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Item 9A. Controls and Procedures

2023-01-27 compared with 2022-01-27 · 19 added, 167 removed, 157 unchanged (54% of the section changed)

3 unchanged sentences

Our management, including the Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that the information required to be disclosed in the reports filed or submitted by us under the Securities Exchange Act of 1934 was recorded, processed, summarized and reported within the requisite time periods and that such information was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that the information required to be disclosed in the reports filed or submitted by us under the Exchange Act was recorded, processed, summarized and reported within the requisite time periods and that such information was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

(b) Management’s Annual Report on Internal Control over Financial Reporting

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Based on our assessment we believe that as of November 30, 2022, our internal control over financial reporting is effective based on those criteria.

The Company acquired Kemp on November 1, 2021.

Management excluded Kemp from its assessment of the effectiveness of the Company’s internal control over financial reporting as of November 30, 2021.

This exclusion was in accordance with SEC guidance that an assessment of a recently acquired business’s internal control over financial reporting may be omitted from management’s report on internal control over financial reporting in the year of acquisition of the business.

Kemp represented, in aggregate, approximately 9% of the Company’s total consolidated assets (excluding goodwill and intangibles, which are included within the scope of the assessment) and less than 2% of total consolidated revenues, as of and for the year ended November 30, 2021.

Deloitte & Touche LLP, our independent registered public accounting firm, which audited our consolidated financial statements, has issued an attestation report on our internal control over financial reporting, which is included in this Item 9A below.

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 30, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

As described in Management’s Annual Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Kemp Technologies, “Kemp”, acquired on November 1, 2021 whose financial statements constitute approximately 9% of total assets (excluding goodwill and intangibles, which are included within the scope assessment) and less than 2% of total revenues of the consolidated financial statement amounts as of and for the year ended November 30, 2021.

Accordingly, our audit did not include the internal control over financial reporting at Kemp.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended November 30, 2022, of the Company and our report dated January 27, 2023, expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s adoption of ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .

Basis for Opinion

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Directors, Executive Officers and Corporate Governance

Executive and Other Key Officers of the Registrant

The following table sets forth certain information regarding our executive and other key officers.

Name Age Position

John Ainsworth 57 Executive Vice President, Products - Enterprise Application Experience

Stephen Faberman 52 Executive Vice President, Chief Legal Officer

Anthony Folger 49 Executive Vice President, Chief Financial Officer

Yogesh Gupta 61 President and Chief Executive Officer

Loren Jarrett 47 Executive Vice President, General Manager - Developer Tools Business

Katie Kulikoski 45 Executive Vice President, Chief People Officer

Jennifer Ortiz 45 Executive Vice President, Corporate Marketing

Ian Pitt 54 Executive Vice President, Chief Information Officer

Gary Quinn 61 Executive Vice President, Field Organization - Enterprise Application

Jeremy Segal 51 Executive Vice President, Corporate Development

Sundar Subramanian 44 Executive Vice President, General Manager - Chef Products

Ainsworth became Senior Vice President, Products-Core in January 2017 and was elevated to Executive Vice President in November 2021.

Ainsworth is responsible for the product management, product marketing, technical support and engineering functions for OpenEdge, Corticon, DataDirect Connect, DataDirect Hybrid Data Pipeline, Sitefinity, MOVEit, WhatsUp Gold, Kemp Loadmaster and Kemp Flowmon.

In December 2021, the product group in which these product lines are incorporated was renamed Enterprise Application Experience.

Prior to joining our company, Mr.

Ainsworth was Senior Vice President, Engineering Services at CA Technologies, Inc., a position he assumed in April 2016.

Prior to that time, Mr.

Ainsworth held various senior positions within CA Technologies, Inc., which he joined through acquisition in 1994.

Faberman became Chief Legal Officer in December 2015 and was elevated to Executive Vice President in November 2021.

As Chief Legal Officer, Mr.

Faberman is responsible for our legal and compliance, risk management, license compliance, and facilities functions.

Prior to becoming Chief Legal Officer, Mr.

