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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:

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 under §240.14a-12
LIQUIDITY SERVICES, INC.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction applies:
(2)
Aggregate number of securities to which transaction applies:
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):  
(4)
Proposed maximum aggregate value of transaction:
(5)
Total fee paid:

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)
Amount Previously Paid:
(2)
Form, Schedule or Registration Statement No.:
(3)
Filing Party:
(4)
Date Filed:

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Fellow Stockholders:
We are pleased to invite you to attend the 2022 Annual Meeting of Stockholders of Liquidity Services, Inc. to be held on Thursday, February 24, 2022, at 3:00 p.m., Eastern Time, at the offices of Liquidity Services, Inc. at 6931 Arlington Road, Suite 200, Bethesda, MD 20814.
Details regarding admission to the Annual Meeting and the business to be conducted are more fully described in the accompanying Notice of Annual Meeting of Stockholders and proxy statement.
Your vote is important. Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote over the Internet, by telephone or by mailing a proxy or voting instruction card. Voting over the Internet, by phone or by written proxy will ensure your representation at the Annual Meeting regardless of whether you attend in person. Please review the instructions on the proxy or voting instruction card regarding each voting option.
Thank you for your ongoing support and continued interest in Liquidity Services, Inc.
Sincerely,
[MISSING IMAGE: sg_williampangrick-bw.jpg]
WILLIAM P. ANGRICK, III
Chairman and Chief Executive Officer
 

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NOTICE OF ANNUAL MEETING OF LIQUIDITY SERVICES, INC. STOCKHOLDERS
Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be Held on February 24, 2022: This Notice of Annual Meeting of Stockholders and Proxy Statement, Annual Report and Other Proxy Materials are Available at www.envisionreports.com/LQDT.
Time and Date
3:00 p.m., Eastern Time, on February 24, 2022.
Place
The offices of Liquidity Services, Inc., 6931 Arlington Road, Suite 200, Bethesda, MD 20814.
Items of Business

Elect each of the Class I directors named in the proxy statement to the Board of Directors to hold office until our Annual Meeting of Stockholders in 2025 or until his or her successor has been elected or appointed;

Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2022;

Approve an advisory resolution on executive compensation;

Approve an amendment to the Company’s Third Amended and Restated 2006 Omnibus Long-Term Incentive Plan (the “LTIP”) to increase the authorized number of shares; and

Transact any other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.
Adjournments and Postponements
Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed.
Record Date
You are entitled to notice of and to vote at the Annual Meeting and at any adjournment or postponement that may take place only if you were a stockholder as of the close of business on January 5, 2022 (the “Record Date”).
Annual Meeting Admission
You will need an admission ticket or proof of ownership to enter the Annual Meeting. If your shares are held beneficially in the name of a broker, bank or other nominee and you plan to attend the Annual Meeting, you must present proof of your ownership of Liquidity Services, Inc. stock as of the close of business on the Record Date, such as a bank or brokerage account statement, to be admitted to the Annual Meeting. If you would rather have an admission ticket, you may obtain one in advance by mailing a written request, along with proof of your ownership of Liquidity Services, Inc. stock as of the close of business on the Record Date, to: Liquidity Services, Inc., 6931 Arlington Road, Suite 200, Bethesda, MD 20814, Attention: Corporate Secretary. All stockholders also must present a form of personal identification to be admitted to the Annual Meeting. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Annual Meeting.
 

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Voting
Your vote is very important. Whether or not you plan to attend the Annual Meeting, we encourage you to read this proxy statement and submit your proxy or voting instruction card as soon as possible. You may submit your proxy or voting instruction card for the Annual Meeting by completing, signing, dating and returning your proxy or voting instruction card in the pre-addressed envelope provided, or, in most cases, by using the telephone or the Internet. For specific instructions on how to vote your shares, please refer to the section entitled “Questions and Answers” beginning on page 2 of this proxy statement and the instructions on the proxy or voting instruction card. You may revoke a proxy before its exercise at the Annual Meeting by following the instructions in the accompanying proxy statement. Any stockholder attending the Annual Meeting may personally vote on all matters considered, in which event the signed proxy will be revoked.
This Notice of Annual Meeting of Stockholders, proxy statement, proxy card and voting instructions and our 2021 Annual Report are first being mailed on or about January 24, 2022.
By Order of the Board of Directors,
/s/ Mark A. Shaffer
MARK A. SHAFFER
Chief Legal Officer and Corporate Secretary
 

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PROXY STATEMENT SUMMARY
PROPOSALS REQUIRING YOUR VOTE
BOARD’S VOTING
RECOMMENDATION
PAGE REFERENCE
(FOR MORE DETAIL)
Proposal 1 – 
ELECTION OF CLASS I DIRECTORS
FOR
each director nominee
24
Proposal 2 – 
RATIFICATION OF INDEPENDENT REGISTERED    PUBLIC ACCOUNTING FIRM
FOR
37
Proposal 3 – 
APPROVAL OF ADVISORY RESOLUTION ON    EXECUTIVE COMPENSATION
FOR
40
Proposal 4 – 
APPROVAL OF AN AMENDMENT TO THE
   COMPANY’S THIRD AMENDED AND RESTATED
   2006 OMNIBUS LONG-TERM INCENTIVE PLAN
FOR
41
 
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QUESTIONS AND ANSWERS
Q.
Why did I receive these proxy materials?
A.
You are receiving these proxy materials because our records indicate you held shares of our common stock as of the close of business on January 5, 2022 (the “Record Date”), which entitles you to vote at our 2022 Annual Meeting of Stockholders (the “Annual Meeting”) and at any adjournment or postponement of such meeting. These proxy materials are part of a solicitation by the Board of Directors for use at the Annual Meeting. If you would prefer to attend the Annual Meeting in person, you are invited to do so.
Unless the context otherwise requires, the terms “us,” “we,” “our” and the “Company” include Liquidity Services, Inc. and its consolidated subsidiaries. The terms “Board of Directors” and “Board” mean the Board of Directors of the Company.
Q.
When and where is the Annual Meeting?
A.
The Annual Meeting will take place on Thursday, February 24, 2022 at 3:00 p.m., Eastern Time, at our corporate headquarters located at 6931 Arlington Road, Suite 200, Bethesda, Maryland 20814.
Q.
When were these proxy materials mailed?
A.
This Notice of Annual Meeting of Stockholders, proxy statement, proxy card and voting instructions and our 2021 Annual Report are first being mailed on or about January 24, 2022.
Q.
Who may vote at the Annual Meeting?
A.
All holders of common stock of the Company as of the close of business on the Record Date are entitled to vote their shares at the Annual Meeting. As of the Record Date, there were 33,221,812 shares of common stock outstanding and entitled to vote.
All stockholders entitled to vote will vote together as a single class on each matter properly brought before the Annual Meeting.
Q.
What shares can I vote?
A.
You can vote all shares of the Company’s common stock you owned on the Record Date, including shares you hold as the stockholder of record and shares you hold as a beneficial owner.
Each outstanding share of the Company’s common stock entitles its holder to cast one vote on each director nominee and one vote on each other matter to be voted upon.
Q.
What is the difference between holding shares as the stockholder of record and as the beneficial owner?
A.
If your shares are registered directly in your name with the Company’s transfer agent, Computershare Trust Company, N.A., you are considered the “stockholder of record” with respect to those shares. If you are a stockholder of record, these proxy materials and our fiscal 2021 Annual Report have been sent directly to you by the Company.
If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of shares held in street name. Access to these proxy materials and our fiscal 2021 Annual Report was provided to you by your bank, broker or other nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you may direct your broker, bank or other nominee on how to vote your shares by using the voting instruction card included in the mailing or by following their instructions for voting by telephone or on the Internet.
Q.
What do I need to bring to the Annual Meeting?
A.
You must bring these two items with you to enter the Annual Meeting:
(1)
Your admission ticket, and
(2)
Photo identification, such as a driver’s license or passport.
 
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Q.
Where is my admission ticket?
A.
If you are a stockholder of record, your admission ticket was mailed to you along with these proxy materials.
If you are a beneficial owner, you may use proof of your ownership of Company common stock as of the close of business on the Record Date, such as a bank or brokerage account statement, as your admission ticket. If you would prefer to obtain an actual admission ticket, please mail a written request, along with your proof of ownership, to:
Liquidity Services, Inc.
6931 Arlington Road, Suite 200
Bethesda, MD 20814
Attention: Corporate Secretary
Q.
Are any items prohibited at the Annual Meeting?
A.
Yes, cameras, recording equipment, electronic devices, large bags, briefcases and packages are prohibited at the Annual Meeting. Any stockholder who attempts to bring prohibited items into the Annual Meeting will not be admitted.
Q.
How do I vote my shares?
A.
You may vote using any of the following methods:
(1)
By mail;
(2)
By telephone or Internet; or
(3)
In person at the Annual Meeting.
Q.
How do I vote by mail?
A.
Complete, sign and date the proxy card or voting instruction card you received with these proxy materials and return it in the prepaid envelope.
If you are a stockholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote your shares in accordance with the recommendations of the Board of Directors.
If you are a stockholder of record, and the prepaid envelope is missing, please mail your completed proxy card to Liquidity Services, Inc., 6931 Arlington Road, Suite 200, Bethesda, MD 20814, Attention: Corporate Secretary.
Q.
How do I vote by telephone or Internet?
A.
To vote by telephone, call the toll-free telephone number on your proxy card. Please have your proxy card in hand when you call. Voice prompts will allow you to vote your shares and confirm that your instructions have been properly recorded.
To vote by internet, visit www.envisionreports.com/LQDT (for shares you hold as the stockholder of record) and/or www.edocumentview.com/LQDT (for shares you hold as a beneficial owner in street name). Please have your proxy card available when you go online. If you vote on the Internet, you also can request electronic delivery of future proxy materials.
Q.
How do I vote in person?
A.
You may vote in person by attending the Annual Meeting. For additional information regarding attendance at the Annual Meeting, see answers to the questions “What do I need bring to attend the Annual Meeting?”, “Where is my admission ticket?” and “Are any items prohibited at the Annual Meeting?” above.
 
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You may also be represented by another person at the Annual Meeting by executing a legal proxy designating that person. If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or other nominee and present it to the inspector of election with your ballot to vote at the Annual Meeting.
Q.
What can I do if I change my mind after I vote my shares?
A.
If you are a stockholder of record, you can revoke your proxy before it is exercised by:

sending written notice to the Corporate Secretary of the Company;

delivering a valid, later dated proxy or a later dated vote by telephone or Internet prior to the Annual Meeting; or

voting in person at the Annual Meeting.
If you are a beneficial owner, you can revoke your proxy before it is exercised by contacting your broker, bank or other nominee and submitting new voting instructions. You may also vote in person at the Annual Meeting if you obtain a legal proxy as described in the answer to the previous question.
All shares represented by properly executed proxies received before the Annual Meeting and not revoked will be voted under the instructions stated in such proxies. Properly executed proxies that do not contain voting instructions will be voted under the recommendations of the Board of Directors set forth under “What are the voting requirements for the matters to be voted on at the Annual Meeting?” below.
Q.
What is “householding” and how does it affect me?
A.
If you received our proxy materials and fiscal 2021 Annual Report electronically, householding does not affect you.
If you received our proxy materials and fiscal 2021 Annual Report through the mail, householding may affect you. “Householding” is a procedure approved by the Securities and Exchange Commission (the “SEC”) that permits us to send a single copy of our proxy materials and fiscal 2021 Annual Report to stockholders of record who share the same address and last name, unless one or more of these stockholders notifies us they wish to receive an individual copy. This procedure reduces our printing costs and postage fees and conserves natural resources. Stockholders affected by householding will receive separate proxy cards.
If you are a stockholder of record, multiple copies of our proxy materials and fiscal 2021 Annual Report were mailed to your address and you would like to participate in householding, please contact our transfer agent, Computershare Trust Company, N.A. (in writing: c/o Shareholder Services, P.O. Box 505000, Louisville, KY 40233-5000, from within the United States by telephone: 800-662-7232; and from outside the United States by telephone: + 1 781-575-2879).
If you are a stockholder of record and you do not wish to participate in householding, please contact our transfer agent.
If you are a beneficial owner, you may request information about householding from your broker, bank or other nominee.
Q.
What are my voting options?
A.
For Proposal 1 (Election of Directors), you may vote “for” one or more nominees, or your vote may be “withheld” from one or more nominees.
For Proposal 2 (Ratification of Independent Registered Public Accounting Firm), you may vote “for” or “against” the proposal or you may indicate that you wish to “abstain” from voting on the proposal.
For Proposal 3 (Approval of Advisory Resolution on Executive Compensation), you may vote “for” or “against” the proposal or you may indicate that you wish to “abstain” from voting on the proposal.
For Proposal 4 (Approval of Amendment to the Company’s Third Amended and Restated 2006 Omnibus Long-Term Incentive Plan (the “LTIP”)), you may vote “for” or “against” the proposal or you may indicate that you wish to “abstain” from voting on the proposal.
 
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Q.
What is the quorum requirement for the Annual Meeting?
A.
The presence of the holders of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting, present in person or represented by proxy, is necessary to constitute a quorum. Abstentions and broker non-votes are counted as present and entitled to vote for purposes of determining a quorum. A broker non-vote occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because that holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.
Q.
What are the voting requirements for the matters to be voted on at the Annual Meeting?
A.
A plurality of the votes cast is required for the election of directors. This means that the director nominees with the most “for” votes will be elected. Thus, shares as to which a stockholder withholds voting authority and broker non-votes will not be counted towards any director nominee’s achievement of a plurality and will not affect the outcome of the election of directors. Stockholders may not cumulate their votes in favor of any one nominee.
A majority of the votes cast by stockholders who are present, either in person or by proxy, at the meeting and entitled to vote on the matter is required to (1) ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm (“Independent Auditor”) for fiscal 2022, (2) approve the advisory resolution on executive compensation, and (3) approve the amendment to the LTIP. Abstentions and broker non-votes will not be counted as votes cast and will not affect the outcome of these items.
If you are a stockholder of record and sign your proxy card with no further instructions, your shares will be voted in accordance with the recommendations of the Board (“for” all director nominees, “for” the ratification of the appointment of Deloitte & Touche LLP as our Independent Auditor for fiscal 2022, “for” the approval of the advisory resolution on executive compensation, and “for” the amendment of the LTIP).
Brokers, banks and other nominees may not vote without instructions from the beneficial owner in the election of directors or on the advisory resolution on executive compensation. Therefore, if your shares are held through a broker, bank or other nominee, they will not be voted on these matters unless you affirmatively vote your shares in one of the ways described above.If you are a beneficial owner, your broker, bank or other nominee may vote your shares on the ratification of Deloitte & Touche LLP as our Independent Auditor even if the broker, bank or other nominee does not receive voting instructions from you.
Q.
Could other matters be decided at the Annual Meeting?
A.
As of the date of this proxy statement, we did not know of any matters to be acted on at the Annual Meeting other than those referred to in this proxy statement.
If other matters are properly presented at the Annual Meeting for consideration, the proxy holders named on the proxy card will have the discretion to vote on those matters for you.
Q.
Can I access these proxy materials online?
A.
Yes, these proxy materials are available under the Investors section of our website at www.liquidityservices.com.
If you are a stockholder of record and would like to receive our proxy materials electronically in the future, you may enroll in the electronic delivery service at any time by going directly to www.computershare.com/investor and following the enrollment instructions.
If you are a beneficial owner, you also may receive copies of these documents electronically. Please check the information provided in the proxy materials mailed to you by your broker, bank or other nominee regarding the availability of this service.
Opting to receive your proxy materials online will save us the cost of producing and mailing documents to your home or business, and also will give you an electronic link to the proxy voting site.
 
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Q.
Who will pay for the cost of this proxy solicitation?
A.
We will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or employees, acting without special compensation, in person, by telephone or electronically.
Q.
Who will count the vote?
A.
Representatives of our transfer agent, Computershare Trust Company, N.A., will tabulate the votes and act as inspectors of election.
 
