VERRA MOBILITY Corp DEF 14A, filed Apr 10, 2023
VERRA MOBILITY Corp (VRRM)
About this DEF 14A
VERRA MOBILITY Corp filed this DEF 14A on April 10, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by a Party other than the Registrant ☐
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☐ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material Pursuant to §240.14a-12
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Verra Mobility Corporation
1150 North Alma School Road
Mesa, Arizona 85201
Notice of Annual Meeting of Stockholders
To Be Held On May 23, 2023 at 9:00 a.m. Pacific Time
Dear Stockholder:
On behalf of the board of directors (our “Board”) of Verra Mobility Corporation, it is our pleasure to invite you to attend the 2023 annual meeting of stockholders (the “Annual Meeting”) on Tuesday, May 23, 2023 at 9:00 a.m. Pacific Time. The Annual Meeting will be a completely “virtual” meeting, held for the following purposes, as more fully described in the accompanying proxy statement:
You will be able to attend the Annual Meeting as well as vote and submit your questions during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/VRRM2023 and entering the 16-digit control number included in your Notice of Internet Availability of Proxy Materials (the “Notice”), on your proxy card or in the instructions that accompanied your proxy materials.
We expect to mail the Notice on April 10, 2023, and it will contain instructions on how to access our proxy statement and annual report. The Notice will also provide instructions on how to vote via the internet or by telephone and receive a paper copy of our proxy materials by mail.
The record date for the annual meeting is March 24, 2023 (the “Record Date”). Only holders of our Class A Common Stock at the close of business on the Record Date may vote at the Annual Meeting or any adjournment thereof.
Your vote is important. Whether or not you expect to attend the Annual Meeting, we urge you to vote and submit your proxy by following the voting procedures described in the proxy card. Even if you have voted by proxy, you may still vote during the Annual Meeting if you attend via the internet. Please note, however, that if your shares are held of record by a broker, bank or other agent and you wish to vote during the Annual Meeting, you must follow the instructions from your broker, bank or other agent. We look forward to your participation.
By order of the Board,
/s/ Patrick Byrne
Patrick Byrne
Chairman of the Board
Mesa, Arizona
April 10, 2023
TABLE OF CONTENTS
Questions and Answers
About these Proxy Materials, Voting and the Annual Meeting
The information provided below is for your convenience only and is merely a summary of the information contained in this proxy statement (this “Proxy Statement”). You should read this entire Proxy Statement carefully before casting your vote. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this Proxy Statement, and references to our website addressed in this Proxy Statement are inactive textual references only. The use of the terms “Verra Mobility,” “we,” “us,” “our,” or “Company,” in this Proxy Statement refers to Verra Mobility Corporation and, where appropriate, its subsidiaries.
Why am I receiving these materials?
Our board of directors (our “Board”) has made these materials available to you on the internet, or, upon your request, has delivered printed proxy materials to you, in connection with the solicitation of proxies for use at Verra Mobility Corporation’s 2023 annual meeting of stockholders (the “Annual Meeting”). The Annual Meeting will take place on Tuesday, May 23, 2023 at 9:00 a.m. Pacific Time and will be completely “virtual.” You are invited to attend if you are a holder of our Class A Common Stock (our “Class A Common Stock”) as of the close of business on March 24, 2023, the record date for the Annual Meeting (the “Record Date”), or hold a valid proxy. If you are a holder of our Class A Common Stock as of the Record Date, you are requested to vote on the proposals described in this Proxy Statement.
What is a proxy?
A proxy means that you authorize persons selected by us to vote your shares of Class A Common Stock at the Annual Meeting in the way that you instruct. All shares represented by valid proxies that are received and not revoked before the Annual Meeting will be voted at the Annual Meeting in accordance with the stockholders’ specific voting instructions.
What is the notice regarding the availability of proxy materials on the internet?
We have elected to provide access to our proxy materials over the internet. Accordingly, on or about April 10, 2023, we expect to send a Notice of Internet Availability of Proxy Materials (the “Notice”) to all stockholders of record as of the Record Date entitled to vote at the Annual Meeting. The Notice will provide instructions on how to access our Proxy Statement and annual report, along with how to vote via the internet or by telephone. Instructions on how to request a printed copy of the proxy materials will also be provided in the Notice. We encourage stockholders to take advantage of the availability of the proxy materials on the internet to help minimize our costs associated with printing and distributing our proxy materials and lessen the environmental impact of our Annual Meeting.
What information is contained in this Proxy Statement?
This Proxy Statement includes information about the nominees for directors and other matters to be voted on at the Annual Meeting. It also explains the voting process and requirements, describes the compensation of our directors and most highly compensated executive officers, and provides certain other information required by the rules of the Securities and Exchange Commission (“SEC”).
What should I do with these materials?
Please carefully read and consider the information contained in this Proxy Statement and then vote your shares as soon as possible to ensure that your shares will be represented at the Annual Meeting. You may vote your shares before the Annual Meeting, even if you plan to attend and participate.
How do I attend and participate in the Annual Meeting?
All stockholders as of the Record Date may attend the Annual Meeting online by visiting www.virtualshareholdermeeting.com/VRRM2023. In order to vote or submit a question during the Annual Meeting, you will need to enter the control number included in the Notice and follow the instructions posted at www.virtualshareholdermeeting.com/VRRM2023. If you requested printed copies of the proxy materials by mail, your control number will be provided with your proxy card or the instructions that accompany your proxy materials.
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Broadridge Financial Solutions is hosting our virtual Annual Meeting. If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting login page.
Who can vote at the Annual Meeting?
Only holders of our Class A Common Stock at the close of business on the Record Date will be entitled to vote at the Annual Meeting. As of the Record Date, there were 149,769,629 shares of our Class A Common Stock outstanding and entitled to vote.
What matters am I voting on?
There are four matters scheduled for a vote. The following table sets forth a description of each of the proposals you are being asked to vote on, how you may vote on each proposal and how our Board recommends that you vote on each proposal.
Proposal |
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Description |
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How May I Vote? |
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How Does Our Board |
Proposal 1 |
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Elect three Class II directors, Patrick Byrne, David Roberts and John Rexford, to hold office until the 2026 annual meeting of stockholders. |
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You may either vote FOR each nominee to serve as a Class II director or WITHHOLD with respect to each nominee. |
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Our Board recommends a vote FOR each of the Class II director nominees. |
Proposal 2 |
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Approve, on an advisory basis, the compensation of our named executive officers as described in this Proxy Statement. |
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You may vote FOR or AGAINST or you may ABSTAIN from voting. |
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Our Board recommends a vote FOR approval of the compensation of our named executive officers as described in this Proxy Statement. |
Proposal 3 |
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To approve the amendment and restatement of our 2018 Equity Incentive Plan. |
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You may vote FOR or AGAINST or you may ABSTAIN from voting. |
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Our Board recommends a vote FOR approval of the amendment and restatement of our 2018 Equity Incentive Plan. |
Proposal 4 |
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Ratify our Board’s appointment of Ernst & Young LLP (“EY”) as our independent registered public accounting firm for the fiscal year ending December 31, 2023. |
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You may vote FOR or AGAINST or you may ABSTAIN from voting. |
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Our Board recommends a vote FOR the ratification of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2023. |
What if another matter is properly brought before the Annual Meeting?
Our Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with their best judgment.
How do I vote?
The procedures for voting are as follows:
Stockholder of Record: Shares Registered in Your Name
If, on the Record Date, your shares of Class A Common Stock are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, then you are a stockholder of record. As a stockholder of record, you may vote electronically during the Annual Meeting or vote by proxy through the internet, over the telephone, or using a proxy card that you may request. Even if you have submitted a proxy before the Annual Meeting, you may still attend and vote during the Annual Meeting. In such case, your previously submitted proxy will be disregarded.
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If we receive your vote by internet or phone or your signed proxy card prior to 11:59 p.m. Pacific Time the day before the Annual Meeting, we will vote your shares as you direct.
To vote, you will need the control number, which will be included in the Notice or on your proxy card if you are a stockholder of record of Class A Common Stock as of the Record Date, or included with your voting instructions received from your broker, bank or other agent if you hold your shares of Class A Common Stock in “street name.”
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If, on the Record Date, your shares of Class A Common Stock are held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and the Notice will be forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting.
As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are also invited to attend the Annual Meeting.
If you are a beneficial owner, you should have received a notice containing voting instructions from your brokerage firm, bank, dealer or similar organization rather than from us. Simply follow the voting instructions in the notice to ensure that your vote is counted. To vote online during the Annual Meeting, you must follow the instructions from your broker, bank or other agent.
Internet proxy voting is provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions.
Can I change my vote?
Yes. Subject to the voting deadlines above, if you are a stockholder of record, you may revoke your proxy at any time before the close of voting using one of the following methods:
If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by such party.
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What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record and do not vote during the Annual Meeting, or through the internet, by telephone or by completing your proxy card before the Annual Meeting, your shares will not be voted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
Broker non-votes occur when shares held by a broker for a beneficial owner are not voted either because (i) the broker did not receive voting instructions from the beneficial owner or (ii) the broker lacked discretionary authority to vote the shares. Abstentions represent a stockholder’s affirmative choice to decline to vote on a proposal, and occur when shares present at the meeting are marked “ABSTAIN.” Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present but have no effect on the outcome of matters voted.
A broker has discretionary authority to vote shares held for a beneficial owner on “routine” matters without instructions from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on “non-routine” matters.
Proposals 1, 2 and 3 are non-routine matters, so your broker or nominee may not vote your shares on Proposals 1, 2 and 3 without your instructions. Proposal 4 (the ratification of the appointment of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2023) is a routine matter, so your broker or nominee may vote your shares on Proposal 4 even in the absence of your instruction.
Please instruct your bank, broker or other agent to ensure that your vote will be counted.
What if I return a proxy card or otherwise vote but do not make specific choices?
If you return a signed and dated proxy card or otherwise vote but do not make specific choices, your shares will be voted FOR the election of each of the nominees for Class II director, FOR the advisory approval of our named executive officer compensation, FOR the amendment and restatement of our 2018 Equity Incentive Plan and FOR the ratification of the selection of EY as our independent registered public accounting firm. If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
How many votes do I have?
Each stockholder will have the right to one vote per share of Class A Common Stock held as of the Record Date.
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How many votes are needed to approve each proposal?
The following table sets forth the voting requirements with respect to each of the proposals:
Proposal |
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Description |
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Voting Requirement |
Proposal 1 |
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Elect three Class II directors, Patrick Byrne, David Roberts and John Rexford, to hold office until the 2026 annual meeting of stockholders. |
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Each Class II director must be elected by a plurality of the votes cast. A plurality means that the nominees with the greatest number of FOR votes are elected as directors up to the maximum number of directors to be elected at the Annual Meeting. A WITHHOLD vote will have no effect on the vote. Proposal 1 is a non-routine matter. Therefore, brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name for the election of the directors. As a result, any shares not voted by a stockholder of record will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote.
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Proposal 2 |
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Approve, on an advisory basis, the compensation of our named executive officers as described in this Proxy Statement. |
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This proposal must be approved by a majority of the votes cast by the stockholders present in person or by proxy, meaning that the votes cast by the stockholders FOR the approval of the proposal must exceed the number of votes cast AGAINST the approval of the proposal. If a stockholder votes to ABSTAIN, it is not counted as a vote cast and has no effect on the outcome of this proposal. Proposal 2 is a non-routine matter. Therefore, brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote. Proposal 2 is non‑binding. Because this vote is advisory and not binding on us or our Board in any way, our Board may decide that it is in our and our stockholders’ best interests to compensate our named executive officers in an amount or manner that differs from that which is approved by our stockholders.
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Proposal 3 |
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Approve the amendment and restatement of our 2018 Equity Incentive Plan. |
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This proposal must be approved by a majority of the votes cast by the stockholders present in person or by proxy, meaning that the votes cast by the stockholders FOR the approval of the proposal must exceed the number of votes cast AGAINST the approval of the proposal. If a stockholder votes to ABSTAIN, it is not counted as a vote cast and has no effect on the outcome of this proposal. Proposal 3 is a non-routine matter. Therefore, brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote.
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Proposal 4 |
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Ratify our Board’s appointment of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2023. |
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This proposal must be approved by a majority of the votes cast by the stockholders present in person or by proxy, meaning that the votes cast by the stockholders FOR the approval of the proposal must exceed the number of votes cast AGAINST the approval of the proposal. If a stockholder votes to ABSTAIN, it is not counted as a vote cast and has no effect on the outcome of this proposal. Proposal 4 is a routine matter. Therefore, if you are a beneficial owner, your broker, bank or other nominee may vote your shares on this proposal without receiving voting instructions from you.
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How are votes counted?
You may either vote FOR each nominee to serve as a Class II director on our Board, or you may WITHHOLD your vote for the nominee to serve as a Class II director. Regarding the approval, on an advisory basis, of the compensation of our named executive officers as described in this Proxy Statement, you may vote FOR or AGAINST or you may ABSTAIN from voting. For the amendment and restatement of our 2018 Equity Incentive Plan, you may vote FOR or AGAINST or you may ABSTAIN from voting. For the ratification of the selection of EY as our independent registered public accounting firm, you may vote FOR or AGAINST or you may ABSTAIN from voting. Abstentions, withheld votes, and broker non-votes are not treated as votes cast either for or against a matter, and therefore will not affect the outcome of the vote.
Who counts the votes?
We have engaged Broadridge Financial Solutions, Inc. (“Broadridge”) as our independent agent to tabulate stockholder votes. If you are a stockholder as of the Record Date, and you choose to vote over the internet or by telephone, Broadridge will access and tabulate your vote electronically, and if you choose to sign and mail your proxy card, your executed proxy card will be returned directly to Broadridge for tabulation. As noted above, if you hold your shares through a broker, your broker (or its agent for tabulating votes of shares held in “street name,” as applicable) will return one proxy card to Broadridge on behalf of all its clients.
Who is paying for this proxy solicitation?
We will pay for the cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid additional compensation for soliciting proxies. We may reimburse brokers, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
When are stockholder proposals due for next year’s annual meeting?
Requirements for stockholder proposals to be brought before the 2024 annual meeting.
Our bylaws provide that, for stockholder director nominations or other proposals to be considered at an annual meeting, a stockholder must give timely notice thereof in writing to our Secretary at Verra Mobility Corporation, 1150 North Alma School Road, Mesa, Arizona 85201. To be timely for the 2024 annual meeting of stockholders, a stockholder’s notice must be delivered to or mailed and received by our Secretary at our principal executive offices between January 24, 2024 and February 23, 2024; provided that if the date of the 2024 annual meeting of stockholders is earlier than April 8, 2024 or later than July 7, 2024, a stockholder must give the required notice not earlier than the 120th day prior to the meeting date and not later than the 90th day prior to the meeting date or, if later, the 10th day following the day on which public disclosure of that meeting date is first made. A stockholder’s notice to our Secretary must also set forth the information required by our bylaws.
Requirements for stockholder proposals to be considered for inclusion in our next year’s proxy materials.
Stockholder proposals submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and intended to be presented at the 2024 annual meeting of stockholders, must be received by us not later than December 12, 2023 in order to be considered for inclusion in our proxy materials for that meeting.
Stockholder Solicitation of Proxies in Support of Director Nominees Other Than Company Nominees.
In addition to satisfying the provisions in our bylaws relating to nominations of director candidates, including the deadline for written notices, to comply with the SEC’s universal proxy rule, stockholders who intend to solicit proxies in support of director nominees other than our nominees in compliance with Rule 14a-19 under the Exchange Act must provide notice that sets forth the information required by Rule 14a-19 to our Secretary at Verra Mobility Corporation, 1150 North Alma School Road, Mesa, Arizona 85201 no later than February 23, 2024; provided that if the date of the 2024 annual meeting of stockholders is earlier than April 8, 2024 or later than July 7, 2024, a stockholder must give the required notice not earlier than the 120th day prior to the meeting date and not later than the 90th day prior to the meeting date or, if later, the 10th day following the day on which public disclosure of that meeting date is first made.
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What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the aggregate voting power of the shares of Class A Common Stock issued, outstanding and entitled to vote at the Annual Meeting are present at the meeting or represented by proxy. Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you attend the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the chairperson of the meeting may adjourn the meeting to another date.
How can I get electronic access to the proxy materials?
The Notice will provide you with instructions regarding how to:
Our proxy materials are also available on the internet at www.proxyvote.com and on our investor relations website at https://ir.verramobility.com (information at or connected to our website is not and should not be considered part of this Proxy Statement). Choosing to receive future proxy materials by email will save us the cost of printing and mailing documents to you and will lessen the impact of our annual meetings on the environment. If you choose to receive future proxy materials by email, you will receive an email message next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials by email will remain in effect until you terminate it.
How can I find out the results of the voting at the Annual Meeting?
We expect that preliminary voting results will be announced during the Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file within four business days after the Annual Meeting.
What does it mean if I receive more than one Notice?
If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the instructions on each Notice to ensure that all your shares are voted.
What does it mean if multiple members of my household are stockholders but we only received one Notice or full set of proxy materials in the mail?
The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy the delivery requirements for notices and proxy materials with respect to two or more stockholders sharing the same address by delivering a single Notice or set of proxy materials addressed to those stockholders. In accordance with a prior notice sent to certain brokers, banks, dealers or other agents, we are sending only one Notice or full set of proxy materials to those addresses with multiple stockholders unless we received contrary instructions from any stockholder at that address. This practice, known as “householding,” allows us to satisfy the requirements for delivering notices or proxy materials with respect to two or more stockholders sharing the same address by delivering a single copy of these documents. “Householding” helps to reduce our printing and postage costs, reduces the amount of mail you receive and helps to preserve the environment. If you currently receive multiple copies of the Notice or proxy materials at your address and would like to request “householding” of your communications, or you would like to revoke your consent to future “householding” mailings, please contact your broker, bank or other agent or contact us at the following address:
Verra Mobility Corporation
Attn: Investor Relations
1150 North Alma School Road
Mesa, Arizona 85201
(480) 443-7000
Other Information
We were originally incorporated in Delaware on August 15, 2016, under the name “Gores Holdings II, Inc.” (“Gores”) as a special purpose acquisition company. On January 19, 2017, Gores consummated its initial public offering, following which its shares began trading on the Nasdaq Capital Market (“Nasdaq”). On June 21, 2018, Gores entered
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into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Greenlight Holding II Corporation, PE Greenlight Holdings, LLC (the “Platinum Stockholder”), and two newly incorporated wholly owned subsidiaries of Gores. On October 17, 2018, we consummated the transactions contemplated by the Merger Agreement (the “Business Combination”) and we changed our name to “Verra Mobility Corporation.”
As a result of the Business Combination, we became the owner, directly or indirectly, of all of the equity interests of Verra Mobility Holdings, LLC and its subsidiaries, including ATS Consolidated, Inc. (“ATS”, now known as VM Consolidated, Inc.). At the closing of the Business Combination, we also changed our trading symbols from “GSHT,” and “GSHTW,” to “VRRM” and “VRRMW.” Currently, our Class A Common Stock is listed on Nasdaq under the symbol “VRRM”, and our Public Warrants (as defined below) trade on the over-the-counter market by the OTC Markets Group Inc. under the symbol VRRMW.
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Board of Directors and Corporate Governance
Corporate Governance
We believe that sound corporate governance helps ensure that Verra Mobility is managed for the short- and long-term benefit of its stockholders. We have adopted corporate governance guidelines (our “Corporate Governance Guidelines”), which provide a foundation for Verra Mobility’s governance as a whole and describe the principles and practices that our Board follows in carrying out its responsibilities. Our Corporate Governance Guidelines address, among other things:
Our Corporate Governance Guidelines are reviewed by our nominating and corporate governance committee from time to time to ensure that they effectively promote the best interests of both Verra Mobility and our stockholders and that they comply with applicable laws, regulations and Nasdaq requirements.
Code of Business Ethics and Conduct
We have adopted a code of business ethics and conduct (our “Code of Ethics”) applicable to all of our directors, officers (including our principal executive officer (“PEO”), principal financial officer and principal accounting officer) and employees. Our Code of Ethics is available on our investor relations website in the “Governance Highlights” section. We will post amendments to our Code of Ethics or any waivers of our Code of Ethics for our directors and executive officers on the same website.
Director Independence
Our Class A Common Stock is listed on Nasdaq. Under the Nasdaq listing standards, a majority of our Board must be comprised of independent directors. In addition, Nasdaq listing standards require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent. Under Nasdaq listing standards, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of his or her independent judgment in carrying out the responsibilities of a director. Compensation committee members must not have a relationship with us that is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member. Additionally, audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. To be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries or be an affiliated person of the listed company or any of its subsidiaries.