Faberman was Senior Vice President, General Counsel.

Faberman became General Counsel in December 2012 and a Senior Vice President in January 2014.

Prior to that time, from October 2012 to December 2012, Mr.

Faberman was Vice President, Acting General Counsel, and from January 2012 to October 2012, Mr.

Faberman was Vice President, Deputy General Counsel.

Prior roles included Senior Vice President, Corporate Counsel at Heritage Property Investment Trust, Inc.

from October 2003 until October 2006, and Partner, Bingham McCutcheon LLP until October 2003.

Folger became Chief Financial Officer in January 2020 and was elevated to Executive Vice President in November 2021.

Folger is responsible for our finance and accounting, financial planning, treasury, tax and investor relations functions.

Prior to joining our company, Mr.

Folger was Chief Financial Officer and Treasurer of Carbonite, Inc., from January 2013 until Carbonite was acquired by OpenText Corporation in late December 2019.

Prior to that time, from June 2006 to December 2012, Mr.

Folger held senior leadership positions at Acronis AG, including Chief Financial Officer from October 2008 to December 2012.

Gupta became President and Chief Executive Officer in October 2016.

Prior to that time, Mr.

Gupta served as an advisor to various venture capital and private equity firms from October 2015 until September 2016.

Prior to that time, Mr.

Gupta was President and Chief Executive Officer at Kaseya, Inc., from June 2013 until July 2015, at which time, Mr.

Gupta became Chairman of the Board of Directors, a position he held until October 2015.

From July 2012 until June 2013, Mr.

Gupta served as an advisor to various venture capital and private equity firms in several mergers and acquisitions opportunities.

Gupta was previously President and Chief Executive Officer of FatWire Software from July 2007 until February 2012, prior to the acquisition of FatWire Software by Oracle Corporation.

Prior roles included Chief Technology Officer at CA Technologies, with whom Mr.

Gupta held various senior positions.

Jarrett became Senior Vice President and General Manager, Developer Tools Business in June 2019 and was elevated to Executive Vice President in November 2021.

As General Manager, Ms.

Jarrett is responsible for the sales, product management, product marketing, field marketing, technical support and engineering functions for our Developer Tools product line.

Prior to this

Jarrett was our Chief Marketing Officer, a position she held from January 2017 to June 2019.

Prior to that time, Ms.

Jarrett was Chief Marketing Officer at Acquia, from 2015 until December 2016.

Previously, Ms.

Jarrett was Chief Marketing Officer at Kaseya, Inc.

from 2013 until 2015, and Vice President, Corporate Charge Card and Loyalty Products at American Express, in 2013.

Prior to that time, Ms.

Jarrett was Vice President, Product Management and Strategy at Oracle Corporation from 2011 until 2012, and Senior Vice President of Marketing and Product Management at FatWire from 2007 until its acquisition by Oracle in 2011.

Kulikoski became Chief People Officer in November 2019 and was elevated to Executive Vice President in November 2021.

As Chief People Officer, Ms.

Kulikoski is responsible for all aspects of the company’s global human resources function, including culture development, talent acquisition, retention, change management and process effectiveness.

Prior to joining our Company, from May 2014 to September 2019, Ms.

Kulikoski held a variety of positions of increasing responsibility and scope at Brightcove, Inc.

Her tenure at Brightcove included serving as Chief People Officer from November 2018 to September 2019.

Prior to May 2014, Ms.

Kulikoski held leadership positions at Optaros, CIDC and ConnectEdu.

Ortiz became Executive Vice President, Corporate Marketing in November 2021.

Prior to that time, beginning in October 2019, she was Vice President of Corporate Marketing.

In this role, Ms.

Ortiz is responsible for the development and execution of our corporate marketing programs.

Prior to becoming Vice President of Corporate Marketing, Ms.

Ortiz held a variety of positions of increasing responsibility and scope at Progress during her more than fifteen-year tenure with the company.

Pitt became Chief Information Officer in August 2021 and was elevated to Executive Vice President in November 2021.