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GOVERNANCE OF THE COMPANY
Corporate Governance Guidelines
The Board is committed to sound and effective corporate governance practices and has adopted a set of guidelines describing the corporate governance principles and procedures by which it functions (the “Governance Guidelines”). The Corporate Governance and Nominating Committee (the “Governance Committee”) reviews the Governance Guidelines periodically, or more frequently as necessary, and recommends changes to the Board as appropriate. The Governance Guidelines, and the charter of each of the committees of the Board (i.e., the Audit Committee, the Governance Committee and the Compensation Committee), are available on our website at https://investors.liquidityservices.com/corporate-governance. Stockholders may request a free copy of these documents by sending a written request to our Corporate Secretary at Liquidity Services, Inc., 6931 Arlington Road, Suite 200, Bethesda, MD 20814.
Among other matters, the Governance Guidelines address board selection, composition and evaluation, engagement of outside advisors, succession planning and stockholder communication with the Board.
Board Leadership Structure
The Board believes it is important to retain the flexibility to select its leadership structure, and regularly reviews the Board leadership structure as part of the succession planning process. The Board presently believes that combining the role of Chairman and Chief Executive Officer (“CEO”) is in the best interests of the Company and our stockholders and has selected Mr. Angrick for these roles. Mr. Angrick, a co-founder of the Company, has extensive industry experience and knowledge gained through 22 years of hands-on management and engagement with the Company’s senior leaders, employees and business partners, as well as industry influencers. Mr. Angrick has a history of outstanding leadership through both strong and challenging periods as our Chairman and CEO since 2000.
Lead Independent Director
The Board believes that strong, independent Board leadership and oversight is critical to effective corporate governance. The Board has established the position of Lead Director to provide an appropriate balance of leadership among directors, given the combination of the roles of Chairman and CEO. The Lead Director is an independent director elected for a period of at least one year by the independent directors and whose responsibilities include:

Setting the agendas for and leading executive sessions;

Calling meetings of the independent directors;

Facilitating teamwork and communication among the independent directors at and outside of Board meetings;

Serving as liaison between the Chairman and the independent directors;

Presiding at all Board meetings at which the Chairman is not present;

Approving Board meeting schedules and agendas, and working with the Chairman and committee chairs to ensure there is sufficient time for discussion of all agenda items; and

Leading the performance assessment of the CEO, in conjunction with the Chair of the Compensation Committee.
Patrick W. Gross has served as the Lead Director since August 2013.
Director Independence
The Board makes an affirmative determination regarding the independence of each director annually, based upon the recommendation of the Governance Committee. Under the Nasdaq Stock Market LLC’s (“Nasdaq”) listing standards (the “Nasdaq Standards”), an independent director is a person other than an executive officer or employee of the Company that the Board determines meets the objective standards for
 
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“director independence” set forth in the Nasdaq Standards and is free of any relationship with the Company that, in the Board’s opinion, would interfere with exercising such person’s independent judgment in carrying out the responsibilities of a director. The Board has not established categorical standards or guidelines to use in making these independence determinations but rather considers all relevant facts and circumstances. In addition, the directors who serve on the Audit Committee each must satisfy SEC standards, which state that Audit Committee members may not accept, directly or indirectly, any consulting, advisory or other compensatory fee from the Company other than their director compensation or fixed payments under a retirement plan for prior service. Similarly, in determining whether the directors who serve on the Compensation Committee satisfy the Nasdaq Standards for service on that committee, the Board must consider the source of compensation of each member, including any consulting, advisory or other compensatory fee from the Company other than their director compensation or fixed payments under a retirement plan for prior service, as well as whether the member is affiliated with the Company, any of its subsidiaries or any affiliate of its subsidiaries.
The Board has determined that Phillip A. Clough, Katharin S. Dyer, George H. Ellis, Patrick W. Gross, Beatriz V. Infante and Edward J. Kolodzieski (75% of our directors) are independent under the Nasdaq Standards. The Board has also determined that Mr. Angrick, our Chairman and CEO, is not independent under the Nasdaq Standards. Additionally, although the Board has determined that Mr. Mateus-Tique, who retired from his position as our President and Chief Operating Officer in 2009, would qualify as independent under the Nasdaq Standards, the Company has elected to not treat him as such due to his former role with the Company and proxy advisory firm guidelines.
DIRECTOR INDEPENDENCE
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Board Oversight of Risk
The Board has overall responsibility for oversight of the risks facing the Company. The Board implements its risk oversight function both directly and indirectly through delegation to committees that report back to the Board. For example, the Board is directly involved in overseeing cyber security risk while the oversight of other risks, such as risks related to accounting and compensation, is delegated to committees. The below chart describes the Board’s oversight of risk management:
 
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Continuous Oversight; Identification and Management of New Risks.   Oversight of risk is an ongoing process. Management continually reviews and analyzes the risk profile of the Company. On at least a quarterly basis, management presents to the Governance Committee on material risks facing the Company and the approach for addressing such risks. To identify material risks, all members of the executive team are surveyed and asked to rank risk categories. The executive team are also polled to identify new risk categories. The members of the Governance Committee are given ample time to review and discuss the risks with management. Information on risks is also periodically presented to the full Board to allow all of the directors the information needed to ensure they can adequately oversee the Company’s risk profile.
In fiscal 2020, the spread of COVID-19 and the mandatory shutdowns ordered by various government authorities in response were identified as material risks to the Company. Although the pandemic and the related measures to contain its spread did not have a material adverse effect on our consolidated results of operations for fiscal 2021, they have adversely affected certain components of our business, particularly revenues during times and in places in which governments ordered business and governmental closures and issued the most restrictive shelter in-place guidelines. As a result, we continue to actively monitor the risk to the Company presented by the pandemic, including the potential impacts it may have on our business, results of operations, financial condition and liquidity in the future.
In addition to actively monitoring the risk, we also took steps in response to the pandemic in fiscal 2021. For example, the Company decided to close or reduce the size of several of our offices, which resulted in the majority of the Company’s office-based workforce becoming full-time remote employees and provided opportunity for significant cost savings for the Company. For those employees whose responsibilities cannot be performed remotely, such as our warehouse employees, we continue to enforce the safety procedures developed in fiscal 2020, including:

Continued mask requirements at all facilities

Temperature checks of anyone entering our facilities
 
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Regular employee hand washing/sanitizing

Regular sanitizing of common touch points

Touchless fixtures added to most restrooms / breakrooms

Modified employee schedules to promote social distancing

Work area modifications to allow for social distancing

Contactless customer check-in and pick-up procedures implemented

Relaxed PTO process to encourage unwell team members to stay home
In fiscal 2021, as was the case in fiscal 2020, the Board was continually updated on the steps taken by the Company and any changes implemented at both regularly scheduled Board meetings and additional meetings held to discuss the Company’s response to COVID-19.
Risk Considerations in Our Compensation Program.   In addition to newly-identified risks, the Company also regularly assesses ongoing risks, such as those associated with our compensation programs. In fiscal 2021, our compensation risk assessment considered a variety of factors. Through this assessment, we determined that our compensation programs do not pose excessive risk because:

Our compensation programs appropriately balance fixed compensation with short-term and long-term variable compensation and cash-based compensation with equity-based compensation, so no one pay element would motivate employees to engage in excessive risk taking.

The design of annual incentive compensation does not lend itself to excessive risk taking because we:

fund annual incentive awards based on a variety of pre-established performance conditions, thus diversifying the risk associated with any single indicator of performance;

establish performance targets objectively determined with verifiable results;

incorporate pre-established caps for all awards; and

retain discretion to decrease bonus payouts.

The Company’s long-term incentive program encourages employees to focus on the long-term success of the Company by providing stock options and stock appreciation rights, which only reward employees if the Company’s stock price increases, and restricted stock awards and restricted stock units (“RSUs”), which decline in value if our stock price declines, reducing the motivation employees may have to take excessive risks.
Board and Committee Membership
Our bylaws provide that our Board shall consist of at least three members and the exact number of directors will be determined from time to time by resolution of our Board. Our Board currently comprises eight directors, divided into three classes: Class I, Class II and Class III. The term for each class of directors expires at successive annual meetings. The Class I directors are William P. Angrick, III and Edward J. Kolodzieski, the Class II directors are Phillip A. Clough, George H. Ellis and Jaime Mateus-Tique, and the Class III directors are Katharin S. Dyer, Patrick W. Gross and Beatriz V. Infante.
The Board met eight times during fiscal 2021. Each director attended 75% or more of the total number of meetings of the Board held while he or she was a director and of each committee on which he or she served while he or she was a member of that committee. Our directors are also encouraged to attend each Annual Meeting of Stockholders. Five directors attended the 2021 Annual Meeting.
The table below provides membership information for the Board and each committee of the Board as of the date of this proxy statement.
 
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Name
Position
Year
Current
Term
Expires
Director
Since
Independent
Audit
Committee
Compensation
Committee
Governance
Committee
Mr. Angrick
Class I director
2022 2000
NO
Mr. Kolodzieski
Class I director
2022 2015
YES
Mr. Clough
Class II director
2023 2004
YES
Chair
Mr. Ellis
Class II director
2023 2010
YES
Chair
Mr. Mateus-Tique
Class II director
2023 2000
NO
Ms. Dyer
Class III director
2024 2020
YES
Mr. Gross**
Class III director
2024 2001
YES
Ms. Infante
Class III director
2024 2014
YES
Chair
**
Lead independent director
Board Committees and Composition
The Board’s current standing committees are the Audit Committee (the “Audit Committee”), the Compensation Committee (the “Compensation Committee”) and the Corporate Governance and Nominating Committee (the “Governance Committee”). The Board reviews committee membership, charters and responsibilities every year. Each committee’s charter is available on our website at https://investors.liquidityservices.com/corporate-governance.
Additional information on each committee, including the members, the number of meetings held in fiscal 2021 and the duties and responsibilities of such committee, are available on the following pages.
 
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Audit Committee
Members
Mr. Ellis (chair), Mr. Gross and Ms. Infante
Meetings
The Audit Committee met 4 times in fiscal 2021.
Director Independence
The Board has determined that every member of the Audit Committee is independent, as defined by the Company’s director independence standards, the Nasdaq Standards and SEC rules.
Financial Expert
The Board has determined that Mr. Ellis is an “audit committee financial expert” within the meaning of such term under Item 407 of the Sarbanes-Oxley Act of 2002.
Committee Report
See page 38.
Primary Duties and Responsibilities*

Directly appointing, retaining, compensating, evaluating and overseeing our Independent Auditor;

Reviewing and preapproving all audit and permissible non-audit services to be provided by the Independent Auditor,

At least annually, reviewing a report by the Independent Auditor describing: (a) its internal quality control procedures; and (b) any material issues raised with respect to such procedures, and any steps taken to deal with any such issues;

At least annually, reviewing the qualifications, independence and performance of the Independent Auditor;

Upon completion of the annual audit, reviewing and discussing with the Independent Auditor the matters required to be discussed by the Independent Auditor under applicable standards;

Meeting to review and discuss with management and the Independent Auditor our annual audited financial statements, and our unaudited quarterly financial statements;

Reviewing and approving related party transactions;

Reviewing and discussing earnings press releases, corporate practices regarding earnings press releases and financial information and earnings guidance provided to analysts and ratings agencies;

Overseeing our processes for assessing financial risks, and reviewing and discussing with management and the Independent Auditor our major financial risk exposures and the steps management has taken to monitor and control such exposures;

Reviewing the adequacy and effectiveness of our internal control procedures and internal controls over financial reporting, and any programs instituted to correct deficiencies;

Reviewing and discussing the adequacy and effectiveness of our disclosure controls and procedures;

Overseeing our compliance systems regarding legal and regulatory requirements and reviewing our Code of Conduct and programs to monitor compliance with such Code of Conduct;

Establishing procedures for the submission and treatment of complaints regarding accounting, internal accounting controls, auditing and federal securities law matters;

Investigating or referring matters brought to its attention, as appropriate;

Reviewing the application of significant regulatory, accounting and auditing initiatives;

Establishing policies for the hiring of employees and former employees of the Independent Auditor;

Annually evaluating its performance and the adequacy of its charter and recommending changes to the Board as appropriate; and

Reviewing and discussing with management the environmental, social and governance disclosures to be included in the Company’s Annual Report on Form 10-K.
*
For a full description of the duties and responsibilities of the Audit Committee, see the Audit Committee Charter, available on our website at https://investors.liquidityservices.com/corporate-governance.
 
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Governance Committee
Members
Mr. Clough (chair), Ms. Dyer, Mr. Gross and Mr. Kolodzieski
Meetings
The Governance Committee met 4 times during fiscal 2021.
Director Independence
The Board has determined that every member of the Governance Committee is independent, as defined by the Company’s director independence standards and the Nasdaq Standards.
Primary Duties and Responsibilities*

Engaging in succession planning for the Board and key leadership roles on the Board and its committees;

Evaluating the composition of the Board to assess the skills and experience represented on the Board as a whole, and in individual directors, as well as the skills and experience that the Board may find valuable in the future;

Developing and recommending to the Board criteria for identifying and evaluating director candidates;

Identifying, reviewing the qualifications of, and recruiting, candidates for election to the Board;

Assessing the contributions and independence of incumbent directors in determining whether to recommend them for reelection to the Board;

Reviewing and recommending changes to policies on stockholder recommendations of director candidates;

Recommending candidates for election or reelection to the Board at each annual meeting of stockholders and candidates to be elected by the Board as necessary to fill vacancies and newly created directorships;

Reviewing, evaluating and recommending to the Board a set of corporate governance guidelines and reviewing and recommending changes to such guidelines, as necessary;

Making recommendations to the Board about the structure, composition and functioning of the Board and its committees;

Recommending to the Board candidates for appointment to Board committees;

Reviewing the Company’s succession plans relating to the Chief Executive Officer and other senior officers;

Overseeing the annual evaluation of the Board, its committees and directors;

Annually evaluating its performance and the adequacy of its charter and recommending changes to the Board as appropriate;

Overseeing enterprise risk management at the Company throughout the year to focus the Board and management on identifying and managing the risks across the Company; and

Evaluating the Company’s environmental, social and governance-related risks and goals.
*
For a full description of the duties and responsibilities of the Governance Committee, see the Governance Committee Charter, available on our website at https://investors.liquidityservices.com/corporate-governance
 
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Compensation Committee
Members
Ms. Infante (Chair), Mr. Clough, Ms. Dyer and Mr. Kolodzieski
Meetings
The Compensation Committee met 5 times during fiscal 2021.
Director Independence
The Board has determined that each member of the Compensation Committee is independent, as defined by the Company’s director independence standards and the Nasdaq Standards.
Committee Report
See page 79.
Primary Duties and Responsibilities*

Overseeing our overall compensation structure, policies and programs, and assessing whether our compensation structure establishes appropriate incentives for management and employees;

Overseeing the assessment of risks associated with our compensation programs for management and employees;

Administering and implementing our incentive compensation and equity based compensation plans;

Reviewing and approving corporate goals and objectives relevant to the compensation of the
CEO and other executive officers, evaluating the CEO’s performance and approving the CEO’s compensation;

Overseeing the evaluation of other executive officers and setting their compensation based upon the recommendations of the CEO, and having the authority to delegate to the CEO specific compensation decisions for officers who are not Section 16 officers;

Approving stock option and other stock incentive awards for all employees;

Reviewing and approving employment and severance arrangements for executive officers;

Reviewing the compensation of outside directors for service on the Board and its committees and recommending changes in compensation to the Board;

Assessing the independence of any consultants and advisors that advise the Compensation Committee, in accordance with the Nasdaq Standards;

Assisting the Board in its oversight of the Company’s policies and strategies relating to culture and human capital management, including diversity and inclusion;

Assessing the results of the Company’s most recent advisory vote on executive compensation; and

Annually evaluating its performance and the adequacy of its charter and recommending changes to the Board as appropriate.
*
For a full description of the duties and responsibilities of the Compensation Committee, see the Compensation Committee Charter, available on our website at https://investors.liquidityservices.com/corporate-governance.
 