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Our Board annually reviews its composition, the composition of its committees and the independence of each director. As a result of this review, our Board has determined that other than Mr. Roberts, all of our directors are “independent” as that term is defined under the applicable rules and regulations of the SEC and the Nasdaq listing standards. Mr. Roberts is not independent given his position as our President and Chief Executive Officer. Accordingly, a majority of our directors are independent, as required under applicable Nasdaq listing standards.
In making this determination, our Board broadly considered all relevant facts and circumstances, including information provided by the directors with regard to each director’s business and personal activities as they may relate to us and our management. There are no family relationships among any of the directors or executive officers.
Board of Directors Leadership
In accordance with our Corporate Governance Guidelines, we currently separate the roles of Chief Executive Officer and Chairman of the Board. These positions are currently held by Mr. Roberts, as our President and Chief Executive Officer, and Mr. Byrne, as Chairman of the Board. We believe this leadership structure is appropriate for us due to the differences between the two roles. Our President and Chief Executive Officer is responsible for setting our strategic direction, providing day-to-day leadership and managing our business, while the Chairman provides guidance to our President and Chief Executive Officer, chairs meetings of our Board, sets the agendas for meetings of our Board and provides information to the members of our Board in advance of such meetings. As a result of this leadership structure, our President and Chief Executive Officer is able to focus on developing and implementing our business strategies and objectives, and our Chairman is able to provide independent oversight and serve as an independent liaison between our management and the members of our Board. Due to his extensive executive leadership experience, we believe Patrick Byrne is well-suited to serve in his role as Chairman.
Executive Sessions of Non-Employee Directors
To encourage and enhance communication among non-employee directors, and as required under applicable Nasdaq rules, our Corporate Governance Guidelines provide that the non-employee directors will meet in executive sessions without management directors or company management on a periodic basis but no less than once a year. The presiding director at executive sessions is the Chairman of the Board, or another non-employee director otherwise designated by the non-employee directors.
Communications with our Board of Directors
Stockholders or interested parties who wish to communicate with our Board or with an individual director may do so by mail to our Board or the individual director, c/o Chief Legal Officer at 1150 North Alma School Road, Mesa, Arizona 85201. The communication should indicate that it contains a stockholder or interested party communication. In accordance with our Corporate Governance Guidelines, all such communications will be reviewed by our Chief Legal Officer, in consultation with appropriate directors as necessary, and, if appropriate, will be forwarded to the director or directors to whom the communications are addressed or, if none are specified, to the Chairman of the Board.
Anti-Hedging and Anti-Pledging Policy
We have adopted an insider trading policy that includes restrictions and limitations on the ability of our directors, officers and certain other employees to engage in transactions involving the hedging and pledging of our Class A Common Stock. Under the policy, hedging or monetization transactions, such as zero-cost collars and forward-sale contracts, which allow an individual to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock, and thus to continue to own our Class A Common Stock without the full risks and rewards of ownership, are prohibited. In addition, the policy addresses the practices of holding our Class A Common Stock in a margin account, under which the securities may be sold by the broker without the customer’s consent if the customer fails to meet a margin call, and of pledging our Class A Common Stock as collateral for a loan, in which event the securities may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in our securities, our directors, officers and certain other employees are prohibited from holding our securities in a margin account or pledging our securities as collateral for a loan.
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Non-Employee Director Compensation Policy
Our Board adopted a Non-Employee Director Compensation Policy in February 2022 that establishes the compensation we pay to our non-employee directors, including cash compensation and equity awards under the Verra Mobility 2018 Equity Incentive Plan. In December 2022, our Board updated the compensation amounts in the Non-Employee Director Compensation Policy, effective January 1, 2023.
Committees of our Board of Directors
Our Board has established an audit committee, a compensation committee and a nominating and corporate governance committee, which have the composition and responsibilities described below. Our Board may establish other committees to facilitate the management of our business. Copies of the charters of our audit, compensation and nominating and corporate governance committees are available in the “Governance Highlights” section of our investor relations website (http://ir.verramobility.com/corporate-governance/governance-highlights). Non-employee members of our Board serve on these committees until their resignation or until otherwise determined by our Board.
Audit Committee
Our audit committee consists of John Rexford, Patrick Byrne and Cynthia Russo. Our Board has determined that John Rexford, Cynthia Russo and Patrick Byrne are independent under Nasdaq listing standards and Rule 10A-3(b)(1) of the Exchange Act. The chair of our audit committee is John Rexford. Our Board has determined that each member of our audit committee can read and understand fundamental financial statements in accordance with applicable requirements and are “audit committee financial experts” within the meaning of SEC regulations. In arriving at these determinations, our Board has examined each audit committee member’s scope of experience and the nature of their employment in the corporate finance sector.
The primary purpose of our audit committee is to discharge the responsibilities of our Board with respect to our accounting, financial and other reporting and internal control practices and to oversee our independent registered accounting firm. Specific responsibilities of our audit committee include:
14
Compensation Committee
Our compensation committee consists of Douglas Davis, Patrick Byrne and Cynthia Russo. The chair of our compensation committee is Douglas Davis. Our Board has determined that all members of our compensation committee are independent under Nasdaq listing standards, are “non-employee directors” as defined in Rule 16b-3 promulgated under the Exchange Act and are “outside directors” as that term is defined in Section 162(m) of the Internal Revenue Code of 1986. Our compensation committee may form subcommittees of at least two members for any purpose that the committee deems appropriate and may delegate to such subcommittees such power and authority as the committee deems appropriate except such power or authority that is required by any law, regulation or listing standard to be exercised by the compensation committee as a whole.
The purpose of our compensation committee is to discharge the responsibilities of our Board to oversee our compensation and employee benefit plans and practices. Specific responsibilities of our compensation committee include:
Compensation Committee Interlocks and Insider Participation
Our compensation committee is comprised of Douglas Davis, Patrick Byrne and Cynthia Russo, none of whom is or has been an officer or employee of Verra Mobility. None of our executive officers currently serves, or during fiscal 2022 has served, as a member of the compensation committee or director (or other board committee performing equivalent functions or, in the absence of any such committee, the entire Board) of any entity that has one or more executive officers serving on our compensation committee or our Board.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee consists of Michael Huerta, Douglas Davis and John Rexford. The chair of our nominating and corporate governance committee is Michael Huerta. Each member of our nominating and corporate governance committee is independent within the meaning of applicable listing standards, is a non-employee director and is free from any relationship that would interfere with the exercise of his independent judgment, as determined by our Board in accordance with the applicable Nasdaq listing standards.
15
The purpose of our nominating and corporate governance committee includes identifying and recommending to our Board the director nominees for the next annual meeting of stockholders and developing and recommending our Corporate Governance Guidelines and policies to our Board. Specific responsibilities of our nominating and corporate governance committee include:
Board of Directors and Committee Meetings and Attendance
Our Board is responsible for the oversight of our management and our strategy and for establishing corporate policies. Our Board and its committees meet throughout the year on a regular schedule, and also hold special meetings and act by written consent from time to time.
Our Board met seven times and acted by written consent eight times during our last fiscal year. Our audit committee met six times and acted by written consent once during our last fiscal year. Our compensation committee met five times and acted by written consent fifteen times during our last fiscal year. Our nominating and corporate governance committee met four times during our last fiscal year. During our last fiscal year, each incumbent director attended 75% or more of the aggregate of the meetings of our Board and of the committees on which he or she served, except for Sarah Farrell, who attended five of seven, or approximately 71% of our Board meetings during the fiscal year.
We encourage our directors and nominees for director to attend our annual meetings of stockholders. In 2022, all of our directors attended our annual meeting of stockholders.
Risk Oversight
Our Board oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance, and to enhance stockholder value. A fundamental aspect of risk management is not only understanding the most significant risks a company faces and what steps management is taking to manage those risks but also understanding what level of risk is appropriate for a given company. Our Board, as a whole, determines the appropriate level of risk for us, assesses the specific risks that we face and reviews management’s strategies for adequately mitigating and managing the identified risks. Although our Board administers this risk management oversight function, the committees of our Board support our Board in discharging its oversight duties and addressing risks inherent in their respective areas.
Our audit committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. Our audit committee monitors compliance with legal and regulatory requirements. Our audit committee also monitors management’s preparedness for and responses to data security incidents. Our nominating and corporate governance committee monitors the effectiveness of our Corporate Governance Guidelines. Our compensation committee assesses and monitors whether our compensation philosophy and practices have the potential to encourage excessive risk taking and evaluates compensation policies and practices that could mitigate such risks.
16
At periodic meetings of our Board and its committees, management reports to and seeks guidance from our Board and its committees with respect to the most significant risks that could affect our business, such as legal risks and financial, tax- and audit-related risks. In addition, among other matters, management provides our audit committee periodic reports on our compliance programs and practices.
Nominations Process and Director Qualifications
Nomination to our Board of Directors
Candidates for nomination to our Board are selected by our Board based on the recommendation of our nominating and corporate governance committee in accordance with the committee’s charter, our policies, our certificate of incorporation and bylaws, our Corporate Governance Guidelines, and the criteria adopted by our Board regarding director candidate qualifications. In recommending candidates for nomination, our nominating and corporate governance committee considers candidates recommended by directors, officers and employees, as well as candidates that are properly submitted by stockholders in accordance with our policies and bylaws, using the same criteria to evaluate all such candidates. Evaluations of candidates generally involve a review of background materials, internal discussions and interviews with selected candidates as appropriate and, in addition, our nominating and corporate governance committee may engage consultants or third-party search firms to assist in identifying and evaluating potential nominees.
Additional information regarding the process for properly submitting stockholder nominations for candidates for membership on our Board is set forth above under “Questions and Answers About these Proxy Materials, Voting and the Annual Meeting.”
Director Qualifications
With the goal of developing an experienced and highly qualified Board, our nominating and corporate governance committee is responsible for developing and recommending to our Board the desired qualifications, expertise and characteristics of members of our Board, including qualifications that the committee believes must be met by a committee-recommended nominee for membership on our Board and specific qualities or skills that the committee believes are necessary for one or more of the members of our Board to possess.
In addition to the qualifications, qualities and skills that are necessary to meet U.S. legal, regulatory and Nasdaq listing requirements and the provisions of our certificate of incorporation, our bylaws, our Corporate Governance Guidelines and the charters of our Board committees, our nominating and corporate governance committee considers the following qualifications for any nominee for a position on our Board: (i) experience in corporate governance, such as an officer or former officer of a publicly held company, (ii) experience in, and familiarity with, our business and industry, (iii) experience as a board member of another publicly held company, (iv) personal and professional character, integrity, ethics and values, (v) practical and mature business judgment, including the ability to make independent analytical inquiries, (vi) academic expertise in an area of our operations and (vii) background in financial and accounting matters. Our Board and nominating and corporate governance committee believe that an experienced and highly qualified Board fosters a robust, comprehensive and balanced decision-making process for the continued, effective functioning of our Board and our success. Accordingly, through the nomination process, our nominating and corporate governance committee seeks to promote Board membership that reflects diversity, factoring in gender, race, ethnicity, differences in professional background, education, skill, and experience, and other individual qualities and attributes that contribute to the total mix of viewpoints and experience. Our nominating and corporate governance committee evaluates the foregoing factors, among others, and does not assign any particular weighting or priority to any of the factors.
17
MATTERS TO COME BEFORE THE ANNUAL MEETING
PROPOSAL 1:
Election of Class II Directors
Our Board has nominated Patrick Byrne, David Roberts and John Rexford to serve, and each has agreed to stand for election at the Annual Meeting, each as a Class II director to serve until the 2026 annual meeting of stockholders and until their successors have been duly elected, or if sooner, until their death, resignation or removal.
Our Board consists of seven members. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election until the third annual meeting following the election. Our directors are currently divided into the three classes as follows:
The division of our Board into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.
Vote Required
Our directors are elected by a plurality of the votes cast by the stockholders present in person or represented by proxy and entitled to vote on the election of directors. Accordingly, the three Class II director nominees receiving the highest number of affirmative votes will be elected at the Annual Meeting. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named above. If such nominees become unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by our Board.
Nominees
Our nominating and corporate governance committee seeks to assemble a Board that, as a group, can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment using its qualifications and experience in various areas. To that end, the committee has identified and evaluated nominees in the broader context of our Board’s overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities deemed critical to effective functioning of our Board.
18
The following table sets forth, for the Class II nominees and our other directors who will continue in office after the Annual Meeting, their ages and position/office held with us as of the date of this proxy statement:
Name |
|
Age |
|
Position/Office Held with Verra Mobility Corporation |
Class I directors whose terms expire at the annual meeting of stockholders in 2025: |
||||
Cynthia Russo(1)(2) |
|
53 |
|
Director |
Douglas Davis(2)(3) |
|
61 |
|
Director |
|
|
|
|
|
Class II directors for election at the Annual Meeting: |
||||
Patrick Byrne(1)(2) |
|
62 |
|
Director, Chairman of the Board, Director Nominee |
John Rexford(1)(3) |
|
66 |
|
Director, Director Nominee |
David Roberts |
|
52 |
|
Director, President and Chief Executive Officer, Director Nominee |
|
|
|
|
|
Class III directors whose terms expire at the annual meeting of stockholders in 2024: |
||||
Sarah Farrell |
|
31 |
|
Director |
Michael Huerta(3) |
|
66 |
|
Director |
Set forth below is biographical information for the nominees and each person whose term of office as a director will continue after the Annual Meeting. This includes information regarding each director’s experience, qualifications, attributes or skills that led our Board to recommend him or her for board service.
Nominees for Election Until the Annual Meeting of Stockholders to be Held in 2026
Patrick Byrne, age 62, has served as a member of our Board since November 2020 and Chairman of the Board since 2022. Mr. Byrne currently serves as Senior Vice President of Operations at the General Electric Company (NYSE: GE). He previously served as the CEO of the GE On-Shore Wind business, a market leader in renewable energy. Before that, Mr. Byrne served as CEO for GE Digital, the software division of General Electric. Before joining GE in 2019, Mr. Byrne served as the Senior Vice President of Fortive Corporation from 2016 to 2019, President of Tektornix, an operating company of Danaher Corporation from 2014 to 2019 and Chief Technology Officer for Danaher’s test and measurement businesses. Mr. Byrne served as an independent director of Micron Technology, Inc. from 2011 to 2020, including as a member of Micron’s audit, nominating and governance and compensation committees. Mr. Byrne holds a BS in Electrical Engineering from the University of California, Berkeley and an MS in Electrical Engineering from Stanford University. We believe that Mr. Byrne’s significant technological and operational experience makes him well-qualified to serve as a member of our Board.
John Rexford, age 66, has served as a member of our Board since the consummation of the Business Combination. Mr. Rexford is the Managing Director of Ramona Park Consulting LLC, which he founded in 2016. Mr. Rexford has over 36 years of finance experience that includes serving as Global M&A Head from 2010 to 2015 at Xerox Corporation (NYSE: XRX) and serving in various positions at Affiliated Computer Services, Inc. (which was acquired by Xerox Corporation), including Chief Financial Officer from 2006 to 2007. Mr. Rexford previously served as director and compensation committee member of Exela Technologies (NASDAQ: XELA) from 2017 to 2022. Mr. Rexford holds a bachelor’s degree in business administration from Southern Methodist University and an MBA from the Cox School of Business at Southern Methodist University. We believe that Mr. Rexford’s significant finance experience and financial expertise make him well-qualified to serve as a member of our Board.
David Roberts, age 52, has served as a member of our Board since the consummation of the Business Combination on October 17, 2018. Mr. Roberts is the President and Chief Executive Officer of Verra Mobility. In such capacity, Mr. Roberts has established a high performing company that embraces consistent financial performance, market leadership and culture as the driver of performance. Prior to Verra Mobility, from April 2012 to August 2014, Mr.
19
Roberts was the President and Chief Executive Officer of BillingTree, a multi-channel electronic payment platform company. Prior to joining BillingTree, from August 2008 to March 2012, Mr. Roberts was a Managing Director at Bank of America Merrill Lynch, leading the Equity Plan Services business. Mr. Roberts joined Bank of America Merrill Lynch via its acquisition of Equity Methods, where he served as Chief Executive Officer. Mr. Roberts earned a BBA at Baylor University at the Hankamer School of Business and an MBA from the University of Chicago Booth School of Business with concentrations in Finance and Strategy. Mr. Roberts has served as an Adjunct Professor at the W.P. Carey Graduate School of Business at Arizona State University. Mr. Roberts currently serves as an adviser for the Arizona Feed My Starving Children Leadership Committee. We believe that Mr. Roberts’ extensive Company experience and experience in the mobility industry makes him well-qualified to serve as a member of our Board.
Our Board recommends a vote FOR each of the Class II director nominees to elect them to our Board.
Directors Continuing in Office Until the 2024 Annual Meeting of Stockholders
Sarah Farrell, age 31, is a Partner at Inclusive Capital Partners, L.P., a San Francisco-based investment firm that seeks to partner with companies that address and enable solutions to address environmental and societal problems. Ms. Farrell is a former director at Lindblad Expeditions Holdings, Inc., where she was a member of the audit committee from March 2020 through April 2021. Ms. Farrell has also served as a board observer at Reddit, Inc. since February 2021 and a director of Kolmac Outpatient Recovery Centers, a private network of intensive outpatient addiction treatment centers, since July 2021. Prior to joining Inclusive Capital Partners at its inception in July 2020, Ms. Farrell worked at ValueAct Capital, a San Francisco-based investment firm, where she started in August of 2018. Ms. Farrell also worked in The Blackstone Groups’ Private Equity division from August 2016 through July 2018. Prior to joining Blackstone, she worked in investment banking at J.P. Morgan in the Mergers & Acquisitions group since May of 2014. Ms. Farrell holds a bachelor’s degree in Honors Chemistry from Harvard College. We believe that Ms. Farrell’s experience supporting environmental, social and governance initiatives and her background in investment banking makes her well-qualified to serve as a member of our Board.
Michael Huerta, age 66, has served as a member of our Board since May 2021. Mr. Huerta currently serves as a transportation industry consultant. He previously served as Administrator for the United States Federal Aviation Administration from 2013 to 2018. Before being named as Administrator, Mr. Huerta served as Acting Administrator of the FAA from 2011 to 2013 and FAA Deputy Administrator from 2010 to 2011. Mr. Huerta also served as Executive Vice President and Group President, Government Transportation, for Affiliated Computer Services, Inc., now Conduent, Inc. Mr. Huerta has served as an independent director of Delta Air Lines, Inc. (NYSE: DAL) since 2018, and is a member of Delta Air Lines’ audit committee and safety and security committee. As of March 2023, Mr. Huerta also serves on the board of directors of Joby Aviation, Inc (NYSE: JOBY). Mr. Huerta holds a bachelor’s degree in Political Science from the University of California, Riverside and a Master’s in Public Affairs with a concentration in international relations from Princeton University. We believe that Mr. Huerta’s significant transportation and administrative experience makes him well-qualified to serve as a member of Verra Mobility’s Board of Directors.
Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders
Cynthia Russo, age 53, has served as a member of our Board since our annual meeting of stockholders in 2019. Ms. Russo currently serves as director of PAR Technology Corporation (NYSE: PAR) and Verifone, Inc. Ms. Russo also serves as the audit committee chair and a member of the compensation and nominating and corporate governance committees for PAR. She previously served as PAR’s lead director. In addition, she is the chair of the audit committee for Verifone, Inc. She also served as a director and as the chair of the audit committee and a member of the compensation committee for UserTesting, Inc (NYSE: USER) from February 2021 until January 2023, when UserTesting was acquired and taken private. Ms. Russo served as consulting Chief Financial Officer for Optoro, Inc., a technology solution for all stages of a returns lifecycle from March 2021 to September 2022. Ms. Russo previously served as Executive Vice President and Chief Financial Officer of Cvent, Inc. (NASDAQ: CVT), a cloud-based enterprise event management platform, from September 2015 to September 2018. Prior to that, Ms. Russo served in a variety of senior financial roles of increasing responsibility at MICROS Systems, Inc. (NASDAQ: MCRS), including as Executive Vice President. Chief Financial Officer from April 2010 until MICROS Systems’ acquisition by Oracle in September 2014. Ms. Russo holds a bachelor’s degree in business administration from James Madison University and is a Certified Public Accountant and Certified Internal Auditor. We believe that Ms. Russo’s significant financial
20
accounting expertise, executive leadership, operational and risk management experience make her well-qualified to serve as a member of our Board.