As our Chief Information Officer, Mr.

Pitt is responsible for driving the vision, strategy and operations of Progress’ global IT organization.

Pitt is also responsible for the security of our internal networks, infrastructure, business applications and products.

Prior to joining our company, Mr.

Pitt was Chief Information Officer from July 2016 until May, 2021 at LogMeIn Inc.

Prior roles included Chief Information Officer and senior technology and IT roles at Thunderbird/Smart Communications, IntraLinks Inc.

Tata Consultancy Services and Chordiant Software Inc.

Quinn became Senior Vice President, Core Field Organization in August 2017 and was elevated to Executive Vice President in November 2021.

Quinn is responsible for global field operations for OpenEdge, Corticon, DataDirect Connect, DataDirect Hybrid Data Pipeline, Sitefinity, MOVEit, WhatsUp Gold, Kemp Loadmaster and Kemp Flowmon.

In December 2021, the product group in which these product lines are incorporated was renamed Enterprise Application Experience.

Prior to joining our company, Mr.

Quinn was President and Chief Executive Officer of FalconStor Software, Inc.

Quinn joined FalconStor Software in April 2012 as vice president of sales and marketing for North America, and he was named executive vice president and chief operating officer (COO) in April 2013, interim CEO in June 2013 and CEO in July 2013.

Prior roles included Executive Vice President of Global Partners and International Sales at CA Technologies until 2006 and Commissioner of Information Technology (CIO) at Suffolk County Department of Information Technology (DoIT) from 2008 until 2012.

Segal became Senior Vice President, Corporate Development in May 2020 and was elevated to Executive Vice President in November 2021.

In this role, Mr.

Segal is responsible for leading our inorganic growth strategy to deliver sustained stockholder value through accretive acquisitions.

Prior to joining our company, Mr.

Segal was Global Head of Corporate Development at LogMeIn, Inc., a position he assumed in September 2019.

Prior to that time, Mr.

Segal was Vice President, Corporate Development at LogMeIn beginning in March 2016.

Prior to that time, Mr.

Segal was Vice President, Corporate Development at Akamai Technologies, which he joined in April 2000.

Subramanian became Senior Vice President and General Manager, Chef in October 2020 upon completion of our acquisition of Chef and was elevated to Executive Vice President in November 2021.

As General Manager, Mr.

Subramanian is responsible for the sales, product management, product marketing, field marketing, technical support and engineering for the Chef product lines.

Prior to that time, upon joining our company in August 2019, Mr.

Subramanian was responsible for driving all facets of the company’s early stage products including the Kinvey, Kinvey Health Cloud, DataRPM, NativeChat and NativeScript product lines.

Prior to joining Progress, Mr.

Subramanian was an Executive Director at athenahealth, Inc., from August 2016 to July 2019, and Vice President, Products at Citrus Payment Solutions Pvt.

Ltd., from September 2015 to August 2016.

Previously, he served as Vice President, SaaS at Kaseya, Inc., from January 2014 to August 2015.

Code of Conduct

We have adopted a Code of Conduct and Business Ethics that applies to all employees and directors.

A copy of the Code of Conduct and Business Ethics is publicly available on our website at www.progress.com.

If we make any substantive amendments to the Code of Conduct and Business Ethics or grant any waiver, including any implicit waiver, from the Code of Conduct and Business Ethics to our executive officers or directors, we will disclose the nature of such amendment or waiver in a Current Report on Form 8-K.

The remainder of the information required by Item 10 is incorporated by reference to our definitive Proxy Statement.

This information will be contained in our definitive proxy statement for the 2023 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference.

Executive Compensation

The information required by Item 11 is incorporated by reference to our definitive Proxy Statement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information related to securities authorized for issuance under equity compensation plans as of November 30, 2021 is as follows (in thousands, except per share data):

Plan Category Number of

Securities to be

Options, Warrants

and Rights Weighted-average

and Rights Number of

Equity compensation plans approved by stockholders (1)

2,193 (2) $ 39.74 7,222 (3)

Equity compensation plans not approved by stockholders (4)

700 42.43 574

Total 2,893 $ 40.67 7,796

(1) Consists of the 1992 Incentive and Nonqualified Stock Option Plan, 1994 Stock Incentive Plan, 1997 Stock Incentive Plan, 2008 Stock Option and Incentive Plan and 1991 Employee Stock Purchase Plan ("ESPP").