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Recommendation of Director Candidates
The Governance Committee believes that candidates for director should have certain minimum qualifications, including the highest level of personal and professional ethics and integrity, sound judgment, the ability to make independent analytical inquiries, the willingness to devote adequate time and resources to diligently perform Board duties and appropriate and relevant business experience and acumen. The Governance Committee evaluates candidates for the Board based on these qualifications and seeks diverse strengths and backgrounds on the Board, including members with specific industry experience and familiarity with general issues affecting our business, as discussed in more detail under “Item 1 — Election of Directors” below. The Governance Committee also considers the number of other boards of public companies on which the candidate serves.
The Governance Committee uses a variety of methods to identify and evaluate candidates for director. Candidates may come to the attention of the Governance Committee through the directors, the CEO, professional search firms (to whom we pay a fee), stockholders or other persons. The Company has also sought to identify potential candidates through professional associations and initiatives, such as the National Association of Corporate Directors (“NACD”), The Boston Club, The Athena Alliance and Stanford Women on Boards.
The Governance Guidelines provide that the Governance Committee will consider candidates for director suggested by our stockholders, provided that the recommendations are made in accordance with the procedures required under our bylaws and described in this proxy statement under the heading “Requirements, Including Deadlines, for Submission of Proxy Proposals, Nomination of Directors and Other Business of Stockholders.” Director candidates recommended by stockholders under these procedures and who meet the criteria outlined above, in the Governance Committee Charter and in the Governance Guidelines will be evaluated by the Governance Committee like other director candidates.
Code of Conduct
Our Board has adopted a Code of Conduct applicable to all of our directors, officers and employees to protect and promote organization-wide integrity and to enhance the Company’s ability to achieve its mission.
The Code of Conduct embodies general principles such as compliance with laws, acting with honesty and integrity, avoidance of conflicts of interest, maintenance of accurate and timely financial and business records, use of the Company’s assets for legitimate business purposes only, provision and acceptance of gifts to or from customers, suppliers and governments in compliance with law, protecting the Company’s information and dealing fairly with other companies.
All directors, officers, and employees must report violations and suspected violations of the Code of Conduct and any concerns they may have pertaining to non-compliance with the Code of Conduct by following certain procedures described in the Code of Conduct. All reports of suspected Code of Conduct violations will be forwarded to the Legal Department and the Human Resources Department, except for complaints and concerns involving accounting or auditing matters, which will be handled in accordance with procedures established by the Audit Committee.
The Code of Conduct is available on our website, www.liquidityservices.com, at “Investors — Corporate Governance — Governance Documents.” A free printed copy is available to any stockholder who requests it by writing to us at Liquidity Services, Inc., 6931 Arlington Road, Suite 200, Bethesda, MD 20814, Attention: Legal Department. We intend to disclose future amendments to certain provisions of the Code of Conduct, or waivers of such provisions granted to executive officers and directors, on our website within four business days following the date of such amendment or waiver.
Reducing Environmental Impact; Increasing Social Impact
While we are a for-profit company with obligations to our shareholders, we are committed to also being a responsible corporate citizen. Our vision is to build the world’s leading marketplace for surplus and idle assets that benefits sellers, buyers and the planet. This vision, with its emphasis on environmental responsibility, is ingrained in our business strategy and the services we provide. We enable corporate and government agency sellers to directly reduce waste generated by redistributing end-of-life products or assets
 
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through our solutions, thereby improving the net financial recovery generated while positively impacting the communities they serve. Some of the world’s largest forward-thinking corporations and government agencies have enhanced their stewardship of communities and the environment by using our services and selling their surplus assets through our marketplaces.
Besides our fundamental business model, which emphasizes the importance of reusing assets, we also encourage the disposal of surplus in an environmentally safe manner. For example, where consumer electronics waste is not sold, we recycle such consumer electronics waste through professional recycling companies with R2 or similar publicly recognized recycling standards. In our warehouses, we also recycle cardboard and plastic dunnage received from sellers.
Our focus on virtual solutions and online auctions also serve the environment by reducing environmental risks caused by travel and transportation. When using our self-directed solutions on our GovDeals and AllSurplus marketplaces, sellers do not have to ship their goods to a site for an auction, thereby reducing emissions into the environment. In addition, individuals do not have to travel to and from an auction site. This reduction in travel is both environmentally responsible and socially responsible during an ongoing global pandemic.
Human Capital Management
In order to achieve our goal to build the world’s leading marketplace for surplus assets, it is crucial that we attract, develop and retain employees who deliver outstanding performance. To do so, we strive to make the Company a rewarding place to work and an environment where we promote diversity, equity and inclusion. As of September 30, 2021, we had 614 employees worldwide. We also utilize temporary workers to augment staffing during peak business cycles and to fill certain open positions on a temporary basis. Our ongoing focus on workplace safety and regulatory compliance has enabled us to maintain business continuity while promoting a safe work environment during the COVID-19 pandemic. Protecting the health and safety of our employees and their families has been a priority throughout the pandemic.
We believe our employees are key to achieving our business goals and growth strategy. We track and report internally on certain key metrics, such as employee engagement, employee net promoter score, turnover rate, workforce growth and internal mobility.
We embrace diversity, equity and inclusion. We actively recruit talent with a diversity of experiences, backgrounds, and ideas. By doing so, we aim to leverage the variety of skills and perspectives inherent in a diverse workforce, improve our problem-solving abilities, and bring innovative solutions to a wider range of clients and customers.
Communication with Directors
Stockholders and other interested parties may communicate with the Board by writing c/o the Corporate Secretary, Liquidity Services, Inc., 6931 Arlington Road, Suite 200, Bethesda, MD 20814. Communications intended for a specific director or directors should be addressed to the attention of the relevant individual(s) c/o the Corporate Secretary at the same address.
Our Corporate Secretary will review all correspondence intended for the Board and forward to the Board a summary of such correspondence and a copy of correspondence that, in the opinion of the Corporate Secretary, requires the Board’s attention. Directors may at any time review a log, and receive copies, of all correspondence received by the Corporate Secretary that is intended for the Board.
In addition, the Audit Committee has established a procedure for parties to submit concerns regarding what they believe to be questionable accounting, internal controls and auditing matters. Concerns may be reported through our Compliance Helpline at 888-475-8376. Concerns may be submitted anonymously and confidentially.
 
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COMPENSATION OF NON-EMPLOYEE DIRECTORS
Director Compensation
Our non-employee directors receive a combination of cash and equity compensation for service as directors. Directors employed by the Company (such as Mr. Angrick) receive no compensation for their service as directors. The Compensation Committee, in consultation with its independent compensation consultant, periodically reviews non-employee director compensation and recommends changes based on competitive market data. The compensation for non-employee directors for calendar year 2021 was consistent with calendar year 2020.
Non-employee director compensation is summarized in the following table:
Annual Compensation Element for Role
Board Compensation
General Board Service – Cash Retainer
$45,000
Lead Director – Cash Retainer
$7,500
Committee Chair Service – Cash Retainer
Audit Committee
$15,000
Compensation Committee
$7,500
Governance Committee
$7,500
Committee Service – Cash Retainer
Audit Committee
$7,500
Compensation Committee
$3,750
Governance Committee
$3,750
General Board Service – Equity (Each Director Elects One of Three Following Options)
Option Value (60%)
$60,000
RSU Value (40%)
$40,000
or
Option Value (20%)
$20,000
RSU Value (80%)
$80,000
or
Option Value (0%)
$0
RSU Value (100%)
$100,000
Vesting Schedule
Stock options and restricted stock
generally vest in full on
February 1 of each year
(one year vesting period).
Cash retainers are paid quarterly in advance. Our non-employee directors may receive payment of their cash retainers in the form of grants of options or RSUs by making an irrevocable annual election. Mr. Gross was the only director to make such an election for 2021.
Non-employee directors also receive equity-based compensation in the form of options and/or RSUs, as elected by the director and described in further detail below. Annual non-employee director equity awards are generally granted in February and generally vest on the one year anniversary of the grant date, subject to the director’s continued service with the Company through that date. Options granted to non-employee directors expire ten years from the date of grant.
For 2021, each non-employee director received an equity award with an aggregate value of $100,000. Such awards vest on February 1, 2022, subject to the director’s continued service with the Company through such date. The number of options to be granted was determined using the Black Scholes model. The number
 
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of RSUs to be granted was determined by dividing the value of the award by the closing price of our common stock on the grant date ($21.48).
Non-employee directors are also reimbursed for expenses they incur in attending Board and committee meetings.
Director Stock Ownership and Anti-Hedging Requirements
We require our non-employee directors to hold a number of shares of our common stock equal to five times the value of his or her annual cash retainer. New non-employee directors have a period of five years after his or her appointment to the Board to satisfy this requirement. Each non-employee director has satisfied or is on track to satisfy the stock ownership requirement within the applicable timeframe. Non-employee directors may not purchase any financial instrument or enter into any transaction that hedges or offsets any decrease in the market value of our common stock (including, but not limited to, prepaid variable forward contracts, equity swaps, collars, or exchange funds). A copy of the Director Stock Ownership Policy is available under the Investors section of our website at www.liquidityservices.com.
Director Compensation for Calendar Year 2021
The following table sets forth the total cash and equity compensation paid to our non-employee directors for their service on the Board and committees of the Board during calendar year 2021:
Name
Retainer Fees
(Paid in Cash)(1)
Stock
Awards(2)(3)(4)
Option
Awards(2)(3)(5)
Total ($)
Phillip A. Clough
$ 56,250 $ 80,000 $ 20,000 $ 156,250
Katharin S. Dyer
$ 52,500 $ 100,000 $ 0 $ 152,500
George H. Ellis
$ 60,000 $ 100,000 $ 0 $ 160,000
Patrick W. Gross
$ 0 $ 71,875 $ 91,875 $ 163,750
Beatriz V. Infante
$ 60,000 $ 100,000 $ 0 $ 160,000
Edward Kolodzieski
$ 52,500 $ 100,000 $ 0 $ 152,500
Jaime Mateus-Tique
$ 45,000 $ 100,000 $ 0 $ 145,000
(1)
Retainer fees, at the election of each director, may be paid in cash or in the form of options or RSUs. Mr. Gross elected to receive his retainer fees in the form of RSUs and options. On February 1, 2021, Mr. Gross was granted 1,484 RSUs and 2,585 options in lieu of a retainer fee. These RSUs and options will vest on February 1, 2022. All other directors elected to receive retainer fees in the form of cash.
(2)
The amounts reported in these columns reflect the aggregate grant date fair value of grants of options and RSUs to each of the non-employee directors, computed under U.S. generally accepted accounting principles (“GAAP”), disregarding estimates of forfeitures related to service-based vesting conditions. For additional information about the assumptions used in these calculations, see Note 2 and Note 11 to our audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021.
(3)
Ms. Dyer, Mr. Ellis, Ms. Infante, Mr. Kolodzieski and Mr. Mateus-Tique each elected to receive all of their equity compensation in RSUs with a grant date fair value of $100,000. Mr. Clough elected to receive twenty percent of his equity compensation in options with a grant date fair value of $20,000, and eighty percent of his equity compensation in RSUs with a grant date fair value of $80,000. Mr. Gross elected to receive sixty percent of his equity compensation in options with a grant date fair value of $60,000, and forty percent of his equity compensation in RSUs with a grant date fair value of $40,000. On February 1, 2021, we granted the following as equity compensation: (i) 4,655 RSUs to each of Ms. Dyer, Mr. Ellis, Ms. Infante, Mr. Kolodzieski and Mr. Mateus-Tique; (ii) options to purchase 1,622 shares of our common stock with an exercise price per share of $21.48 and 3,724 RSUs to Mr. Clough; and (iii) options to purchase 7,451 shares of our common stock with an exercise price per share of $21.48 and 3,346 RSUs to Mr. Gross. The number of options granted was determined using the Black Scholes model. The number of RSUs granted was determined by dividing the value of the award by the closing price of our common stock on the grant date ($21.48).
 
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(4)
On September 30, 2021, our non-employee directors held the following unvested RSUs: Phillip A. Clough, 3,724; Katharin S. Dyer, 4,655; George H. Ellis, 4,655; Patrick W. Gross, 3,346; Beatriz V. Infante, 4,655; Edward J. Kolodzieski, 4,655; and Jaime Mateus-Tique, 4,655.
(5)
On September 30, 2021, our non-employee directors held the following stock option awards, some of which were not fully vested: Phillip A. Clough, 82,799 options; Katharin S. Dyer, 0 options; George H. Ellis, 24,426 options; Patrick W. Gross, 183,732 options; Beatriz V. Infante, 0 options; Edward J. Kolodzieski, 0 options; and Jaime Mateus-Tique, 31,343 options.
 
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BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK
The following table sets forth information regarding ownership of our common stock as of the Record Date, other than as set forth below, by each of our directors and executive officers, all of our directors and executive officers as a group and the holders of 5% or more of our common stock known to us. The information in this table is based on our records, information filed with the SEC and information provided to us. To our knowledge, except as disclosed in the table below, none of our stockholders hold 5% or more of our common stock. Except as otherwise indicated, (1) each person has sole voting and investment power (or shares such powers with his or her spouse) with respect to the shares set forth in the following table and (2) the business address of each of our officers and directors is 6931 Arlington Road, Suite 200, Bethesda, MD 20814.
Number of Shares
Beneficially Owned
Percentage of Shares
Outstanding(1)
5% Stockholders
BlackRock, Inc.(2)
55 East 52nd Street
New York, NY 10055
3,973,661 11.96%
Renaissance Technologies LLC(3)
800 Third Avenue
New York, NY 10022
2,369,004 7.13%
Staley Capital Advisers, Inc.(4)
One Oxford Centre, Suite 3950
Pittsburgh, PA 15219
2,165,000 6.52%
Granahan Investment Management, Inc.(5)
404 Wyman Street, Suite 460
Waltham, MA 02451
1,788,742 5.38%
The Vanguard Group(6)
100 Vanguard Blvd.
Malvern, PA 19355
1,777,838 5.35%
Officers and Directors
William P. Angrick, III(7)
8,061,647 23.53%
Jorge A. Celaya(8)
137,184 *
Phillip A. Clough(9)
174,520 *
John P. Daunt(10)
242,825 *
Katharin S. Dyer(11)
23,452 *
George H. Ellis(12)
57,855 *
Patrick W. Gross(13)
275,219 *
Beatriz V. Infante(14)
76,157 *
Edward J. Kolodzieski(15)
62,323 *
Jaime Mateus-Tique(16)
816,008 2.45%
Novelette Murray(17)
107,223 *
Mark A. Shaffer(18)
111,689 *
Steven J. Weiskircher(19)
166,763 *
All directors and executive officers as a group (13 individuals)
10,312,865 29.33%
*
Less than 1% of the outstanding shares of our common stock.
(1)
The percentages of shares outstanding for our 5% stockholders were calculated based on 33,221,812 shares of common stock outstanding as of the Record Date. The percentage of shares outstanding for our directors and executive officers as a group was calculated based on 35,159,013 shares of common
 
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stock, which is equal to the 33,221,812 shares of common stock outstanding as of the Record Date plus 1,839,906 shares of common stock issuable pursuant to options held by our directors and executive officers that are exercisable as of the Record Date or within 60 days of such date and 97,295 RSUs scheduled to vest within 60 days of such date.
(2)
Based on a review of a Form 13F-HR filed on November 9, 2021, BlackRock, Inc. beneficially owned 3,973,661 shares of common stock, had sole voting power with respect to 3,959,331 shares of common stock and had sole investment power with respect to 3,973,661 shares of common stock.
(3)
Based on a review of a Form 13F-HR filed on November 12, 2021, Renaissance Technologies LLC beneficially owned 2,369,004 shares of common stock, had sole voting power with respect to 2,313,954 shares of common stock and had sole investment power with respect to 2,369,004 shares of common stock.
(4)
Based on a review of a Form 13F-HR filed on November 5, 2021, Staley Capital Advisers, Inc. beneficially owned 2,165,000 shares of common stock, had sole voting power with respect to 2,165,000 shares of common stock and had sole investment power with respect to 2,165,000 shares of common stock.
(5)
Based on a review of a Form 13F-HR filed on November 15, 2021, Granahan Investment Management, Inc. beneficially owned 1,788,742 shares of common stock, had sole voting power with respect to 1,550,003 shares of common stock and had sole investment power with respect to 1,788,742 shares of common stock.
(6)
Based on a review of a Form 13F-HR filed on November 12, 2021, The Vanguard Group beneficially owned 1,777,838 shares of common stock, had sole voting power with respect to 0 shares of common stock and had sole investment power with respect to 1,721,007 shares of common stock.
(7)
Includes 5,453,647 shares of common stock held by the William P. Angrick, III Revocable Trust, 873,379 shares of common stock held by the William P. Angrick III 2005 Irrevocable Trust, 114,699 shares of common stock held by the Stephanie S. Angrick Revocable Trust and 575,513 shares of common stock held by the Stephanie S. Angrick 2005 Irrevocable Trust. Mr. Angrick disclaims beneficial ownership of these securities. This amount also includes 1,020,709 shares of common stock issuable pursuant to options held by Mr. Angrick that are exercisable as of the Record Date or within 60 days of such date and 23,700 RSUs scheduled to vest within 60 days of such date. 1,400,000 shares of common stock are pledged as collateral to secure certain personal indebtedness.
(8)
Includes 92,072 shares of common stock issuable pursuant to options held by Mr. Celaya that are exercisable as of the Record Date or within 60 days of such date and 9,950 RSUs scheduled to vest within 60 days of such date.
(9)
Includes 82,799 shares of common stock issuable pursuant to options held by Mr. Clough that are exercisable as of the Record Date or within 60 days of such date and 3,724 RSUs scheduled to vest within 60 days of such date.
(10)
Includes 68,869 shares of common stock held by the Daunt Family Trust, 162,906 shares of common stock issuable pursuant to options held by Mr. Daunt that are exercisable as of the Record Date or within 60 days of such date and 11,050 RSUs scheduled to vest within 60 days of such date.
(11)
Includes 4,655 RSUs scheduled to vest within 60 days of Record Date. Ms. Dyer does not hold any options that are exercisable as of the Record Date or within 60 days of such date.
(12)
Includes 1,160 shares of common stock held by the George H. Ellis Individual Retirement Account, 24,426 shares of common stock issuable pursuant to options held by Mr. Ellis that are exercisable as of the Record Date or within 60 days of such date and 4,655 RSUs scheduled to vest within 60 days of such date.
(13)
Includes 183,732 shares of common stock issuable pursuant to options held by Mr. Gross that are exercisable as of the Record Date or within 60 days of such date and 3,346 RSUs scheduled to vest within 60 days of such date.
(14)
Includes 4,655 RSUs scheduled to vest within 60 days of the Record Date. Ms. Infante does not hold any options that are exercisable as of the Record Date or within 60 days of such date.
(15)
Includes 4,655 RSUs scheduled to vest within 60 days of the Record Date. Mr. Kolodzieski does not hold any options that are exercisable as of the Record Date or within 60 days of such date.
 
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(16)
Includes 163,208 shares of common stock held by the Jaime Mateus-Tique 2005 Irrevocable Trust, 468,262 shares of common stock held by the Em El 2007 Irrevocable Trust, 31,343 shares of common stock issuable pursuant to options held by Mr. Mateus Tique that are exercisable as of the Record Date or within 60 days of such date and 4,655 RSUs scheduled to vest within 60 days of such date.
(17)
Includes 75,179 shares of common stock issuable pursuant to options held by Ms. Murray that are exercisable as of the Record Date or within 60 days of such date and 5,900 RSUs scheduled to vest within 60 days of such date.
(18)
Includes 69,620 shares of common stock issuable pursuant to options held by Mr. Shaffer that are exercisable as of the Record Date or within 60 days of such date and 7,650 RSUs scheduled to vest within 60 days of such date.
(19)
Includes 97,120 shares of common stock issuable pursuant to options held by Mr. Weiskircher that are exercisable as of the Record Date or within 60 days of such date and 8,700 RSUs scheduled to vest within 60 days of such date.
Stock Ownership and Anti-Hedging Requirements
A NEO must hold common stock equal to 150% of the NEO’s annual base salary except the Chairman and CEO, who must hold common stock equal to 600% of his annual base salary. Each NEO has five years after his or her date of hire or appointment to satisfy this requirement. Each of our NEOs has satisfied or is on track to satisfy the stock ownership requirement within the applicable timeframe. Executive officers may not purchase any financial instrument or enter into any transaction that hedges, pledges or offsets any decrease in the market value of our common stock (including, but not limited to, prepaid variable forward contracts, equity swaps, collars, or exchange funds) without advance approval from our Board. On September 11, 2020, the Board approved in advance Mr. Angrick’s pledge of 1,400,000 shares of common stock. This approval was reviewed and extended on December 6, 2021 until such date as the Board revokes its approval. In reviewing and extending this approval, the Board took note of certain facts and circumstances that helped moderate risk to the Company from the pledge, including: (i) shares pledged by Mr. Angrick would be derived from shares purchased by Mr. Angrick for investment purposes as compared to shares received by Mr. Angrick as executive compensation; (ii) the pledge having a 50% loan-to-value ratio and only requiring funding for the difference between 50% of the original share value at the time of pledge and the then current price; (iii) the limited size of the pledge in reference to Mr. Angrick’s overall holdings; and (iv) Mr. Angrick’s lack of reliance on the pledged shares for compliance with the Company’s executive stock holding policy.
Additionally, non-executive employees who are deemed to be “insiders” pursuant to the Company’s Insider Trading Policy cannot enter into hedging, pledging or similar arrangements with respect to the Company’s securities without advance approval from the Board.
 
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Company did not participate in or review any potential related party transactions during fiscal 2021 and there currently are no proposed related party transactions. To be considered a related party transaction under current SEC rules, a transaction, or a series of similar transactions, must include the Company as a participant, and one of our officers, directors or greater than 5% stockholders or a family member of such person must have a direct or indirect material interest in the transaction. To date, we have not participated in any related party transactions requiring disclosure as such under the SEC disclosure requirements. Should we consider participating in a related party transaction in the future, such transaction would be reviewed and subject to approval by the Audit Committee, in accordance the Audit Committee’s written charter. We have not adopted specific standards that would govern such review.
As a general matter, our written Code of Conduct prohibits conflicts of interest. We consider a conflict of interest to exist when a person’s private interest interferes in any way with the interests of the Company, including: (i) a conflict that makes it difficult for an employee, officer or director to perform his or her work objectively and effectively; (ii) when an employee, officer or director, or any member of his or her family, receives improper personal benefits because of his or her position in or with our Company; or (iii) when an employee, officer or director is engaged in a business or business activity in competition with or injurious to us. The Code of Conduct requires that the General Counsel be consulted with questions about conflicts of interest in addition to requiring that our directors and officers consult with the General Counsel before engaging in any potential conflict of interest transactions.
 
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PROPOSALS REQUIRING YOUR VOTE
Proposal 1 — Election of Directors
Overview of Proposal 1
Our Class I directors are William P. Angrick, III and Edward J. Kolodzieski. Mr. Angrick and Mr. Kolodzieski were last elected at the Annual Meeting of Stockholders in 2019. Their current terms end at this Annual Meeting and each has consented to be nominated to serve as a director for an additional three-year term. Each nominee will, if elected, continue in office until our Annual Meeting of Stockholders in 2025 or until his successor has been duly elected and qualified, or until the earlier of his death, resignation or retirement.
2022 Director Nominees
Name
Director Since
Independent
Committee Memberships
William P. Angrick, III
2000
NO
None
Edward J. Kolodzieski
2015
YES
Compensation
Committee;
Governance
Committee
If you are a stockholder of record, the proxy holders named on the proxy card intend to vote your proxy for the election of each nominee, unless you indicate on the proxy card that your vote should be withheld from any or all of the nominees. Brokers, banks and other nominees may not vote in the election of directors without instructions from the beneficial owner. Therefore, if your shares are held through a broker, bank or other nominee, they will not be voted in the election of directors unless you affirmatively vote your shares.
We expect each nominee to serve as a director if elected. If any nominee cannot serve, proxies will be voted in favor of the other nominees and may be voted for substitute nominees selected by the Board, unless the Board reduces the number of directors serving on the Board.
Selection of Directors
In evaluating director candidates and considering incumbent directors for nomination, the Board and the Governance Committee consider a variety of factors as discussed above under “Governance Committee.” Among other things, the Board has determined that it is important to have individuals with the following skills, qualifications and experiences on the Board:

Industry Experience and/or Company Knowledge.   It is important for our directors to have knowledge of the Company and the online auction marketplace industry in order to understand the Company’s business, operations and strategy. 50% of our directors have this experience.

Senior Leadership Experience.   It is important for our directors to have successfully served in senior leadership roles at other organizations, which demonstrates strong abilities to motivate and manage others and to identify and develop leadership qualities in others. 100% of our directors have this experience.

High-Growth Company Experience.   As a high-growth company, it is important for our directors to have experience with other companies that have undergone periods of significant growth because they can provide insight on the challenges faced by companies in these situations, including how to balance strategic acquisitions with organic growth, manage expectations about the scope, speed and success of our growth strategy, and leverage operational infrastructure to support expansion. 100% of our directors have this experience.

U.S. Public Company Board Service Experience.   Directors who have served on other public company boards can offer advice and perspective regarding board dynamics and operations; the relationship between the Board and management; and other matters, including corporate governance, executive compensation and oversight of strategic, operational and compliance-related matters. 50% of our directors have this experience.
 
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Media and Technology Experience.   As the Company is a provider of online marketplaces, it is important for our directors to have media and technology experience, especially as this experience relates to the Internet. 100% of our directors have this experience.

Financial and/or Accounting Experience.   It is important for our directors to have knowledge of finance and financial reporting processes to enable them to understand and evaluate the Company’s capital structure and to oversee the preparation of our financial statements. 75% of our directors have this experience.

Data Analytics and E-commerce Marketing Experience.   With the continued growing importance of data analytics and e-commerce marketing in the Company’s business strategy, it is important for our directors to have experience in this area. 25% of our directors have this experience.
Name
Industry
Experience
and/or
Company
Knowledge
Senior
Leadership
Experience
High-Growth
Company
Experience
U.S. Public
Company
Board
Service
Experience
Media
and
Technology
Experience
Financial
and/or
Accounting
Experience
Data
Analytics and
E-commerce
Marketing
Experience
Mr. Angrick
Mr. Clough
Ms. Dyer
Mr. Ellis
Mr. Gross
Ms. Infante
Mr. Kolodzieski
Mr. Mateus-Tique
Consideration of Diversity
The Board does not have a specific diversity policy but recognizes the value of diversity among directors. Diversity is important because a variety of viewpoints improves the quality of discussion, contributes to a more effective decision-making process, enhances the overall culture of the boardroom and helps the Board address the complex issues it faces.
Additional information on our directors and their specific qualifications and experience are set forth below. For more information on the director nomination process, refer to “Governance Committee” above.
 
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[MISSING IMAGE: tm223064d1-pc_proposal4c.jpg]
RECOMMENDATION OF THE BOARD
[MISSING IMAGE: tm223064d1-icon_tickmarkbw.jpg]
Your Board of Directors unanimously recommends a vote FOR the election of William P. Angrick, III and Edward J. Kolodzieski as directors.
 
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Our Board of Directors
WILLIAM P. ANGRICK, III
Director Since: January 2000
Age: 54
Not Independent (Chairman & CEO)
Committee(s):
None
Class: Class I Director
Last Elected: 2019 (Votes For: 96%)
Current Term Expires: 2022
Key Skills. Qualifications and Experience:
✓ Industry Experience and/or Company Knowledge
✓ Senior Leadership Experience
✓ Financial and/or Accounting Expertise
✓ High-Growth Company Experience
✓ Media and Technology Experience
Biography:
Mr. Angrick is a co-founder of the Company and has served as the Chairman and CEO of the Company since January 2000. Mr. Angrick previously worked with Deutsche Banc Alex. Brown’s Consumer and Business Services Investment Banking Group from 1995 to 1999 where he served as a Vice President.
Education:
Mr. Angrick holds a M.B.A. from the Kellogg Graduate School of Management at Northwestern University and a B.B.A. with honors from the University of Notre Dame.
JAIME MATEUS-TIQUE
Director Since: April 2000
Age: 55
Not Independent (Co-Founder)
Committee(s):
None
Class: Class II Director
Last Elected; 2020 (Votes For: 86%)
Current Term Expires: 2023
Key Skills, Qualifications and Experience:
✓ Industry Experience and/or Company Knowledge
✓ Senior Leadership Experience
✓ Financial and/or Accounting Expertise
✓ High-Growth Company Experience
✓ Media and Technology Experience
Biography:
Mr. Mateus-Tique is a co-founder of the Company who has served as a director of the Company since April 2000. Mr. Mateus-Tique served as the Company’s President and Chief Operating Officer from April 2000 until his retirement in September 2009. Before co-founding the Company, Mr. Mateus-Tique served as a senior engagement manager at McKinsey & Co., a management consulting firm, from September 1995 to March 2000.
Education:
Mr. Mateus-Tique holds a Master in Biomedical Science degree from the Icahn School of Medicine, a M.B.A. from the Kellogg Graduate School of Management at Northwestern University, a B.S in Mathematics and a Master in Management degree from Ecole des Hautes Etudes Commerciales in Paris.
 
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PHILLIP A. CLOUGH
Director Since: September 2004
Age: 60
Independent
Committee(s):
Compensation Committee
Governance Committee (Chair)
Class: Class II Director
Last Elected: 2020 (Votes For: 88%)
Current Term Expires: 2023
Key Skills. Qualifications and Experience:
✓ Senior Leadership Experience
✓ Financial and/or Accounting Experience
✓ High-Growth Company Experience
✓ Media and Technology Experience
✓ U.S. Public Company Board Service Experience
Biography:
Mr. Clough has served as a director of the Company since September 2004 and currently serves as chair of the Governance Committee and a member of the Compensation Committee. Mr. Clough is currently a General Partner and the Chairman of ABS Capital Partners (“ABS”), a growth equity firm focused on investments in tech-enabled services businesses. From January 2007 to December 2020, Mr. Clough was a Managing General Partner of ABS. Prior to that, Mr. Clough was a General Partner of ABS from September 2001 to January 2007. Before joining ABS, Mr. Clough was President and Chief Executive Officer of Sitel Corporation, a global provider of outsourced customer support services, from May 1998 to March 2001. Mr. Clough previously served on the board of directors of American Public Education, Inc., a provider of exclusively online post-secondary education, from August 2002 to 2010 and on the board of directors of Rosetta Stone Inc., a provider of technology-based language learning solutions, from January 2006 to May 2014.
Education:
Mr. Clough holds a B.S. degree from the U.S. Military Academy at West Point and holds a M.B.A. from the Darden Graduate School of Business Administration at the University of Virginia.
 
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KATHARIN S. DYER
Director Since: January 2020
Age: 64
Independent
Committee(s):
Compensation Committee
Governance Committee
Class: Class III Director
Last Elected: 2021 (Votes For: 99%)
Current Term Expires: 2024
Key Skills, Qualifications and Experience:
✓ Senior Leadership Experience
✓ High-Growth Company Experience
✓ Media and Technology Experience
✓ Data Analytics and E-commerce Marketing Experience
Biography:
Ms. Dyer has served as a director of the Company since January 2020 and is a member of the Compensation Committee and the Governance Committee. Since June 2018, she has been the Chief Executive Officer of PivotWise, a strategic advisory firm focused on digital transformation founded by Ms. Dyer. Previously, she was a Global Partner and a member of the senior leadership team at IBM Global Business Services from 2016 to 2018. From 2013 to 2015, she served as EVP and General Manager, Global Chief Marketing Officer, Merchant Services at American Express Company which covers more than 112 million business and consumer card members and 18 million American Express accepting merchants. Ms. Dyer has also served as Global Management Board Member and Global Chief Transformation Officer for the digital and media agencies of the Publicis Groupe; EVP, Executive Leadership Team, and Client Portfolio General Manager of Digitas; and in leadership roles at Advanta, MNC Financial, Sallie Mae, and Citigroup. She has also served as Guest Lecturer at Harvard Business School and Boston College Carroll School of Management. Ms. Dyer is also an Advisory Board Member for two tech ventures: Momenti, an interactive content PaaS venture using AI, and VODIUM, a virtual communication technology. She dedicates her time to organizations including Women in Blockchain and WOMEN in America Executive Mentoring. In addition to Liquidity Services, she also currently serves on the boards of The Grameen Foundation and YWCA of Nashville and Middle Tennessee. Previously, she served on, the boards of Noora Health, Providence Health, and CARE, a leading global NGO working to end poverty in more than 90 developing countries. Ms. Dyer is a member of NACD, Women Corporate Directors, and Extraordinary Women on Boards.
Education:
Ms. Dyer holds a M.B.A. from the University of Maryland and a B.A. from the University of Kentucky.
 
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GEORGE H. ELLIS
Director Since: May 2010
Age: 72
Independent
Committee(s):
Audit Committee (Chair)
Class: Class II Director
Last Elected: 2020 (Votes For: 90%)
Current Term Expires: 2023
Key Skills, Qualifications and Experience:
✓ Senior Leadership Experience
✓ Financial and/or Accounting Experience
✓ High-Growth Company Experience
✓ Media and Technology Experience
✓ U.S. Public Company Board Service Experience
Biography:
Mr. Ellis has served as a director of the Company since May 2010 and is the Chairman of the Audit Committee. Mr. Ellis has served as the Chief Financial Officer of Accumen Inc., a provider of health system performance optimization solutions, since November 2020. From 2015 through 2020, Mr. Ellis was a Managing Director in the healthcare practice of Huron Consulting, Inc. Prior to that, Mr. Ellis served as the Chief Financial Officer of Studer Group, a private equity-backed healthcare consulting firm, from September 2011 to February 2015. From July 2006 to August 2011, Mr. Ellis served as the Chief Financial Officer of Global 360, Inc., a software development company. Mr. Ellis has also served in several capacities at Softbrands, Inc., a software developer and provider of related professional services, including as a member of its board of directors from October 2001 to August 2009, as Chairman from October 2001 to June 2006, and as Chief Executive Officer from October 2001 to January 2006. Mr. Ellis is also a director of Blackbaud, Inc., a supplier of software for non-profit companies, where he is Chairman of the Audit Committee. Mr. Ellis served on the board of directors of NEON Systems, Inc., from January 2000 to December 2005 and PeopleSupport, Inc., from October 2004 to October 2008. He also served as a director of AremisSoft Corp. from April 1999 until February 2001 and as Chairman and Chief Executive Officer of AremisSoft from October 2001 to July 2002. Previously, Mr. Ellis served as Chief Financial Officer of Sterling Software, Inc., Chief Financial Officer and founder of Sterling Commerce, Inc., a spin-off of Sterling Software, and Executive Vice President and Chief Operating Officer of the Communities Foundation of Texas. Mr. Ellis is a Certified Public Accountant and is admitted to the State Bar of Texas. Mr. Ellis is a board fellow with NACD and is certified in Cyber Security for Board Members through NACD.
Education:
Mr. Ellis holds a B.S. degree from Texas Tech University and a J.D. from Southern Methodist University Dedman School of Law.
 