Douglas Davis, age 61, has served as a member of our Board since our annual meeting of stockholders in 2019. Mr. Davis currently serves as a director of Oshkosh Corporation, where he serves on the audit committee and the compensation committee, and of Cerence Corporation, where he serves on the nomination and corporate governance committee. Mr. Davis previously held various positions of increasing responsibility at Intel Corporation from 1984 to 2019, most recently as Senior Vice President of the Automated Driving Group and Senior Vice President and General Manager of the Internet of Things Solutions Group. Mr. Davis holds a bachelor’s degree in electrical engineering from New Mexico State University and an MBA from W.P. Carey Graduate School of Business at Arizona State University. We believe that Mr. Davis’ significant technological expertise and operational experience make him well-qualified to serve as a member of our Board.
Non-Employee Director Compensation
We compensate our non-employee directors with a combination of (i) cash incentives and (ii) equity incentives in the form of time-based restricted stock units (“RSUs”), pursuant to our Non-Employee Director Compensation Policy. Mr. Roberts, our President and Chief Executive Officer, also serves as a director and we compensate Mr. Roberts solely for serving as our President and Chief Executive Officer—see “Executive Compensation” below—and do not provide additional compensation for his service as a director. The following table describes our annual compensation arrangements with our non-employee directors for the year 2022.
Cash(1) |
|
|
|
|
Board member fee |
|
$ |
60,000 |
|
Chair fees(2) |
|
|
|
|
Board of Directors |
|
$ |
60,000 |
|
Audit Committee |
|
$ |
20,000 |
|
Compensation Committee |
|
$ |
15,000 |
|
Nominating and Corporate Governance Committee |
|
$ |
10,000 |
|
Committee member fees |
|
|
|
|
Audit Committee |
|
$ |
10,000 |
|
Compensation Committee |
|
$ |
7,500 |
|
Nominating and Corporate Governance Committee |
|
$ |
4,000 |
|
Equity |
|
|
|
|
Director restricted stock unit grant(3) |
|
$ |
130,000 |
|
In February 2022, our Board adopted a Non-Employee Director Compensation Policy that establishes the compensation we pay to our non-employee directors, including cash compensation and equity awards granted under the Verra Mobility 2018 Equity Incentive Plan. In December 2022, our Board updated the compensation amounts in the Non-Employee Director Compensation Policy, effective January 1, 2023, as follows: director cash retainer increased by $5,000 to $65,000, director equity compensation increased by $40,000 to $170,000 annually, Board chairman supplemental retainer increased by $10,000 to $70,000, and audit committee and compensation committee chairman supplemental retainers increased by $2,500 to $12,500 and $10,000, respectively.
The following table provides information for all compensation awarded to, earned by or paid to each person who served as a non-employee director in the fiscal year ending December 31, 2022. Mr. Roberts is not included in the table below because he did not receive additional compensation for his service as a director. The compensation received by Mr. Roberts as an employee is shown below in “Executive Compensation—Summary Compensation Table.”
21
The following table sets forth information concerning the compensation earned by or paid to our non-employee directors during fiscal 2022.
Name |
|
Fees |
|
|
Stock |
|
|
Total |
|
|||
Patrick Byrne |
|
|
138,438 |
|
|
|
140,514 |
|
|
|
278,952 |
|
Douglas Davis |
|
|
78,813 |
|
|
|
140,514 |
|
|
|
219,327 |
|
Michael Huerta |
|
|
68,750 |
|
|
|
140,514 |
|
|
|
209,264 |
|
John Rexford |
|
|
84,000 |
|
|
|
140,514 |
|
|
|
224,514 |
|
Cynthia Russo |
|
|
77,500 |
|
|
|
140,514 |
|
|
|
218,014 |
|
Sarah Farrell |
|
|
60,000 |
|
|
|
194,676 |
|
|
|
254,676 |
|
We currently reimburse our directors for their reasonable out-of-pocket expenses in connection with attending meetings of our Board and committees. We have granted equity awards to our non-employee directors as compensation for their services. All of our non-employee directors hold RSUs.
22
MATTERS TO COME BEFORE THE ANNUAL MEETING
PROPOSAL 2:
Advisory Vote to Approve Executive Compensation
As required by Section 14A of the Exchange Act, we are asking our stockholders to vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement. We currently plan to conduct this non-binding vote to approve executive compensation annually, with the next advisory vote taking place at the 2024 annual meeting of stockholders.
As described in the section entitled “Compensation Discussion and Analysis,” our executive compensation program is designed to drive and reward performance and align the compensation of our named executive officers with the interests of our stockholders. We believe that our compensation program effectively aligns the interests of our employees and our stockholders and rewards superior short-term and long-term financial and operational performance. Please read the section entitled “Compensation Discussion and Analysis” beginning on page 44 and the compensation tables and narrative disclosure that follow for specific details about our executive compensation program. Your vote is not intended to address any specific item of our compensation program, but rather to address our overall approach to the compensation of our named executive officers described in this Proxy Statement.
Accordingly, we are asking our stockholders to vote FOR the following resolution:
Resolved, that the stockholders hereby approve, on an advisory and non-binding basis, the compensation paid to Verra Mobility’s named executive officers, as disclosed in its proxy statement for the 2023 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the SEC, including in the Compensation Discussion and Analysis, the compensation tables and the narrative discussions that accompany the compensation tables.
Vote Required
The approval of this advisory proposal requires the affirmative vote of a majority of the votes cast by our stockholders present in person or by proxy at the Annual Meeting and entitled to vote thereon.
As an advisory vote, this proposal will not be binding on us, our Board or our compensation committee in any way. As such, the results of the vote will not create or imply any change to the fiduciary duties of any members of our Board. Notwithstanding the advisory non-binding nature of this vote, our Board values the opinions of our stockholders, and will consider the outcome of the vote when setting the frequency of the advisory vote on executive compensation.
At our 2022 annual meeting of stockholders, approximately 99% of the votes cast on the non-binding advisory vote (also known as a “say-on-pay” proposal) on the compensation of our named executive officers were voted in support of our executive compensation program, and our stockholders approved a proposal that we submit a say-on-pay vote to our stockholders on an annual basis.
Our Board recommends a vote FOR the approval, on an advisory non-binding basis, of the compensation of our named executive officers as disclosed in this Proxy Statement.
23
MATTERS TO COME BEFORE THE ANNUAL MEETING
PROPOSAL 3:
Approval of the Amendment and Restatement of the 2018 Equity Incentive Plan
We are asking our stockholders to approve an amended and restated version of our Verra Mobility 2018 Equity Incentive Plan (the “2018 Plan”) to, among other things, increase the maximum number of shares available for awards by 5,000,000 shares (or approximately 3.34% of our outstanding Class A Common Stock as of the Record Date). Subject to our stockholders’ approval at the Annual Meeting, our Board approved an amended and restated version of the 2018 Plan (the “Amended and Restated Plan”) on March 27, 2023, based on the recommendation of the compensation committee. As further described below in “Compensation Best Practices,” the Amended and Restated Plan also includes terms and conditions that reflect best practices in governance and compensation.
If approved by our stockholders, the Amended and Restated Plan would be effective as of the date of the Annual Meeting and would replace the current version of the 2018 Plan. However, the terms and conditions of the Amended and Restated Plan, to the extent they differ from the terms and conditions of the 2018 Plan, would not apply to or otherwise impact outstanding awards previously granted under the 2018 Plan – such outstanding awards will continue in effect in accordance with their existing terms. If the Amended and Restated Plan is not approved by our stockholders, no awards will be made under the Amended and Restated Plan, and the 2018 Plan will remain in effect.
If approved, we intend to file a Registration Statement on Form S-8 relating to the issuance of additional common shares under the Amended and Restated Plan with the SEC pursuant to the Securities Act as soon as practicable after approval of the Amended and Restated Plan.
As further described below, the 2018 Plan provides for grants of equity awards to our executives and employees, as well as non-employee directors and consultants. The purpose of the 2018 Plan is to provide equity incentives to executives, employees, non-employee directors and consultants in order to align their interests with long-term stockholder interests, motivate and reward them for achieving long-term results and help us retain key executives and employees in a competitive market for talent. We believe that increasing the number of shares issuable under the 2018 Plan is necessary in order to allow us to continue to utilize equity awards to retain and attract the services of key individuals essential to our long-term growth and financial success and to further align their interests with those of our stockholders. We rely on equity awards to retain and attract key employees and non-employee Board members and believe that equity incentives are necessary for us to remain competitive with regard to retaining and attracting highly qualified individuals upon whom, in large measure, our future growth and success depend. The availability of an adequate number of shares available for issuance under the 2018 Plan is an important factor in fulfilling these purposes. Our Board recommends that you vote to approve the Amended and Restated Plan.
The Amended and Restated Plan includes the following material changes to the 2018 Plan: (i) subject to adjustment for certain changes in our capitalization, an increase in the aggregate number of shares that we may issue under awards under the plan by 5,000,000, so that the aggregate share reserve will be 15,864,000 shares, (ii) an increase in the aggregate number of shares that may be issued subject to incentive stock options by 5,000,000, so that the aggregate limit on shares that can be issued subject to incentive stock options will be 15,864,000 shares, (iii) inclusion of a minimum vesting period of one year for all awards (subject to certain exceptions), (iv) no dividends will be paid with respect to any shares of our Class A Common Stock subject to an award before the date such award vests and any dividend equivalents credited in respect of shares of our Class A Common Stock covered by an award will be subject to all of the same terms and conditions of the underlying award agreement to which they relate (including any vesting conditions applicable to the shares with respect to which such dividend equivalents are credited), (v) extends the term of the Amended and Restated Plan, (viii) provides that our Board or a committee may provide for certain acceleration of the vesting of awards in connection with a change in control to extent the awards are not assumed or continued by the acquiror in the transaction (or if the participant is involuntarily terminated if the awards are assumed or continued), and (ix) certain other changes. We believe that the amendments to the 2018 Plan are needed to account for our growth as well as changes in compensation best practices.
24
Determination of Share Reserve Increase
In making its recommendation to our Board to increase the 2018 Plan’s share reserve by 5,000,000 shares through the Amended and Restated Plan, our compensation committee considered the following factors:
As of the Record Date, 3,569,090 shares of Class A Common Stock remained available for issuance under the 2018 Plan. If the Amended and Restated Plan is not approved, this remaining share pool will not be sufficient to fulfill our equity compensation program during the next several years. We may be compelled to increase the cash component of our employee and director compensation, which may not necessarily align compensation interests with the investment interests of our stockholders as effectively as the alignment provided by equity-based awards. Awards under the Amended and Restated Plan are intended to provide our employees and non-employee directors significant incentive to protect and enhance stockholder value. Replacing equity awards with cash would also increase compensation expense and exhaust cash that could be better utilized if reinvested in our businesses.
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
Total number of shares subject to options granted |
|
|
846,235 |
|
|
|
731,524 |
|
|
|
719,577 |
|
Total number of shares subject to full value awards granted |
|
|
1,271,765 |
|
|
|
890,353 |
|
|
|
692,391 |
|
Weighted-average shares of Class A Common Stock outstanding during the fiscal year |
|
|
152,848,000 |
|
|
|
159,983,000 |
|
|
|
161,632,000 |
|
Burn rate |
|
|
1.39 |
% |
|
|
1.01 |
% |
|
|
0.87 |
% |
25
Overhang
The following table provides certain additional information regarding our equity incentive program.
|
|
As of |
|
|
Total number of shares of Class A Common Stock subject to outstanding stock options |
|
|
1,522,633 |
|
Weighted-average exercise price of outstanding stock options |
|
$ |
13.62 |
|
Weighted-average remaining term of outstanding stock options |
|
8.17 years |
|
|
Total number of shares of Class A Common Stock subject to outstanding full value awards |
|
|
2,776,957 |
|
Total number of shares of Class A Common Stock available for grant under the 2018 Plan |
|
|
3,569,090 |
|
Total number of shares of Class A Common Stock available for grant under other equity incentive plans |
|
|
— |
|
Total number of shares of Class A Common Stock outstanding |
|
|
149,769,629 |
|
Per-share closing price of Class A Common Stock as reported on Nasdaq |
|
$ |
17.01 |
|
Compensation Best Practices
In addition to increasing the applicable share reserve, the Amended and Restated Equity Incentive Plan incorporates a range of compensation best practices, including the following key features:
26
Summary of Material Terms of the Amended and Restated Plan
The following summary of the Amended and Restated Amended and Restated Plan is qualified in its entirety to the text of the Amended and Restated Plan as set forth on Appendix A to this Proxy Statement. You should read the complete text of the Amended and Restated Plan for additional details regarding the operation of the Amended and Restated Plan. Capitalized terms used but not defined in this section shall have the meaning ascribed to such term in the Amended and Restated Plan.
General. The purpose of the Amended and Restated Plan is to advance our interests and those of our stockholders by providing an incentive program that will enable us to attract, retain and award employees, consultants and non-employee directors in order to align their interests with long-term stockholder interests, motivate and reward them for achieving long-term results and help us retain key executives and employees in a competitive market for talent. These incentives are provided through the grant of stock options, stock appreciation rights restricted stock, restricted stock units, performance shares, performance units, other stock-based awards and cash-based awards.
Authorized Shares. Subject to adjustment for certain capitalization events as provided in the Amended and Restated Plan, the maximum aggregate number of shares authorized for issuance under the Amended and Restated Plan is 15,864,000 shares. Such shares shall consist of authorized but unissued or reacquired shares or any combination thereof.
Share Counting. Each share made subject to an award will reduce the number of shares remaining available for grant under the Amended and Restated Plan by one share. If any award granted under the Amended and Restated Plan expires or otherwise terminates or is canceled for any reason without having been exercised or settled in full, or if shares subject to forfeiture or repurchase are forfeited or repurchased by us for not more than the participant’s purchase
27
price, the shares allocable to the terminated portion of the award or such forfeited or repurchased shares will again become available for issuance under the Amended and Restated Plan. If the exercise price is paid by attestation of ownership of shares or by means of a net exercise, then the number of shares available for issuance under the Amended and Restated Equity Plan will be reduced by the gross number of shares for which the option is exercised. Shares will not be treated as having been issued under the Amended and Restated Plan and will therefore not reduce the number of shares available for issuance to the extent an award is settled in cash. Shares that are withheld or that are tendered in payment of the exercise price of an option will not be made available for new awards under the Amended and Restated Plan. Shares purchased in the open market with option exercise proceeds will not increase the maximum number of shares that may be issued under the Amended and Restated Plan. However, shares withheld or reacquired by us in satisfaction of a tax withholding obligation in connection with the vesting or settlement of any full value award (but not options) will not reduce the number of shares remaining available for the future grant of awards.
Adjustments for Capital Structure Changes. Appropriate and proportionate adjustments will be made to the number of shares authorized under the Amended and Restated Plan, to the numerical limits on certain types of awards described below, and to outstanding awards in the event of any change in our Class A Common Stock through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares or similar change in our capital structure, or if we make a distribution to our stockholders in a form other than Class A Common Stock (excluding regular, periodic cash dividends) that has a material effect on the fair market value of our Class A Common Stock. In such circumstances, the compensation committee also has the discretion under the Amended and Restated Plan to adjust other terms of outstanding awards as it deems appropriate.
Nonemployee Director Award Limits. Annual compensation awarded to any nonemployee director during each fiscal year, including both shares of stock subject to awards and any cash fees paid to such nonemployee director (but excluding expense reimbursements), may not exceed $750,000 in total value (calculating the value of any such awards based on the grant date fair value of such awards for financial reporting purposes).
Other Award Limits. To comply with applicable tax rules, the Amended and Restated Plan limits to 15,864,000 the number of shares that may be issued upon the exercise of incentive stock options granted under the Amended and Restated Plan.
Administration. The Amended and Restated Plan generally will be administered by the compensation committee of our Board, although our Board retains the right to appoint another of its committees to administer the Amended and Restated Plan or to administer the Amended and Restated Plan directly. Subject to the provisions of the Amended and Restated Plan, the compensation committee determines in its discretion the persons to whom and the times at which awards are granted, the types and sizes of awards and all of their terms and conditions. The compensation committee may, subject to certain limitations on the exercise of its discretion provided by the Amended and Restated Plan, amend, cancel or renew any award, waive any restrictions or conditions applicable to any award, and accelerate, continue, extend or defer the vesting of any award. The compensation committee will interpret the Amended and Restated Plan and awards granted thereunder, and all determinations of the compensation committee generally will be final and binding on all persons having an interest in the Amended and Restated Plan or any award.
The Amended and Restated Plan provides, subject to certain limitations, for indemnification by us of any director, officer or employee against all reasonable expenses, including attorneys’ fees, incurred in connection with any legal action arising from such person’s action or failure to act in administering the Amended and Restated Plan. All awards granted under the Amended and Restated Plan will be evidenced by a written or digitally signed agreement between us and the participant specifying the terms and conditions of the award, consistent with the requirements of the Amended and Restated Plan.
Prohibition of Option and SAR Repricing. The Amended and Restated Plan expressly provides that, without the approval of a majority of the votes cast in person or by proxy at a meeting of our stockholders, the compensation committee or the Board may not provide for any of the following with respect to underwater options or stock appreciation rights: (1) either the cancellation of such outstanding options or stock appreciation rights in exchange for the grant of new options or stock appreciation rights at a lower exercise price or the amendment of outstanding options or stock appreciation rights to reduce the exercise price, (2) the issuance of new full value awards in exchange for the
28
cancellation of such outstanding options or stock appreciation rights, or (3) the cancellation of such outstanding options or stock appreciation rights in exchange for payments in cash.
Eligibility. Awards may be granted to our employees, directors and consultants or any present or future parent or subsidiary corporation or other affiliated entity. Incentive stock options may be granted only to employees who, as of the time of grant, are our employees or any of our parent or subsidiary corporations. As of the Record Date, we had approximately 445 employees, including six executive officers, and six non-employee directors who would be eligible in the Amended and Restated Plan.
Stock Options. The compensation committee may grant nonstatutory stock options, incentive stock options within the meaning of Section 422 of the Code, or any combination of these. The exercise price of each option may not be less than the fair market value of a share of our Class A Common Stock on the date of grant. However, any incentive stock option granted to a person who at the time of grant owns stock possessing more than 10% of the total combined voting power of all of our classes of stock or any parent or subsidiary corporation (a “10% Stockholder”) must have an exercise price equal to at least 110% of the fair market value of a share of Class A Common Stock on the date of grant.
The Amended and Restated Plan provides that the option exercise price may be paid in cash, by check, or cash equivalent, by means of a broker-assisted cashless exercise, by means of a net-exercise procedure, to the extent legally permitted, by tender to us of shares of Class A Common Stock owned by the participant having a fair market value not less than the exercise price, by such other lawful consideration as approved by the compensation committee, or by any combination of these. Nevertheless, the compensation committee may restrict the forms of payment permitted in connection with any option grant.
Options will become vested and exercisable at such times or upon such events and subject to such terms, conditions, performance criteria or restrictions as specified by the compensation committee. The maximum term of any option granted under the Amended and Restated Plan is 10 years, provided that an incentive stock option granted to a 10% Stockholder must have a term not exceeding five years. Unless otherwise permitted by the compensation committee, an option generally will remain exercisable for three months following the participant’s termination of service, provided that if service terminates as a result of the participant’s death or disability, the option generally will remain exercisable for twelve months, but in any event the option must be exercised no later than its expiration date. If a participant’s service is terminated for cause or if, following the participant’s termination and during which any period the stock option remains exercisable, the participant engages in any act that would constitute cause, the stock option will terminate in its entirety and cease to be exercisable immediately upon such termination of service or act.
Options are nontransferable by the participant other than by will or by the laws of descent and distribution, and are exercisable during the participant’s lifetime only by the participant. However, an option may be assigned or transferred to certain family members or trusts for their benefit to the extent permitted by the compensation committee and, in the case of an incentive stock option, only to the extent that the transfer will not terminate its tax qualification.
Stock Appreciation Rights. The compensation committee may grant stock appreciation rights either in tandem with a related option (a “Tandem SAR”) or independently of any option (a “Freestanding SAR”). A Tandem SAR requires the option holder to elect between the exercise of the underlying option for shares of Class A Common Stock or the surrender of the option and the exercise of the related stock appreciation right. A Tandem SAR is exercisable only at the time and only to the extent that the related stock option is exercisable, while a Freestanding SAR is exercisable at such times or upon such events and subject to such terms, conditions, performance criteria or restrictions as specified by the compensation committee. The exercise price of each stock appreciation right may not be less than the fair market value of a share of our Class A Common Stock on the date of grant.