(2) Includes 874,000 restricted stock units under our 2008 Plan.

Does not include purchase rights accruing under the ESPP because the purchase price (and therefore the number of shares to be purchased) will not be determined until the end of the purchase period.

(3) Includes 687,000 shares available for future issuance under the ESPP.

(4) Consists of the 2002 Nonqualified Stock Plan and the 2004 Inducement Plan described below.

We have adopted two equity compensation plans, the 2002 Nonqualified Stock Plan (2002 Plan) and the 2004 Inducement Stock Plan (2004 Plan), for which the approval of stockholders was not required.

We intend that the 2004 Plan be reserved for persons to whom we may issue securities as an inducement to become employed by us pursuant to the rules and regulations of NASDAQ.

Executive officers and members of the Board of Directors are not eligible for awards under the 2002 Plan.

An executive officer would be eligible to receive an award under the 2004 Plan only as an inducement to join us.

Awards under the 2002 Plan and the 2004 Plan may include nonqualified stock options, grants of conditioned stock, unrestricted grants of stock, grants of stock contingent upon the attainment of performance goals and stock appreciation rights.

A total of 11,250,000 shares are issuable under the two plans, of which, 573,863 shares are available for future issuance.

The information required by Item 12 with respect to security ownership and our equity compensation plans may be found under the headings captioned “Information About Progress Software Common Stock Ownership” and “Equity Compensation Plan Information” in our definitive Proxy Statement and is incorporated by reference.

Certain Relationships and Related Transactions, and Director Independence

The information required by Item 13 is incorporated by reference to our definitive Proxy Statement.

Principal Accounting Fees and Services

The information required by Item 14 is incorporated by reference to our definitive Proxy Statement.

Exhibits, Financial Statement Schedules

1 unchanged sentence

Financial Statements (included in Part II, Item 8 of this Annual Report on Form 10-K):

• Report of Independent Registered Public Accounting Firm

• Report of Independent Registered Public Accounting Firm (PCAOB ID No.

• Consolidated Balance Sheets as of November 30, 2022 and 2021

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• Consolidated Statements of Comprehensive Income (Loss) for the years ended November 30, 2022, 2021 and 2020

• Consolidated Statements of Stockholder s’ Equity for the years ended November 30, 2021, 2020 and 2019

• Consolidated Statements of Stockholders’ Equity for the years ended November 30, 2022, 2021 and 2020

• Consolidated Statements of Cash Flows for the years ended November 30, 2022, 2021 and 2020

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2.3 Stock Purchase Agreement, dated September 23, 2021, by and among Progress Software Corporation, MPC Kappa Holdings, Inc., the Sellers named therein and the Seller Representative (3)

2.4 Stock Purchase Agreement, dated January 3, 2023, between Progress Software Corporation, Vector Maven Holdings, Inc., and Vector Maven Holdings, L.P.

2.5 Plan of Domestication (5)

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4.4 Form of 1.00% Convertible Senior Note due 2026 (included as Exhibit A in Exhibit 4.3) (12)

10.1** 1992 Incentive and Nonqualified Stock Option Plan (1 2 )

10.2** 1994 Stock Incentive Plan (1 3 )

10.3** 1997 Stock Incentive Plan, as amended and restated (1 4 )

10.4** Form of Employee Retention and Motivation Agreement (effective prior to September 2014) (1 5 )

10.1** 2002 Nonqualified Stock Plan, as amended and restated (13)

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10.5** Form of Notice of Grant of Stock Options and Grant Agreement under the Progress Software Corporation 2008 Stock Option and Incentive Plan (17)

10.10** Progress Software Corporation Corporate Executive Bonus Plan ( 21 )

