments.
Prior to deferring compensation, participants must elect the time and manner of their account payouts. Benefits are paid as elected by the participant at the time of the deferral in the form of a single lump sum payment, equal annual installments over a period of years or an annuity. Under limited circumstances, participants may change the time and manner of their account payouts or receive distributions because of a financial hardship or other conditions.
Potential Payments Upon Termination or Change in Control
The tables and narrative below reflect the amount of compensation payable to each of the Named Executive Officers in the event of termination of the executive’s employment under the various circumstances described. The amounts shown assume that the termination was effective as of
March 31, 2023. With the exception of Mr. Jenson, these are only estimates of the amounts which would be paid to the Named Executive Officers upon their termination. The actual amounts to be paid can only be determined at the time of an executive’s actual separation from
the Company. Payments or benefits generally available to all employees on similar terms are not described. All terms not otherwise defined herein shall have the meanings set forth in the Employment Agreements or the Severance Policy, as applicable.
Potential Payments Upon Termination
Regardless of the manner in which a Named Executive Officer’s employment terminates, he or she may be entitled to receive amounts earned during his/her term of employment. These amounts include:
•
base salary earned through the date of termination; and
•
amounts accrued and vested through
the Company’s 401(k) plan or SERP.
Employment Agreements. Mr. Howe entered into a new employment agreement with
the Company effective
February 14, 2018 (the “
Howe Agreement”). Mr. Jenson entered into a new employment agreement with
the Company effective
February 14, 2018 (the “
Jenson Agreement” and, together with the Howe Agreement, the
“Employment
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 63
|
Compensation Tables
|
|
|
|
|
of completing a Potential Sale, such executive will be entitled to claim a post-change in control good reason termination of employment under the applicable arrangement; and (iii) for employees who, following a Potential Sale,
“go with” the division sold in a Potential Sale, a Potential Sale would be deemed to constitute a change in control for purposes of the Severance Policy, entitling such individuals to the enhanced severance payments and benefits in accordance with the terms of those arrangements. In 2018,
the Company also amended the 2005 Plan to remove the Compensation Committee and Board of Director’s discretion in determining whether a change in control has occurred and provided for revised treatment of outstanding equity awards under the 2005 Plan upon a change in control.
In the event of a change of control, the treatment of PSUs is as follows:
•
the applicable performance period for such PSU awards was truncated,
•
a number of PSUs equal to the higher of the target number of shares granted and the number of PSUs that would vest based on the degree of achievement of the applicable performance objectives as of the change in control date will become eligible to vest, and
•
the number of PSUs that were determined to be eligible to vest will be treated as unvested RSUs, and if assumed or substituted for by the acquiring or surviving entity (or an affiliate of such entity), will convert into RSUs of equal value to be settled in cash or shares by the acquiring or surviving entity (as determined pursuant to the definitive agreement relating to the change in control). If the executive officer remains employed with the acquiring or surviving entity through the end of the original performance period, the RSUs (i.e., the converted PSU awards) will become fully vested. Further, if within 24 months following a change in control, the executive officer’s employment is terminated without cause, he or she resigns for good reason, or if he or she dies or becomes disabled, the RSUs (i.e., the converted PSU awards), to the extent unvested, will become fully vested. If the RSU awards (i.e., the converted PSU awards) are not appropriately assumed or substituted
by the acquiring or surviving entity (or an affiliate of such entity), then such converted RSU awards will fully vest in accordance with the terms of the 2005 Plan.
Terminations Without Cause, Resignation for Good Reason or Non-Renewal of Employment Agreements
Employment Agreements. In the event of a qualifying termination (other than non-renewal of employment agreement for Mr. Jenson), subject to
the Company receiving a general release of claims from him, Mr. Howe will be, and Mr. Jenson would have been entitled to receive: (i) all base salary and benefits payable through the date of termination, (ii) the amount of any cash bonus related to any fiscal year ending before the date of termination that has been earned but remains unpaid, (iii) a prorated bonus for the fiscal year in which termination occurs, (iv) an amount equal to 200% of base salary, (v) an amount equal to 200% of average annual bonus based on the preceding two years bonus payments prior to the fiscal year in which the termination occurs, (vi) any unpaid benefits to which he is entitled under any plan, policy or program of
the
Company applicable to him as of the termination according to the terms of the plan, policy or program, and (vii) vesting of a prorated portion of PSUs that are earned but unvested or for which the performance period is ongoing at the time of termination and at least one year of the performance period has elapsed. If the qualifying termination is a non-renewal of his employment agreement, the percentage for Mr. Jenson in (iv) and (v) above would have been 100% and all other provisions above would remain the same.
Severance Policy. Under the Severance Policy, if an eligible participant is involuntarily terminated by
the Company without cause other than in connection with a change in control, upon executing a general release of claims against
the Company which includes one-year non-competition and non-solicitation restrictions, he will receive an amount equal to 100% of base salary, 100% of his or her average annual bonus based on their bonus payment for the preceding two years prior to termination (using target bonus for the portion of time he has been employed if less than two years), a prorated bonus based on the actual fiscal year results, a prorated portion of any PSUs (i) that are earned but unvested or (ii) for which the performance period is ongoing at the time of termination
and for which at least one year of the performance period has elapsed. The base salary and average annual bonus will be paid on regular paydays during the 12 months following the Delay Period. The prorated bonus will be paid within 90 days after the end of the fiscal year in which the termination occurs or following the Delay Period, whichever is later. Vesting of PSUs will occur within 30 days of the expiration of the Delay Period for PSUs earned but unvested at the time of termination and as soon as administratively practicable following the close of the performance period for
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 65
|
Compensation Tables
|
|
|
|
|
As required by Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the median of the annual total compensation of all our employees (other than our CEO) and the annual total compensation of our CEO:
For fiscal 2023:
•
the median of the annual total compensation of all employees of
our company (other than our CEO) was $144,125;
•
the annual total compensation of our CEO was $6,256,075; and
•
the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all our employees was 43 to 1. This ratio is a reasonable estimate calculated in a manner consistent with SEC rules.
We identified the employee with compensation at the median of the annual total compensation of all our employees using the following methodology.
1.
In determining our employee population, we considered the individuals, excluding our CEO, who were employed by us and our consolidated
subsidiaries on
March 31, 2023, whether employed on a full-time, part-time, seasonal or temporary basis (which consisted of 1,387 individuals on that date). We did not include any contractors or other non-employee workers in our employee population.
2.
As permitted by SEC rules, to identify our median employee, we selected
“base pay,” which we calculated as annual base pay using a reasonable estimate of the hours worked during fiscal 2023 for hourly employees and using annual salary levels for our remaining employees for the 12-month period from
April 1, 2022 through
March 31, 2023.
3.
