Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2023, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Management's Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the criteria established in the 2013 Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. Based on our evaluation under the criteria set forth in the 2013 Internal Control - Integrated Framework issued by the COSO, our management concluded our internal control over financial reporting was effective as of December 31, 2023.
The effectiveness of the Company's internal control over financial reporting as of December 31, 2023 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in its report, which is included in Item 8 of this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the fourth quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Item 9B. Other Information
Securities Trading Plans of Directors and Executive Officers
During the three months ended December 31, 2023, the following director, as defined in Rule 16a-1(f), adopted a “Rule 10b5-1 trading arrangement” as defined in Regulation S-K Item 408, as follows:
On November 21, 2023 , Jeffrey P. Hank , the chair of our board of directors , adopted a Rule 10b5-1 trading arrangement providing for the sale from time to time of an aggregate of up to 8,850 shares of our common stock plus an additional number of shares to be granted on the date of the Company's 2024 Annual Meeting of Stockholders. Pursuant to the Company's non-employee director compensation program, each non-employee director who has served on our board of directors for at least six months prior to such date will be granted an award of restricted stock units with an intended value (based on the average of the closing prices of our common stock for the 30 trading days ending one week before the applicable grant date) of $200,000.
The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c). The duration of the trading arrangement is until June 30, 2025, or earlier if all transactions under the trading arrangement are completed.
No other director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408, during the three months ended December 31, 2023.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
Executive Officers and Directors
Except as set forth below, the information required by this item is incorporated by reference to our Proxy Statement for our 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2023.
Codes of Business Conduct and Ethics
Our Board of Directors has adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. The code of business conduct and ethics is available on our website at www.qualys.com. We expect that, to the extent required by law, any amendments to the code, or any waivers of its requirements, will be disclosed on our website. We intend to disclose any waiver to the provisions of the code of business conduct and ethics that applies specifically to directors or executive officers by filing such information on a Current Report on Form 8-K with the SEC, to the extent such filing is required by the NASDAQ Stock Market's listing requirements; otherwise, we will disclose such waiver by posting such information on our website.
Item 11. Executive Compensation
The information required by this item is incorporated by reference to our Proxy Statement for our 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2023.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item with respect to Item 403 of Regulation S-K regarding security ownership of certain beneficial owners and management is incorporated by reference to our Proxy Statement for our 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2023.
Securities Authorized for Issuance under Equity Compensation Plans
The following table summarizes information about our equity compensation plans as of December 31, 2023. All outstanding awards relate to our common stock.
Plan Category (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and
Rights (b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
(in thousands) (in thousands)
Equity compensation plans approved by security holders (1)
2,521 (2) $ 97.98 (3) 2,318 (4)
Equity compensation plans not approved by security holders — $ — —
(1) Includes our Amended and Restated 2012 Equity Incentive Plan (Restated 2012 Plan) and 2021 Employee Stock Purchase Plan (ESPP).
(2) Consists of 1,074 thousand restricted stock units and 1,447 thousand shares underlying stock options.
(3) The weighted average exercise price is calculated based solely on outstanding stock options.
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(4) Consists of 1,824 thousand shares reserved for issuance under our Amended and Restated 2012 Plan and 494 thousand shares reserved for issuance under our ESPP.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference to our Proxy Statement for our 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2023.
Item 14. Principal Accountant Fees and Services
The information required by this item is incorporated by reference to our Proxy Statement for our 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2023.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(a)(1) Financial Statements - The financial statements filed as part of this Annual Report on Form 10-K are listed on the Index to Consolidated Financial Statements in Item 8.
(a)(2) Financial Statement Schedules - All financial statement schedules have been omitted since the required information is not applicable or has been included in the consolidated financial statements and accompanying notes included in this Form 10-K.
(b) Exhibits
Incorporated by Reference
Exhibit
Number
Description Filed
Herewith Form File No. Exhibit No. Filing Date
3.1 Amended and Restated Certificate of Incorporation of Qualys, Inc.
S-1/A 333-182027 3.3 September 12, 2012
3.2 Amended and Restated Bylaws of Qualys, Inc.
8-K 001-35662 3.1 November 2, 2022
4.1 Form of common stock certificate.
S-1/A 333-182027 4.1 September 12, 2012
4.2 Description of Registrant’s securities
10-K 001-35662 4.2 February 21, 2020
10.1* 2000 Equity Incentive Plan, as amended, and the form of stock option agreement thereunder.
S-1 333-182027 10.1 June 8, 2012
10.2* Qualys, Inc. 2012 Equity Incentive Plan, as amended, restated and extended.
8-K 001-35662 10.1 June 10, 2022
10.3* Qualys, Inc. 2021 Employee Stock Purchase Plan
8-K 001-35662 10.1 June 11, 2021
10.4* Offer Letter, between Qualys, Inc. and Sumedh S. Thakar, dated January 20, 2003.
S-1 333-182027 10.5 June 8, 2012
10.5* Offer Letter, between Qualys, Inc. and Joo Mi Kim, dated May 21, 2020.
8-K 001-35662 10.1 May 26, 2020
10.6* Offer Letter, between Qualys, Inc. and Bruce K. Posey, dated May 8, 2012.
S-1 333-182027 10.9 June 8, 2012
10.7*
Form of Performance-Based Restricted Stock Unit Agreement for Executives under the 2012 Equity Incentive Plan, dated October 28, 2021
10-K 001-35662 10.8 February 22, 2022
10.8*
Form of director and executive officer indemnification agreement.
S-1/A 333-182027 10.10 August 10, 2012
10.9*
Qualys, Inc. Executive Performance Bonus Plan.
Schedule 14A, Appendix A 001-35662 N/A April 25, 2016
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Incorporated by Reference
Exhibit
Number
Description Filed
Herewith Form File No. Exhibit No. Filing Date
10.10*#
Qualys, Inc. 2023 Corporate Bonus Plan.
X
10.11 Lease Agreement, between Qualys, Inc. and Hudson Metro Center, LLC, dated October 14, 2016.
8-K 001-35662 10.1 October 19, 2016
21.1 List of subsidiaries of Qualys, Inc.
X
23.1 Consent of Grant Thornton LLP, independent registered public accounting firm.
X
31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
X
31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
X
32.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.
X
32.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.
X
97.1 Qualys Inc. Compensation Recovery Policy, as adopted on October 26, 2023
X
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. X
101.SCH Inline XBRL Taxonomy Extension Schema Document. X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase. X
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Incorporated by Reference
Exhibit
Number
Description Filed
Herewith Form File No. Exhibit No. Filing Date
101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document. X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X
104 Cover Page Interactive Data File - formatted in Inline XBRL and included as Exhibit 101. X
* Indicates a management contract or compensatory plan or arrangement.
# Portions of the exhibit, marked by brackets, have been omitted because the omitted information (i) is not material and (ii) would likely cause competitive harm if publicly disclosed.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Foster City, State of California on February 22, 2024 .
QUALYS, INC.
By: /s/ SUMEDH S. THAKAR
Sumedh S. Thakar
President and Chief Executive Officer
(principal executive officer)
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated:
Signature Title Date
/s/ SUMEDH S. THAKAR
Director, President and Chief Executive Officer (principal executive officer) February 22, 2024
Sumedh S. Thakar
/s/ JOO MI KIM Chief Financial Officer (principal financial officer and principal accounting officer) February 22, 2024
Joo Mi Kim
/s/ JEFFREY P. HANK Chair of the Board of Directors February 22, 2024
Jeffrey P. Hank
/s/ THOMAS P. BERQUIST
Director February 22, 2024
Thomas P. Berquist
/s/ WILLIAM BERUTTI Director February 22, 2024
William Berutti
/s/ WENDY M. PFEIFFER Director February 22, 2024
Wendy M. Pfeiffer
/s/ KRISTI M. ROGERS Director February 22, 2024
Kristi M. Rogers
/s/ JOHN A. ZANGARDI Director February 22, 2024
John A. Zangardi
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