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PATRICK W. GROSS
Director Since: February 2001
Age: 77
Independent / Lead Independent Director
Committee(s):
Audit Committee
Governance Committee
Class: Class III Director
Last Elected: 2021 (Votes For: 95%)
Current Term Expires: 2024
Key Skills, Qualifications and Experience:
✓ Senior Leadership Experience
✓ Media and Technology Experience
✓ Industry Experience and/or Company Knowledge
✓ High-Growth Company Experience
✓ U.S. Public Company Board Service Experience
Biography:
Mr. Gross has served as a director of the Company since February 2001 and currently serves as the Lead Director and a member of the Audit Committee and the Governance Committee. Mr. Gross has served as Chairman of The Lovell Group, a private business and technology advisory and investment firm, since October 2002. Mr. Gross is a founder of, and served as a principal executive officer from 1970 to September 2002 at, American Management Systems, Inc., a publicly traded information technology consulting, software development and systems integration firm. Mr. Gross is also a director of Perdoceo Education Corporation, a publicly traded provider of post-secondary educational services. Mr. Gross previously served on the board of directors of Rosetta Stone Inc., a provider of technology based language learning solutions, from 2006 until October 2020, Waste Management, Inc., a publicly traded provider of integrated waste services, from 2006 to 2020, Capital One Financial Corporation, a publicly traded financial services company, from February 1995 to May 2017, and Taleo Corporation, a publicly traded provider of talent management solutions, from August 2006 until April 2012. Mr. Gross currently serves on the boards of directors of various private companies.
Education:
Mr. Gross holds a B.S.E. degree from Rensselaer Polytechnic Institute, a M.S.E. degree from the University of Michigan, and a M.B.A. from the Stanford Graduate School of Business.
 
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BEATRIZ V. INFANTE
Director Since: May 2014
Age: 67
Independent
Committee(s):
Audit Committee
Compensation Committee (Chair)
Class: Class III Director
Last Elected: 2021 (Votes For: 98%)
Current Term Expires: 2024
Key Skills. Qualifications and Experience:
✓ Senior Leadership Experience
✓ Media and Technology Experience
✓ High-Growth Company Experience
✓ Financial and/or Accounting Experience
✓ U.S. Public Company Board Service Experience
Biography:
Ms. Infante has served as a director of the Company since May 2014, and she currently serves as the Chair of the Compensation Committee and a member of the Audit Committee. Ms. Infante is currently the Chief Executive Officer of BusinessExcelleration LLC, a business consultancy specializing in corporate transformation and renewal. Since October 2017, she has served as director of Ribbon Communications, a cloud communications company formed from the merger of Sonus Networks Inc. and GENBAND Holdings Company, and more recently the acquisition of ECI Telecom Group Ltd, and is currently Chair of the Compensation Committee and member of it’s Audit and Technology Committees. Since January 2018, she has served as a director of PriceSmart Inc., the largest operator of membership warehouse clubs in Latin America and the Caribbean, and currently serves as Chair of its Compensation Committee, Chair of its Digital Transformation Committee, and member of its Audit Committee. From January 2010 to October 2017, she served as a director and member of the Compensation Committee of Sonus Networks. From May 2012 until its acquisition by Broadcom in May 2015, Ms. Infante served as a director of Emulex, and was the Chair of its Nominating and Governance Committee and member of its Compensation Committee. From July 2016 until its acquisition by Veeco in May 2017, Ms. Infante served as a director and member of the Nominating and Corporate Governance Committee of Ultratech, Inc. From 1994 to 2019, she served on the Advisory Committee to the Princeton University School of Engineering and Applied Science. Ms. Infante served as Chef Executive Officer and a director of ENXSuite Corporation from May 2010 until it was acquired in October 2011. Ms. Infante served as Chief Executive Officer and a director of VoiceObjects, Inc. from March 2006 until VoiceObjects, Inc. was acquired in December 2008. Ms. Infante served as a director and Interim Chief Executive Officer of Sychron, Inc. from December 2004 to June 2005 until its sale to an investor group. Ms. Infante was Chief Executive Officer and President of Aspect Communications Corporation, a market leader in communications solutions, from April 2000 until October 2003, and was additionally named Chairman in February 2001. Between October 1998 and April 2000, she held additional roles at Aspect Communications.
 
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Ms. Infante has demonstrated her commitment to boardroom excellence by completing NACD’s comprehensive program of study for experienced corporate directors — a rigorous suite of courses spanning leading practices for boards and committees. Ms. Infante has been a NACD Board Leadership Fellow since 2012. Ms. Infante supplements her board leadership skills through ongoing engagement with the director community and access to leading practices.
Education:
Ms. Infante holds a B.S.E degree in Electrical Engineering and Computer Science from Princeton University and a M.S. degree in Engineering Science from California Institute of Technology.
 
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EDWARD J. KOLODZIESKI
Director Since: November 2015
Age: 61
Independent
Committee(s):
Compensation Committee
Governance Committee
Class: Class I Director
Last Elected: 2019 (Votes For: 96%)
Current Term Expires: 2022
Key Skills, Qualifications and Experience:
✓ Senior Leadership Experience
✓ Financial and/or Accounting Experience
✓ High-Growth Company Experience
✓ Industry Experience and/or Company Knowledge
✓ Media and Technology Experience
✓ Data Analytics and E-commerce Marketing Experience
Biography:
Mr. Kolodzieski has served as a director of the Company since November 2015, and currently serves as a member of the Compensation Committee and the Governance Committee. Since 2013, Mr. Kolodzieski has also served as a Senior Advisor for CVC Capital Partners in the consumer products, retail and supply chain sectors. In addition, he has served on the advisory board of The Welspun Group since January 2017 and on the Board of Directors of 99 Cents Only Stores LLC since January 2020. Previously, Mr. Kolodzieski served as Chairman of the Board for Archway Marketing Services from September 2015 through June 2018, as Chairman of And Go Concepts, LLC from August 2018 through March 2020 and as a Board Director of Vi-Jon Inc from August 2013 through September 2020. Prior to that, Mr. Kolodzieski served as Executive Vice President — Global Sourcing at Wal-Mart, Inc. from February 2010 through his retirement from Wal-Mart in February 2013. Prior to this position, he held several other senior executive positions with Wal-Mart, including Chairman of the Board and Chief Executive Officer of Walmart Japan, Chief Operating Officer of Wal-Mart International, and SVP of Wal-Mart’s Neighborhood Market division. Before joining Wal-Mart, he was the President of Acme Markets of Virginia, a supermarket firm with operations in five Mid- Atlantic States.
Mr. Kolodzieski has been a certified law enforcement officer for over 30 years and is currently increasing his training in the area of cyber security and Internet fraud. He has completed courses from the U.S. Department of Justice / National White Collar Crime Center and the Carnegie Mellon University CERT Cyber Security Certification Program.
Mr. Kolodzieski has demonstrated his commitment to boardroom excellence by completing NACD’s comprehensive program of study for corporate directors, a rigorous suite of courses spanning leading practices for boards and committees. Mr. Kolodzieski was a 2013 NACD Board Governance Fellow.
Education:
Mr. Kolodzieski holds a B.S. in Business Management from University of South Florida and a M.B.A. from University of Tampa.
 
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Our Executive Officers
Below you can find information, including biographical information, about our executive officers (other than Mr. Angrick, whose biographical information appears above):
Name
Age
Position
Jorge A. Celaya
55
Chief Financial Officer
John P. Daunt
56
Chief Commercial Officer
Steven J. Weiskircher
48
Chief Technology Officer
Mark A. Shaffer
48
Chief Legal Officer and Corporate Secretary
Novelette Murray
56
Chief Human Resources Officer
Jorge A. Celaya has served as our Chief Financial Officer since 2015. Mr. Celaya has more than 30 years of experience in capital markets, financial accounting, operations, and strategic transformation with global and publicly held companies in diverse industries. Before joining the Company, he co-founded Avanz Capital, an independent investment firm focused on private equity investing across emerging markets. Before that, Mr. Celaya was Executive Vice President and Chief Financial Officer for both FTI Consulting, a global provider of business restructuring, financial consulting, and e-discovery software and services, and Sitel Corporation, a global provider of business process outsourcing services. From 1990 to October 2003, Mr. Celaya also held various corporate and operating group positions with Schlumberger Ltd. where he worked across multiple industries and sectors both domestically and internationally. Mr. Celaya holds a Bachelor of Arts degree and a Master’s in Business degree from the University of Texas at Austin.
John P. Daunt has served as our Chief Commercial Officer since April 2019. Previously, Mr. Daunt was our Senior Vice President, CAG North America, from June 2018 to April 2019, Senior Vice President, Global Operations and DoD from August 2015 to May 2018 and Senior Vice President, Account Management from November 2014 to July 2015. Before joining the Company, Mr. Daunt served as Senior Vice President of FedBid, Inc., a company that allows federal, state and local governments, and educational institutions to purchase goods and services through a reverse auction-based platform, from March 2013 to November 2014. Prior to that, Mr. Daunt was Vice President and General Manager of AssetNation and an Account Executive at Ariba, Inc. Mr. Daunt also served as a Naval Flight Officer in the US Navy. Mr. Daunt holds a B.S. in Entrepreneurial Studies from Babson College.
Steven J. Weiskircher has served as our Chief Technology Officer since August 2019. Prior to joining the Company, Mr. Weiskircher was Vice President, Omnichannel, Marketing, and Digital Delivery Technology at GameStop, a video game, consumer electronics, and wireless services retailer, from July 2018 through July 2019. Prior to that, Mr. Weiskircher worked for ThinkGeek, a retailer, as Chief Information Officer from February 2013 through July 2018. Mr. Weiskircher has also been employed as Chief Information Officer at Fanatics, Inc. and as Vice President, Information Technology at Crutchfield Corporation. Mr. Weiskircher served as a Captain in the U.S. Army Signal Corps. Mr. Weiskircher holds a B.S. in Mechanical Engineering from Virginia Tech and a M.S. in Management Information Systems from the University of Virginia.
Mark A. Shaffer has served as our Chief Legal Officer and Corporate Secretary since July 2016. Before this role, Mr. Shaffer was Senior Associate General Counsel and Assistant General Counsel from September 2012 to July 2016. Before joining the Company, Mr. Shaffer served as Senior Counsel and Global Compliance Officer for Barnes Group, Inc., an international industrial and aerospace manufacturer and service provider, from June 2010 to August 2012. Before that, he served in other roles at Barnes Group and as Senior Counsel at the law firm of Miller Canfield, where he focused on industrial and automotive mergers and acquisitions and commercial negotiations. Mr. Shaffer also served as Senior Counsel for Kmart Corporation and as an associate at the law firms of LeBoeuf, Lamb, Greene & MacRae LLP and Latham & Watkins LLP. Mr. Shaffer holds a B.S. in Foreign Service and a J.D. from Georgetown University. Mr. Shaffer became a NACD Board Leadership Fellow in 2020.
Novelette Murray has served as our Chief Human Resources Officer since October 2020. In this role, Ms. Murray leads all aspects of human resources and is responsible for aligning talent with the Company’s business strategy, including hiring, training, development, performance management, diversity and inclusion, and succession planning. Ms. Murray originally joined in the Company in 2010 as the Director of Human
 
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Resources. She was promoted multiple times during her tenure with the Company, serving as both Sr. Director of Human Resources and Vice President, HR Operations before becoming Chief Human Resources Officer. Prior to her employment with the Company, Ms. Murray served as Senior Human Resources Manager for the U.S. Concrete Pipe Division of Cemex, a global building materials company, from 2006 to 2010. Prior to that, Ms. Murray was the Director of Human Resources for Houston ENT, an otolaryngology physician group, from 2000 to 2006, and a Human Resources Associate at GE Healthcare, a manufacturer of medical imaging equipment, from 1995 to 2000. Ms. Murray received a B.A. in Organizational Communication with honors from Rollins College and a M.B.A. from University of Maryland University College.
 
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PROPOSALS REQUIRING YOUR VOTE
Proposal 2 — Ratification of Independent Registered Public Accounting Firm
Overview of Proposal 2
The Audit Committee has selected Deloitte & Touche LLP to serve as our Independent Auditor for fiscal 2022.
We are asking our stockholders to ratify the selection of Deloitte& Touche LLP as our Independent Auditor. Although ratification is not required by our bylaws or otherwise, we are submitting the selection of Deloitte & Touche LLP to our stockholders for ratification because we value our stockholders’ views on our Independent Auditor and as a matter of good corporate practice. If our stockholders fail to ratify the selection, the Audit Committee will review its future selection of our Independent Auditor. Even if this selection is ratified, pursuant to the Sarbanes-Oxley Act of 2002, the Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of our Independent Auditor and may determine to change the firm selected at such time and based on such factors as it determines to be appropriate.
Representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting to answer appropriate questions. They also will have the opportunity to make a statement if they desire to do so.
RECOMMENDATION OF THE BOARD
[MISSING IMAGE: tm223064d1-icon_tickmarkbw.jpg]
Your Board of Directors unanimously recommends a vote FOR the ratification of Deloitte & Touche LLP as our Independent Auditor for fiscal 2022.
Change of Independent Auditor
As previously reported on the Company’s Current Report on Form 8-K, dated December 27, 2021, the Audit Committee conducted a comprehensive, competitive process to determine our Independent Auditor for fiscal 2022. On December 20, 2021, the Audit Committee approved the engagement of Deloitte & Touche LLP as our Independent Auditor for fiscal 2022, replacing Ernst & Young LLP, our prior Independent Auditor.
Ernst & Young LLP’s audit reports on the Company’s consolidated financial statements for the fiscal years ended September 30, 2021 and September 30, 2020 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the Company’s fiscal years ended September 30, 2021 and September 30, 2020, there were (i) no disagreements between the Company and Ernst & Young LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, any of which, if not resolved to Ernst & Young LLP’s satisfaction, would have caused Ernst & Young LLP to make reference thereto in its reports, and (ii) no “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K.
During the Company’s fiscal years ended September 30, 2021 and September 30, 2020, neither the Company nor anyone on its behalf has consulted with Deloitte & Touche LLP regarding:
(a)
the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that Deloitte & Touche LLP concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue;
(b)
any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K; or
(c)
any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K.
Audit and Non-Audit Fees
The following table presents fees for professional audit services rendered by Ernst & Young LLP for the audit of the Company’s annual financial statements for the fiscal years ended September 30, 2021 and September 30, 2020, and for fees billed for other services rendered by Ernst & Young LLP during those periods.
 
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Fiscal 2021
Fiscal 2020
Audit Fees(1)
$ 1,171,178 $ 1,110,615
Audit-Related Fees(2)
$ 88,479 $ 83,590
Tax Fees(3)
$ 294,108 $ 297,815
All Other Fees
$ 0 $ 0
Total Fees
$ 1,553,765 $ 1,492,020
(1)
Audit fees consisted principally of work performed in connection with the audit of our consolidated financial statements and the review of our unaudited quarterly financial statements. This amount includes $61,367 in costs during fiscal 2021 and $61,515 in costs during fiscal 2020 related to the statutory audits of our foreign subsidiaries and other related services.
(2)
Audit-related fees consisted principally of fees incurred in connection with audits related to our employee benefit plans.
(3)
Tax fees consisted principally of tax return preparation, planning and compliance work.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor
Under its Charter, its policy and applicable law, the Audit Committee preapproves all audit and permissible non-audit services to be provided by our Independent Auditor, including audit services, audit-related services, tax services and other services. The Audit Committee has delegated authority to the Chair of the Audit Committee in some cases to preapprove the provision of services by our Independent Auditor, which preapprovals the Chair then communicates to the full Audit Committee. To avoid potential conflicts of interest, the law prohibits a publicly traded company from obtaining certain non-audit services from its Independent Auditor. We obtain these services from other service providers as needed.
Audit Committee Report
The Company’s management team is responsible for the Company’s financial statements, internal controls and financial reporting process. Our Independent Auditor is responsible for auditing the financial statements and for expressing an opinion as to whether those audited financial statements fairly present, in all material respects, the financial position, results of operations and cash flows of the Company in conformity with GAAP. The Audit Committee was established for the purpose of representing and assisting the Board in overseeing the Company’s accounting and financial reporting processes and audits of the Company’s annual financial statements, including the integrity of the Company’s financial statements, the Company’s compliance with legal and regulatory authority requirements, the Independent Auditor’s qualifications, independence, and performance. The members of the Audit Committee are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management or the Independent Auditor.
In this context, the Audit Committee has reviewed and discussed the audited financial statements with management. The Audit Committee has discussed with the Independent Auditor the matters required to be discussed with the Independent Auditor pursuant to the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has received the written disclosures and the letter from the Independent Auditor required by applicable requirements of the PCAOB regarding the Independent Auditor’s communications with the Audit Committee concerning independence and has discussed with the Independent Auditor its independence.
Based upon the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Company’s audited financial statements for fiscal 2021 be included in the Annual Report on Form 10-K for the year ended September 30, 2021 to be filed with the SEC. The Board of Directors approved including the Company’s audited financial statements for fiscal 2021 in the Annual Report on Form 10-K for the year ended September 30, 2021.
 
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The Audit Committee:
George H. Ellis, Chair
Patrick W. Gross
Beatriz V. Infante
The Audit Committee Report does not constitute soliciting material and shall not be deemed to be filed or incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically incorporate the Audit Committee Report by reference therein.
 
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PROPOSALS REQUIRING YOUR VOTE
Proposal 3 — Approval of an Advisory Resolution on Executive Compensation
Overview of Proposal 3
We are asking stockholders to approve an advisory resolution on the Company’s executive compensation as reported in this proxy statement. As described below in the “Compensation Discussion and Analysis” section of this proxy statement, the Compensation Committee’s goals in setting executive compensation are to support the attainment of our short-term and long-term financial and strategic objectives, reward executives for continuous growth in earnings and stockholder value and align executives’ interests with those of our stockholders. To achieve these goals, our executive compensation structure emphasizes performance-based compensation, including annual incentive compensation and stock-based awards with multi-year vesting schedules.
We urge stockholders to read the “Compensation Discussion and Analysis,” beginning on page 51 of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, appearing on page 65 through page 77, which provide detailed information on the compensation of our NEOs. The Board and the Compensation Committee believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our NEOs reflects and supports these compensation policies and procedures.
In accordance with Section 14A of the Exchange Act, and as a matter of good corporate governance, stockholders will be asked at the Annual Meeting to approve the following advisory resolution:
RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers described in the Compensation Discussion and Analysis and disclosed in the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for the Company’s 2022 Annual Meeting of Stockholders.”
This advisory resolution, commonly referred to as a “say on pay” resolution, is non-binding. Although non-binding, the Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program.
The Board has adopted a policy of providing for annual “say on pay” advisory votes. Unless the Board modifies its policy on the frequency of holding “say on pay” advisory votes, the next “say on pay” advisory vote will occur in 2023.
RECOMMENDATION OF THE BOARD
[MISSING IMAGE: tm223064d1-icon_tickmarkbw.jpg]
Your Board of Directors unanimously recommends a vote FOR the advisory resolution on executive compensation.
 
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PROPOSALS REQUIRING YOUR VOTE
Proposal 4 — Approval of an Amendment to the Company’s
Third Amended and Restated 2006 Omnibus Long-Term Incentive Plan
Overview of Proposal 4
At the Annual Meeting, stockholders will be presented with a proposal to approve an amendment to the LTIP (the “Amendment”) to increase the number of shares of common stock reserved for issuance thereunder from 19,100,000 to 20,300,000. This increase of 1,200,000 shares represents approximately 4% of the Company’s outstanding shares of common stock as of the Record Date.
On January 10, 2022, the Board unanimously approved the Amendment, subject to approval by the Company’s stockholders at the Annual Meeting. In order for the Amendment to take effect, it must be approved by the Company’s stockholders. If the Amendment is not approved by the Company’s stockholders, the LTIP as currently in effect as of the date hereof will continue to operate according to its terms.
We believe the Company’s future progress, growth and profitability depends in part on its ability to attract, motivate and retain high quality employees and directors and that the ability to provide equity compensation is critical to achieving this success. The Company would be at a severe competitive disadvantage if it cannot use equity to recruit, motivate and retain directors, officers and other employees. The use of equity as part of our compensation program is important because it fosters a pay-for-performance culture that is a key element of our overall compensation philosophy. We believe equity compensation provides additional motivation for directors and employees to create stockholder value because the value such individuals realize from their equity compensation is based on the Company’s stock price performance. Equity compensation also aligns the compensation interests of our directors and employees with the investment interests of our stockholders and promotes a focus on long-term value creation because our equity compensation awards are subject to vesting and/or performance criteria.
If the Amendment is not approved, we may not be able to appropriately incentivize our directors and employees through equity compensation, which may affect our ability to remain competitive, attract employees with an interest in creating long-term stockholder value, reward employees for building and sustaining stockholder value, and retain employees. Employee retention is particularly significant for fiscal 2022 as the job market remains competitive. To address this concern, we have granted equity compensation more deeply across our organization than we have in prior years. As of December 31, 2021, approximately 130 individuals participated in the LTIP, up from approximately 80 as of December 31, 2020. If the Amendment is approved, we can continue to reward key employees below the executive level and incentivize them to remain with the Company and continue to perform at a high level.
Furthermore, if the Amendment is not approved, we may be compelled to increase significantly the cash component of our employee and director compensation, which may not necessarily align compensation interests with the investment interests of our stockholders as well as alignment provided by equity-based compensation. Replacing equity awards with cash also would increase cash compensation expense and use cash that could be better utilized if reinvested in our business.
The following table sets forth certain information about the LTIP, as amended by the Amendment (the “Amended Plan”):
Number of new shares being authorized
1,200,000
Number of shares available for future awards as of the Record Date
994,605
Number of shares relating to outstanding time-based stock options as of the Record Date
1,770,362
Number of shares relating to outstanding performance-based stock options as of the Record Date
1,240,140
Number of shares relating to outstanding awards of time-based restricted stock and restricted stock units as of the Record Date
609,913
Number of shares relating to outstanding awards of performance-based restricted stock and restricted stock units as of the Record Date
444,196
 
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Maximum option term
10 years
Minimum exercise price (relative to the market value on date of grant)
100%
Weighted average remaining term of outstanding options as of the Record Date
6.4 years
Weighted average exercise price of outstanding options as of the Record Date
$10.88
Total number of shares available for future awards if this proposal is approved
2,194,605
On the Record Date, the closing price of a share of the Company’s common stock was $21.10.
The potential dilution from the proposed share increase is 4% as of the Record Date. If the proposed share increase is approved, the Company’s total potential dilution would increase from 15% as of the Record Date to 19%. The Compensation Committee has considered this potential dilution level in the context of competitive data from its peer group and believes that the resulting dilution levels would be within normal competitive ranges.
The Company manages its long-term dilution goal by limiting the number of shares subject to equity awards that it grants annually, commonly referred to as burn rate. Burn rate shows how rapidly a company is depleting its shares reserved for equity compensation. Burn rate is defined as the number of shares granted under the Company’s equity incentive plans divided by total common shares outstanding at the end of the year. Over the past three fiscal years, the Company’s annual burn rate has averaged 5.2%. The Compensation Committee believes that this burn rate has been within the range granted by its peer companies and is reasonable from a competitive standpoint.
The Company manages its equity compensation plans to minimize impacts to shareholder dilution, including by permitting participants to elect that the Company:

Withhold shares to satisfy withholding tax obligations on full-value awards;

Withhold shares to the satisfy exercise price and/or withholding tax obligations on option awards; and/or

Receive shares to satisfy exercise price obligations on option awards.
If we did not permit the above, we would have issued a total of 1,833,617 shares from our equity compensation plans in fiscal 2021 from the vesting of full-value awards and the exercise of stock options. These actions reduced the dilutive impact of our equity compensation plans by 527,807 shares, or 29%.
Our share repurchase programs have also contributed to our management of dilution. During fiscal 2021, we repurchased 1,591,963 shares for $31.1 million and, on December 6, 2021, our Board approved a new $20.0 million share repurchase program to expire on December 31, 2023 (the “New Repurchase Program”). The timing and actual number of shares repurchased under the New Repurchase Program will depend on a variety of factors, including price, general business and market conditions, and the existence of alternative investment opportunities.
In fiscal 2021, our share repurchases together with the shares withheld for exercise price and/or tax obligations and those shares received for exercise price obligations completely offset the net shares issued from our equity compensation plans, driving a (299,886) share decrease, or (1%), in our net shares outstanding. The following table summarizes our share activity during fiscal 2021:
Shares
Outstanding
Treasury
Stock
Net Shares
Outstanding
September 30, 2020
34,082,406 (547,508) 33,534,898
Stock Options Exercised
1,033,529
Full-Value Awards Vested
800,088
Shares Withheld for Exercise Price and/or Tax
Obligations
(445,195)
 
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Shares
Outstanding
Treasury
Stock
Net Shares
Outstanding
Shares Received for Exercise Price Obligations
(82,612)
Shares Repurchased
(1,591,963)
Other*
(13,733)
September 30, 2021
35,457,095 (2,222,083) 33,235,012
Change #
(299,886)
Change %
−1%
* Relates to a forfeiture of award prior to vesting due to employee termination.
The following table provides details regarding the number of equity awards granted annually under the LTIP for each of the past three fiscal years by type of award and includes separate disclosure regarding the performance-based awards granted and earned in each year for the past three fiscal years as well as our weighted average shares of common stock outstanding:
Share Element
2021
2020
2019
Time-Based Stock Options Granted
558,673 415,719 563,066
Time-Based Full-Value Awards Granted
190,945 330,493 325,128
Performance-Based Stock Options Granted
549,600 402,800 571,250
Performance-Based Stock Options Earned/Vested
909,500 16,106 224,530
Performance-Based Full-Value Awards Granted
139,600 193,600 287,600
Performance-Based Full-Value Awards Earned/Vested
483,054 73,518 235,807
Weighted-Average Shares of Common Stock Outstanding During the Fiscal Year
33,333,557 33,612,263 33,062,976
When considering the number of additional shares to add to the Amended Plan, in addition to the items mentioned above, the Compensation Committee also reviewed projected future share usage and projected future forfeitures. The projected future usage of shares for long-term incentive awards under the Amended Plan was reviewed under scenarios based on a variety of assumptions. Depending on assumptions, the 1,200,000 shares to be added to the LTIP by the Amendment, in combination with the remaining authorized shares and shares added back to the LTIP from forfeitures of awards previously granted, is expected to satisfy, assuming no significant acquisitions of other companies, the Company’s equity compensation needs for two years. The Compensation Committee is committed to effectively managing the number of shares reserved for issuance under the Amended Plan while minimizing stockholder dilution.
Changes in Amended Plan
The Amendment increases the number of shares of common stock reserved for issuance under the LTIP. No other changes are being proposed at this time.
Summary of Amended Plan
The following summary of the material terms of the LTIP, as amended by the Amendment, is qualified in its entirety by reference to the full text of the LTIP and the Amendment. The Amendment, which is the subject of this Proposal 4, is attached hereto as Appendix A to this Proxy Statement. The LTIP, as approved by our shareholders in 2020, is attached hereto as Appendix B to this Proxy Statement.
Purpose.   The Amended Plan is intended to enhance the Company’s ability to attract and retain highly qualified officers, directors, key employees, and other persons, and to motivate such officers, directors, key employees, and other persons to serve the Company and to expend maximum effort to improve the business results and earnings of the Company, by providing to such persons an opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company. To this end, the Amended
 
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Plan provides for the grant of stock options, stock appreciation rights, restricted stock, stock units, dividend equivalent rights and cash awards.
Administration.   The Amended Plan is administered by the Board, the Compensation Committee or such other committees as the Board may from time to time delegate. The Board or its designated committee has the authority to designate grantees, determine the type(s) of awards to be made to a grantee, determine the number of shares to be subject to an award, establish the terms and conditions of each award, prescribe the form of each award agreement and amend, modify or supplement the terms of each outstanding award, provided that no amendment, modification or supplement shall, without the consent of the grantee, impair the grantee’s rights under such award or amend or modify an award such that it would be treated as a repricing without approval of the Company’s stockholders.
Notwithstanding the foregoing, no amendment or modification may be made to an outstanding option or stock appreciation right (“SAR”) which reduces the exercise price of the award, either by lowering the exercise price or by canceling the outstanding option or SAR and granting either a replacement option or SAR with a lower exercise price, another award or a cash payment in lieu thereof without the approval of the stockholders of the Company, provided, that, appropriate adjustments may be made to outstanding options and SARs in connection with changes in the Company’s capitalization.
Eligibility.   Awards may be granted under the Amended Plan to employees, officers, directors, consultants, advisers and outside directors of the Company and its affiliates. As of the Record Date, approximately 130 individuals participated in the LTIP.
Shares Subject to the Plan.   If the Amendment is approved by the stockholders at the Annual Meeting, subject to adjustment for certain changes in the Company’s capitalization, the total number of shares of the Company’s common stock that may be issued under the Amended Plan will be 20,300,000. For this purpose, every share of common stock issued pursuant to an award granted after January 9, 2015 that is an option or SAR will count as one share and every share of common stock issued pursuant to an award granted after January 9, 2015 other than an option or SAR will count as 1.5 shares of common stock. The number of shares that may be issued as incentive stock options (“ISOs”) shall not exceed 19,100,000. Stock issued or to be issued under the Amended Plan shall be authorized but unissued shares; or, to the extent permitted by applicable law, issued shares that have been reacquired by the Company. If any shares covered by an award are not purchased or are forfeited, or if an award otherwise terminates without delivery of any stock subject thereto, then the number of shares of stock counted against the aggregate number of shares available under the Amended Plan with respect to such award shall, to the extent of any such forfeiture or termination, again be available for making awards under the Amended Plan; provided, however, that any shares of common stock that again become available for grant after January 9, 2015 will be added back on a one-for-one basis if such shares of common stock were subject to awards of options or SARs or added back as 1.5 shares of common stock for all shares granted as awards other than options or SARs. Notwithstanding the foregoing, the following shares shall not be available for future grant: (a) shares tendered or withheld in payment of the exercise price of an option, and (b) shares withheld by the Company or otherwise received by the Company to satisfy tax withholding obligations in connection with an award. In addition, all shares covered by a SAR (including shares subject to a stock-settled SAR that were issued upon the net settlement or net exercise of such SAR) shall be counted against the number of shares of common stock available for issuance under the Amended Plan. The Board shall have the right to substitute or assume awards in connection with mergers, reorganizations, separations and certain other transactions. The maximum number of shares of common stock subject to options or SARs granted under the Amended Plan to any one individual in any one calendar year may not exceed 1,000,000; the maximum number of shares of common stock subject to awards granted under the Amended Plan other than options and SARs to any one individual in any one calendar year may not exceed 700,000; the maximum amount that may be earned pursuant to a cash award under the Amended Plan by any one individual in any one calendar year may not exceed $3,000,000; the maximum amount that may be earned as a performance award or other cash award in respect of a performance period by any one individual may not exceed $5,000,000; and the aggregate dollar value of equity-based and cash compensation granted under the Amended Plan or otherwise during any one calendar year to any one non-employee director may not exceed $420,000.
Several types of stock grants can be made under the Amended Plan. A summary of these grants is set forth below.
 
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Stock Options.   Stock options granted under the Amended Plan can be either ISOs or nonqualified stock options. An option may constitute an ISO only (i) if the grantee of such option is an employee of the Company or any subsidiary of the Company; (ii) to the extent specifically provided in the related award agreement; and (iii) to the extent that the aggregate fair market value (determined at the time the option is granted) of the shares of stock with respect to which all ISOs held by such grantee become exercisable for the first time during any calendar year (under the Amended Plan and all other plans of the grantee’s employer and its affiliates) does not exceed $100,000. This limitation is applied by taking options into account in the order in which they were granted.
The exercise price of stock options is at least the fair market value on the date of grant; provided, however, that in the event a grantee is a 10 percent stockholder, the option price of an option that is intended to be an ISO may not be less than 110 percent of the fair market value on the date of grant. Options become exercisable at such times and under such conditions as are determined by the Board; provided, however, that the vesting of any option that is based on performance criteria and level of achievement versus such criteria will be subject to a performance period of not less than one (1) year, and the vesting of any option that is based solely upon continued employment and/or the passage of time may not vest in full over a period of less than one (1) year from the grant date, except that the administrator may provide for the satisfaction and/or lapse of all conditions under any such award in the event of the participant’s death or disability or in connection with a corporate transaction of the Company, and the administrator may provide that any such restriction or limitation will not apply in the case of an option that is issued in payment or settlement of compensation that has been earned by the participant or that qualifies as a substitute award under the Amended Plan. Notwithstanding the foregoing, the administrator may grant awards covering an aggregate of five percent (5%) or fewer of the total number of shares authorized under the Amended Plan without regard to such minimum vesting requirements. In no case will an individual holding an option receive dividend payments or dividend equivalents.
Each option terminates ten years from the date of grant, or as set forth in the Amended Plan or fixed by the Board; provided, however, that in the event that the grantee is a 10 percent stockholder, an option that is intended to be an ISO generally cannot be exercisable after five years from the date of grant. An option that is exercisable may be exercised by the grantee’s delivery to the Company of a written notice of exercise. Such notice must be accompanied by payment in full of the option price of the shares for which the option is being exercised plus the amount (if any) of federal and/or other taxes which the Company may, in its judgment, be required to withhold with respect to an award, or by “cashless exercise.” Each award agreement sets forth the extent to which the grantee has the right to exercise the option following termination of the grantee’s service.
SARs.   A SAR confers on the grantee, upon exercise thereof, the excess of (A) the fair market value of one share of stock on the date of exercise over (B) the grant price of the SAR as determined by the Board. The award agreement for a SAR specifies the grant price of the SAR, which must be at least the fair market value of a share of stock on the date of grant. SARs may be granted in conjunction with all or part of an option granted under the Amended Plan or at any subsequent time during the term of such option, in conjunction with all or part of any other award or without regard to any option or other award; provided that a SAR that is granted subsequent to the date of grant of a related option must have a grant price that is no less than the fair market value of one share of stock on the date of grant. The Board determines the time or times at which and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or times at which SARs cease to be or become exercisable following termination of service or upon other conditions, the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which stock will be delivered or deemed to be delivered to grantees, whether or not a SAR is granted in tandem or in combination with any other award, and any other terms and conditions of any SAR; provided, however, that the term of each SAR shall be no more than ten years, and the vesting of any SAR that is based on performance criteria and level of achievement versus such criteria will be subject to a performance period of not less than one (1) year, and the vesting of any SAR that is based solely upon continued employment and/or the passage of time may not vest in full over a period of less than one (1) year from the grant date, except that the administrator may provide for the satisfaction and/or lapse of all conditions under any such award in the event of the participant’s death or disability or in connection with a corporate transaction of the Company, and the administrator may provide that any such restriction or limitation will not apply in the case of a SAR that is issued in payment or settlement of compensation that has been earned by the participant or that qualifies as a
 