For this analysis, we annualized base pay for any employees who commenced work during fiscal 2023 and converted our international employees’ base pay to U.S. dollars using a standard conversion rate.
4.
Using this approach, we identified the individual at the median of our employee population, who was based in the United States. We then calculated the annual total compensation for this individual using the same methodology we used to calculate the amount reported for our CEO in the “Total” column of the Summary Compensation Table as set forth herein, which was $6,256,075.
Because SEC rules for identifying the median of the annual total compensation of all employees allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their employee population and compensation practices, the pay ratio reported by other companies may not be comparable to our pay ratio, as other companies have different employee populations and compensation practices and may have used different methodologies, exclusions, estimates and assumptions in calculating their pay ratios. As explained by the SEC when it adopted these rules, the rule was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow shareholders to better understand and assess each particular company’s compensation practices and pay ratio disclosures.
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 69
|
|
|
|
|
Non-Employee Director Compensation
|
|
|
|
|
|
|
|
|
The Governance/Nominating Committee of the Board reviews and makes a recommendation to the full Board regarding the compensation to be paid to the non-employee directors each year. In the past fiscal year, the base annual retainer for each non-employee director, except for the Non-Executive Chairman of the Board, was $220,000, of which $160,000 was payable in Company common stock and $60,000 was payable in stock or cash at the election of each director. The base annual retainer for the Non-Executive Chairman of the Board during the past fiscal year was $290,000, of which $200,000 was payable in Company common stock and $90,000 was payable in stock or cash at the Chairman’s election. An additional $10,000 per committee was payable to each non-employee director for his or her service on the Audit/Finance, Compensation and Governance/Nominating Committees, payable in stock or cash at the election of each director. No additional compensation
was paid for service on the Executive Committee. The chairs of the Audit/Finance, Compensation and Governance/Nominating Committees were paid an additional $20,000, $20,000, and $10,000, respectively, as compensation for their additional responsibilities as chairs, payable in stock or cash at each chair’s election.
Director fees are paid in arrears on a quarterly basis.
The Company reimburses its outside directors for travel and other expenses directly incurred by them in connection with their service to
the Company.
The Company maintains a deferred compensation plan under which the directors may elect to defer receipt of their equity (but not cash) fees.
The following table shows the compensation awarded in fiscal year 2023 to
the Company’s non-employee directors.
|
Name
|
|
|
Fees Earned or Paid in Cash ($)
|
|
|
Stock Awards ($)
|
|
|
Total ($)
|
|
|
John L. Battelle |
|
|
|
|
60,000 |
|
|
|
|
|
170,000 |
|
|
|
|
|
230,000 |
|
|
|
Timothy R. Cadogan |
|
|
|
|
60,000 |
|
|
|
|
|
200,000 |
|
|
|
|
|
260,000 |
|
|
|
Vivian Chow |
|
|
|
|
90,000 |
|
|
|
|
|
160,000 |
|
|
|
|
|
250,000 |
|
|
|
Richard P. Fox1 |
|
|
|
|
40,000 |
|
|
|
|
|
80,000 |
|
|
|
|
|
120,000 |
|
|
|
Clark M. Kokich |
|
|
|
|
105,000 |
|
|
|
|
|
200,000 |
|
|
|
|
|
305,000 |
|
|
|
Brian O’Kelley2 |
|
|
|
|
0 |
|
|
|
|
|
0 |
|
|
|
|
|
0 |
|
|
|
Kamakshi Sivaramakrishnan3 |
|
|
|
|
80,000 |
|
|
|
|
|
120,000 |
|
|
|
|
|
200,000 |
|
|
|
Omar Tawakol |
|
|
|
|
65,000 |
|
|
|
|
|
165,000 |
|
|
|
|
|
230,000 |
|
|
|
Debora B. Tomlin |
|
|
|
|
80,000 |
|
|
|
|
|
160,000 |
|
|
|
|
|
240,000 |
|
|
1.
Mr. Fox’s term ended on the date of the 2022 annual meeting of shareholders. The amounts above represent his fees for his service during the first half of fiscal 2023.
2.
Mr. O’Kelley was appointed to the Board on
February 10, 2023, but since board fees are paid quarterly in arrears, he did not receive any compensation in fiscal 2023, which ended on
March 31, 2023.
3.
Board of Directors’ Stock Ownership Guidelines
The following guidelines have been adopted by the Board with respect to stock ownership:
To further align the interests of non-employee directors with the interests of
the Company’s shareholders, each non-employee director is expected to acquire and retain shares of
the Company’s common stock having a value equal to at least three times the total value of the non-employee director’s annual stock and cash retainer. Non-employee directors shall have five years from the date of election or appointment to attain such ownership levels. The Governance/Nominating Committee in its discretion may extend the period of time for attainment of such ownership levels in appropriate circumstances.
For purposes of these guidelines, a non-employee director’s stock ownership shall include all shares of
the Company’s common stock owned outright by the director and by his or her immediate family members (spouse and dependent children) and any shares held in trust for the benefit of the director and/or his or her immediate family members, plus any stock held for the benefit of the director in a deferred compensation plan. The value of stock to be acquired by the
|
|
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|
|
Appendix A
|
|
|
|
|
|
|
|
|
AMENDED AND RESTATED
2005 EQUITY COMPENSATION PLAN
OF
LIVERAMP HOLDINGS, INC.
1. Establishment and Purpose.
This Amended and Restated 2005 Equity Compensation Plan of LiveRamp Holdings, Inc. (the
“Plan”) was originally established under the name of the 2000 Associate Stock Option Plan of Acxiom Corporation, the predecessor of LiveRamp Holdings, Inc. (
“Company”). The Plan has been amended from time to time and hereby is amended and restated as set forth herein, effective
May 17, 2023, for awards issued on or after that date. The purpose of the Plan is to further the growth and development of
the Company and any of its present or future
Subsidiaries and Affiliated Companies (as defined below) by allowing certain Associates (as defined below) to acquire or increase equity ownership in
the
Company, thereby offering such Associates a proprietary interest in
the Company’s business and a more direct stake in its continuing welfare, and aligning their interests with those of
the Company’s shareholders. The Plan is also intended to assist
the Company in attracting and retaining talented Associates, who are vital to the continued development and success of
the Company.
2. Definitions.
The following capitalized terms, when used in the Plan, have the following meanings:
(a) “Act” means the Securities Exchange Act of 1934, as amended and in effect from time to time.
(b)
“Affiliated Company” means any corporation, limited liability company, partnership, limited liability partnership, joint venture or other entity in which
the Company or any of its
Subsidiaries has an ownership interest.
(c)
“Associate” means any employee, officer (whether or not also a director), director, affiliate, independent contractor or consultant of
the Company, a Subsidiary or an Affiliated Company who renders those types of services which tend to contribute to the success of
the Company, its
Subsidiaries or its Affiliated Companies, or which may reasonably be anticipated to contribute to the future success of
the Company, its
Subsidiaries or its Affiliated Companies.