10.11** Progress Software Corporation 2020 Fiscal Year Compensation Program for Non-Employee Directors (2 2 )

10.6** P rogress Software Corporation Corporate Executive Bonus Plan (18)

10.7** Form of Performance-Based Stock Unit Agreement under the Amended and Restated Progress Software Corporation 2008 Stock Option and Incentive Plan

10.8** Form of Deferred Stock Unit Agreement under the Progress Software Corporation 2008 Stock Option and Incentive Plan (19)

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10.11** Form of Restricted Stock Unit Agreement under the Progress Software Corporation 2008 Stock Option and Incentive Plan (22)

10.16* Third Amended and Restated Credit Agreement, dated as of January 25, 2022, by and among Progress Software Corporation, each of the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, N.A.

and Citizens Bank, N.A., as Syndication Agents, and Bank of America, N.A., Citibank, N.A., PNC Bank, National Association, Silicon Valley Bank and TD Bank, N.A., as Documentation Agents, and JPMorgan Chase Bank, N.A., as Sole Bookrunner and Sole Lead Arranger (27)

10.12** Employment Agreement, dated October 10, 2016, by and between Progress Software Corporation and Yogesh Gupta (23)

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10.14** Employment Agreement, dated January 16, 2020, by and between Progress Software Corporation and Anthony Folger (25)

10.20 Form of Employee Retention and Motivation Agreement (effective after September 2014) ( 3 1 )

10.15 Form of Employee Retention and Motivation Agreement (Amended and Restated as of January 9, 2023)

10.16 Form of Termination Letter (Executive Officers) (26)

10.22 Form of Separation Form of Separation Agreement and Release (Executive Officers) (3 3 )

10.17 Form of Separation Agreement and Release (Executive Officers) (27)

10.18 Form of Capped Call Confirmation (28)

10.19* Third Amended and Restated Credit Agreement, dated as of January 25, 2022, by and among Progress Software Corporation, each of the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, N.A.

21.1 List of Subsidiaries of the Registrant

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(3) Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed of September 27, 2021.

(4) Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on January 3, 2023.

(5) Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on May 14, 2015.

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(14) Incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K for the year ended November 30, 2015.

(14) Incorporated by reference to Exhibit 10.3 to our Annual Report on Form 10-K for the year ended November 30, 2012.

(15) Incorporated by reference to Exhibit 10.4 to our Annual Report on Form 10-K for the year ended November 30, 2013.

(16) Incorporated by reference to Exhibit 10.5 to our Annual Report on Form 10-K for the year ended November 30, 2015.

(17) Incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K for the year ended November 30, 2015.

(18) Incorporated by reference to Appendix A to our definitive Proxy Statement filed April 14, 2021.

(15) Incorporated by reference to Appendix B to our definitive Proxy Statement filed April 14, 2021.

(16) Incorporated by reference to Appendix A to our definitive Proxy Statement filed April 14, 2021.

(17) Incorporated by reference to Exhibit 10.9 to our Annual Report on Form 10-K for the year ended November 30, 2013.

(18) Incorporated by reference to Exhibit 10.10 to our Annual Report on Form 10-K for the year ended November 30, 2012.

(22) Incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended February 28, 2021 filed on April 7, 2021.

(19) Incorporated by reference to Exhibit 10.12 to our Annual Report on Form 10-K for the year ended November 30, 2013.

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(22) Incorporated by reference to Exhibit 10.15 to our Annual Report on Form 10-K for the year ended November 30, 2014.

(27) Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 27, 2022.

(23) Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on October 14, 2016.

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(27) Incorporated by reference to Exhibit 10.22 to our Annual Report on Form 10-K for the year ended November 30, 2019.

(33) Incorporated by reference to Exhibit 10.22 to our Annual Report on Form 10-K for the year ended November 30, 2019.

(28) Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 13, 2021.

(29) Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 27, 2022.

* Certain schedules and exhibits have been omitted from this Exhibit pursuant to Item 601(a)(5) of Regulation S-K.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures