Q2 HOLDINGS, INC. (NYSE:QTWO) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

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Q2 HOLDINGS, INC. (NYSE:QTWO) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e)

On December 15, 2017, the Compensation Committee (the "Committee") of the Board of Directors of Q2 Holdings, Inc. (the "Company") approved base salaries for the Company's named executive officers to be effective for the fiscal year ending December 31, 2018. On December 15, 2017, the Committee also approved the 2018 Bonus Plan to be effective for the fiscal year ending December 31, 2018. The 2018 Bonus Plan provides for the payment of cash bonuses to certain of the Company's executive officers, including the Company's named executive officers, based upon achievement of established performance measures and payout formulas determined by the Committee. To the extent earned, bonuses under the 2018 Bonus Plan for the Company's named executive officers will be paid in a single annual payout following completion of the 2018 fiscal year.

The new base salaries and target bonus payments as a percentage of the base salary for each of the Company's named executive officers established by the Committee are set forth in the following table:

Named Executive Officer

2018 Base Salary

Target Bonus as % of Base Salary

Matthew P. Flake

Chief Executive Officer

$

520,000

50%

Odus E. Wittenburg, Jr.

President

443,000

86%

Jennifer N. Harris

Chief Financial Officer

353,400

74%

Adam D. Blue

Executive Vice President and Chief Technology Officer

300,000

52%

John E. Breeden

Executive Vice President of Operations

300,000

53%

The 2018 Bonus Plan provides for the bonus amounts to be determined based on the following metrics:

Weighting of Performance Measure as % of Potential Bonus Payment

Bookings

Adjusted EBITDA as a Percentage of Revenue

Mr. Flake

50%

50%

Mr. Wittenburg

50%

50%

Ms. Harris

50%

50%

Mr. Blue

50%

50%

Mr. Breeden

50%

50%

The bookings performance measure consists of monthly recurring bookings revenue based on committed or contracted levels in our customer agreements, with an exclusion for one-time services. The adjusted EBITDA as a percentage of revenue performance measure ("EBITDA performance measure") consists of the ratio determined by dividing the Company's adjusted EBITDA by the Company's revenue calculated in accordance with generally accepted accounting principles. To determine adjusted EBITDA, the Company adjusts net loss for such things as interest, taxes, depreciation and amortization, stock-based compensation, acquisition-related costs, amortization of technology and intangibles, and unoccupied lease charges. The 2018 Bonus Plan provides that the bookings and EBITDA performance measures are to be measured against bookings and adjusted EBITDA performance measure targets based on the 2018 annual budget approved by the Company's board of directors.

Potential payouts under the 2018 Bonus Plan with respect to the bookings and EBITDA performance measures are to be based on performance within a range of each performance measure's target. No incentive payment may be earned for performance below the target minimum and the maximum bonus may be earned for performance at or above the target maximum. The range and target for each performance measure are set forth in the following table:

Achievement Level

Percentage of Bookings Performance Measure Attained

Percentage of EBITDA Performance Measure Attained

Corresponding Weighted Potential Payout Percentage Per Performance Measure

Minimum

75%

90%

50%

At target

50%

50%

50%

Maximum

120%

120%

150%

For Mr. Flake, Ms. Harris and Mr. Blue, the final payout is earned based upon determination of the above achievement levels. For each of Mr. Wittenburg and Mr. Breeden, the above achievement levels determine the potential payout under the 2018 Bonus Plan, with the final payout earned based upon determination by the compensation committee of their respective performance against specified target individual business objectives.


About Q2 HOLDINGS, INC. (NYSE:QTWO)

Q2 Holdings, Inc. is a provider of secure, cloud-based virtual banking solutions. The Company enables regional and community financial institutions (RCFIs) to deliver a range of virtual banking services. The Company delivers virtual banking solutions across online, mobile, voice and tablet channels. The Company’s solutions are the point of interaction between its RCFI customers and their account holders. Its software-as-a-service (SaaS) delivery model is designed to scale with its customers as they add account holders on its solutions. The Company sells subscriptions to its cloud-based solutions through its direct sales organization. Its solutions include Q2online, Q2 Risk & Fraud Analytics, Q2 Treasury, Q2mobility App, Q2mobile Remote Deposit Capture, Q2text, Q2voice, Q2themes and Q2clarity. The Company’s solutions provide both behavioral analytics and policy-based decision prompts to identify suspect transactions and allow RCFI administrators to analyze transaction activity.

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