Upon the exercise of any stock appreciation right, the participant is entitled to receive an amount equal to the excess of the fair market value of the underlying shares of Class A Common Stock as to which the right is exercised over the aggregate exercise price for such shares. Payment of this amount upon the exercise of a Tandem SAR may be made only in shares of Class A Common Stock whose fair market value on the exercise date equals the payment amount. At the compensation committee’s discretion, payment of this amount upon the exercise of a Freestanding SAR may be made in cash or shares of Class A Common Stock. The maximum term of any stock appreciation right granted under the Amended and Restated Plan is 10 years.
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Stock appreciation rights are generally nontransferable by the participant other than by will or by the laws of descent and distribution and are generally exercisable during the participant’s lifetime only by the participant. If permitted by the compensation committee, a Tandem SAR related to a nonstatutory stock option and a Freestanding SAR may be assigned or transferred to certain family members or trusts for their benefit to the extent permitted by the compensation committee. Other terms of stock appreciation rights are generally similar to the terms of comparable stock options.
Restricted Stock Awards. The compensation committee may grant restricted stock awards under the Amended and Restated Plan either in the form of a restricted stock purchase right, giving a participant a right to purchase Class A Common Stock, or in the form of a restricted stock bonus, in which stock is issued in consideration for services to us rendered by the participant. The compensation committee determines the purchase price payable under restricted stock purchase awards, which may be less than the then current fair market value of our Class A Common Stock. Restricted stock awards may be subject to vesting conditions based on such service or performance criteria as the compensation committee specifies, including the attainment of one or more performance goals similar to those described below in connection with performance awards. Shares acquired pursuant to a restricted stock award may not be transferred by the participant until vested. Participants holding restricted stock will have the right to vote the shares and to receive any dividends paid, except that dividends or other distributions paid in shares will be subject to the same restrictions as the original award and dividends paid in cash may be made subject to such restrictions. If a participant’s service terminates for any reason, whether voluntary or involuntary (including the participant’s death or disability), then (a) we will have the option to repurchase for the purchase price paid by the participant any shares acquired by the participant pursuant to a restricted stock purchase right which remain subject to vesting conditions as of the date of the participant’s termination of service and (b) the participant will forfeit to us any shares acquired by the participant pursuant to a restricted stock bonus which remain subject to vesting conditions as of the date of the participant’s termination of service.
Restricted Stock Units. The compensation committee may grant restricted stock units under the Amended and Restated Plan, which represent rights to receive shares of our Class A Common Stock at a future date determined in accordance with the participant’s award agreement. No monetary payment is required for receipt of restricted stock units or the shares issued in settlement of the award, the consideration for which is furnished in the form of the participant’s services to us. The compensation committee may grant restricted stock unit awards subject to the attainment of one or more performance goals similar to those described below in connection with performance awards or may make the awards subject to vesting conditions similar to those applicable to restricted stock awards. Restricted stock units may not be transferred by the participant. Participants have no voting rights or rights to receive cash dividends with respect to restricted stock unit awards until shares of Class A Common Stock are issued in settlement of such awards. However, the compensation committee may grant restricted stock units that entitle their holders to dividend equivalent rights, which are rights to receive cash or additional restricted stock units whose value is equal to any cash dividends we pay. Dividend equivalent rights will be made subject to the same vesting conditions and settlement terms as the original award. Unless otherwise provided by the compensation committee and subject to the terms of the Amended and Restated Plan, a participant will forfeit any restricted stock units which have not vested prior to the participant’s termination of service.
Performance Awards. The compensation committee may grant performance awards subject to such conditions and the attainment of such performance goals over such periods as the compensation committee determines in writing and sets forth in a written agreement between us and the participant. These awards may be designated as performance shares or performance units, which consist of unfunded bookkeeping entries generally having initial values equal to the fair market value determined on the grant date of a share of Class A Common Stock in the case of performance shares and a monetary value established by the compensation committee at the time of grant in the case of performance units. Performance awards will specify a predetermined amount of performance shares or performance units that may be earned by the participant to the extent that one or more performance goals are attained within a predetermined performance period. To the extent earned, performance awards may be settled in cash, shares of Class A Common Stock (including shares of restricted stock that are subject to additional vesting) or any combination of these.
Prior to the beginning of the applicable performance period or such later date as determined by the compensation committee, the compensation committee will establish one or more performance goals applicable to the award. Performance goals will be based on the attainment of specified target levels with respect to one or more measures of
30
our business or financial performance and each subsidiary corporation consolidated with us for financial reporting purposes, or such division or business unit as may be selected by the compensation committee. The compensation committee, in its discretion, may base performance goals on one or more of the following such measures: revenue, sales, expenses, operating income, gross margin, operating margin, earnings before any one or more of: stock-based compensation expense, interest, taxes, depreciation and amortization, pre-tax profit, adjusted pre-tax profit, net operating income, net income, economic value added, free cash flow, operating cash flow, balance of cash, cash equivalents and marketable securities, stock price, earnings per share, return on stockholder equity, return on capital, return on assets, return on investment, total stockholder return, employee satisfaction, employee retention, market share, customer satisfaction, product development, research and development expense, completion of an identified special project and completion of a joint venture or other corporate transaction and personal performance objectives established for an individual participant or group of participants.
The target levels with respect to these performance measures may be expressed on an absolute basis or relative to an index, budget or other standard specified by the compensation committee. The degree of attainment of performance measures will be calculated in accordance with our financial statements, generally accepted accounting principles, if applicable, or other methodology established by the compensation committee, but prior to the accrual or payment of any performance award for the same performance period, and, according to criteria established by the compensation committee, excluding the effect (whether positive or negative) of changes in accounting standards or any unusual or infrequently occurring event or transaction occurring after the establishment of the performance goals applicable to a performance award.
Following completion of the applicable performance period, the compensation committee will determine the extent to which the applicable performance goals have been attained and the resulting value to be paid to the participant. The compensation committee may make positive or negative adjustments to performance award payments to participants to reflect the participant’s individual job performance or other factors determined by the compensation committee. In its discretion, the compensation committee may provide for a participant awarded performance shares to receive dividend equivalent rights with respect to cash dividends paid on our Class A Common Stock to the extent that the performance shares become vested. The compensation committee may provide for performance award payments in lump sums or installments.
Unless otherwise provided by the compensation committee, if a participant’s service terminates due to the participant’s death or disability prior to completion of the applicable performance period, the final award value will be determined at the end of the performance period on the basis of the performance goals attained during the entire performance period but will be prorated for the number of days of the participant’s service during the performance period. The compensation committee may provide similar treatment for a participant whose service is involuntarily terminated. If a participant’s service terminates prior to completion of the applicable performance period for any other reason, the Amended and Restated Plan provides that the performance award will be forfeited. No performance award may be sold or transferred other than by will or the laws of descent and distribution prior to the end of the applicable performance period.
Cash-Based Awards and Other Stock-Based Awards. The compensation committee may grant cash-based awards or other stock-based awards in such amounts and subject to such terms and conditions as the compensation committee determines. Cash-based awards will specify a monetary payment or range of payments, while other stock-based awards will specify a number of shares or units based on shares or other equity-related awards. Such awards may be subject to vesting conditions based on continued performance of service or subject to the attainment of one or more performance goals similar to those described above in connection with performance awards. Settlement of awards may be in cash or shares of Class A Common Stock, as determined by the compensation committee. A participant will have no voting rights with respect to any such award unless and until shares are issued pursuant to the award. The compensation committee may grant dividend equivalent rights with respect to other stock-based awards. The effect on such awards of the participant’s termination of service will be determined by the compensation committee and set forth in the participant’s award agreement.
Change in Control. In the event of a Change in Control, the surviving, continuing, successor or purchasing entity or its parent may, without the consent of any participant, either assume or continue outstanding awards or substitute substantially equivalent awards for its stock. If so determined by the compensation committee, stock-based awards will be deemed assumed if, for each share subject to the award prior to the Change in Control, its holder is
31
given the right to receive the same amount of consideration that a stockholder would receive as a result of the Change in Control. The Amended and Restated Plan also authorizes the compensation committee, in its discretion and without the consent of any participant, to cancel each or any award denominated in shares of stock upon a Change in Control in exchange for a payment to the participant with respect to each vested share (and each unvested share if so determined by the compensation committee) subject to the cancelled award of an amount equal to the excess of the consideration to be paid per share of Class A Common Stock in the Change in Control transaction over the exercise or purchase price per share, if any, under the award. The compensation committee may provide that (i) if any awards are not assumed or continued in connection with a Change in Control or (ii) if any awards are assumed or continued in connection with a Change in Control but the holder of such awards is involuntarily terminated, then, in each case, the vesting of such awards subject to time-based vesting may be accelerated and any awards subject to performance-based vesting may be determined based on actual achievement of the performance goals through the date of the Change in Control or such awards may vest at target, prorated based on the period of the participant’s actual service during the applicable performance period. The vesting of all awards held by non-employee directors will be accelerated in full upon a Change in Control.
The Amended and Restated Plan provides that a “Change in Control” occurs upon: (i) a person (with certain exceptions described in the Amended and Restated Plan) acquiring direct or indirect beneficial ownership of 50% or more of the total fair market value or total combined voting power of our then-outstanding securities entitled to vote generally in the election of our Board, (ii) stockholder approval of our liquidation or dissolution, or (iii) the occurrence of any of the following events upon which our stockholders immediately before the event do not retain immediately after the event direct or indirect beneficial ownership of more than 50% of our voting securities, our successor or the entity to which our assets were transferred: (a) a sale or exchange by our stockholders in a single transaction or series of related transactions of more than 50% of our voting stock, (b) a merger or consolidation in which we are a party, or (c) the sale, exchange or transfer of all or substantially all of our assets (other than a sale, exchange or transfer to one or more of our subsidiaries).
Minimum Vesting Requirements. Under the Amended and Restated Plan, no award will vest (or, if applicable, be exercisable) until at least 12 months following the date of grant of the award; provided, however, that up to 5% of the authorized shares may be subject to awards which do not meet such vesting (and, if applicable, exercisability) requirements.
Dividends and Dividend Equivalents. The Amended and Restated Plan provides that dividends or dividend equivalents may be paid or credited with respect to any shares of our Class A Common Stock subject to an award, as determined by our Board and contained in the applicable award agreement; provided, however, that any dividends or dividend equivalents that are credited with respect to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of the applicable award agreement (including any vesting conditions).
Tax Withholding. We will have the right to deduct from any and all payments made under the Amended and Restated Plan, or to require the participant, through payroll withholding, cash payment or otherwise, to make adequate provision for, the federal, state, local and foreign taxes (including social insurance), if any, required by law to be withheld by us with respect to an award or the shares acquired pursuant thereto. We will have no obligation to deliver shares, to release shares from an escrow established pursuant to an award agreement, or to make any payment in cash under the Amended and Restated Plan until our tax withholding obligations have been satisfied by the participant.
We also have the right, but not the obligation, to deduct from the shares issuable to a participant upon the exercise or settlement of an award, or to accept from the participant the tender of, a number of whole shares having a fair market value, as determined by us, equal to all or any part of our tax withholding obligations. The fair market value of any shares withheld or tendered to satisfy any such tax withholding obligations will not exceed the amount determined by the applicable minimum statutory withholding rates (or the maximum individual statutory withholding rates for the applicable jurisdiction if use of such rates would not result in adverse accounting consequences or cost). We may require a participant to direct a broker, upon the vesting, exercise or settlement of an award, to sell a portion of the shares subject to the award determined by us in our discretion to be sufficient to cover our tax withholding obligations and to remit an amount equal to such tax withholding obligations in cash.
Federal Excise Tax Under Section 4999 of the Code. The Amended and Restated Plan provides that, if any of the payments or benefits provided or to be provided by us to a participant, or for the participant’s benefit, pursuant to
32
the terms of (i) the Amended and Restated Plan, (ii) an award agreement or (iii) otherwise, constitute parachute payments within the meaning of Section 280G of the Code and would be subject to the excise tax imposed under Section 4999 of the Code or any similar tax imposed by state or local law, then the participant will be eligible for the greater of (a) the payments or benefits after payment of the excise tax or (b) the payments or benefits reduced to the extent necessary to avoid being subject to the excise tax.
Amendment, Suspension or Termination. The Amended and Restated Plan will continue in effect until its termination by the compensation committee, provided that no awards may be granted under the Amended and Restated Plan following the 10th anniversary of the Amended and Restated Plan’s effective date, which will be the date on which it is approved by the stockholders. The compensation committee may amend, suspend or terminate the Amended and Restated Plan at any time, provided that no amendment may be made without stockholder approval that would increase the maximum aggregate number of shares of stock authorized for issuance under the Amended and Restated Plan, change the class of persons eligible to receive incentive stock options or require stockholder approval under any applicable law or the rules of any stock exchange on which our shares are then listed. No amendment, suspension or termination of the Amended and Restated Plan may affect any outstanding award unless expressly provided by the compensation committee, and, in any event, may not have a materially adverse effect an outstanding award without the consent of the participant unless necessary to comply with any applicable law, regulation or rule, including, but not limited to, Section 409A of the Code.
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 Amended and Restated Plan and does not attempt to describe all possible federal or other tax consequences of such participation or tax consequences based on particular 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 incentive stock option qualifying under Section 422 of the Code. Participants who neither dispose of their shares within two years following the date the option was granted nor within one year following the exercise of the option will normally recognize a capital gain or loss upon the sale of the shares equal to the difference, if any, between the sale price and the purchase price of the shares. If a participant satisfies such holding periods upon a sale of the shares, we will not be entitled to any deduction for federal income tax purposes. If a participant disposes of shares within two years after the date of grant or within one year after the date of exercise (a “disqualifying disposition”), the difference between the fair market value of the shares on the option exercise date and the exercise price (not to exceed the gain realized on the sale if the disposition is a transaction with respect to which a loss, if sustained, would be recognized) will be taxed as ordinary income at the time of disposition. 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 Code.
In general, the difference between the option exercise price and the fair market value of the shares on the date of exercise of an incentive stock option is treated as an adjustment in computing the participant’s alternative minimum taxable income and may be subject to an alternative minimum tax which is paid if such tax exceeds the regular tax for the year. Special rules may apply with respect to certain subsequent sales of the shares in a disqualifying disposition, certain basis adjustments for purposes of computing the alternative minimum taxable income on a subsequent sale of the shares and certain tax credits which may arise with respect to participants subject to the alternative minimum tax.
Nonstatutory Stock Options. Options not designated or qualifying as incentive stock options are nonstatutory stock options having no special tax status. A participant generally recognizes no taxable income upon receipt of such an option. Upon exercising a nonstatutory stock option, the participant normally recognizes ordinary income equal to the difference between the exercise price paid and the fair market value of the shares on the date when the option is exercised. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of stock 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 of the shares on the exercise date, will be taxed as capital gain or loss. We generally should be entitled to a tax deduction equal to the amount of ordinary income
33
recognized by the participant as a result of the exercise of a nonstatutory stock option, except to the extent such deduction is limited by applicable provisions of the Code.
Restricted Stock. A participant acquiring restricted stock generally will recognize ordinary income equal to the excess of the fair market value of the shares on the “determination date” over the price paid, if any, for such shares. The “determination date” is the date on which the participant acquires the shares unless the shares are subject to a substantial risk of forfeiture and are not transferable, in which case the determination date is the earlier of (i) the date on which the shares become transferable or (ii) the date on which the shares are no longer subject to a substantial risk of forfeiture (e.g., when they become vested). If the determination date follows the date on which the participant acquires the shares, the participant may elect, pursuant to Section 83(b) of the Code, to designate the date of acquisition as the determination date by filing an election with the Internal Revenue Service no later than 30 days after the date on which the shares are acquired. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. 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 of the shares on the determination date, will be taxed as capital gain or loss. We generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.
Restricted Stock Unit, Performance, Cash-Based and Other Stock-Based Awards. A participant generally will recognize no income upon the receipt of a restricted stock unit, performance share, performance unit, cash-based or other stock-based award. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of settlement in an amount equal to the cash received and the fair market value of any substantially vested shares of stock received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. If the participant receives shares of restricted stock, the participant generally will be taxed in the same manner as described above under “Restricted Stock.” Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value of the shares on the determination date (as defined above under “Restricted Stock”), will be taxed as capital gain or loss. We generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.
New Plan Benefits
Future Awards: Awards are subject to the discretion of the compensation committee, so the benefits or amounts that any participant or group of participants may receive in the future under the Amended and Restated Plan are not currently determinable.
Past Awards: As of the Record Date, the aggregate numbers of shares of Class A Common Stock made subject to awards granted to certain persons and groups under the 2018 Plan since its initial adoption in October 2018, of which the Amended and Restated Plan is a continuation, are as follows:
Name and Position |
|
Number of Shares |
|
|
David Roberts, President and Chief Executive Officer |
|
|
2,256,581 |
|
Craig Conti, Executive Vice President and Chief Financial Officer |
|
|
296,454 |
|
Steve Lalla, Executive Vice President, Commercial Services |
|
|
247,202 |
|
Jonathan Baldwin, Executive Vice President, Government Solutions |
|
|
150,602 |
|
Norman (Adam) Blake, President, T2 Systems |
|
|
192,360 |
|
Patricia Chiodo, Former Executive Vice President and Chief Financial Officer |
|
|
779,490 |
|
All Current Executive Officers as a Group(1) |
|
|
3,209,032 |
|
All Current Directors who are not Executive Officers |
|
|
158,073 |
|
All Employees, including current Officers who are not Executive Officers, as a Group |
|
|
3,740,562 |
|
Required Vote and Board of Directors Recommendation
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Approval of this proposal requires the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote on this proposal. If you hold your shares in your own name and abstain from voting on this matter, your abstention will not be counted as a vote cast and will have no effect on the outcome of this vote. If you hold your shares through a broker and you do not instruct the broker on how to vote on this proposal, your broker will not have authority to vote your shares. Broker non-votes will have no effect on the outcome of this vote. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum.
Our Board believes that the proposed adoption of the Amended and Restated Plan is in our best interests and those of our stockholders for the reasons stated above.
THEREFORE, OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF THE ADOPTION OF THE AMENDED AND RESTATED PLAN.
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MATTERS TO COME BEFORE THE ANNUAL MEETING
PROPOSAL 4:
Ratification of Selection of Independent Registered Public Accounting Firm
Our audit committee has appointed EY as our independent registered public accounting firm for the fiscal year ending December 31, 2023 and has further directed that management submit this selection for ratification by the stockholders at the Annual Meeting. EY has been our independent registered public accounting firm since the consummation of the Business Combination on October 17, 2018, and served as the independent registered public accounting firm for ATS from 2013 through the Business Combination.
Representatives of EY are expected to be present during the Annual Meeting, where they will be available to respond to appropriate questions and, if they desire, make a statement. Our Board is submitting this selection as a matter of good corporate governance and because we value our stockholders’ views on our independent registered public accounting firm. Neither our bylaws nor other governing documents or law require stockholder ratification of the selection of our independent registered public accounting firm. If the stockholders fail to ratify this selection, our Board will reconsider whether or not to retain that firm. Even if the selection is ratified, our Board may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our best interests of us and our stockholders.
Vote Required
An affirmative vote from holders of a majority in voting power of the shares present at the Annual Meeting or represented by proxy and entitled to vote on the proposal will be required to ratify the selection of EY.
Principal Accountant Fees and Services
The following table provides the aggregate fees for services provided by EY as our independent registered public accounting firms for the fiscal years ending December 31, 2022 and December 31, 2021, respectively.
|
|
Fiscal Year |
|
|
Fiscal Year |
|
||
Type of Fees |
|
($) |
|
|
($) |
|
||
Audit fees(1) |
|
|
3,825,922 |
|
|
|
4,079,275 |
|
Audit-Related Fees(2) |
|
|
|
|
|
120,000 |
|
|
Tax Fees(3) |
|
|
41,200 |
|
|
|
— |
|
Total fees |
|
|
3,867,122 |
|
|
|
4,199,275 |
|
36
Audit Committee Approval
Our audit committee approved all of the foregoing services. Our audit committee pre-approves all audit and permissible non-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services. Our independent registered public accounting firm and management are required to periodically report to our audit committee regarding the extent of services provided by our independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. Our audit committee may also pre-approve particular services on a case-by-case basis. During 2022 and 2021, services provided by EY were pre-approved by the audit committee in accordance with this policy.
Our Board recommends a vote FOR the ratification of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2023.
37
Report of the Audit Committee
On behalf of our Board, our audit committee oversees the financial reporting process, which includes establishing and maintaining internal controls and preparing the Company’s consolidated financial statements, for which management has responsibility. Our independent registered public accounting firm, EY, is responsible for performing an audit of the Company’s consolidated financial statements and expressing an opinion on the conformity of those consolidated financial statements with United States generally accepted accounting principles and expressing an opinion as to the effectiveness of the Company’s internal controls over financial reporting.
Our audit committee has reviewed and discussed the audited consolidated financial statements for the fiscal year ended December 31, 2022 with our management. The audit committee has discussed with its independent registered public accounting firm, EY, the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as issued by the Public Company Accounting Oversight Board (“PCAOB”). Our audit committee has also received the written disclosures and the letter from EY required by applicable requirements of the PCAOB regarding the EY’s communications with our audit committee concerning independence, and has discussed with EY its independence. Based on the foregoing, our audit committee has recommended to our Board that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
The Audit Committee
John Rexford (Chair)
Patrick Byrne
Cynthia Russo
The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
38
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information with respect to the beneficial ownership of our Class A Common Stock as of the Record Date:
The percentage of shares beneficially owned shown in the table is based on 149,769,629 shares of Class A Common Stock outstanding as of the Record Date. In computing the number of shares of capital stock beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares of our Class A Common Stock underlying warrants, stock options and time-based RSUs held by the person that are currently exercisable or exercisable within 60 days of the Record Date. However, we did not deem such shares of our Class A Common Stock outstanding for the purpose of computing the percentage ownership of any other person.
39
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. To our knowledge, except as indicated in the footnotes to this table and subject to community property laws where applicable, the persons named in the table below have sole voting and investment power with respect to all shares of our Class A Common Stock shown as beneficially owned by them. The information contained in the following table is not necessarily indicative of beneficial ownership for any other purpose, and the inclusion of any shares in the table does not constitute an admission of beneficial ownership of those shares. Except as otherwise noted below, the address for persons listed in the table is c/o Verra Mobility Corporation, 1150 North Alma School Road, Mesa, Arizona 85201. The information provided in the table below is based on our records, information filed with the SEC and information provided to us, except where otherwise noted.
|
|
Shares |
|
|
% of Voting |
|
5% Beneficial Owners |
|
|
|
|
|
|
BlackRock, Inc.(2) |
|
|
21,913,572 |
|
|
14.63% |
The Vanguard Group(3) |
|
|
16,375,397 |
|
|
10.93% |
Inclusive Capital Partners, L.P.(4) |
|
|
10,395,815 |
|
|
6.94% |
Darlington Partners Capital Management, LP(5) |
|
|
9,537,546 |
|
|
6.37% |
Named Executive Officers |
|
|
|
|
|
|
David Roberts(6) |
|
|
1,065,307 |
|
|
* |
Craig Conti(7) |
|
|
84,739 |
|
|
* |
Steve Lalla(8) |
|
|
53,102 |
|
|
* |
Norman (Adam) Blake(9) |
|
|
28,273 |
|
|
* |
Jonathan Baldwin(10) |
|
|
21,379 |
|
|
* |
Jonathan Keyser |
|
|
— |
|
|
* |
Patricia Chiodo(11) |
|
|
109,705 |
|
|
* |
Directors(12) |
|
|
|
|
|
|
Patrick Byrne |
|
|
22,639 |
|
|
* |
Douglas Davis |
|
|
32,341 |
|
|
* |
Sarah Farrell |
|
|
8,480 |
|
|
* |
Michael Huerta |
|
|
17,170 |
|
|
* |
John Rexford |
|
|
51,275 |
|
|
* |
Cynthia Russo |
|
|
32,341 |
|
|
* |
All directors and executive officers as a group (13 persons)(13) |
|
|
1,526,751 |
|
|
1.02% |
* Denotes less than 1%.
(†) Each share of Class A Common Stock will be entitled to one vote per share.
40
41
Executive Officers
The following is biographical information for the executive officers, and all persons chosen to become executive officers, as of the date of this Proxy Statement:
Name |
|
Age |
|
Position |
David Roberts |
|
52 |
|
President and Chief Executive Officer |
Craig Conti |
|
45 |
|
Executive Vice President and Chief Financial Officer |
Steve Lalla |
|
60 |
|
Executive Vice President, Commercial Services |
Jonathan Baldwin |
|
48 |
|
Executive Vice President, Government Solutions |
Norman (Adam) Blake |
|
49 |
|
President, T2 Systems |
Jonathan Keyser |
|
41 |
|
Executive Vice President and Chief Legal Officer |
David Roberts has served as Verra Mobility’s President and Chief Executive Officer since the consummation of the Business Combination and served as the President and Chief Executive Officer of ATS from May 2018 until the Business Combination. He served as ATS’ Chief Operating Officer from August 2014 to May 2018. Mr. Roberts brings more than 24 years of management experience to Verra Mobility. Prior to Verra Mobility, from April 2012 to August 2014, Mr. Roberts was the President and Chief Executive Officer of BillingTree, a multi-channel electronic payment platform company. Prior to joining BillingTree, from August 2008 to March 2012, Mr. Roberts was a Managing Director at Bank of America Merrill Lynch, leading the Equity Plan Services business. Mr. Roberts joined Bank of America Merrill Lynch via its acquisition of Equity Methods, where he served as Chief Executive Officer.
Craig Conti has served as Verra Mobility’s Executive Vice President and Chief Financial Officer since April 2022. Mr. Conti’s previous global financial leadership roles included serving as the CFO for ITW’s welding business, and leading financial planning and analysis for GE Healthcare’s IT business. Mr. Conti began his career at GE, where he gained a wide range of finance, operations and strategy experience over the course of 15 years. He holds an MBA from the Kellogg School of Business at Northwestern University, and he earned a Bachelor of Science in Finance from Siena College.
Steve Lalla has served as Verra Mobility’s Executive Vice President, Commercial Services since February 2021. Prior to Verra Mobility, he spent more than 30 years leading global, transformational changes at technology providers such as Vertiv, Dell and Motorola. At Vertiv, as Executive Vice President, he oversaw a global portfolio that included services and software solutions for power, thermal and industrial products. At Dell, Mr. Lalla held leadership roles in Commercial PC, PC Accessories, and Cloud and Data Security. Prior to Dell, he led the Mass Market cellular phone business at Motorola.
Jonathan Baldwin joined the Company as Verra Mobility’s Executive Vice President, Government Solutions in April 2022. Mr. Baldwin previously served as President of Fortive’s Gems, Sensors and Controls business, a global supplier of industrial sensors and control components. Prior to joining Fortive, Mr. Baldwin served as the General Manager for Texas Instruments’ Precision Signal Path business unit. He also held leadership roles in marketing, business development and strategy for National Semiconductor Corporation, Samplify Systems, Inc. and Analog Devices, Inc. He began his career at Raytheon Technologies as a systems engineer. Mr. Baldwin earned an MBA and a Master of Science in Electrical Engineering from Northeastern University in Boston, and a bachelor of science in electrical engineering from the University of Connecticut.
Norman (Adam) Blake joined the Company when Verra Mobility acquired T2 Systems, Inc. (“T2 Systems”), in December 2021. Mr. Blake served as President and Chief Executive Officer of T2 Systems from 2016 to 2021 and served as President and Chief Operating Officer of T2 Systems from 2015 to 2016. Prior to T2 Systems, Mr. Blake served as Vice President and General Manager at NCR Corporation, a global leader in consumer transaction technologies, where he oversaw a global portfolio that included software, hardware and services for their retail line of business. Mr. Blake has worked for more than 20 years in the technology industry and has extensive experience in operations, product development, sales and strategy.
42
Jonathan Keyser joined the Company as its Executive Vice President and Chief Legal Officer in December 2022. Prior to joining Verra Mobility, Mr. Keyser served as Vice President and General Counsel of Honeywell Performance Materials and Technologies (PMT), a business unit of Honeywell International that develops process technologies, automation solutions, advanced materials, hardware, chemicals, services and industrial software. Mr. Keyser previously served as Vice President and General Counsel of Honeywell UOP and Aerospace Integrated Supply Chain business units. Prior to Honeywell, Mr. Keyser served as Assistant General Counsel and Managing Counsel at Harley-Davidson Motor Company and was an attorney at Hogan Lovells US LLP. Between 2014 and 2016, Mr. Keyser served as a member of the Colorado State House of Representatives. Mr. Keyser holds a Bachelor of Science degree from the United States Air Force Academy and a law degree from the University of Denver Sturm College of Law.
43
Executive Compensation
Compensation Discussion and Analysis
Introduction
This Compensation Discussion and Analysis (the “CD&A”) describes the material elements of compensation awarded to, earned by, or paid to each of our named executive officers. This CD&A also describes our executive compensation philosophy, objectives and design, as well as the manner in which we award, and our named executive officers earn, such compensation. Finally, this CD&A is intended to supplement the data presented in the Summary Compensation Table and other compensation tables that follow the CD&A.
Our named executive officers, consisting of our PEO, principal financial officer, the next three most highly compensated executive officers as of December 31, 2022 and a former principal financial officer, are listed below. For purposes of this disclosure, we define “executive officer” as the president, any executive vice president in charge of a principal business unit or function, and any other officer or person who performs a policy making function for us.
Executive Summary
Key Compensation Highlights
Verra Mobility’s executive compensation program was designed to be consistent with its executive compensation principles, objectives, and commitment to sound corporate governance, as summarized below.
44
Compensation Philosophy and Objectives
Our compensation philosophy is primarily driven by our commitment to aligning our executive compensation with the interests of our stockholders by emphasizing performance-based incentive compensation focused on objectives that our Board believes have a significant impact on stockholder value. We recognize that an effective compensation strategy and philosophy is critical to recruiting, incentivizing and retaining key employees who contribute to the achievement of our short-term and long-term success and thereby create value for our stockholders. Therefore, our executive compensation program is designed to reinforce the following objectives:
Underpinning our compensation philosophy is our belief that Verra Mobility is a growth company with the potential to have a significant impact on the global smart mobility technology solutions and services industry. Achieving that potential should result in value creation for our stockholders. Thus, we believe that management’s incentives, our annual goals, and the long-term goals set by our compensation committee and our Board should reflect that growth orientation.
45
Elements of Our Executive Compensation Program
Our compensation program in 2022 consisted of base salary, annual cash incentives, stock options, RSUs and PSUs. The following table summarizes the primary elements and objectives of our 2022 compensation program for executive officers, including our named executive officers.
Element |
Description |
Primary Objectives |
Base Salary |
Ongoing cash compensation based on the executive officer’s role and responsibilities, individual job performance, and experience. |
§ Recruitment and retention |
Annual Cash Incentive (Annual Incentive Bonus Plan) |
Annual incentive with target award amounts for each executive officer. Actual cash payouts are linked to achievement of annual Company goals and individual performance. For 2022, payouts could range from 0%-150% of target depending on the relevant metric. |
§ Drive top-tier performance |
|
|
§ Incentivize and reward |
Long-Term Incentives |
David Roberts, Craig Conti, Steve Lalla, Jonathan Baldwin and Norman (Adam) Blake received annual equity awards during 2022, comprised of a combination of stock options, RSUs and PSUs. Stock options and RSUs vest over four years in equal installments. PSUs vest three years from the grant date and are based on the achievement of milestones based on our three-year relative total shareholder return (“TSR”). |
§ Drive top-tier performance |
|
|
§ Align with stockholders’ interests |
|
|
§ Link realized value entirely to stock price appreciation |
|
|
§ Retention |
Executive Pay Mix
Our compensation approach is to deliver a significant portion of compensation in the form of at-risk, performance-based components, and in 2022, a significant portion of our executive compensation consisted of variable, at-risk compensation. Approximately 86% of our Chief Executive Officer’s compensation for 2022 was delivered in variable compensation elements, and approximately 84% of our other named executive officers’ overall compensation, on average, was delivered in at-risk variable compensation.
Compensation Decision-Making Process
Our compensation committee has numerous tools at its disposal to help us accomplish our short- and long-term performance goals. Our compensation committee generally chooses to utilize those tools as follows in its administration and oversight of our executive compensation program.
46
Role of the Compensation Committee
Our compensation committee works closely with its independent compensation consultant, Semler Brossy, and meets regularly, including in executive session without members of management present, to make decisions concerning our executive compensation program and on the compensation of our Chief Executive Officer and other executive officers. The compensation committee reviews a variety of market data and information, including company peers, compensation information in the technology industry and general economic trends, and considers the recommendations of its compensation consultant when making compensation decisions. The compensation committee chair reports on the compensation committee’s actions at each regular Board meeting. The compensation committee’s responsibilities include, among other things, reviewing and approving (or making recommendations to our Board, as applicable, regarding):
The full description of our compensation committee’s authority and responsibilities is provided in our compensation committee charter, which is available on our investor relations website.
Role of the Independent Compensation Consultant
Our compensation committee retained Semler Brossy to serve as its independent compensation consultant for fiscal year 2022. Semler Brossy was engaged to assist our compensation committee with a variety of tasks related to 2022 executive compensation, which included, among other things, evaluating the impact of COVID-19 on the committee’s compensation-related decisions, conducting and presenting the annual review of the total compensation packages for our executive officers, including base salary, cash bonuses, long-term incentives and total direct compensation, reviewing market data on compensation, reviewing and assessing the annual and long-term incentives currently provided to executives and future awards, aligning and testing performance-related pay, reviewing non-employee directors’ compensation, reviewing our peer group, and understanding and responding to market compensation trends. Our compensation committee assessed the independence of Semler Brossy pursuant to the rules prescribed by the SEC and Nasdaq and concluded that no conflict of interest existed in 2022 that would have prevented Semler Brossy from serving as an independent consultant to our compensation committee.
Role of Management
When making decisions on executive compensation, our compensation committee considers input from our Chief Executive Officer, who provides his evaluation of each executive officer’s performance to the committee and makes recommendations with respect to base salary and target incentives, incentive awards and equity awards for each executive officer other than himself. This recommendation is considered by our compensation committee, which makes its own ultimate determinations. No member of management, including our Chief Executive Officer, is present during the deliberation of his or her own compensation decisions.
47
Competitive Market Information
Our compensation committee considered competitive market practices when setting total pay levels for 2022. However, competitive market data is only one of several resources made available to the committee to assist it in setting executive compensation levels. The compensation committee also considers individual-specific factors, such as individual performance, experience and level and scope of responsibilities, company performance and economic conditions. Our compensation committee does not use a formula or fixed target to determine compensation.
In setting compensation, our compensation committee compares base salaries, annual incentive opportunities, and long-term compensation for our executive officers against to a peer group of companies with similar revenue, market capitalization and EBITDA characteristics. Our compensation committee regularly reviews the composition of the peer group and makes modifications as appropriate. A comprehensive review was conducted in April 2022. We believe these peer group companies on the whole are:
Our peer group consisted of the following companies:
ACI Worldwide |
Alarm.Com Holdings, Inc. |
Aspen Technology |
Badger Meter |
Blackbaud |
Cerence |
CSG Systems |
EVERTEC, Inc. |
EVO Payments |
ExlService Holdings |
WEX Inc. |
Guidewire Software |
Manhattan Associates |
SP Plus Corporation |
OSI Systems |
Q2 Holdings |
|
|
In addition to these peer companies, the compensation committee also reviews pay data from compensation surveys, where relevant, as an additional reference point when setting executive compensation levels.
2022 Compensation Decisions
Base Salary
Base salary is a fixed element within a total compensation package intended to attract and retain the talent necessary to successfully manage our business and execute our business strategies. Base salary for our named executive officers is established based on the scope of their responsibilities, taking into account relevant experience, internal pay equity, tenure and other factors deemed relevant. The table below shows the annualized base salary for each named executive officer for 2022 and 2021. Base salary increases for 2022 were approved by our Board and compensation committee in February 2022 to more closely align compensation levels with market data. Base salaries for Mr. Conti and Mr. Baldwin were approved by our compensation committee in connection with their appointments.
|
|
Base Salary ($) |
|
|
|
|
||||||
Name |
|
2022 |
|
|
2021 |
|
|
Change (%) |
|
|||
David Roberts |
|
|
590,000 |
|
|
|
550,000 |
|
|
|
7.3 |
|
Craig Conti |
|
|
450,000 |
|
|
N/A |
|
|
N/A |
|
||
Steve Lalla |
|
|
420,000 |
|
|
|
400,000 |
|
|
|
5.0 |
|
Jonathan Baldwin |
|
|
385,000 |
|
|
N/A |
|
|
N/A |
|
||
Norman (Adam) Blake |
|
|
350,210 |
|
|
|
340,000 |
|
|
|
3.0 |
|
Patricia Chiodo |
|
|
411,045 |
|
|
|
411,045 |
|
|
|
- |
|
48
Annual Incentive Bonus Plan
During 2022, we sponsored the Bonus Plan for our employees who were active, full-time employees in management levels or higher, and who were approved for participation by our Chief People Officer and Chief Executive Officer. Participation for our executive officers was determined by the compensation committee. Participants in the Bonus Plan, which included our named executive officers, were eligible to receive cash bonus payments based on our (and segment, if applicable) performance during two performance periods, corresponding with the two halves of the year, and individual performance over the course of the full fiscal year. For 2022, the annual bonus targets for our named executive officers remained unchanged from the prior year and were established as a percentage of base salary as follows:
Name |
|
Target Award % |
|
|
David Roberts |
|
|
100 |
% |
Craig Conti |
|
|
75 |
% |
Steve Lalla |
|
|
75 |
% |
Jonathan Baldwin |
|
|
75 |
% |
Norman (Adam) Blake |
|
|
75 |
% |
Patricia Chiodo |
|
|
75 |
% |
The Bonus Plan consists of an annual performance period with a potential first-half progress payment (“Progress Payment”) corresponding with the first half of the year. Payment of bonuses to our named executive officers is based on the achievement of our revenue and adjusted EBITDA targets and each of our segments for the plan year, as well as an individual performance measure. The revenue and adjusted EBITDA targets are determined by our Chief Financial Officer and approved by our compensation committee, and are subject to adjustment by the application of an operational modifier (consisting of performance against key strategic objectives applicable to the participant based on the participant’s designation). Progress Payments are capped at 100% of the participant’s target bonus allocated to financial factors and any payout in excess of 100% of the participant’s target bonus is paid at the end of the plan year, if any. We define adjusted EBITDA as earnings before interest, taxes, depreciation and amortization determined on the basis of the financial statements prepared for the plan year, as adjusted in our Board’s discretion by removing irregular, one-time or non-recurring items.
|
|
Performance Metric Weighting |
|
|||||||||||||||||
Name |
|
Consolidated Revenue |
|
|
Consolidated Adjusted EBITDA |
|
|
Business Unit Revenue |
|
|
Business Unit Adjusted EBITDA |
|
|
Individual Performance |
|
|||||
David Roberts |
|
|
32 |
% |
|
|
48 |
% |
|
|
|
|
|
|
|
|
20 |
% |
||
Craig Conti |
|
|
32 |
% |
|
|
48 |
% |
|
|
|
|
|
|
|
|
20 |
% |
||
Steve Lalla |
|
|
|
|
|
|
|
|
32 |
% |
|
|
48 |
% |
|
|
20 |
% |
||
Jonathan Baldwin |
|
|
|
|
|
|
|
|
32 |
% |
|
|
48 |
% |
|
|
20 |
% |
||
Norman (Adam) Blake |
|
|
|
|
|
|
|
|
32 |
% |
|
|
48 |
% |
|
|
20 |
% |
||
Patricia Chiodo |
|
|
32 |
% |
|
|
48 |
% |
|
|
|
|
|
|
|
|
20 |
% |
||
Our consolidated revenue for fiscal year 2022 was approximately $741.6 million, which correlated to approximately 100.3% against the consolidated revenue target. Our consolidated adjusted EBITDA for fiscal year 2022 was approximately $338.5 million, which correlated to approximately 101.6% against the consolidated adjusted EBITDA target. Our Commercial Services revenue for fiscal year 2022 was approximately $326.0 million, which correlated to approximately 112.1% against the Commercial Services revenue target for fiscal year 2022. Our Commercial Services adjusted EBITDA for fiscal year 2022 was approximately $208.5 million, which correlated to approximately 120.0% against the Commercial Services adjusted EBITDA target. Our Government Solutions revenue for fiscal year 2022 was approximately $336.7 million, which correlated to approximately 95.1% against the Government Solutions revenue target for fiscal year 2022. Our Government Solutions adjusted EBITDA for fiscal year 2022 was approximately $115.8 million, which correlated to approximately 84.1% against the Government Solutions adjusted EBITDA target for fiscal year 2022. Our Parking Solutions revenue for fiscal year 2022 was approximately $79.0 million, which correlated to approximately 83.7% against the Parking Solutions revenue target for fiscal year 2022. Our Parking Solutions adjusted EBITDA for fiscal year 2022 was approximately $14.2 million, which correlated to
49
approximately 65.7% against the Parking Solutions adjusted EBITDA target for fiscal year 2022. Strategic priorities underlying the operational modifier for fiscal year 2022 were related to strategic growth opportunities and operational efficiencies, and the compensation committee determined the operational modifiers for Consolidated (Shared Services), Commercial Services, Government Solutions and Parking Solutions were 1.045, 1.05, 1.05 and 1.0, respectively.
While Parking Solutions did not meet the revenue and adjusted EBITDA thresholds for bonus eligibility in fiscal year 2022, the compensation committee determined in its discretion to deliver a payout of approximately 70% of target bonus to Mr. Blake. The compensation committee determined to make this payout in recognition of strong integration, progress and future positioning of the T2 Systems acquisition, and increasing momentum around customer retention in the later part of fiscal 2022. The compensation committee has not exercised upward discretion for annual incentive outcomes in our history as a public company, however, it believes that a payout of approximately 70% of target reflects the overall performance and contributions of Mr. Blake in 2022.
|
|
Performance Metric Goals and Achievement ($MM) |
|
|||||||||||||||||||||
Performance Metric |
|
<Threshold |
|
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|
2022 Actual |
|
|
Payout as a % of Target(2) |
|
||||||
Payout as a % of Target |
|
|
0 |
% |
|
|
50 |
% |
|
|
100 |
% |
|
|
150 |
% |
|
|
|
|
|
|
||
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenue |
|
<$628.5 |
|
|
$ |
628.5 |
|
|
$ |
739.4 |
|
|
$ |
887.2 |
|
|
$ |
741.6 |
|
|
|
105.0 |
% |
|
Adjusted EBITDA |
|
<$283.1 |
|
|
$ |
283.1 |
|
|
$ |
333.1 |
|
|
$ |
399.7 |
|
|
$ |
338.5 |
|
|
|
107.5 |
% |
|
Commercial Services Business Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenue |
|
<$247.3 |
|
|
$ |
247.3 |
|
|
$ |
290.9 |
|
|
$ |
349.1 |
|
|
$ |
326.0 |
|
|
|
130.0 |
% |
|
Adjusted EBITDA |
|
<$147.7 |
|
|
$ |
147.7 |
|
|
$ |
173.8 |
|
|
$ |
208.6 |
|
|
$ |
208.5 |
|
|
|
150.0 |
% |
|
Government Solutions Business Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenue |
|
<$301.0 |
|
|
$ |
301.0 |
|
|
$ |
354.1 |
|
|
$ |
424.9 |
|
|
$ |
336.7 |
|
|
|
96.7 |
% |
|
Adjusted EBITDA |
|
<$117.1 |
|
|
$ |
117.1 |
|
|
$ |
137.7 |
|
|
$ |
165.3 |
|
|
$ |
115.8 |
|
|
|
60.0 |
% |
|
Parking Solutions Business Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenue |
|
<$80.2 |
|
|
$ |
80.2 |
|
|
$ |
94.4 |
|
|
$ |
113.3 |
|
|
$ |
79.0 |
|
(3) |
|
0.0 |
% |
|
Adjusted EBITDA |
|
<$18.3 |
|
|
$ |
18.3 |
|
|
$ |
21.6 |
|
|
$ |
25.9 |
|
|
$ |
14.2 |
|
|
|
0.0 |
% |
|
Verra Mobility Corporation 2018 Equity Incentive Plan
The Verra Mobility 2018 Equity Incentive Plan (the “2018 Plan”) was approved by our stockholders on October 17, 2018, after being adopted by our Board on July 10, 2018, subject to stockholder approval. Awards made under the 2018 Plan allow us to attract new key employees, to continue to retain existing key employees, directors and other service providers for our and our stockholders’ long-term benefit and to align the interests of our employees, directors and other service providers with the interests of our stockholders. The 2018 Plan authorizes the compensation committee to provide incentive compensation in the form of stock options, restricted stock and stock units, performance shares and units, other stock-based awards and cash-based awards. The maximum aggregate number of shares authorized for issuance under the 2018 Plan is 10,864,000, and such shares shall consist of authorized but unissued or reacquired shares or any combination thereof.
50
2022 Long-Term Incentive Program
For 2022, our compensation committee approved awards of long-term incentives to our named executive officers comprised of RSUs, stock options and PSUs. RSUs and stock options vest in four equal annual installments beginning on the first anniversary of the grant date. PSUs vest three years from the grant date based on the achievement of our three-year TSR relative to a select group of companies within the data processing and outsourced services industry.
Restricted Stock Units
RSUs granted under the 2018 Plan represent rights to receive shares of our Class A Common Stock at a future date determined in accordance with the participant’s award agreement. Unless otherwise authorized by the compensation committee, one quarter of the 2022 RSU awards vested on the first anniversary of the grant date and one quarter of the award will vest annually thereafter, such that the entire award vests by the fourth anniversary of the grant date, subject to the participant’s continued service on each applicable vesting date. RSUs may not be transferred by the participant. Participants have no voting rights or rights to receive cash dividends with respect to RSUs until shares of stock are issued in settlement of such awards. Unless otherwise provided by our compensation committee, a participant will forfeit any RSUs which have not vested prior to the participant’s termination of service.
On May 11, 2022, we granted the following number of RSUs to our named executive officers:
(1) The RSUs granted to Mr. Conti on May 11, 2022 are comprised of two awards pursuant to his executive employment agreement. One award was for 21,475 RSUs subject to annual time-based vesting of 25% increments on each of the first four anniversaries of the grant date. The second award was for 128,848 RSUs subject to annual time-based vesting of 50% increments on each of the first two anniversaries of the grant date.
(2) The RSUs granted to Mr. Blake on May 11, 2022 are comprised of two awards. The first award, for 28,919 RSUs, was pursuant to his executive employment agreement, and is subject to annual time-based vesting of 25% increments on each of the first four anniversaries of the grant date. The second award, for 15,032 RSUs, was part of Mr. Blake’s annual long-term incentive award for 2022.
Ms. Chiodo did not receive a grant of RSUs in 2022 in anticipation of her retirement. In connection with Ms. Chiodo’s departure, the compensation committee accelerated the vesting date for 145,388 RSUs, representing the final tranche of RSUs granted on October 23, 2018. Ms. Chiodo forfeited 23,586 RSUs when she retired.
Stock Options
Stock options granted under the 2018 Plan represent options to purchase certain shares of Class A Common Stock at a future date determined in accordance with the participant’s award agreement. Stock options expire at the 10th anniversary of the grant date. Stock options may not be transferred by the participant. Unless otherwise provided by the compensation committee, a participant will forfeit any stock options which have not vested prior to the participant’s termination of service.
On May 11, 2022, we granted the following number of stock options to our named executive officers:
51
(1) The stock options granted to Mr. Blake on May 11, 2022 are comprised of two awards. The first award, for 40,964 stock options, was pursuant to his Executive Employment Agreement. The second award, for 42,169 stock options, was part of Mr. Blake’s annual long-term incentive award for 2022.
Ms. Chiodo did not receive a grant of stock options in 2022 in anticipation of her retirement. Ms. Chiodo forfeited 79,474 unvested stock options when she retired on April 23, 2022.
Performance Share Units
The number of PSUs that may vest is based on the achievement of threshold (minimum required for a payout), target or maximum levels and may range from 50% to 150% of the target number of shares.
If we do not achieve the threshold level, then no shares will vest. If our achievement falls between the threshold, target or maximum levels, the portion of the award that may vest will be determined based on straight-line interpolation. If our absolute TSR is negative over the three-year performance period, the number of PSUs that may vest will be capped at 100% of the target number of shares.
On May 11, 2022, we granted the following number of PSUs to our named executive officers:
(1) The PSUs granted to Mr. Blake are comprised of two awards. The first award, for 13,094 PSUs, was pursuant to his executive employment agreement. The second award, for 13,497 PSUs, was part of Mr. Blake’s annual long-term incentive award for 2022.
Mr. Chiodo did not receive a grant of PSUs in 2022 in anticipation of her retirement. Ms. Chiodo forfeited 35,044 PSUs, all of which were unvested, when she retired on April 23, 2022.
For the three-year period beginning in 2022, PSUs may be earned, if at all, based on our three-year annualized TSR performance against companies in the S&P 1000 Index. The compensation committee adopted the S&P 1000 Index as the comparator group for purposes of relative TSR to address a lack of direct public competitors and to motivate outperformance versus a broader market index. In keeping with its pay-for-performance philosophy, the compensation committee also set the performance target for earning PSUs at the 55th percentile of the comparator group for the three-year period beginning in 2022. Beginning with PSUs granted in 2022, the performance required to earn the threshold payout (50% of the target amount) is performance at the 25th percentile, performance required to earn the target payout (100% of target amount) is performance at the 55th percentile, and the performance required to earn the maximum payout (150% of the target amount) is performance at or above the 75th percentile. The payout cannot exceed 100% of the target amount if our absolute TSR is negative.
A relative TSR payout factor will be determined by calculating the percentile rank of our three-year annualized TSR versus the three-year annualized TSR of the S&P 1000 Index for the performance period:
|
|
Below Threshold |
|
Threshold |
|
Target |
|
Maximum |
|
Percentile Rank of Company vs. Comparator Group |
|
<25th percentile |
|
25th percentile |
|
55th percentile |
|
75th percentile |
|
Payout |
|
0% |
|
50% |
|
100% |
|
150% |
|
2020 PSU Grant Payout
52
In 2020, we granted PSUs (the “2020 PSUs”) to our named executive officers, among others, that could be earned based on relative total shareholder return performance. The 2020 PSUs had a three-year performance period beginning on March 5, 2020 and ending on March 5, 2023. We measured Verra Mobility’s total shareholder return relative to a comparator group consisting of a group of companies within the data processing and outsourced services industry over the three-year performance period. Based on performance relative to the comparator group, the PSU awards could be earned as illustrated in the following table:
|
|
Below Threshold |
|
Threshold |
|
Target |
|
Maximum |
Difference from Comparator Group Median |
|
<-8% |
|
-8% |
|
0% |
|
+8% |
Payout |
|
0% |
|
50% |
|
100% |
|
150% |
Based on our relative TSR of 11.99% during the performance period, the 2020 PSUs earned a payout of 150%. Mr. Roberts’ 52,810 2020 PSUs earned a payout of 79,215 shares of Class A Common Stock.
Compensation Governance
Stock Ownership Guidelines
We have stock ownership guidelines for our non-employee directors and certain employees, including our named executive officers as set forth below. Each director and executive must achieve the minimum equity investment within five years of the adoption of the guidelines or within five years of the date the employee first becomes subject to the guidelines.
Position |
|
Ownership Guidelines |
Chief Executive Officer |
|
Lesser of 4 times base salary or 230,000 shares |
Chief Financial Officer |
|
Lesser of 2 times salary or 95,000 shares |
All Other Executives |
|
Lesser of 1 times base salary or 40,000 shares |
Non-Employee Directors |
|
3 times cash retainer |
Compensation Recovery Policy
Our Board adopted a clawback policy of incentive compensation that allows us to recapture amounts paid or equity issued to executive officers under certain circumstances. This policy allows for recovery of certain incentive compensation if an executive officer:
The compensation elements subject to clawback or cancellation under the clawback policy include equity awards made pursuant to the 2018 Plan, whether or not vested or restricted, shares acquired upon vesting or lapse of restriction, any profits realized from the sale of any such equity awards, short-term and long-term incentive bonus and similar cash compensation, discretionary bonuses, and any other awards or compensation under our compensation programs other than base salary, in each case, awarded, earned or paid out during the 36 months preceding the need for the financial restatement or the determination of actions that leads to a for cause termination. Our Board has the sole discretion, subject to applicable law, to determine the form and timing of the clawback, which may include repayment from the executive officer or a reduction to the payment of future incentive compensation. This policy is in addition to the clawback policy in the 2018 Plan approved by stockholders.
Other Compensation
In addition to base salary and annual and long-term performance-based compensation, our named executive officers are also eligible for the following benefits on a similar basis as our other eligible employees:
53
Retirement Benefits
We maintain a 401(k) plan (our “401(k) Plan”) available to substantially all of our employees who meet certain eligibility requirements. Our named executive officers may elect to have a portion of their compensation withheld, up to the statutory limit. Our 401(k) Plan includes a matching contribution by us that vests immediately of up to 100% of our named executive officers’ first 3% contribution, and 50% of the next 2%, subject to the terms of the 401(k) Plan. Other than the benefits described under our 401(k) Plan, we have not provided our named executive officers with any retirement benefits.
Accounting and Tax Considerations
We consider the accounting impact reflected in our financial statements when establishing the amounts and forms of executive compensation. The forms of compensation that we select are intended to be cost-efficient. Stock-based compensation expense for all stock-based payment awards granted is determined based on the grant-date fair value of such awards. We recognize these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the stock-based payment award. Forfeitures are accounted for as they occur.
Section 162(m) of the Internal Revenue Code generally sets a limit of $1 million on the amount of compensation that we may deduct for federal income tax purposes in any given year with respect to the compensation of certain executives, including each of our named executive officers. Historically, compensation that qualified as “performance-based compensation” under Section 162(m) of the Code could be excluded from this $1 million limit. This exception was repealed with the Tax Cuts and Jobs Act of 2017, effective for taxable years beginning after 2017, unless certain transition relief is available.
While the compensation committee may consider the deductibility of compensation as a factor in determining executive compensation, the compensation committee retains the discretion to award and pay compensation that is not deductible as it believes that it is in the best interests of our stockholders to maintain flexibility in our approach to executive compensation and to structure a program that we consider to be the most effective in attracting, motivating and retaining key executives, without regard to the deductibility of compensation under it.
Compensation Risk Assessment
As a publicly traded company, we are subject to SEC rules regarding risk assessment. Those rules require a publicly traded company to determine whether any of its existing incentive compensation plans, programs or arrangements create risks that are reasonably likely to have a material adverse effect on us. We do not believe that our incentive compensation plans, programs or arrangements create risks that are reasonably likely to have a material adverse effect on us.
Compensation Committee Report
The compensation committee has reviewed and discussed with management the CD&A included in this Proxy Statement. Based on this review and discussion, the compensation committee has recommended to our Board that the CD&A be included in this Proxy Statement.
The Compensation Committee
Douglas Davis (Chair)
Patrick Byrne
Cynthia Russo
54
Summary Compensation Table
The following table sets forth all of the compensation earned by our named executive officers during fiscal 2022, 2021, and 2020.
Name and Principal Position |
|
Year |
|
|
Salary ($) |
|
|
Equity Awards ($) |
|
|
Non-Equity Incentive Plan Compensation ($)(1) |
|
|
|
Other Bonuses ($) |
|
|
All Other Compensation ($)(2) |
|
|
Total ($) |
|
|||||||
David Roberts |
|
|
2022 |
|
|
|
580,769 |
|
|
|
2,999,998 |
|
|
|
661,001 |
|
|
|
- |
|
|
|
11,400 |
|
|
|
4,253,168 |
|
|
President and Chief Executive Officer |
|
|
2021 |
|
|
|
530,952 |
|
|
|
2,499,998 |
|
|
|
426,751 |
|
|
|
- |
|
|
|
11,600 |
|
|
|
3,469,301 |
|
|
|
|
|
2020 |
|
|
|
452,364 |
|
|
|
2,110,009 |
|
|
- |
|
|
|
- |
|
|
|
11,400 |
|
|
|
2,573,773 |
|
||
Craig Conti |
|
|
2022 |
|
|
|
311,538 |
|
|
|
2,800,007 |
|
|
|
277,958 |
|
|
|
|
325,000 |
|
|
|
8,601 |
|
|
|
3,398,104 |
|
Executive Vice President and Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Steve Lalla |
|
|
2022 |
|
|
|
415,385 |
|
|
|
999,999 |
|
|
|
470,232 |
|
|
|
- |
|
|
|
11,400 |
|
|
|
1,897,016 |
|
|
Executive Vice President, Commercial Services |
|
|
2021 |
|
|
|
338,462 |
|
|
|
900,006 |
|
|
|
233,210 |
|
|
|
100,000(3) |
|
|
|
11,400 |
|
|
|
1,583,077 |
|
|
Jonathan Baldwin |
|
|
2022 |
|
|
|
273,942 |
|
|
|
1,100,006 |
|
|
|
187,858.00 |
|
|
|
|
|
|
|
10,871 |
|
|
|
1,572,677 |
|
|
Executive Vice President, Government Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Norman (Adam) Blake |
|
|
2022 |
|
|
|
352,166 |
|
|
|
1,580,006 |
|
|
|
79,144 |
|
|
|
106,397(4) |
|
|
|
6,208 |
|
|
|
2,123,921 |
|
|
President, T2 Systems |
|
|
2021 |
|
|
|
23,333 |
|
|
- |
|
|
- |
|
|
|
342,949(5) |
|
|
- |
|
|
|
366,282 |
|
||||
Patricia Chiodo |
|
|
2022 |
|
|
|
284,890 |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
11,400 |
|
|
|
296,290 |
|
|||
Former Chief Financial Officer |
|
|
2021 |
|
|
|
405,675 |
|
|
|
1,030,003 |
|
|
|
231,408 |
|
|
|
- |
|
|
|
11,600 |
|
|
|
1,678,686 |
|
|
|
|
|
2020 |
|
|
|
376,879 |
|
|
|
660,025 |
|
|
- |
|
|
|
- |
|
|
|
11,400 |
|
|
|
1,048,304 |
|
||
Name and Principal Position |
|
Year |
|
Severance Payments |
|
Company Safe-Harbor Contributions to 401(k) Plan($) |
|
|
Relocation Expenses |
|
Total ($) |
|
||
David Roberts |
|
2022 |
|
- |
|
|
11,400 |
|
|
- |
|
|
11,400 |
|
President and Chief Executive Officer |
|
2021 |
|
- |
|
|
11,600 |
|
|
- |
|
|
11,600 |
|
|
|
2020 |
|
- |
|
|
11,400 |
|
|
- |
|
|
11,400 |
|
Craig Conti |
|
2022 |
|
|
|
|
8,601 |
|
|
|
|
|
8,601 |
|
Executive Vice President and Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
||
Steve Lalla |
|
2022 |
|
|
|
|
11,400 |
|
|
|
|
|
11,400 |
|
Executive Vice President, Commercial Services |
|
2021 |
|
- |
|
|
11,400 |
|
|
- |
|
|
11,400 |
|
Jonathan Baldwin |
|
2022 |
|
|
|
|
10,871 |
|
|
|
|
|
10,871 |
|
Executive Vice President, Government Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
||
Norman (Adam) Blake |
|
2022 |
|
|
|
|
6,208 |
|
|
|
|
|
6,208 |
|
President, T2 Systems |
|
2021 |
|
- |
|
- |
|
|
- |
|
- |
|
||
Patricia Chiodo |
|
2022 |
|
|
|
|
11,400 |
|
|
|
|
|
11,400 |
|
Former Chief Financial Officer |
|
2021 |
|
- |
|
|
11,600 |
|
|
- |
|
|
11,600 |
|
|
|
2020 |
|
- |
|
|
11,400 |
|
|
- |
|
|
11,400 |
|
55
Grants of Plan-Based Awards Table
The following table sets forth certain information with respect to grants of plan-based awards to our named executive officers during 2022. Please see the “Outstanding Equity Awards at Fiscal Year-End” table below for additional information regarding the vesting parameters that are applicable to these awards.
|
|
|
|
Estimated Future Payouts |
|
|
Estimated Future Payouts |
|
|
All other |
|
|
All other |
|
|
Exercise |
|
|
Grant |
|
||||||||||||||||||||||
|
|
|
|
Threshold |
|
|
Target |
|
|
Max |
|
|
Threshold |
|
|
Target |
|
|
Max |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Name |
|
Grant Date |
|
($) |
|
|
($) |
|
|
($) |
|
|
(#) |
|
|
(#) |
|
|
(#) |
|
|
(#) |
|
|
(#) |
|
|
($) |
|
|
($) |
|
||||||||||
David Roberts |
|
|
|
|
295,000 |
|
|
|
590,000 |
|
|
|
885,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
5/11/2022 |
|
|
|
|
|
|
|
|
|
|
|
28,883 |
|
|
|
57,766 |
|
|
|
86,649 |
|
|
|
64,424 |
|
|
|
180,723 |
|
|
|
13.97 |
|
|
|
2,999,998 |
|
|||
Craig Conti(4) |
|
|
|
|
121,875 |
|
|
|
243,750 |
|
|
|
365,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
5/11/2022 |
|
|
|
|
|
|
|
|
|
|
|
9,628 |
|
|
|
19,255 |
|
|
|
28,883 |
|
|
|
150,323 |
|
|
|
59,791 |
|
|
|
13.97 |
|
|
|
2,800,007 |
|
|||
Steve Lalla |
|
|
|
|
157,500 |
|
|
|
315,000 |
|
|
|
472,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
5/11/2022 |
|
|
|
|
|
|
|
|
|
|
|
9,628 |
|
|
|
19,255 |
|
|
|
28,883 |
|
|
|
21,475 |
|
|
|
60,241 |
|
|
|
13.97 |
|
|
|
999,999 |
|
|||
Jonathan Baldwin(5) |
|
|
|
|
107,078 |
|
|
|
214,157 |
|
|
|
321,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
5/11/2022 |
|
|
|
|
|
|
|
|
|
|
|
6,740 |
|
|
|
13,479 |
|
|
|
20,219 |
|
|
|
43,665 |
|
|
|
41,854 |
|
|
|
13.97 |
|
|
|
1,100,006 |
|
|||
Norman (Adam) Blake |
|
|
|
|
131,329 |
|
|
|
262,658 |
|
|
|
393,987 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
5/11/2022 |
|
|
|
|
|
|
|
|
|
|
|
13,287 |
|
|
|
26,573 |
|
|
|
39,860 |
|
|
|
43,951 |
|
|
|
83,133 |
|
|
|
13.97 |
|
|
|
1,580,006 |
|
|||
Patricia Chiodo(6) |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
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— |
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— |
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— |
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— |
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— |
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||||||||||
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||||||||||
56
Outstanding Equity Awards as of December 31, 2022
The following table presents information regarding outstanding equity awards held by our named executive officers as of December 31, 2022. All awards were granted under our 2018 Plan.
|
|
|
|
|
|
Option Awards |
|
Restricted Stock Awards |
|
|
Performance Stock Awards |
|
||||||||||||||||||||||
Name |
|
Grant Date |
|
Vesting |
|
Number of |
|
|
Equity Incentive Plan Awards: Number of |
|
|
Option |
|
|
Option |
|
Equity |
|
|
Equity |
|
|
Equity |
|
|
Equity |
|
|||||||
David Roberts |
|
10/23/2018 |
|
10/23/2019 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||||
|
|
3/5/2020 |
|
3/5/2021 |
|
|
102,995 |
|
|
|
102,996 |
|
|
|
12.62 |
|
|
3/5/2030 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
|
|
3/5/2020 |
|
3/5/2021 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
19,137 |
|
|
|
264,665 |
|
|
- |
|
|
- |
|
|||||
|
|
3/5/2020 |
|
3/5/2023 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
|
52,810 |
|
|
|
730,362 |
|
|||||
|
|
3/17/2021 |
|
3/4/2022 |
|
|
38,759 |
|
|
|
116,280 |
|
|
|
13.69 |
|
|
3/4/2031 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
|
|
3/17/2021 |
|
3/4/2022 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
27,393 |
|
|
|
378,845 |
|
|
- |
|
|
- |
|
|||||
|
|
3/17/2021 |
|
3/4/2024 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
|
62,578 |
|
|
|
865,454 |
|
|||||
|
|
5/11/2022 |
|
3/3/2023 |
|
- |
|
|
|
180,723 |
|
|
|
13.97 |
|
|
5/11/2032 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
|
|
5/11/2022 |
|
3/3/2023 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
64,424 |
|
|
|
890,984 |
|
|
- |
|
|
- |
|
|||||
|
|
5/11/2022 |
|
3/3/2025 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
|
57,766 |
|
|
|
798,904 |
|
|||||
Craig Conti |
|
5/11/2022 |
|
5/11/2023 |
|
- |
|
|
|
59,791 |
|
|
|
13.97 |
|
|
5/11/2032 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
|
|
5/11/2022 |
|
5/11/2023 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
150,323 |
|
(4) |
|
2,078,967 |
|
|
- |
|
|
- |
|
|||||
|
|
5/11/2022 |
|
3/3/2025 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
|
19,255 |
|
|
|
266,297 |
|
|||||
Steve Lalla |
|
3/18/2021 |
|
3/4/2022 |
|
|
12,403 |
|
|
|
37,209 |
|
|
|
13.69 |
|
|
3/4/2031 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
|
|
3/18/2021 |
|
3/4/2022 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
18,627 |
|
|
|
257,611 |
|
|
- |
|
|
- |
|
|||||
|
|
3/18/2021 |
|
3/4/2024 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
|
15,019 |
|
|
|
207,713 |
|
|||||
|
|
5/11/2022 |
|
3/3/2023 |
|
- |
|
|
|
60,241 |
|
|
|
13.97 |
|
|
5/11/2032 |
|
- |
|
|
|
|
|
|
|
|
|
|
|||||
|
|
5/11/2022 |
|
3/3/2023 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
21,475 |
|
|
|
296,999 |
|
|
- |
|
|
- |
|
|||||
|
|
5/11/2022 |
|
3/3/2025 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
|
19,255 |
|
|
|
266,297 |
|
|||||
Jonathan Baldwin |
|
5/11/2022 |
|
5/11/2023 |
|
- |
|
|
|
41,854 |
|
|
|
13.97 |
|
|
5/11/2032 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
|
|
5/11/2022 |
|
5/11/2023 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
43,665 |
|
|
|
603,887 |
|
|
- |
|
|
- |
|
|||||
|
|
5/11/2022 |
|
3/3/2025 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
|
13,479 |
|
|
|
186,415 |
|
|||||
Norman (Adam) Blake |
|
5/11/2022 |
|
3/3/2023 |
|
- |
|
|
|
83,133 |
|
|
|
13.97 |
|
|
5/11/2032 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
|
|
5/11/2022 |
|
3/3/2023 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
43,951 |
|
(5) |
|
607,842 |
|
|
- |
|
|
- |
|
|||||
|
|
5/11/2022 |
|
3/3/2025 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
|
26,573 |
|
(8) |
|
367,505 |
|
|||||
Patricia Chiodo(3) |
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||||
57
Pay versus Performance
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following information about the relationship between executive compensation actually paid and our financial performance. For further information concerning our variable pay-for-performance philosophy and how we align executive compensation with our performance, see the section titled “Compensation Discussion and Analysis.” Fair value amounts below are computed in a manner consistent with the fair value methodology used to account for share-based payments in our financial statements under generally accepted accounting principles. Total shareholder return has been calculated in a manner consistent with Item 402(v) of Regulation S-K. In accordance with the transitional relief under the SEC rules, only three years of information is required as this is our first year of disclosure under Item 402(v) of Regulation S-K.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Initial Fixed $100 |
|
|
|
|
|
|
|
|||||||||||
Year(1) |
|
Summary Compensation Table Total for PEO ($) |
|
|
Compensation Actually Paid to PEO(2)(3)(4) ($) |
|
|
Average Summary Compensation Table Total for Non-PEO NEOs ($) |
|
|
Average Compensation Actually Paid to Non-PEO NEOs(2)(3)(4) ($) |
|
|
Total Shareholder Return(5) ($) |
|
|
Peer Group Total Shareholder Return(6) ($) |
|
|
Net Income |
|
|
Company-Selected Measure(7) |
|
||||||||
(a) |
|
(b) |
|
|
(c) |
|
|
(d) |
|
|
(e) |
|
|
(f) |
|
|
(g) |
|
|
(h) |
|
|
(i) |
|
||||||||
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||||
58
Year |
|
2020 |
|
|
2021 |
|
|
2022 |
|
|||||||||||||||
|
|
PEO |
|
|
Avg. Non-PEO NEOs |
|
|
PEO |
|
|
Avg. Non-PEO NEOs |
|
|
PEO |
|
|
Avg. Non-PEO NEOs |
|
||||||
SCT Total Compensation ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Less: Equity Award Values Reported in SCT for Covered Year ($) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Plus: Year End Fair Value of Equity Awards ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Compensation Actually Paid ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
List of Most Important Financial Performance Measures
The following list outlines what we believe to be the most important performance measures we used to link our named executive officers’ compensation actually paid to our performance for the most recently completed fiscal year:
Pay versus Performance Relationship Disclosure
Compensation Actually Paid (“CAP”) versus TSR
The following graph compares the amount of compensation actually paid to Mr. Roberts and the average amount of compensation actually paid to our other named executive officers as a group (excluding Mr. Roberts) to our TSR over the applicable periods.
CAP vs Company TSR
59
Company TSR versus Peer TSR
The following graph compares our TSR to the TSR of our peer group, the S&P Composite 1500 Data Processing & Outsources Services Index, over the applicable periods.
Compensation Actually Paid versus Net Income
The following graph compares the amount of compensation actually paid to Mr. Roberts and the average amount of compensation actually paid to our other named executive officers as a group (excluding Mr. Roberts) to our net income over the applicable periods.
60
CAP vs. Net Income ($M)
Compensation Actually Paid versus Company Selected Measure
The following graph compares the amount of compensation actually paid to Mr. Roberts and the average amount of compensation actually paid to our other named executive officers as a group (excluding Mr. Roberts) to adjusted EBITDA, our company selected measure of over the applicable periods.
Company TSR vs Peer TSR
CAP vs. Company Selected Measure
Pay Ratio Disclosure
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations, we are providing the information below regarding the ratio of the annual total compensation of our median compensated employee to that of our Chief Executive Officer (the “CEO Pay Ratio”).
Identifying Our Median Compensated Employee
In determining our median compensated employee, we included the taxable annual compensation for 2022 paid to each employee (annualized for employees starting after January 1, 2022) other than our President and Chief Executive Officer, including employees of our consolidated subsidiaries, as of December 31, 2022 (the “Determination Date”), using the foreign exchange rates as of December 31, 2022 for non-domestic employees.
On the Determination Date, our global employee population for purposes of the median employee determination was 1,570 employees (comprised of 1,034 domestic and 536 international employees), including full-time and part-time employees. This determination process identified in a median group consisting of several employees and a
61
representative employee was selected from that group, taking into account demographic characteristics that best represent a typical Verra Mobility employee, including tenure, location, role and responsibilities.
Median Employee’s Total 2022 Compensation
Using our calculation for our median compensated employee, we calculated that employee’s actual 2022 total annual compensation in accordance with the SEC’s requirements for reporting named executive officer compensation in the Summary Compensation Table, resulting in 2022 annual total compensation of $60,902.
Chief Executive Officer’s Total 2022 Compensation
For the purposes of the 2022 CEO Pay Ratio disclosure, we used Mr. Roberts’ 2022 total compensation as reported in the Summary Compensation Table, which was $4,253,168.
2022 CEO Pay Ratio
The ratio of Mr. Roberts’ annual total compensation for 2022 to the median employee annual total compensation, determined as described above, was approximately 70:1.
Option Exercises and Stock Vested Table
The following table provides additional information about the value realized by our named executive officers on stock option award exercises, restricted stock and RSUs vesting and performance shares vesting during the fiscal year ended December 31, 2022.
|
|
Option Awards |
|
|
Stock Awards |
|
|
Performance Awards |
||||||||||||
Name |
|
Number of |
|
|
Value |
|
|
Number of |
|
|
Value |
|
|
Number of |
|
Value on |
||||
David Roberts |
|
— |
|
|
— |
|
|
|
315,071 |
|
|
|
5,262,752 |
|
|
— |
|
— |
||
Craig Conti |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
||||
Steve Lalla |
|
— |
|
|
— |
|
|
|
6,209 |
|
|
|
102,076 |
|
|
— |
|
— |
||
Jonathan Baldwin |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
||||
Norman (Adam) Blake |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
||||
Patricia Chiodo |
|
|
47,536 |
|
|
|
183,558 |
|
|
|
154,358 |
|
|
|
2,544,915 |
|
|
— |
|
— |
Employment, Severance and Change in Control Agreements
On March 25, 2021, we entered into an amended and restated executive employment agreement (each, a “Restated Employment Agreement,” and collectively, the “Restated Employment Agreements”) with David Roberts and Patricia Chiodo, both of which became effective March 25, 2021 and replaced the existing offer letters then in place with those executive officers. The Restated Employment Agreements were intended to standardize employment terms across our executive team in a professional format and did not materially change the terms of employment for any of our named executive officers. We additionally entered into an executive employment agreement with Steve Lalla on January 31, 2021 (the “Lalla Employment Agreement”), with Norman (Adam) Blake on December 7, 2021 (the “Blake Employment Agreement”), with Jonathan Baldwin on January 16, 2022 (the “Baldwin Employment Agreement”), with Craig Conti on January 29, 2022, as amended on March 29, 2022 (the “Conti Employment Agreement”) and with Jonathan Keyser on November 8, 2022 (the “Keyser Employment Agreement,” together with the Restated Employment Agreements, the Lalla Employment Agreement, the Blake Employment Agreement, the Baldwin Employment Agreement and the Conti Employment Agreement, the “Executive Employment Agreements”). The Executive Employment Agreements generally provide for at-will employment and set forth the executive officer’s
62
annual base salary, subject to adjustment. The Executive Employment Agreements additionally provide that each executive officer is eligible to participate in our health and welfare benefit plans, retirement plan and our long-term equity and other incentive programs, consisting of grants of cash and/or equity awards at the discretion of our Board or its designees. Pursuant to the Executive Employment Agreements, our named executive officers are eligible for termination benefits, which provide for certain employee benefits and severance payments upon a qualifying termination of employment as summarized below under “Termination Benefits.” Our compensation committee believes it is in the best interests of our stockholders to extend these benefits to our executives to reinforce and encourage retention and focus on creating stockholder value without undue distraction. In addition, our named executive officers have each executed our standard proprietary information and inventions agreement.
David Roberts
Pursuant to his Restated Employment Agreement, Mr. Roberts is entitled to receive an annual base salary of $550,000, subject to adjustment on an annual basis, as approved by our compensation committee. He is also eligible to participate in our cash-based bonus plan and receive a cash bonus payment equal to a target level of 100% of his base salary (subject to adjustment on an annual basis, as approved by our compensation committee) based upon our financial achievement and his personal performance. Mr. Roberts is eligible to earn up to 150% of his target bonus under our cash-based bonus plan, based upon our financial achievement and his personal performance.
Craig Conti
Pursuant to the terms of the Conti Employment Agreement, Mr. Conti is entitled to receive an annual base salary of $450,000, subject to adjustment on an annual basis, as approved by our compensation committee. He is also eligible to participate in our cash-based bonus plan and receive a cash bonus payment equal to a target level of 75% of his base salary (subject to adjustment on an annual basis, as approved by our compensation committee) based upon our financial achievement and his personal performance. Mr. Conti also received a one-time inducement equity grant with a grant value of $1,800,000 and a one-time inducement cash bonus of $325,000, both subject to terms outlined in the Conti Employment Agreement. Mr. Conti is eligible to earn up to 150% of his target bonus under our cash-based bonus plan, based upon our financial achievement and his personal performance.
Steve Lalla
Pursuant to the terms of the Lalla Employment Agreement, Mr. Lalla is entitled to receive an annual base salary of $400,000, subject to adjustment on an annual basis, as approved by our compensation committee. He is also eligible to participate in our cash-based bonus plan and receive a cash bonus payment equal to a target level of 75% of his base salary (subject to adjustment on an annual basis, as approved by our compensation committee) based upon our financial achievement and his personal performance. Mr. Lalla is eligible to earn up to 150% of his target bonus under our cash-based bonus plan, based upon our financial achievement and his personal performance.
Jonathan Baldwin
Pursuant to the terms of the Baldwin Employment Agreement, Mr. Baldwin is entitled to receive an annual base salary of $385,000, subject to adjustment on an annual basis, as approved by our compensation committee. He is also eligible to participate in our cash-based bonus plan and receive a cash bonus payment equal to a target level of 75% of his base salary (subject to adjustment on an annual basis, as approved by our compensation committee) based upon our financial achievement and his personal performance. Mr. Baldwin also received a one-time inducement equity grant with a grant value of $400,000, subject to terms outlined in the Conti Employment Agreement. Mr. Baldwin is eligible to earn up to 150% of his target bonus under our cash-based bonus plan, based upon our financial achievement and his personal performance.
Norman (Adam) Blake
Pursuant to the terms of the Blake Employment Agreement, Mr. Blake is entitled to receive an annual base salary of $340,000, subject to adjustment on an annual basis, as approved by our compensation committee. He is also eligible to participate in our cash-based bonus plan and receive a cash bonus payment equal to a target level of 75% of his base salary (subject to adjustment on an annual basis, as approved by our compensation committee) based upon our
63
financial achievement and his personal performance. Mr. Blake is eligible to earn up to 150% of his target bonus under our cash-based bonus plan, based upon our financial achievement and his personal performance.
Jonathan Keyser
Pursuant to the terms of the Keyser Employment Agreement, Mr. Keyser is entitled to receive an annual base salary of $400,000, subject to adjustment on an annual basis, as approved by our compensation committee. He is also eligible to participate in our cash-based bonus plan and receive a cash bonus payment equal to a target level of 70% of his base salary (subject to adjustment on an annual basis, as approved by our compensation committee) based upon our financial achievement and his personal performance. Mr. Keyser also received a one-time inducement equity grant with a grant value of $450,000 and a one-time inducement cash bonus of $200,000, both subject to terms outlined in the Keyser Employment Agreement. Mr. Keyser is eligible to earn up to 150% of his target bonus under our cash-based bonus plan, based upon our financial achievement and his personal performance.
Patricia Chiodo
Pursuant to her Restated Employment Agreement, Ms. Chiodo was entitled to receive an annual base salary of $411,000, subject to adjustment on an annual basis, as approved by our compensation committee. She was also eligible to participate in our cash-based bonus plan and receive a cash bonus payment equal to a target level of 75% of her base salary (subject to adjustment on an annual basis, as approved by our compensation committee) based upon our financial achievement and her personal performance. Ms. Chiodo was eligible to earn up to 150% of her target bonus under our cash-based bonus plan, based upon our financial achievement and her personal performance. Ms. Chiodo retired on April 23, 2022.
Termination Benefits
David Roberts
Pursuant to the terms of his Restated Employment Agreement, Mr. Roberts is eligible to receive continuing payments of his base salary and the cost of his medical benefits for a period of 24 months following a termination of his employment by Verra Mobility for reasons other than “Cause” or Mr. Roberts’ resignation for “Good Reason.” Such severance payments and benefits are subject to Mr. Roberts’ execution of a release in our favor and compliance with the obligations under such release as well as certain non-disparagement, non-competition, non-solicitation and cooperation covenants.
Craig Conti
Pursuant to the terms of his Restated Employment Agreement, Mr. Conti is eligible to receive continuing payments of his base salary and the cost of his medical benefits for a period of 12 months following a termination of his employment by Verra Mobility for reasons other than “Cause” or Mr. Conti’s resignation for “Good Reason.” Such severance payments and benefits are subject to Mr. Conti’s execution of a release in our favor and compliance with the obligations under such release as well as certain non-disparagement, non-competition, non-solicitation and cooperation covenants.
Steve Lalla
Pursuant to the terms of the Lalla Employment Agreement, Mr. Lalla is eligible to receive continuing payments of his base salary and the cost of his medical benefits for a period of 12 months following a termination of his employment by Verra Mobility for reasons other than “Cause” or Mr. Lalla’s resignation for “Good Reason.” Such severance payments and benefits are subject to Mr. Lalla’s execution of a release in our favor and compliance with the obligations under such release as well as certain non-disparagement, non-competition, non-solicitation and cooperation covenants.
Jonathan Baldwin
Pursuant to the terms of the Baldwin Employment Agreement, Mr. Baldwin is eligible to receive continuing payments of his base salary and the cost of his medical benefits for a period of 12 months following a termination of his employment by Verra Mobility for reasons other than “Cause” or Mr. Baldwin’s resignation for “Good Reason.” Such severance payments and benefits are subject to Mr. Baldwin’s execution of a release in our favor and compliance with
64
the obligations under such release as well as certain non-disparagement, non-competition, non-solicitation and cooperation covenants.