(d) “Award” means the grant, pursuant to the Plan, of any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Awards, Performance Share, Performance Unit, Qualified Performance-Based Award, or Other Stock Unit Award. The terms and conditions applicable to an Award shall be set forth in applicable Grant Documents.
(e)
“Award Agreement” means any written or electronic agreement,
contract, or other document or instrument evidencing any Award granted by the Committee or the Board hereunder, which may, but need not, be executed or acknowledged by both
the Company and the Participant.
(f)
“Board” means the Board of Directors of
the Company.
(g) “Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time.
(h)
“Common Stock” means the common stock, par value $.10 per share, of
the Company or any security into which such common stock may be changed by reason of any transaction or event of the type described in Section 16 of the Plan.
(i) “Committee” means the Compensation Committee of the Board (as well as any successor to the Compensation Committee and any Company officers to whom authority has been lawfully delegated by the Compensation Committee). All of the members of the Committee, which may not be less than two, are intended at all times to qualify as “outside directors” within the meaning of Section 162(m) of the Code and “Non-Employee Directors” within the meaning of Rule 16b-3, and each of whom is “independent” as set forth in the applicable rules and
regulations of the Securities and Exchange Commission and/or Nasdaq or any stock exchange upon which the Shares may be listed in the future; provided, however, that the failure of a member of such Committee to so qualify shall not be deemed to invalidate any Award granted by such Committee.
(j) “Covered Associate” shall mean a “covered employee” within the meaning of Section 162(m)(3) of the Code, or any successor provision thereto.
(k) “Date of Grant” means the date specified by the Committee or the Board, as applicable, on which a grant of an Award will become effective.
(l) “Exercise Period” means the period during which an Option shall vest and become exercisable by a Participant (or his or her representatives or transferees) as specified in Section 6(c) below.
(m) “Exercise Price” means the purchase price per share payable upon exercise of an Option.
(n)
“Fair Market Value” means, as of any applicable determination date or for any applicable determination period, the closing price of
the Company’s Common Stock as reported by Nasdaq (or any other stock exchange upon which the Common Stock may be listed for trading).
(o)
“Grant Documents” means any written or electronic Award Agreement, memorandum, notice, and/or other document or instrument evidencing the terms and conditions of the grant of an Award by the Committee or the Board under the Plan, which may, but need not, be executed or acknowledged by both
the Company and the Participant.
(p) “Incentive Stock Option” means an Option intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code.
(q)
“Legal Requirements” means any laws, or any rules or regulations issued or promulgated by the Internal Revenue Service (including Section 422 of the Code), the Securities and Exchange Commission, the National Association of Securities Dealers, Inc., Nasdaq (or any other stock exchange upon which the Common Stock may be listed for trading), or any other governmental or quasi-governmental agency having jurisdiction over
the Company, the Common Stock or the Plan.
(r) “Non-Qualified Stock Option” means any Option that is not an Incentive Stock Option.
(s) “Option” means an option granted to a Participant pursuant to the Plan to acquire a certain number of Shares at such price(s) and during such period(s) and under such other terms and conditions as the Committee or Board shall determine from time to time.
(t) “Other Stock Unit Award” means any right granted to a Participant by the Committee or Board pursuant to Section 10 hereof.
(u) “Participant” means an Associate who is selected by the Committee or the Board to receive an Award under the Plan.
(v) “Performance Award” means any Award of Performance Shares or Performance Units pursuant to Section 9 hereof.
(w)
“Performance Goals” means the pre-established objective performance goals established by the Committee for each Performance Period. The Performance Goals may be based upon the performance of
the Company (or a division, organization or other business unit thereof), a Subsidiary, an Affiliated Company, or of an individual Participant, using one or more of the Performance Measures selected by the Committee in its discretion. Performance Goals may be set at a specific level, or may be expressed as a relative percentage to the comparable measure at comparison companies or a defined index. Performance Goals shall, to the extent applicable, be based upon generally accepted accounting principles, but shall be adjusted by the Committee to take into account the effect of the following: changes in accounting standards that may be required by the Financial Accounting
Standards Board after the Performance Goal is established; realized investment gains and losses; extraordinary, unusual, non-recurring, or infrequent items;
“non-GAAP financial measures” that have been included in
the Company’s quarterly earnings releases and disclosed to investors in accordance with SEC regulations; and other items as the Committee determines to be required so that the operating results of
the Company (or a division, organization or other business unit thereof), a Subsidiary or an Affiliated Company shall be computed on a
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 79
comparative basis from Performance Period to Performance Period. Determinations made by the Committee shall be based on relevant objective information and/or financial data, and shall be final and conclusive with respect to all affected parties.
(x) “Performance Measures” means one or more of the following criteria, on which Performance Goals may be based: (a) earnings (either in the aggregate or on a per-Share basis, reflecting dilution of Shares as the Committee deems appropriate and, if the Committee so determines, net of or including dividends) before or after interest and taxes (“EBIT”) or before or after interest, taxes, depreciation, and amortization (“EBITDA”); (b) gross or net revenue or changes in annual revenues; (c) cash flow(s) (including operating, free or net cash flows); (d) financial return ratios; (e) total shareholder return, shareholder return based on growth measures or the attainment by the Shares of a specified value for a specified period of time, (f) Share price, or Share price appreciation; (g) earnings growth or growth in earnings per Share; (h) return measures, including return or net return on assets, net assets, equity, capital, investment,
or gross sales; (i) adjusted pre-tax margin; (j) pre-tax profits; (k) operating margins; (l) operating profits; (m) operating expenses; (n) dividends; (o) net income or net operating income; (p) growth in operating earnings or growth in earnings per Share; (q) value of assets; (r) market share or market penetration with respect to specific designated products or product groups and/or specific geographic areas; (s) aggregate product price and other product measures; (t) expense or cost levels, in each case, where applicable, determined either on a company-wide basis or in respect of any one or more specified divisions; (u) reduction of losses, loss ratios or expense ratios; (v) reduction in fixed costs; (w) operating cost management; (x) cost of capital; (y) debt reduction; (z) productivity improvements; (aa) satisfaction of specified business expansion goals or goals relating to acquisitions or divestitures; (bb) customer satisfaction based on specified objective goals
or a Company-sponsored customer survey; or (cc) Associate diversity goals.
Performance Measures may be applied on a pre-tax or post-tax basis, and may be based upon the performance of
the Company (or a division, organization or other business unit thereof), a Subsidiary, an Affiliated Company, or of an individual Participant. The Committee may, at time of grant, in the case of an Award intended to be a Qualified Performance-Based Award, and in the case of other grants, at any time, provide that the Performance Goals for such Award may include or exclude items to measure specific objectives, such as losses from discontinued operations, extraordinary gains or losses, the cumulative effect of accounting changes, acquisitions or divestitures, foreign exchange impacts, and any unusual nonrecurring gain or loss.
(y) “Performance Period” means that period established by the Committee or the Board at the time any Award is granted or at any time thereafter during which any performance goals specified by the Committee or the Board with respect to such Award are to be measured.
(z) “Performance Share” means any grant pursuant to Section 9 hereof of a right to receive the value of a Share, or a portion or multiple thereof, which value may be paid to the Participant by delivery of such property as the Committee or Board shall determine, including, without limitation, cash, Shares, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee or the Board shall establish at the time of such grant or thereafter.
(aa) “Performance Unit” means any grant pursuant to Section 9 hereof of a right to receive the value of property other than a Share, or a portion or multiple thereof, which value may be paid to the Participant by delivery of such property as the Committee or Board shall determine, including, without limitation, cash, Shares, or any combination thereof, upon achievement of such Performance Goals during the Performance Period as the Committee or the Board shall establish at the time of such grant or thereafter.
(bb)
“Qualified Performance-Based Award” means an Award to a Covered Associate who is a salaried employee of
the Company or to an Associate that the Committee determines may be a Covered Associate at the time
the Company would be entitled to a deduction for such Award, which Award is intended to provide
“qualified performance-based compensation” within the meaning of Code Section 162(m).
(cc) “Restricted Stock” means any Share issued with the restriction that the holder may not sell, transfer, pledge, or assign such Share and with such other restrictions as the Committee or the Board, in their sole discretion, may impose (including, without limitation, any forfeiture condition or any restriction on the right to vote such Share, and the right to receive any cash dividends on unvested shares), which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Committee or the Board may deem appropriate.
(dd) “Restricted Stock Award” means an award of Restricted Stock or Restricted Stock Units under Section 8 hereof.
(ee) “Restricted Stock Unit” means a right awarded to a Participant that, subject to Section 8(c), may result in the Participant’s ownership of Shares upon, but not before, the lapse of restrictions related thereto.
(ff) “Restriction Period” means the period of time specified by the Committee or Board pursuant to Sections 8 and 10 below.
(gg) “Rule 16b-3” means Rule 16b-3 under Section 16 of the Act, as such Rule may be in effect from time to time.
(hh)
“Shares” means the shares of Common Stock of
the Company, $.10 par value, as may be adjusted in accordance with Section 16 of the Plan.
(ii)
“Stock Appreciation Right” means the right pursuant to an Award granted under Section 7 of the Plan, to surrender to
the Company all (or a portion) of such right and, if applicable, a related Option, and receive cash or shares of Common Stock in accordance with the provisions of Section 7.
(jj) “Strike Price” shall have the meaning set forth for such term in Section 7(b) of the Plan.
(kk)
“Subsidiary” means any corporation, limited liability company, partnership, limited liability partnership, joint venture or other entity in which
the Company owns or controls, directly or indirectly, not less than 50% of the total combined voting power or equity interests represented by all classes of stock, membership or other interests issued by such corporation, limited liability company, partnership, limited liability partnership, joint venture or other entity.
(ll)
“Substitute Awards” shall mean Awards granted or Shares issued by
the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by
the Company or with which
the Company combines.
(mm) “UK Addendum” means the addendum set forth on Schedule A.
3. Administration.
The Plan shall be administered by the Committee and the Board. Except as otherwise provided herein, each of the Committee or the Board has the full authority and discretion to administer the Plan, and to take any action that is necessary or advisable in connection with the administration of the Plan including, without limitation, the authority and discretion to:
(a) select the Associates eligible to become Participants under the Plan;
(b) determine whether and to what extent Awards are to be granted;
(c) determine the number of Shares to be covered by each grant;
(d) determine the terms and conditions, not inconsistent with the terms of the Plan, of any grant hereunder (including, but not limited to, the term of the Award, the Exercise Price or Strike Price and any restriction, limitation, procedure, or deferral related thereto, provisions relating to the effect upon the Award of a Participant’s cessation of employment, acceleration of vesting, forfeiture provisions regarding an Award and/or the profits received by any Participant from receiving an Award of exercising an Option or Stock Appreciation Right, and any other terms and conditions regarding any Award, based in each case upon such guidelines and factors as the Committee or Board shall determine from time to time in their sole discretion);
(e) determine whether, to what extent and under what circumstances grants under the Plan are to be made and operate, whether on a tandem basis or otherwise, with other grants or awards (whether equity or cash based) made by
the Company under or outside of the Plan; and
(f) delegate to one or more officers of
the Company the right to grant Awards under the Plan, provided that such delegation is made in accordance with the provisions of applicable state and federal laws.
Each of the Committee and the Board shall have the authority to adopt, alter and repeal such rules, guidelines and practices governing the Plan as it shall from time to time deem advisable; to interpret the terms and provisions of the
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 81
6. Options.
(a)
Grant of Options. The Committee, the Board or their authorized designees may from time to time authorize grants of Options to any Participant upon such terms and conditions as the Committee or Board may determine in accordance with the provisions set forth in the Plan. Each grant will specify, among other things, the number of Shares to which it pertains; the Exercise Price; the form of payment to be made by the Participant for the Shares purchased upon exercise of any Option; the required period or periods (if any) of continuous service by the Participant with
the Company, a Subsidiary or an Affiliated Company and/or any other conditions to be satisfied before the Options or installments thereof will vest and become exercisable. Options granted under the Plan may be either Non-Qualified Options or Incentive Stock Options.
Notwithstanding any provision of the Plan to the contrary, the aggregate Fair Market Value (as determined on the Date of Grant) of the Common Stock with respect to which Incentive Stock Options granted are exercisable for the first time by any Participant during any calendar year (under all plans of
the Company and its
Subsidiaries) shall not exceed the maximum amount specified by Section 422 of the Code, as amended from time to time (currently $100,000).
Each Option granted under this Plan will be evidenced by Grant Documents delivered to the Participant containing such further terms and provisions, not inconsistent with the Plan, as the Committee or Board may approve in their discretion.
(b) Exercise Price.
(i) The Exercise Price for each share of Common Stock purchasable under any Option shall be not less than 100% of the Fair Market Value per share on the Date of Grant as the Committee or Board shall specify. All such Exercise Prices shall be subject to adjustment as provided for in Section 16 hereof.
(ii) If any Participant to whom an Incentive Stock Option is to be granted under the Plan is on the Date of Grant the owner of stock (as determined under Section 425(d) of the Code) possessing more than 10% of the total combined voting power of all classes of stock of
the Company or any one of its
Subsidiaries or Affiliated Companies, then the Exercise Price per share of Common Stock subject to such Incentive Stock Option shall not be less than 110% of the Fair Market Value of one Share on the Date of Grant.