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substitute award under the Amended Plan. Notwithstanding the foregoing, the administrator may grant awards covering an aggregate of five percent (5%) or fewer of the total number of shares authorized under the Amended Plan without regard to such minimum vesting requirements. In no case will an individual holding a SAR receive dividend payments or dividend equivalents.
Restricted Stock and Restricted Stock Units.   Awards of restricted stock or restricted stock units may be made for no consideration. At the time a grant of restricted stock or restricted stock units is made, the Board may, in its sole discretion, establish a restricted period applicable to such restricted stock or restricted stock units. Each award of restricted stock or restricted stock units may be subject to a different restricted period. The Board may, in its sole discretion, at the time a grant of restricted stock or restricted stock units is made, prescribe restrictions in addition to or other than the expiration of the restricted period, including the satisfaction of corporate or individual performance objectives, which may be applicable to all or any portion of the restricted stock or restricted stock units. The grant, issuance, retention, vesting and/or settlement of shares of common stock under any such award that is based on performance criteria and level of achievement versus such criteria will be subject to a performance period of not less than one (1) year, and the grant, issuance, retention, vesting and/or settlement of shares of common stock under any restricted stock or restricted stock unit award that is based solely upon continued employment and/or the passage of time may not vest or be settled in full over a period of less than one (1) year from the grant date, except that the administrator may provide for the satisfaction and/or lapse of all conditions under any such award in the event of the participant’s death or disability or in connection with a corporate transaction of the Company, and the administrator may provide that any such restriction or limitation will not apply in the case of a restricted stock or stock unit award that is issued in payment or settlement of compensation that has been earned by the participant or that qualifies as a substitute award under the Amended Plan. Notwithstanding the foregoing, the administrator may grant awards covering an aggregate of five percent (5%) or fewer of the total number of shares authorized under the Amended Plan without regard to such minimum vesting requirements. Neither restricted stock nor restricted stock units may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the restricted period or prior to the satisfaction of any other restrictions prescribed by the Board.
Unless the Board otherwise provides, except as provided below, holders of restricted stock have the right to vote such stock and the right to receive any dividends declared or paid with respect to such stock provided that any such dividends will be subject to the same vesting restrictions as the underlying shares subject to the award. Dividends accrued with respect to the shares subject to any restricted stock award, whether subject to time-based and/or performance-based vesting criteria, will become payable no earlier than the date the applicable vesting criteria have been satisfied and the underlying restricted stock has become vested and/or been earned, as applicable. The Board may provide that any dividends paid on restricted stock be reinvested in shares of stock. All distributions, if any, received by a grantee with respect to restricted stock as a result of any stock split, stock dividend, combination of shares, or other similar transaction are subject to the restrictions applicable to the original grant. Holders of restricted stock units have no rights as stockholders of the Company. The Board may provide that the holder of such restricted stock units be entitled to receive, upon the Company’s payment of a cash dividend on its outstanding stock, a cash payment for each restricted stock unit held equal to the per share dividend paid on the stock provided that any such dividends will be subject to the same vesting restrictions as the underlying shares subject to the award. Dividends accrued with respect to the shares subject to any restricted stock unit award, whether subject to time-based and/or performance-based vesting criteria, will become payable no earlier than the date the applicable vesting criteria have been satisfied and the underlying restricted stock units have become vested and/or been earned, as applicable. The Board may also provide that such cash payment will be deemed reinvested in additional stock units at a price per unit equal to the fair market value of a share of stock on the date that such dividend is paid. Unless the Board otherwise provides, upon the termination of a grantee’s service, any restricted stock or restricted stock units held by such grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited.
Dividend Equivalent Rights.   A dividend equivalent right is an award entitling the recipient to receive credits based on cash distributions that would have been paid on the shares of stock specified in the dividend equivalent right (or other award to which it relates) if such shares had been issued to and held by the recipient. The terms and conditions of dividend equivalent rights shall be specified in the grant. Dividend equivalents credited to the holder of a dividend equivalent right may be paid currently or may be deemed to be reinvested
 
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in additional shares of stock, which may thereafter accrue additional equivalents. Any such reinvestment is made at fair market value on the date of reinvestment. Dividend equivalent rights may be settled in cash or stock or a combination thereof, in a single installment or installments, all determined in the sole discretion of the Board. A dividend equivalent right granted as a component of another award may provide that such dividend equivalent right shall be settled upon exercise, settlement, or payment of, or lapse of restrictions on, such other award, and that such dividend equivalent right will expire or be forfeited or annulled under the same conditions as such other award. A dividend equivalent right granted as a component of another award may also contain terms and conditions different from such other award. Notwithstanding anything in the Amended Plan to the contrary, in no event will dividend equivalent rights granted as a component of an award, whether subject to time-based and/or performance-based vesting criteria, be paid during the vesting period with respect to the unvested and/or unearned portion of any such awards. Specifically, dividends and dividend equivalents will not be paid on options or SARs. Dividend equivalent rights accrued on shares subject to any such awards will become payable no earlier than the date the vesting criteria have been satisfied and the underlying restricted stock or stock units have become vested and/or been earned, as applicable. Except as may otherwise be provided by the Board, a grantee’s rights in all dividend equivalent rights or interest equivalents shall automatically terminate upon the grantee’s termination of service for any reason.
Performance Goals.   The right of a grantee to exercise or receive a grant or settlement of any award, and the timing thereof, may be subject to such performance conditions as may be specified by the Board or the Compensation Committee. If and to the extent that the Compensation Committee determines that an award to be granted to a grantee who is designated by the Compensation Committee as likely to be a covered employee within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) for grants made prior to November 2, 2017 should qualify as “performance-based compensation” for purposes of Section 162(m) of the Code, the grant, exercise and/or settlement of such award shall be contingent upon achievement of pre-established performance goals. For purposes thereof, the performance goals may consist of one or more of the following business criteria for the Company, on a consolidated basis, and/or specified subsidiaries or business units of the Company (except with respect to the total stockholder return and earnings per share criteria), shall be used exclusively by the Compensation Committee in establishing performance goals for such awards: (1) total stockholder return; (2) such total stockholder return as compared to total return (on a comparable basis) of a publicly available index such as, but not limited to, the Standard & Poor’s 500 Stock Index; (3) net income; (4) pretax earnings; (5) contribution margin or earnings before interest expense, taxes, depreciation and amortization; (6) pretax operating earnings after interest expense and before bonuses, service fees, and extraordinary or special items; (7) operating margin; (8) earnings per share; (9) return on equity; (10) return on capital; (11) return on investment; (12) operating earnings; (13) working capital; (14) ratio of debt to stockholders’ equity; (15) revenue; (16) gross merchandise value; (17) launch of a new marketplace on an e-commerce platform or the launch of an existing marketplace on a new e-commerce software platform by a specific date; and (18) growth of a new marketplace or e-commerce product as objectively measured by a gross merchandise volume target, contribution margin, number of sellers and/or buyers or a combination thereof. Business criteria may be measured on an absolute basis or on a relative basis (i.e., performance relative to peer companies) and on a GAAP or non-GAAP basis. To the extent consistent with Section 162(m) of the Code with respect to grants made on or before November 2, 2017, the Compensation Committee may appropriately adjust any evaluation of performance under a business criteria (A) to eliminate the effects of charges for restructurings, discontinued operations, and all items of gain, loss or expense that are unusual or infrequently occurring or related to the acquisition or disposal of a segment of a business or related to a change in accounting principle all as determined in accordance with applicable accounting provisions, as well as the cumulative effect of accounting changes, in each case as determined in accordance with GAAP or identified in the Company’s financial statements or notes to the financial statements, (B) to exclude any of the following events that occurs during a performance period: (i) asset write-downs, (ii) litigation, claims, judgments or settlements, (iii) the effect of changes in tax law or other such laws or provisions affecting reported results, (iv) accruals for reorganization and restructuring programs (v) accruals of any amounts for payment under the Amended Plan or any other compensation arrangement maintained by the Company, (vi) foreign exchange gains and losses, and (vii) acquisitions or divestitures, and (C) for such other events as the Compensation Committee deems appropriate, if such adjustment is timely approved in connection with the establishment of such business criteria. Such performance goals shall be established not later than 90 days after the beginning of any performance period applicable to such awards, or in the case of grants made on or before November 2, 2017, at such other date as may be required or permitted for
 
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“performance-based compensation” under Section 162(m) of the Code. The maximum amount that may be earned under a cash award in any calendar year by any one grantee is $3,000,000 and the maximum amount that may be earned as a cash award in respect of a performance period by any one grantee is $5,000,000. If the Compensation Committee reasonably determines at any time during the applicable performance period that the performance goals underlying any award are unachievable, the Compensation Committee may cancel such award and the number of shares of stock counted against the aggregate number of shares available under the Amended Plan with respect to such award shall, to the extent of any such cancellation, again become available for making awards under the Amended Plan.
Corporate Transactions.   Upon the occurrence of (i) the dissolution or liquidation of the Company or a merger, consolidation, or reorganization of the Company with one or more other entities in which the Company is not the surviving entity, (ii) a sale of substantially all of the assets of the Company to another person or entity, or (iii) any transaction (including without limitation a merger or reorganization in which the Company is the surviving entity) which results in any person or entity (other than persons who are stockholders or affiliates immediately prior to the transaction) owning 50% or more of the combined voting power of all classes of stock of the Company, provision will be made in writing for the assumption or continuation of the options, SARs, stock units and restricted stock theretofore granted, or for the substitution for such options, SARs, stock units and restricted stock for new common stock options and stock appreciation rights and new common stock units and restricted stock relating to the stock of a successor entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number of shares (disregarding any consideration that is not common stock) and option and stock appreciation right exercise prices, in which event the Amended Plan, options, SARs, stock units and restricted stock theretofore granted will continue in the manner and under the terms so provided; provided, however, that if the successor entity refuses to assume or substitute the awards: (a) all outstanding shares of restricted stock shall be deemed to have vested, and all stock units shall be deemed to have vested and the shares of stock subject thereto shall be delivered, immediately prior to the occurrence of such corporate transaction; and (b) either of the following two actions shall be taken: (1) fifteen days prior to the scheduled consummation of a corporate transaction, all options and SARs outstanding under the Amended Plan shall become immediately exercisable and shall remain exercisable for a period of fifteen days; or (2) the Board may elect, in its sole discretion, to cancel any outstanding awards of options, restricted stock, stock units, and/or SARs and pay or deliver, or cause to be paid or delivered, to the holder thereof an amount in cash or securities having a value (as determined by the Board acting in good faith), in the case of restricted stock or restricted stock units, equal to the formula or fixed price per share paid to holders of shares of stock and, in the case of options or SARs, equal to the product of the number of shares of stock subject to the option or SAR (the “Award Shares”) multiplied by the amount, if any, by which (I) the formula or fixed price per share paid to holders of shares of stock pursuant to such transaction exceeds (II) the option price or SAR exercise price applicable to such Award Shares. With respect to the Company’s establishment of an exercise window, (i) any exercise of an option or SAR during such fifteen-day period will be conditioned upon the consummation of the event and will be effective only immediately before the consummation of the event, and (ii) upon consummation of any corporate transaction, the Amended Plan, and all outstanding but unexercised options and SARs shall terminate. In the event that awards are assumed or substituted by a successor entity and a participant experiences a termination without cause or for good reason within one year following the occurrence of the corporate transaction, all outstanding shares of restricted stock will be deemed to have vested, and all stock units will be deemed to have vested and the shares of common stock subject thereto will be delivered upon such termination and all options and SARs outstanding will become immediately exercisable and remain exercisable for a period of one year following such termination, or until the expiration date of such option or SAR, if earlier.
Compensation Clawback Policy.   Subject to the terms and conditions of the Amended Plan, the administrator may provide that any participant and/or any award, including any shares of common stock subject to an award, is subject to any recovery, recoupment, clawback and/or other forfeiture policy maintained by the Company from time to time.
Effectiveness and Term; Amendment and Termination
The Amended Plan will become effective upon approval of the Amendment by the Company’s stockholders at the Annual Meeting and will remain available for the grant of awards until January 14, 2030. The Board may, at any time and from time to time, amend, suspend, or terminate the Amended Plan as to any
 
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shares of stock as to which awards have not been made. An amendment shall be contingent on approval of the Company’s stockholders to the extent stated by the Board, required by applicable law or required by applicable stock exchange or market listing requirements. No amendment, suspension, or termination of the Amended Plan may, without the consent of the grantee, impair rights or obligations under any award theretofore awarded under the Amended Plan.
U.S. Federal Income Tax Consequences
The following is a summary of the material U.S. federal income tax consequences to the Company and to recipients of stock options and stock appreciation rights under the Amended Plan. The summary is based on the Code and the U.S. Treasury regulations promulgated under the Code in effect as of the date of this proxy statement, all of which are subject to change with retroactive effect. The summary is not intended to be a complete analysis or discussion of all potential tax consequences that may be important to recipients of awards under the Amended Plan. The laws governing the tax aspects of these awards are highly technical, and such laws are subject to change. Different tax rules may apply to specific participants and transactions under the Amended Plan, particularly in jurisdictions outside the United States.
Non-Qualified Stock Options and Stock Appreciation Rights.   The recipient will not have any income at the time a nonqualified stock option or a SAR is granted, nor will the Company be entitled to a deduction at that time. When a nonqualified option is exercised, the optionee generally will recognize ordinary income (whether the option price is paid in cash or by delivery or surrender of shares of common stock), in an amount equal to the excess of the fair market value of the shares to which the option exercise pertains over the option exercise price. When an SAR is exercised, the holder will recognize ordinary income equal to the sum of (a) the gross cash proceeds payable and (b) the fair market value on the exercise date of any shares received. The Company will be entitled to a corresponding deduction with respect to a nonqualified stock option or SAR equal to the ordinary income recognized by the optionee or holder of the SAR, provided that the deduction is not disallowed by Section 162(m) for grants made on or before November 2, 2017 or otherwise limited by the Code.
ISOs.   A recipient will not have any income at the time an ISO is granted or have regular taxable income at the time the ISO is exercised. However, the excess of the fair market value of the shares at the time of exercise over the option exercise price will be a preference item that could create an alternative minimum tax liability for the optionee. Such alternative minimum tax may be payable even though the optionee receives no cash upon the exercise of the ISO with which to pay such tax. If the optionee disposes of the shares acquired on exercise of an ISO after the later of two years after the grant of the ISO and one year after exercise of the ISO, the gain recognized by the optionee (i.e., the excess of the proceeds received over the option exercise price), if any, will be long-term capital gain eligible for favorable tax rates under the Code. Conversely, if the optionee disposes of the shares within two years of the grant of the ISO or within one year of exercise of the ISO, the disposition will generally be a “disqualifying disposition,” and the optionee will recognize ordinary income in the year of the disqualifying disposition equal to the lesser of (i) the excess of the fair market value of the stock on the date of exercise over the option exercise price and (ii) the excess of the amount received for the shares over the option exercise price. The balance of the gain or loss, if any, will be long-term or short-term capital gain, depending on how long the shares were held. The Company is not entitled to a deduction as the result of the grant or exercise of an ISO. However, if the optionee recognizes ordinary income as a result of a disqualifying disposition, the Company will be entitled to a corresponding deduction equal to the amount of ordinary income recognized by the optionee, provided that the deduction is not disallowed by Section 162(m) for grants made on or before November 2, 2017 or otherwise limited by the Code. We intend that awards granted under the Amended Plan comply with, or are otherwise exempt from, Section 409A of the Code.
Deductibility of Executive Compensation.   The Company generally will be entitled to a tax deduction in connection with an award under the Amended Plan in an amount equal to the ordinary income realized by a participant and at the time the participant recognizes such income (for example, the exercise of a non-statutory stock option). Prior to the enactment of the Tax Cuts and Jobs Act that was signed into law on December 22, 2017 (the “2017 Tax Act”), Section 162(m) limited a publicly traded company’s federal income tax deduction for compensation in excess of $1 million paid to certain current and former executive officers, including its CEO and the next three highest-paid executive officers. Further, prior to the 2017 Tax Act, compensation that satisfied conditions set forth under Section 162(m) to qualify as “performance-based
 
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compensation” was not subject to the $1 million deduction limitation, and the limitation did not apply to compensation paid to the Chief Financial Officer nor to former executive officers. The 2017 Tax Act eliminated the Section 162(m) performance-based compensation deduction exception beginning January 1, 2018, but the 2017 Tax Act provides a transition rule with respect to compensation which is provided pursuant to a written binding contract which was in effect on November 2, 2017 and which was not materially modified after that date. The Compensation Committee intends to administer any awards granted on or prior to November 2, 2017 which qualify as “performance-based compensation” under Section 162(m), as amended by the 2017 Tax Act, in accordance with the transition rules applicable to binding contracts in effect on November 2, 2017. With the elimination of the Section 162(m) exemption for performance-based compensation, we expect that we will be unable to deduct all compensation in excess of $1 million paid to our Chief Executive Officer, Chief Financial Officer and the next three highest-paid executive officers (and any other person who was or will be a Section 162(m) covered employee on or after January 1, 2017), other than previously granted awards that comply with the transition rules.
New Plan Benefits
The benefits that will be awarded or paid in the future under the Amended Plan are not currently determinable. Such awards are within the discretion of the Compensation Committee, and the Compensation Committee has not determined future awards or who might receive them. Information about awards granted in fiscal 2021 under the LTIP to the Company’s named executive officers can be found in the table under the heading “Grants of Plan-Based Awards for Fiscal 2021” on page 69 of this proxy statement.
Existing Plan Benefits
The following table sets forth information with respect to the number of shares underlying grants of all types of awards under the LTIP that have been granted through December 31, 2021 that count against the plan’s maximum share authorization. These share numbers do not take into account the effect of options that have been canceled or expired unexercised.
Name and Position
Total Number of Shares
Underlying Awards Grants
William P. Angrick, III
1,540,075
Chairman and Chief Executive Officer
Jorge A. Celaya
236,177
Chief Financial Officer
John P. Daunt
310,694
Chief Commercial Officer
Steven J. Weiskircher
264,162
Chief Technology Officer
Mark A. Shaffer
179,458
Chief Legal Officer and Corporate Secretary
All current executive officers as a group
2,530,566
All non-employee directors as a group
352,645
All employees as a group (excluding executive officers)
1,255,249
RECOMMENDATION OF THE BOARD
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Your Board of Directors unanimously recommends a vote FOR the Amendment to the LTIP.
 