Norman (Adam) Blake
Pursuant to the terms of the Blake Employment Agreement, Mr. Blake is eligible to receive continuing payments of his base salary and the cost of his medical benefits for a period of 12 months following a termination of his employment by Verra Mobility for reasons other than “Cause” or Mr. Blake’s resignation for “Good Reason.” Such severance payments and benefits are subject to Mr. Blake’s execution of a release in our favor and compliance with the obligations under such release as well as certain non-disparagement, non-competition, non-solicitation and cooperation covenants.
Jonathan Keyser
Pursuant to the terms of the Keyser Employment Agreement, Mr. Keyser is eligible to receive continuing payments of his base salary and the cost of his medical benefits for a period of 12 months following a termination of his employment by Verra Mobility for reasons other than “Cause” or Mr. Keyser’s resignation for “Good Reason.” Such severance payments and benefits are subject to Mr. Keyser’s execution of a release in our favor and compliance with the obligations under such release as well as certain non-disparagement, non-competition, non-solicitation and cooperation covenants.
Patricia Chiodo
Ms. Chiodo retired on April 23, 2022. Pursuant to the terms of her Restated Employment Agreement, Ms. Chiodo was eligible to receive continuing payments of her base salary and the cost of her medical benefits for a period of 12 months following a termination of her employment by Verra Mobility for reasons other than “Cause” or Ms. Chiodo’s resignation for “Good Reason.” Such severance payments and benefits were subject to Ms. Chiodo’s execution of a release in our favor and compliance with the obligations under such release as well as certain non-disparagement, non-competition, non-solicitation and cooperation covenants. In connection with her retirement, our Board accelerated the vesting of the final tranche of 145,388 RSUs granted to Ms. Chiodo on October 23, 2018 as part of a total original award of 581,552 RSUs, provided that Ms. Chiodo executed a general release of claims agreement in our favor and is in continued compliance with her non-compete and non-disparagement agreement.
For the purposes of the Executive Employment Agreements, “Good Reason” means: (i) a change in material reduction in the executive officer’s base salary, (ii) a material diminution of the executive officer’s duties, responsibilities or authority, (iii) our requiring that the executive officer’s principal office location be moved to a location more than 50 miles from the executive officer’s principal office location immediately before the change without the executive officer’s prior consent, or (iv) a material breach by us of the Executive Employment Agreement or any other written agreement between the parties.
For the purposes of the Executive Employment Agreements, “Cause” means: (i) the executive officer’s being charged with a felony or misdemeanor criminal offense, other than a misdemeanor traffic offense, (ii) the executive officer’s engagement in any act involving gross misconduct or dishonesty that is materially injurious to us or any of our affiliates, (iii) the executive officer’s willful and continued breach of, or failure to substantially perform under or comply with any of the material terms and covenants of any written agreement with us or any Company affiliate, (iv) the executive officer’s willful and continued breach of, or refusal or failure substantially to perform under, any policy or reasonable performance goals set by us or our affiliate with respect to the executive officer’s job duties or responsibilities, the operation of our or our affiliates’ business and affairs, or the management of our employees, or those of our affiliates, or (v) the executive officer commits or has committed a breach of any laws or regulations which may affect or relate to the conduct of our business or that of our affiliates; provided, however, that with respect to (iii) and (iv) above, the executive officer will be provided notice of any misconduct and/or breach constituting Cause and be given a reasonable opportunity (not to exceed 30 consecutive days) to cure the misconduct and/or breach (unless such misconduct and/or breach is determined by us not to be susceptible to cure, in which case the termination shall be deemed to be immediate), and provided further that such cure period shall only be available for the first such act of misconduct and/or breach of the same or substantially similar type, and subsequent acts of misconduct and/or breach of the same or substantially similar type shall constitute Cause without regard to the executive officer’s subsequent cure of same.
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Potential Payments upon Termination or Change in Control
The following table provides information regarding the potential payments upon termination without Cause or for Good Reason, which would have been paid to each named executive officer in the event he or she had been terminated as of December 31, 2022, the last business day of fiscal year 2022. None of our named executive officers has any arrangement that provides for payment or benefits upon a change in control. All payments in connection with any such termination will comply with Section 409A of the Code, to the extent Section 409A applies. The actual amounts to be paid out can only be determined at the time of such executive’s separation.
|
|
Termination without Cause or for Good Reason |
|
|||||||||
|
|
Cash Payment ($)(1) |
|
|
Benefits ($)(2) |
|
|
Acceleration of Vesting of RSUs ($)(3) |
|
|||
David Roberts |
|
|
2,360,000 |
|
|
|
36,056 |
|
|
|
— |
|
Craig Conti |
|
|
787,500 |
|
|
|
6,635 |
|
|
|
— |
|
Steve Lalla |
|
|
735,000 |
|
|
|
18,028 |
|
|
|
— |
|
Jonathan Baldwin |
|
|
673,750 |
|
|
|
19,357 |
|
|
|
— |
|
Norman (Adam) Blake |
|
|
612,868 |
|
|
|
19,214 |
|
|
|
— |
|
Patricia Chiodo(4) |
|
|
|
|
|
|
|
|
|
|||
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Equity Compensation Plan Information
The following table summarizes information about our equity compensation plans as of December 31, 2022. All outstanding awards relate to our Class A Common Stock.
Plan Category |
|
Number of |
|
|
Weighted |
|
Number of |
|
Equity compensation plans approved by security holders |
|
3,373,157 |
(1) |
|
$13.53 |
|
3,388,102 |
(2) |
Equity compensation plans not approved by security holders |
|
— |
|
|
N/A |
|
— |
|
Total |
|
3,373,157 |
(1) |
|
$13.53 |
|
3,388,102 |
(2) |
The following is a summary of transactions, since the beginning of our last fiscal year, to which we have been a participant, in which the amount involved exceeded or will exceed $120,000 and in which any of our directors, executive officers or holders of more than five percent of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.
Registration Rights Agreement
Upon the closing of the Business Combination, we entered into a registration rights agreement with certain restricted stockholders. Pursuant to the terms of the registration rights agreement, (a) any outstanding shares of Class A Common Stock or any of our other equity securities (including the Private Placement Warrants (defined below) and including shares of Class A Common Stock issued or issuable upon the exercise of any other equity security) held by a restricted stockholder as of the date of the agreement or thereafter acquired by a restricted stockholder (including the shares of Class A Common Stock issued upon exercise of any Private Placement Warrants) and shares of Class A Common Stock issued or issuable as Earn-Out Shares (defined below) to certain stockholders and (b) any of our other equity securities issued or issuable with respect to any such share of common stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise, will be entitled to registration rights.
The restricted stockholders are each entitled to make up to six demands for registration, excluding short form demands, that we register shares of Class A Common Stock held by these parties. In addition, the restricted stockholders have certain “piggy-back” registration rights. We will bear the expenses incurred in connection with the filing of any registration statements filed pursuant to the terms of the registration rights agreement. We and the restricted stockholders agree in the registration rights agreement to provide customary indemnification in connection with offerings of common stock effected pursuant to the terms of the registration rights agreement.
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Warrant Agreement
In connection with our initial public offering, we issued 13,333,333 warrants with an exercise price of $11.50 per share of Class A Common Stock (the “Public Warrants”) and 6,666,666 warrants with an exercise price of $11.50 per share of Class A Common Stock that we sold to Gores Sponsor II LLC in a private sale (the “Private Placement Warrants”). In addition, we have filed a registration statement under the Securities Act covering the 13,333,301 shares of our Class A Common Stock that may be issued upon exercise of the outstanding Public Warrants, the 6,666,666 Private Placement Warrants, and the 6,666,666 shares of our Class A Common Stock that may be issued upon exercise of the Private Placement Warrants, and we are obligated to maintain the effectiveness of such registration statement until the Warrants expire.
The Public Warrants entitle their holders to purchase one Class A Common Stock for a purchase price of $11.50, subject to adjustments pursuant to the Warrant Agreement. The Public Warrants were listed on Nasdaq under the symbol “VRRMW,” and were removed from listing on Nasdaq on December 14, 2018 and are currently traded by the OTC Markets Group Inc. As of December 31, 2022, 13,333,301 Public Warrants were outstanding. The Private Placement Warrants entitle its holders to purchase one Class A Common Stock for a purchase price of $11.50, subject to adjustments pursuant to the Warrant Agreement. As of December 31, 2022, 6,666,666 Private Placement Warrants were outstanding. The terms of the Private Placement Warrants are identical to the Public Warrants, except that such Private Placement Warrants are not redeemable by us so long as they are still held by Gores Sponsor II LLC or its permitted transferees.
Earn-Out Shares
Pursuant to the Merger Agreement, we agreed to issue up to 10,000,000 additional shares of Class A Common Stock (the “Earn-Out Shares”) to the Platinum Stockholder if either (i) the volume weighted average closing sale price of one share of Class A Common Stock on the Nasdaq exceeds certain thresholds for a period of at least 10 out of 20 consecutive trading days (the “Common Share Price”) or (ii) there is a change in control (as described in the Merger Agreement) in which the holders of Class A Common Stock receive a per share price in respect of their Class A Common Stock that is equal to or greater than any such Common Share Price threshold (the “Change in Control Price”), in each case, at any time during the five-year period following the completion of the Business Combination.
On April 26, 2019, the triggering event for the issuance of the first tranche of Earn-Out Shares to the Platinum Stockholder occurred, as the volume weighted average closing price per share of our Class A Common Stock as of that date had been greater than $13.00 for 10 out of 20 consecutive trading days. As a result, we issued 2,500,000 Earn-Out Shares to the Platinum Stockholder on April 30, 2019.
On January 27, 2020, the triggering event for the issuance of the second tranche of Earn-Out Shares occurred, as the volume weighted average closing price per share of our Class A Common Stock as of that date had been greater than $15.50 for 10 out of 20 consecutive trading days. This triggering event resulted in the issuance of 2,500,000 shares of our Class A Common Stock.
We will be required to issue additional Earn-Out Shares to the Platinum Stockholder as follows: (i) a one-time issuance of 2,500,000 shares if the Common Share Price or Change in Control Price is greater than $18.00 and (ii) a one-time issuance of 2,500,000 shares if the Common Share Price or Change in Control Price is greater than $20.50.
Tax Receivable Agreement
At the closing of the Business Combination, we entered into the Tax Receivable Agreement with the Platinum Stockholder and Greenlight as the stockholder representative. In August 2022, the Platinum Stockholder assigned its interest in the Tax Receivable Agreement to Lakeside Smart Holdco L.P. (“Lakeside”). The Tax Receivable Agreement generally provides for the payment by us to Lakeside of 50% of the net cash savings, if any, in U.S. federal, state and local income tax that we actually realize (or are deemed to realize in certain circumstances) in periods after the closing of the Business Combination as a result of the increase in the tax basis of the intangible assets of HTA which resulted from our acquisition of HTA prior to the Business Combination. We generally will retain the benefit of the remaining 50% of these cash savings. In fiscal 2022, we paid Lakeside a total of approximately $5.2 million, consisting of $5.1 million, which amount represented 50% of the net cash savings realized in tax year 2021, and $0.1 million, which amount represented interest on the balance due.
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Employment Arrangements and Equity Grants
We have entered into Executive Employment Agreements with certain of our executive officers, which include certain termination benefits. For more information regarding these arrangements, see “Employment, Severance and Change of Control Agreements” above. We have granted equity awards to our executive officers and certain members of our Board. For a description of these equity awards, see the sections titled “Executive Compensation” and “Director Compensation.”
Indemnification Agreements
Our certificate of incorporation contains provisions limiting the liability of directors, and our bylaws provide that we will indemnify each of our directors and officers to the fullest extent permitted under Delaware law. In addition, we maintain standard policies of insurance under which coverage is provided (i) to our directors and officers against loss arising from claims made by reason of breach of duty or other wrongful act, while acting in their capacity as our directors and officers, and (ii) to us with respect to payments which may be made by us to such officers and directors pursuant to any indemnification provision contained in our certificate of incorporation and bylaws or otherwise as a matter of law. We have additionally entered into indemnity agreements with each of our directors and executive officers. Each indemnity agreement provides for indemnification and advancements by Verra Mobility of certain expenses and costs relating to claims, suits or proceedings arising from his or her service to us or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.
Related Person Transaction Policy
Our audit committee has adopted a written policy and procedures with respect to related person transactions. Under this policy, a transaction constitutes a “related person transaction” if (i) we (or any of our subsidiaries) participate in the transaction, (ii) the transaction’s value exceeds $120,000, and (iii) a related person has or will have a direct or indirect material interest. A related person for the purposes of our policy is any of our executive officers, our directors and director nominees, beneficial owners of more than five percent of our Class A Common Stock, any immediate family member of any of the foregoing persons and any person (other than a tenant or employee) sharing the household of the foregoing persons.
Our audit committee must review and approve any related person transaction before we participate in the transaction. No member of our audit committee participates in any review, consideration or approval of any related person transaction with respect to which such member or any of his or her immediate family members is the related person. Our audit committee reports any transaction that the committee has approved under this policy at each meeting of our Board. If we become aware of related person transactions that had not previously approved or ratified under this policy, the audit committee evaluates all options, including, but not limited to, ratification, amendment or termination of the related person transaction based on all of the relevant facts and circumstances available to the audit committee.
In reviewing a related person transaction, our audit committee considers all of the relevant facts and circumstances available, including (if applicable) but not limited to: (i) the benefits to us, (ii) the impact on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, stockholder or officer, (iii) the availability of other sources for comparable products or services, (iv) the terms of the transaction, and (v) the terms available to unrelated third parties or to employees generally. The audit committee approves only those related person transactions that are in, or not inconsistent with, our best interests and those of our stockholders, as the audit committee determines in good faith.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our Class A Common Stock and our other equity securities. Officers, directors and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended December 31, 2022, our officers, directors and greater than 10% beneficial owners complied with all applicable Section 16(a) filing requirements, with the exception of a Form 4 filed on July 13, 2022 for Sarah Farrell.
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Other Matters
Our Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the associated proxy to vote on such matters in accordance with their best judgment.
We have filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 with the SEC. These filings are available free of charge at the SEC’s website at www.sec.gov. Stockholders can also access this proxy statement and our Annual Report on Form 10‑K at https://ir.verramobility.com, or a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 is available without charge upon written request to our Secretary at 1150 North Alma School Road, Mesa, Arizona 85201.
* * * * *
By order of the Board, |
|
/s/ Patrick Byrne |
|
Patrick Byrne |
Chairman of the Board |
Mesa, Arizona |
April 10, 2023 |
70
Appendix A: Amended and Restated 2018 Equity Incentive Plan
If Proposal 3 is approved by stockholders, the Verra Mobility Corporation Amended and Restated 2018 Equity Incentive Plan, approved by the Board of Directors on March 27, 2023, will become effective, as set forth below:
VERRA MOBILITY CORPORATION
Amended and Restated
2018 Equity Incentive Plan
A-1
For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Committee shall determine whether multiple events described in subsections (i), (ii) and (iii) of this Section 2.1(h) are related and to be treated in the aggregate as a single Change in Control, and its determination shall be final, binding and conclusive.
A-2
A-3
A-4
A-5
A-6
A-7
A-8
A-9
Options shall be evidenced by Award Agreements specifying the number of shares of Stock covered thereby, in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
A-10
A-11
Stock Appreciation Rights shall be evidenced by Award Agreements specifying the number of shares of Stock subject to the Award, in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
A-12
A-13
Restricted Stock Awards shall be evidenced by Award Agreements specifying whether the Award is a Restricted Stock Bonus or a Restricted Stock Purchase Right and the number of shares of Stock subject to the Award, in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
A-14
Restricted Stock Unit Awards shall be evidenced by Award Agreements specifying the number of Restricted Stock Units subject to the Award, in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
A-15
A-16
Performance Awards shall be evidenced by Award Agreements in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
A-17
A-18
A-19
Cash-Based Awards and Other Stock-Based Awards shall be evidenced by Award Agreements in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
A-20
A-21
A-22
A-23
The grant of Awards and the issuance of shares of Stock pursuant to any Award shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities and the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, no Award may be
A-24
exercised or shares issued pursuant to an Award unless (a) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect with respect to the shares issuable pursuant to the Award, or (b) in the opinion of legal counsel to the Company, the shares issuable pursuant to the Award may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares under the Plan shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to issuance of any Stock, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.
Subject to the provisions of Section 409A, the term “Short-Term Deferral Period” means the 21/2 month period ending on the later of (i) the 15th day of the third month following the end of the Participant’s taxable year in which the right to payment under the applicable portion of the Award is no longer subject to a substantial risk of forfeiture or (ii) the 15th day of the third month following the end of the Company’s taxable year in which the right to payment under the applicable portion of the Award is no longer subject to a substantial risk of forfeiture. For this purpose, the term “substantial risk of forfeiture” shall have the meaning provided by Section 409A.
A-25
A-26
A-27
The Committee may amend, suspend or terminate the Plan at any time. However, without the approval of the Company’s stockholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of Sections 4.2 and 4.3, (b) no change in the class of persons eligible to receive Incentive Stock Options, and (c) no other amendment of the Plan that would require approval of the Company’s stockholders under any applicable law, regulation or rule, including the rules of any stock exchange or quotation system upon which the Stock may then be listed or quoted. No amendment, suspension or termination of the Plan shall affect any then outstanding Award unless expressly provided by the Committee. Except as provided by the next sentence, no amendment, suspension or termination of the Plan may have a materially adverse effect on any then outstanding Award without the consent of the Participant. Notwithstanding any other provision of the Plan or any Award Agreement to the contrary, the Committee may, in its sole and absolute discretion and without the consent of any Participant, amend the Plan or any Award Agreement, to take effect retroactively or otherwise, as it deems necessary or advisable for the purpose of conforming the Plan or such Award Agreement to any present or future law, regulation or rule applicable to the Plan, including, but not limited to, Section 409A.
A-28
A-29
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing sets forth the Verra Mobility Corporation Amended and Restated 2018 Equity Incentive Plan as duly adopted by the Board on March 27, 2023.
|
/s/ |
|
, Secretary |
A-30
Verra mobility corporation 1150 north alma school road mesa, az 85201 scan to view materials & vote vote by internet before the meeting - go to www.proxyvote.com or scan the qr barcode above use the internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Edt on may 22, 2023. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During the meeting - go to www.virtualshareholdermeeting.com/vrrm2023 you may attend the meeting via the internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. Vote by phone - 1-800-690-6903 use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Edt on may 22, 2023. Have your proxy card in hand when you call and then follow the instructions. Vote by mail mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to vote processing, c/o broadridge, 51 mercedes way, edgewood, ny 11717. To vote, mark blocks below in blue or black ink as follows: v06636-p84318 keep this portion for your records this proxy card is valid only when signed and dated. Detach and return this portion only verra mobility corporation for all withhold all for all except to withhold authority to vote for any individual nominee(s), mark "for all except" and write the number(s) of the nominee(s) on the line below. The board of directors recommends you vote for all with respect to the following: 1. Elect three class ii directors, patrick byrne, david roberts and john rexford, to serve on our board until our 2026 annual meeting of stockholders. Nominees: 01) patrick byrne 02) david roberts 03) john rexford the board of directors recommends you vote for proposals 2, 3 and 4. 2. Approve, on an advisory basis, the compensation of our named executive officers. 3. Approve the amendment and restatement of the company's 2018 equity incentive plan. 4. Ratify the selection of ernst & young llp as our independent registered public accounting firm for our fiscal year ending december 31, 2023. For against abstain note: in their discretion, the proxyholders will vote on other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [please sign within box] date signature (joint owners) date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com V06637-P84318 VERRA MOBILITY CORPORATION Annual Meeting of Stockholders May 23, 2023 9:00 AM PDT This proxy is solicited by the Board of Directors The undersigned stockholder(s) of Verra Mobility Corporation hereby appoint(s) Jon Keyser and Raphael Avraham, or either of them, as proxies, each with the power to appoint his/her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Class A common stock of Verra Mobility Corporation that the stockholder(s) is/are entitled to vote at the Annual Meeting to be held virtually at www.virtualshareholdermeeting.com/VRRM2023 on May 23, 2023 at 9:00 AM PDT, and any adjournment or postponement thereof, in accordance with and as more fully described in the Notice of Annual Meeting of Stockholders and the Proxy Statement, receipt of which is hereby acknowledged and the terms of each are incorporated by reference, and otherwise to represent the undersigned at the meeting with all powers the undersigned would possess if personally present at the meeting. The undersigned hereby revokes any proxy heretofore given with respect to the 2023 Annual Meeting of Stockholders. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Continued and to be signed on reverse side