(c) Exercise Period. Subject to Section 11 hereof, the period during which an Option shall vest and become exercisable by a Participant (or his or her representative(s) or transferee(s)) whether during or after employment or following death, retirement or disability (the “Exercise Period”) shall be such period of time as may be designated by the Committee or the Board as set forth in the Committee’s or Board’s applicable rules, guidelines and practices governing the Plan and/or in the Grant Documents executed in connection with such Option. If the Committee or Board provides, in their sole discretion, that any Option is exercisable only in installments, the Committee or Board may waive or accelerate such installment exercise provisions at any time at or after grant in whole or in part, based upon such factors as the Committee or Board shall determine, in their sole discretion.
The maximum duration of any Incentive Stock Option granted under the Plan shall be ten (10) years from the Date of Grant (and no such Incentive Stock Option shall be exercisable after the expiration of such (10) year period), unless the Incentive Stock Option is granted to a Participant who, at the time of the grant, owns stock representing more than 10% of the voting power of all classes of stock of
the Company, in which case the term may not exceed five (5) years from the Date of Grant. The duration of Non-Qualified Stock Options shall be for such period as determined by the Committee or Board in its sole discretion, not to exceed ten years.
(d)
Exercise of Option. Subject to Section 11 hereof, an Option may be exercised by a Participant at any time and from time to time during the Exercise Period by giving written notice of such exercise to
the Company specifying the number of shares of Common Stock to be purchased by the Participant. Such notice shall be accompanied by payment of the Exercise Price in accordance with subsection (e) below.
(e) Payment for Shares. Full payment of the Exercise Price for the Shares purchased upon exercise of an Option, together with the amount of any tax or excise due in respect of the sale and issue thereof, may be made in one of the following forms of payment:
(i) Cash, by check or electronic funds transfer;
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to an endorsement which makes appropriate reference to such representations, warranties, agreements and restrictions both on the option and on the certificate representing the shares.
(h)
Use of Proceeds. Proceeds realized from the sale of Common Stock pursuant to Options granted hereunder shall constitute general funds of
the Company.
(i) Minimum Vesting Period. The minimum vesting period applicable to any Option shall be one (1) year from the date of grant.
7. Stock Appreciation Rights.
(a) When granted, Stock Appreciation Rights may, but need not be, identified with a specific Option (including any Option granted on or before the Date of Grant of the Stock Appreciation Rights) in a number equal to or different from the number of Stock Appreciation Rights so granted. If Stock Appreciation Rights are identified with Shares subject to an Option, then, unless otherwise provided in the applicable Grant Documents, the Participant’s associated Stock Appreciation Rights shall terminate upon the expiration, termination, forfeiture or cancellation of such Option or the exercise of such Option.
(b) The Strike Price of any Stock Appreciation Right shall (i) for any Stock Appreciation Right that is identified with an Option, equal the Exercise Price of such Option, or (ii) for any other Stock Appreciation Right, be not less than 100% of the Fair Market Value of a Share of Common Stock on the Date of Grant as the Committee or Board shall specify. The duration of any Stock Appreciation Right shall be for such period as determined by the Committee or Board in its sole discretion, not to exceed ten years.
(c) Subject to Section 11 hereof, (i) each Stock Appreciation Right which is identified with any Option grant shall vest and become exercisable by a Participant as and to the extent, including the minimum vesting period provided in Section 6(i), that the related Option with respect to which such Stock Appreciation Right is identified may be exercised; and (ii) each other Stock Appreciation Right shall vest and become exercisable by a Participant, whether during or after employment or following death, retirement or disability, at such time or times as may be designated by the Committee or Board as set forth in the applicable rules, guidelines and practices governing the Plan and/or the Grant Documents executed in connection with such Stock Appreciation Right; provided, however, that the minimum vesting period applicable to any such other Stock Appreciation Right shall be one (1) year from the date of grant.
(d) Subject to Section 11 hereof, Stock Appreciation Rights may be exercised by a Participant by delivery to
the Company of written notice of intent to exercise a specific number of Stock Appreciation Rights. Unless otherwise provided in the applicable Grant Documents, the exercise of Stock Appreciation Rights which are identified with Shares of Common Stock subject to an Option shall result in the cancellation or forfeiture of such Option to the extent of the exercise of such Stock Appreciation Right.
(e) The benefit to the Participant for each Stock Appreciation Right exercised shall be equal to (i) the Fair Market Value of a Share of Common Stock on the date of exercise, minus (ii) the Strike Price of such Stock Appreciation Right. Such benefit shall be payable in cash, except that the Committee or Board may provide in the applicable rules, guidelines and practices governing the Plan and/or the Grant Documents that benefits may be paid wholly or partly in Shares of Common Stock. No dividends, dividend equivalents or other similar payments shall be payable in respect of an unvested Stock Appreciation Right.
8. Restricted Stock Awards.
(a) Issuance. A Restricted Stock Award shall be subject to restrictions imposed by the Committee or the Board during a period of time specified by the Committee or Board (the “Restriction Period”). Restricted Stock Awards may be issued hereunder to Participants for no cash consideration or for such minimum consideration as may be required by applicable law, either alone or in addition to other Awards granted under the Plan. The provisions of Restricted Stock Awards need not be the same with respect to each Participant.
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(c) Restricted Stock Units.
(i)
The Company may grant Restricted Stock Units to those Associates as the Committee or the Board may select in its sole discretion. Restricted Stock Units represent the right to receive Shares in the future, at such times, and subject to such conditions as the Committee or the Board shall determine. The restrictions imposed shall take into account potential tax treatment under Code Section 409A.
(ii) Until the Restricted Stock Unit is released from restrictions and any Shares subject thereto are delivered to the Participant, the Participant shall not have any beneficial ownership in any Shares subject to the Restricted Stock Unit, nor shall the Participant have the right to sell, transfer, assign, convey, pledge, hypothecate, grant any security interest in or mortgage on, or otherwise dispose of or encumber any Restricted Stock Unit or any interest therein. Except as required by any law, no Restricted Stock Unit nor any interest therein shall be subject in any manner to any forced or involuntary sale, transfer, conveyance, pledge, hypothecation, encumbrance, or other disposition or to any charge, liability, debt, or obligation of the Participant, whether as the direct or indirect result of any action of the Participant or any action taken in any proceeding, including any proceeding under any bankruptcy or other creditors’ rights law. Any action
attempting to effect any transaction of that type shall be void.
(iii) Upon the lapse of the restrictions, the Participant holder of Restricted Stock Units shall, except as noted below, be entitled to receive, as soon as administratively practical, (a) that number of Shares subject to the Award that are no longer subject to restrictions, (b) cash in an amount equal to the Fair Market Value of the number of Shares subject to the Award that are no longer subject to restrictions, or (c) any combination of Shares and cash, as the Committee or the Board shall determine in their sole discretion, or shall have specified at the time the Award was granted.
(iv) Restricted Stock Units and the entitlement to Shares, cash, or any combination thereunder will be forfeited and all rights of a Participant to such Restricted Stock Units and the Shares thereunder will terminate if the applicable restrictions are not satisfied.
(v) A Participant holder of Restricted Stock Units is not entitled to any rights of a holder of the Shares (e.g., voting rights), prior to the receipt of such Shares pursuant to the Plan. No dividends, dividend equivalents or other similar payments shall be payable in respect of an outstanding Restricted Stock Unit.
(vi) The Committee or the Board may withhold, in accordance with Section 17(f) hereof, any amounts necessary to collect any withholding taxes upon any taxable event relating to any Restricted Stock Units.
(vii) The granting of Restricted Stock Units and the delivery of any Shares is subject to compliance by
the Company with all applicable Legal Requirements
(viii) At the time of grant of Restricted Stock Units (or at such earlier or later time as the Committee or the Board determines to be appropriate in light of the provisions of Code Section 409A), the Committee or the Board may permit a Participant to elect to defer receipt of the Shares or cash to be delivered upon lapse of the restrictions applicable to the Restricted Stock Units in accordance with rules and procedures that may be established from time to time by the Committee or the Board. Such rules and procedures shall take into account potential tax treatment under Code Section 409A, and may provide for payment in Shares or cash.
(ix) The minimum Restriction Period applicable to any Award of Restricted Stock Units shall be one (1) year from the date of grant, provided, however, that a Restriction Period of less than one (1) year may be approved under the Plan for such Awards with respect to up to a total of 100,000 Shares.
9. Performance Awards.
(a)
Grant.
The Company may grant Performance Awards to Associates on any terms and conditions the Committee or the Board deem desirable. Each Award of Performance Awards shall have those terms and conditions that are expressly set forth in, or are required by, the Plan and the Grant Documents.
(b) Performance Goals. The Committee or the Board may set Performance Goals which, depending on the extent to which they are met during a Performance Period, will determine the number of Performance Shares or Performance Units that will be delivered to a Participant at the end of the Performance Period. The Performance Goals may be set at threshold, target, and maximum performance levels, and the number of Performance Share
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 87
or Performance Units to be delivered may be tied to the degree of attainment of the various performance levels specified under the various Performance Goals during the Performance Period, which may not be less than one year. No payment shall be made with respect to a Performance Award if any specified threshold performance level is not attained.
(c) Beneficial Ownership. A Participant receiving a Performance Award shall not have any beneficial ownership in any Shares subject to such Award until Shares are delivered in satisfaction of the Award, nor shall the Participant have the right to sell, transfer, assign, convey, pledge, hypothecate, grant any security interest in or mortgage on, or otherwise dispose of or encumber any Performance Award or any interest therein. Except as required by any law, neither the Performance Award nor any interest therein shall be subject in any manner to any forced or involuntary sale, transfer, conveyance, pledge, hypothecation, encumbrance, or other disposition or to any charge, liability, debt, or obligation of the Participant, whether as the direct or indirect result of any action of the Participant or any action taken in any proceeding, including any proceeding under any bankruptcy or other creditors’ rights law. Any action attempting
to effect any transaction of that type shall be void.
(d) Determination of Achievement of Performance Awards. The Committee or the Board shall, promptly after the date on which the necessary financial, individual or other information for a particular Performance Period becomes available, determine and certify the degree to which each of the Performance Goals have been attained.
(e) Payment of Performance Awards. After the applicable Performance Period has ended, a recipient of a Performance Award shall be entitled to payment based on the performance level attained with respect to the Performance Goals applicable to the Performance Award. Performance Awards shall be settled as soon as practicable after the Committee or Board determines and certifies the degree of attainment of Performance Goals for the Performance Period. Subject to the terms and conditions of the Grant Documents, payment to a Participant with respect to a Performance Award may be made (a) in Shares, (b) in cash, or (c) any combination of Shares and cash, as the Committee or the Board may determine at any time in their sole discretion.
(f) Limitation on Rights/Withholding. A recipient of a Performance Award is not entitled to any rights of a holder of the Shares (e.g. voting rights), prior to the receipt of such Shares pursuant to the Plan. No dividends, dividend equivalents or other similar payments shall be payable in respect of an outstanding Performance Award. The Committee or the Board may withhold, in accordance with Section 17(f) hereof, any amounts necessary to collect any withholding taxes upon any taxable event relating to Performance Awards.
10. Other Stock Unit Awards.
Other Awards of Shares and other Awards that are valued in whole or in part by reference to, or are otherwise based on, Shares or other property (“Other Stock Unit Awards”) may be granted hereunder to Participants, either alone or in addition to other Awards granted under the Plan. Other Stock Unit Awards may be paid in Shares, cash or any other form of property as the Committee or the Board may determine. Subject to the provisions of the Plan, the Committee or the Board shall have sole and complete authority to determine the Associates to whom such Awards shall be made, the times at which such Awards shall be made, the number of Shares to be granted pursuant to such Awards, and all other terms and conditions of such Awards. The provisions of Other Stock Unit Awards need not be the same with respect to each Participant. For any Award or Shares subject to any Award made under this Section 10, the vesting of which is conditioned only on the passage
of time, such Restriction Period shall be a minimum of two (2) years for full vesting. Shares (including securities convertible into Shares) subject to Awards granted under this Section 10 may be issued for no cash consideration or for such minimum consideration as may be required by applicable law. No dividends, dividend equivalents or other similar payments shall be payable in respect of an outstanding Other Stock Unit Award.
11. Change in Control.
Notwithstanding any other provision of the Plan to the contrary, upon the occurrence of a transaction involving the consummation of a reorganization, merger, consolidation or similar transaction involving
the Company (other than a reorganization, merger, consolidation or similar transaction in which
the Company’s shareholders immediately prior to such transaction own more than 50% of the combined voting power entitled to vote in the election of directors of the surviving corporation), a sale of all or substantially all of its assets, the liquidation or dissolution of
the Company, the acquisition of a significant percentage, which shall be no less than beneficial ownership (within the meaning of
Rule 13d-3 under the Act) of 20%, of the voting power of
the Company, (each a
“Change in Control Event”), which shall not include preliminary transaction activities such as receipt of a letter of interest, receipt of a letter of intent or an agreement in principle, each outstanding Award will be treated as the Committee or Board may determine (subject to the provisions of the following paragraph), without a Participant’s consent, including, without limitation, that (A) Awards will be assumed, or substantially equivalent Awards will be substituted, by the acquiring or succeeding corporation (or affiliate thereof), with appropriate adjustments as to the number and kind of shares and prices; (B) upon written or electronic notice to a Participant, that the Participant’s Awards will terminate upon or immediately prior to the consummation of such Change in Control
Event; (C) that, to the extent the Committee or Board may determine, in whole or in part prior to or upon consummation of such Change in Control Event, (i) Options and Stock Appreciation Rights may become immediately exercisable; (ii) restrictions and deferral limitations applicable to any Restricted Stock or Restricted Stock Unit Award may become free of all restrictions and limitations and become fully vested and transferable; (iii) all Performance Awards may be considered to be prorated, and any deferral or other restriction may lapse and such Performance Awards may be immediately settled or distributed (provided, for purposes of clarification, that any Performance Award converted into an Award that provides for service-based vesting will be treated in accordance with clause (ii) of this subsection 11(C)); and (iv) the restrictions and deferral limitations and other conditions applicable to any Other Stock Unit Awards or any other Awards granted under the Plan may
lapse and such Other Stock Unit Awards or such other Awards may become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the Award not previously forfeited or vested; (D) the termination of an Award in exchange for an amount equal to the excess of the fair market value of the Shares subject to the Award immediately prior to the occurrence of such transaction (which shall be no less than the value being paid for such Shares pursuant to such transaction as determined by the Committee or Board) over the Exercise Price or Strike Price, if applicable, of such Award, with such amount payable in cash, in one or more of the kinds of property payable in such transaction, or in a combination thereof, as the Committee or Board in their discretion shall determine, or (E) any combination of the foregoing. In taking any of the actions permitted by this Section 11, the Committee or Board will not be obligated to treat
all Awards, all Awards held by a Participant, or all Awards of the same type, similarly. Notwithstanding the definition of Change in Control Event above in this Section 11, to the extent required to avoid the adverse tax consequences under Section 409A of the Code, a Change in Control Event shall be deemed to occur only to the extent it also meets the requirements for a change in control event for purposes of Section 409A of the Code.
In the event that the successor corporation does not assume or substitute for the Award (or portion thereof), (i) Options and Stock Appreciation Rights will vest and become immediately exercisable; (ii) restrictions and deferral limitations applicable to any Restricted Stock or Restricted Stock Unit Award will become free of all restrictions and limitations and become fully vested and transferable; (iii) all Performance Awards will be considered to be prorated, and any deferral or other restriction will lapse and such Performance Awards will be immediately settled or distributed; and (iv) the restrictions and deferral limitations and other conditions applicable to any Other Stock Unit Awards or any other Awards granted under the Plan will lapse and such Other Stock Unit Awards or such other Awards will become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the Award not previously forfeited
or vested. In addition, if an Option or Stock Appreciation Right is not assumed or substituted in the event of a Change in Control Event, the Committee or Board will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be exercisable for a period of time determined by the Committee or Board in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.
For the purposes of this Section 11, an Award will be considered assumed if, following the Change in Control Event, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control Event, the consideration (whether stock, cash, or other securities or property) received in the Change in Control Event by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control Event is not solely common stock of the successor corporation or its parent entity, the Committee or Board may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout
of any other Award, for each Share subject to such Award, to be solely common stock of the successor corporation or its parent entity equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control Event.
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Notwithstanding anything in this Section 11 to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more Performance Goals will not be considered assumed if
the Company or its successor modifies any of such Performance Goals without the Participant’s consent; provided, however, a modification to such Performance Goals only to reflect the successor corporation’s post-Change in Control Event corporate structure will not be deemed to invalidate an otherwise valid Award assumption.
12. Clawback.
All Awards granted pursuant to this Plan are subject to
the Company’s
“clawback policy” as may be in effect at the time.
13. Transferability of Awards.
(a) Incentive Stock Options granted under the Plan shall not be transferred by a Participant, except by will or by the laws of descent and distribution.
(b) Other Awards (subject to the limitations in paragraph (c) below) granted under the Plan may be transferred by a Participant to: (i) the Participant’s family members (whether related by blood, marriage, or adoption and including a former spouse); (ii) trust(s) in which the Participant’s family members have a greater than 50% beneficial interest; (iii) trusts, including but not limited to charitable remainder trusts, or similar vehicles established for estate planning and/or charitable giving purposes; and (iv) family partnerships and/or family limited liability companies which are controlled by the Participant or the Participant’s family members, such transfers being permitted to occur by gift or pursuant to a domestic relation order, or, only in the case of transfers to the entities described in clauses (i), (ii) and (iii) immediately above, for value. The Committee or Board, or their authorized designees may, in their sole discretion, permit transfers
of Awards to other persons or entities upon the request of a Participant; provided, however, that such Awards may not be transferred to a third party financial institution for value, including as collateral. Subsequent transfers of previously transferred Awards may only be made to one of the permitted transferees named above, unless the subsequent transfer has been approved by the Committee or the Board, or their authorized designee(s). Otherwise, such transferred Awards may be transferred only by will or the laws of descent and distribution.
(c) Notwithstanding the foregoing, if at the time any Option is transferred as permitted under this Section 13, a corresponding Stock Appreciation Right has been identified as being granted in tandem with such Option, then the transfer of such Option shall also constitute a transfer of the corresponding Stock Appreciation Right, and such Stock Appreciation Right shall not be transferable other than as part of the transfer of the Option to which it relates.
(d) Concurrently with any transfer, the transferor shall give written notice to the Plan’s then-current Plan administrator of the name and address of the transferee, the number of Shares being transferred, the Date of Grant of the Awards being transferred, and such other information as may reasonably be required by the administrator. Following a transfer, any such Awards shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer. The provisions of the Plan and applicable Grant Documents shall continue to be applied with respect to the original Participant, and such Awards shall be exercisable by the transferee only to the extent that they could have been exercised by the Participant under the terms of the original Grant Documents.
The Company disclaims any obligation to provide notice to a transferee of any termination
or expiration of a transferred Award.
14. Code Section 162(m) Provisions and Award Limitations.
(a) Notwithstanding any other provision of the Plan, (i) to the extent Awards to salaried employees (each an
“eligible employee” for purposes of Code Section 162(m) and the Treasury Regulations thereunder with regard to shareholder approval of the material terms of the Performance Goals) are intended to be Qualified Performance-Based Awards; or (ii) if the Committee determines at the time any Award is granted to a salaried employee who is, or who may be as of the end of the tax year in which
the Company would claim a tax deduction in connection with such Award, a Covered Associate, then the Committee may provide that this Section 14 is applicable to such Award.
(b) If an Award is subject to this Section 14, then the lapsing of restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be subject to the achievement or attainment of one or more objective Performance Goals as determined by the Committee, using one or more Performance Measures also as determined by the Committee. Such Performance Goals shall be established by the Committee no later than 90 days after the beginning of the Performance Period to which the Performance Goals pertain and while the attainment of the Performance Goals is substantially uncertain, and in any event no later than the date on which 25% of the Performance Period has elapsed.
(c) Notwithstanding any provision of this Plan (other than Section 11 or 15), with respect to any Award that is subject to this Section 14, the Committee may adjust downwards, but not upwards, the amount payable pursuant to such Award, and the Committee may not waive the achievement of the applicable Performance Goals except in the case of the death or disability of the Participant.
(d) The Committee shall have the power to impose such other restrictions on Awards subject to this Section 14 as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, or any successor provision thereto. Whenever the Committee determines that it is advisable to grant or pay Awards that do not qualify as Qualified Performance-Based Awards, the Committee may make grants or payments without satisfying the requirements of Code Section 162(m).
(e) Notwithstanding any provision of this Plan other than Section 16, commencing with calendar year 2005, (i) no Participant may be granted in any twelve (12) month period an aggregate amount of Options and/or Stock Appreciation Rights with respect to more than 400,000 Shares, and (ii) no Participant may be granted in any twelve (12) month period an aggregate amount of Restricted Stock Awards, Restricted Stock Unit Awards, Performance Awards or Other Stock Unit Awards, with respect to more than 400,000 Shares (or cash amounts based on the value of more than 400,000 Shares).
(f) Notwithstanding any provision of this Plan other than Section 16, commencing with calendar year 2015, no non-employee director of
the Company may be granted in any twelve (12) month period an aggregate amount of equity having a value of more than $400,000 on the date of grant, under this Plan or any other equity compensation plan sponsored by
the Company.
15. Alteration, Termination, Discontinuance, Suspension, and Amendment.
(a) The Committee or the Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time; provided that no such amendment, alteration, suspension, discontinuation or termination shall be made without (i) shareholder approval if such approval is necessary to qualify for or comply with any tax or regulatory requirement for which or with which the Committee or Board deems it necessary or desirable to qualify or comply; or (ii) the consent of the affected Participant, if such action would impair the rights of such Participant under any outstanding Award. Notwithstanding anything to the contrary herein, the Committee or the Board may make technical amendments to the Plan as may be necessary so as to have the Plan conform to any Legal Requirements in any jurisdiction within or outside the United States, so long as shareholder approval of such technical amendments is not required.
(b) The Committee or Board may amend the terms of any outstanding Award, prospectively or retroactively, except to the extent that such action would cause an Award subject to Section 14 not to qualify for the exemption from the limitation on deductibility imposed by Section 162(m)(4)(c) of the Code, and except that no such amendment shall impair the rights of any Participant without his or her consent. Subject to the requirements of paragraph (c) below, the Committee or Board may, without the consent of the Participant, amend any Grant Documents evidencing an Option or Stock Appreciation Right granted under the Plan, or otherwise take action, to accelerate the time or times at which an Option or Stock Appreciation Right may be exercised; to waive any other condition or restriction applicable to an Award or to the exercise of an Option or Stock Appreciation Right; to amend the definition of a change in control of
the
Company (if such a definition is contained in such Grant Documents) to expand the events that would result in a change in control and to add a change in control provision to such Grant Documents (if such provision is not contained in such Grant Documents); and may amend any such Grant Documents in any other respect with the consent of the Participant.
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are then listed, and any applicable state or Federal securities law, and the Committee or Board may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
(d) No Award granted hereunder shall be construed as an offer to sell securities of
the Company, and no such offer shall be outstanding, unless and until the Committee or the Board in their sole discretion has determined that any such offer, if made, would be in compliance with all applicable requirements of the U.S. Federal securities laws and any other Legal Requirements to which such offer, if made, would be subject.
(e) The Committee or the Board shall be authorized to establish procedures pursuant to which the payment of any Award may be deferred.
(f)
The Company shall be authorized to withhold from any Award granted or payment due under the Plan the amount of withholding taxes due in respect of an Award or payment hereunder and to take such other action as may be necessary in the opinion of the Plan administrator to satisfy all obligations for the payment of such taxes, not to exceed the statutory minimum withholding obligation. The Committee or Board shall be authorized to establish procedures for election by Participants to satisfy such obligations for the payment of such taxes (i) by delivery of or transfer of Shares to
the Company, (ii) with the consent of the Committee or the Board, by directing
the Company to retain Shares otherwise deliverable
in connection with the Award, (iii) by payment in cash of the amount to be withheld, or (iv) by withholding from any cash compensation otherwise due to the Participant.
(g) Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if required, and such arrangements may be either generally applicable or applicable only in specific cases.
(h) The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the state of Delaware and applicable Federal law.
(i) If any provision of this Plan is or becomes or is deemed invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or any Award under any law deemed applicable by the Committee or the Board, such provision shall be construed or deemed amended to conform to applicable law, or if it cannot be construed or deemed amended without, in the determination of the Committee or the Board, materially altering the intent of the Plan, it shall be stricken, and the remainder of the Plan shall remain in full force and effect.
(j) Awards may be granted to Participants who are foreign nationals or employed outside the United States, or both, on such terms and conditions different from those applicable to Awards to Employees employed in the United States as may, in the judgment of the Committee or the Board, be necessary or desirable in order to recognize differences in local law or tax policy. The Committee or Board also may impose conditions on the exercise or vesting of Awards in order to minimize
the Company’s obligations with respect to tax equalization for Associates on assignments outside their home country.
(k) No Award shall be granted or exercised if the grant of the Award or the exercise and the issuance of shares or other consideration pursuant thereto would be contrary to the Legal Requirements of any duly constituted authority having jurisdiction.
(l) The Plan will not confer upon any Participant any right with respect to continuance of employment or other service with
the Company or any Subsidiary or Affiliated Company, nor will it interfere in any way with any right
the Company or any Subsidiary or Affiliated Company would otherwise have to terminate a Participant’s employment or other service at any time.
(m) Notwithstanding any provision of the Plan to the contrary, in the event of a Participant’s retirement from
the Company or any Subsidiary or Affiliated Company on or after age 65 with at least five (5) years of service as an Associate, the Participant’s Awards shall continue to vest in accordance with the schedule set forth in the applicable Grant Documents excluding any inconsistent provisions relating to the effect upon the Award of the Participant’s cessation of employment.
(n) Employees and directors of
the Company and its
Subsidiaries who are based in the United Kingdom may be granted Awards pursuant to the terms of the UK Addendum. Grants made pursuant to the UK Addendum shall be subject to the terms and conditions of the Plan, unless otherwise provided in the UK Addendum.
LiveRamp Holdings, Inc. Notice of 2023 Annual Meeting and Proxy Statement 93
i DEF 14A
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