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This section describes our compensation strategy, programs and practices for these executive officers during fiscal 2021:
Executive Officer
Principal Position
William P. Angrick, III
Chairman and Chief Executive Officer
Jorge A. Celaya
Chief Financial Officer
John P. Daunt
Chief Commercial Officer
Steven J. Weiskircher
Chief Technology Officer
Mark A. Shaffer
Chief Legal Officer and Corporate Secretary
In this proxy statement, we refer to these individuals as our named executive officers or NEOs.
Executive Summary
The Compensation Committee believes in a “pay-for-performance” approach that aligns executive compensation with shareholder interests. This means that a significant portion of an executive’s compensation should be at risk and may vary from “targeted” compensation based upon the level of achievement of specified performance objectives. Our pay for performance executive compensation philosophy and the elements of our executive compensation program for fiscal 2021 are summarized below:

The main objectives of our executive compensation program are to drive continuous stockholder return by motivating executives to achieve short-term and long-term financial and strategic objectives, to reward executives for continuous growth in earnings and stockholder value, and to align executives’ interests with those of our stockholders.

Our executive compensation program emphasizes performance-based compensation, including annual incentive compensation and stock-based awards, such as options and RSUs. For fiscal 2021, 50% of the stock-based awards granted to our NEOs had performance-based vesting criteria.

The Compensation Committee evaluates and sets the compensation levels of our NEOs. In setting compensation levels for NEOs, the Compensation Committee solicits the input and recommendations of our Chairman and CEO and engages an independent compensation consultant to conduct market reviews of our competitive market for executive talent.

83% of our Chairman and CEO’s targeted total direct compensation for fiscal 2021 was delivered through variable incentives for which payout is tied to achievement of pre-determined performance objectives.

On average, approximately 70% of the targeted total direct compensation for fiscal 2021 of the other NEOs was delivered through variable incentives with payout tied to achievement of pre-determined performance objectives.

We emphasize equity-based long-term incentives to ensure executives are focused on longer-term operating objectives and stock price performance in addition to shorter-term goals. The targeted value for long-term incentive awards for the NEOs other than Mr. Angrick is approximately 52% of the targeted value of their annual incentive awards and for Mr. Angrick is approximately 57% of the targeted value of such award.

To support the retention and incentive purposes of our executive compensation program, each of our NEOs received time-based and performance-based options and RSUs in fiscal 2021.
Our fiscal 2021 business and financial performance, combined with several important operational developments, significantly impacted the design of our 2021 executive compensation program and the timing of decisions related to such program. In fiscal 2021, we achieved some notable financial and operational milestones, including:
 
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Fiscal 2021 comparative year-over-year consolidated financial results reflect increased volumes across all our segments, as businesses and government agencies continued to embrace our e-commerce marketplace solutions, coupled with fewer economic restrictions related to the COVID-19 pandemic.

We reported fiscal 2021 gross merchandise volume (“GMV”) of $886.7 million, a 43% increase over fiscal 2020, which included periods significantly affected by economic restricted related to the COVID-19 pandemic.

Revenue for fiscal 2021 was $257.5 million, a 25% increase from $205.9 million in fiscal 2020. Gross profit for fiscal 2021 was $149.9 million, a 36% increase from $109.9 million in fiscal 2020. Our gross profit margin as a percentage of revenue increased from 53% in fiscal 2020 to 58% in fiscal 2021.

GAAP Net Income for fiscal 2021 was $50.9 million, which resulted in GAAP EPS of $1.45 based on a weighted average of 35.0 million diluted shares outstanding, compared to a loss of $(3.8) million and $(0.11), respectively, in fiscal 2020. The fiscal 2021 GAAP Net Income includes a net $24.6 million benefit, or a $0.70 benefit to GAAP EPS, from the impacts of the release of our valuation allowance on US deferred tax assets in the fourth quarter of fiscal 2021.

Non-GAAP Adjusted EBITDA, which excludes stock compensation expense, impairment and business realignment expenses, acquisition costs, fair value adjustments to acquisition earn-outs, and deferred revenue purchase accounting adjustments, and is used as a performance metric under our annual incentive compensation program, was $42.9 million, a $33.9 million increase from $9.0 million in fiscal 2020.

We are making several strategic investments to expand and scale the solutions we offer to large enterprises, small businesses, and government agencies across the world. For example, on November 1, 2021, we announced our acquisition of Bid4Assets, Inc., which broadens our online real estate solutions available to state and local government agencies. Additionally, we have added a new, direct to consumer online sales channel for retail surplus called AllSurplus Deals and opened a new distribution center in northeastern Pennsylvania, which increases our capacity to efficiently serve retail buyers and sellers in the northeastern United States.

We completed $31.1 million of share repurchases in fiscal 2021, including $15.0 million in the fourth quarter of fiscal 2021. On December 6, 2021, the Board authorized a new share repurchase program of up to $20.0 million of the Company’s common stock.

At the end of fiscal 2021, registered buyers totaled approximately 4,031,000 representing a 7% increase over the approximately 3,772,000 registered buyers at the end of fiscal 2020.

In fiscal 2021, auction participants increased to approximately 2,279,000, a 20% increase from the approximately 1,899,000 auction participants in fiscal 2020.

In fiscal 2021, completed transactions increased to approximately 703,000, a 27% increase from the approximately 553,000 completed transactions in fiscal 2020.
The following chart provides additional information on our fiscal 2021 financial milestones.
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For a reconciliation of adjusted EBITDA, see pages 36-37 of the Company’s Annual Report on Form 10-K for fiscal year ended September 30, 2021 filed with the SEC on December 9, 2021.
For fiscal 2021, we achieved consolidated, commercial adjusted EBITDA and gross profit levels that exceeded the maximum performance levels under our incentive programs, resulting in payouts to our NEOs as described in additional detail below.
[MISSING IMAGE: tm223064d1-bc_ceoneo4c.jpg]
[MISSING IMAGE: tm223064d1-bc_ceoneo19214c.jpg]
*
The average NEO target and realized amounts reflected in the above charts were calculated based on the compensation of Messrs. Celaya, Daunt, Weiskircher and Shaffer.
**
Realized long-term equity incentive pay includes only those options exercised in the applicable period.
Best Practices
Our approach to executive compensation incorporates these best practices:

The Compensation Committee receives objective advice from an independent compensation consultant, Radford, an Aon company (the “Compensation Consultant”).

Our Board has adopted a claw-back policy applicable to all cash incentive payments and performance-based equity awards granted to our executive officers.

No employee is entitled to any “single trigger” equity acceleration with a change in control.
 
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All named executive officers must own Company common stock equal to 150% of their annual base salaries (600% for the Chairman and CEO).

We do not provide excise tax gross-ups.
“Say-on-Pay” Advisory Vote on Executive Compensation
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We asked stockholders to vote on a “say on pay” advisory vote on our executive compensation at the 2021 Annual Meeting of Stockholders. Stockholders expressed substantial support for the compensation of our NEOs with approximately 99% of the votes cast in favor of the “say on pay” advisory vote. The Compensation Committee carefully evaluated the results of the 2021 advisory vote at its March 3, 2021 meeting. The Compensation Committee also considers many other factors in evaluating our executive compensation programs as discussed in this Compensation Discussion and Analysis, including the Compensation Committee’s assessment of total stockholder return, the interaction of our compensation programs with our corporate business objectives, evaluations of our programs by external consultants, and review of peer group and survey data, each of which is evaluated in the context of the Compensation Committee’s fiduciary duty to act as the directors determine to be in stockholders’ best interests. While each factor bore on the Compensation Committee’s decisions regarding executive compensation, the Compensation Committee did not change our executive compensation program and policies as a direct result of the 2021 “say on pay” advisory vote.
General Compensation Philosophy
The Company’s executive compensation program is designed to:

align executives’ interests with those of our stockholders;

support the attainment of our short-term and long-term financial, operational, and strategic objectives;

reward executives for continuous growth in earnings and stockholder value;

attract, retain and motivate key executives; and

encourage a long-term commitment to the Company.
 
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Compensation Dashboard*
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*
Percentages calculated based upon the average target total compensation of our NEOs for fiscal 2021.
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Factors Considered When Determining Compensation.   The Compensation Committee seeks to set executive compensation at competitive levels that it considers appropriate for a company of our size and stage of growth. Annually, the Compensation Committee determines and approves the total compensation level of each of our NEOs based on its evaluation of external market conditions and Company performance. The Compensation Committee also considers each executive’s level of experience, unique skills and abilities critical to the Company, and the executive’s tenure, position, responsibilities and performance with the Company. The Compensation Committee considers recommendations from the Chairman and CEO regarding levels for base salary, annual incentive awards and long-term incentive awards for NEOs. The Chairman and CEO annually provides to the Compensation Committee historical and prospective breakdowns of the total direct compensation components for each NEO.
Pay Mix.   Because our NEOs are in a position to directly influence our performance, a significant portion of their compensation is delivered in the form of an annual cash incentive award and a long-term incentive award. We rely on a mix of compensation components intended to reward short-term results (in the form of annual cash incentive awards) and motivate long-term performance (in the form of stock options and RSU grants that vest over several years). We do not have a specific allocation target between cash and equity compensation or between annual and long-term incentive compensation. Instead, we retain flexibility when determining the compensation mix to react to our evolving business environment and our specific hiring and retention requirements. In fiscal 2021, approximately 44% or more of the target total direct compensation for each of our NEOs, including approximately 54% of the target total direct compensation for the Chairman and CEO, was performance-based or tied directly to the performance of our stock (in the form of target annual cash incentive awards and performance-based stock options and RSU awards), consistent with our
 
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compensation philosophy to link executive compensation with stockholder returns and achievement of strategic business objectives.
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*
Percentages reflect the average compensation of Messrs. Celaya, Daunt, Weiskircher and Shaffer for fiscal 2021.
Role of Compensation Consultant.   The Compensation Committee has engaged on an annual basis a leading industry compensation consultant to assess the market competitiveness of our executive compensation program, so our program attracts and retains executive talent essential to achieve our business plans. For fiscal 2021, the Compensation Committee engaged the Compensation Consultant to assess the market competitiveness of our executive compensation program and to evaluate and set executive compensation levels. Prior to such engagement, the Compensation Committee determined that there was no conflict of interest between the Compensation Committee and the Compensation Consultant. In making this determination, the Compensation Committee considered these six factors regarding the Compensation Consultant:
(i)
the provision of other services to us by the Compensation Consultant;
(ii)
the fees paid by us to the Compensation Consultant, as a percentage of the total revenue of the Compensation Consultant;
(iii)
the policies and procedures of the Compensation Consultant designed to prevent conflicts of interest;
(iv)
any business or personal relationship between the Compensation Consultant and any member of the Compensation Committee;
(v)
any of our stock owned by the Compensation Consultant; and
(vi)
any business or personal relationship between the Compensation Consultant and any of our executive officers.
The scope of the Compensation Consultant’s work included a review of the Company’s executive compensation practices, assistance with development of an appropriate peer group, and presentation to the Compensation Committee of a report regarding executive compensation trends for similarly sized companies and the market competitiveness of our executive compensation program. The Compensation Consultant was engaged directly by the Compensation Committee and provided no services to the Company other than the executive and director compensation consulting services described above.
To assist the Compensation Committee in its market review for fiscal 2021, the Compensation Consultant prepared an analysis of the market competitiveness of the aggregate value of total direct compensation (base
 
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salary, annual cash bonus and long-term equity incentives) and the market competitiveness of each element of compensation for each NEO. The market review was based upon two different sources of compensation data — the Radford Global Technology Survey and publicly available market data from a selected peer group of companies. The Radford Global Technology Survey is a national survey that contains compensation data for high-technology sector companies. The survey data was used as a market reference to assess how the Company’s compensation practices for top executives compare to market practices and to confirm that the overall compensation mix is reasonably aligned with the marketplace.
The peer companies utilized in the review were updated for fiscal 2021 by the Compensation Consultant with input from the Compensation Committee and were approved by the Compensation Committee. The updated peer group was developed using several criteria (e.g., market capitalization, revenue and headcount) and consists of internet and direct marketing retail companies with an emphasis on platform and e-commerce companies. As part of the update for fiscal 2021, seven companies were removed from the fiscal 2020 peer group. Four companies were removed based on business model, two companies were removed due to acquisition and one company was removed based on industry. Ten new companies were added to the peer group. The peer group companies for the fiscal 2021 review were:

Agilysys

Porch Group

American Software

PubMatic

Benefitfocus

QAD

BigCommerce

Quotient Technology

CarParts.com

Ritchie Bros.

Cars.com

SPS Commerce

Channel Advisor

Stamps.com

DHI Group

Switch

LivePerson

The RealReal

PetMed Express

TrueCar
At the time of the fiscal 2021 review, we were at the 33rd percentile of the peer group for revenue, the 21st percentile for headcount and the 38th percentile for market capitalization.
The Compensation Committee considers market data in setting compensation levels but does not target or position NEO pay levels at a specific percentile level relative to the peer group. Instead, the Compensation Committee reviews total direct compensation and the mix of the compensation components relative to the peer group as one factor in determining if compensation is adequate to attract and retain qualified executives. The compensation decisions specific to each component of total direct compensation for the NEOs are discussed below.
Base Salary
Summary.   Base salaries for NEOs are designed to be competitive when compared with prevailing market rates. Base salaries are reviewed annually and at the time of promotion or other changes in responsibilities. In determining whether to award base salary increases, the Compensation Committee considers the Company’s overall business outlook, the Company’s budget, the executive’s individual performance, historical compensation, market compensation levels for comparable positions, internal pay equity and other factors, including any retention concerns. Under the employment agreements in place with our NEOs, the Compensation Committee may not reduce the salary of a NEO downward unless the NEO consents to a reduction.
 
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Fiscal 2021.   For fiscal 2021, the Compensation Committee approved base salaries in the following amounts for our NEOs:
Named Executive Officer
2021 Salary
2020 Salary
Percentage
Increase
William P. Angrick, III
$ 420,000 $ 420,000 0%
Jorge A. Celaya
$ 380,974 $ 373,504 2%
John P. Daunt
$ 349,959 $ 318,000 10%
Steven J. Weiskircher
$ 336,192 $ 329,600 2%
Mark A. Shaffer
$ 328,659 $ 322,215 2%
Mr. Angrick’s base salary was not increased for fiscal 2021. This base salary level is below the competitive median range of our peers to emphasize long-term equity incentives during a period in which the Company is focused on long-term reinvestment of its earnings. The base salary levels for Messrs. Celaya, Weiskircher and Shaffer increased by 2% for fiscal 2021 to provide base salary levels competitive with our peers. Mr. Daunt’s base salary was increased by 10% for fiscal 2021 due to market conditions and his performance during fiscal 2020.
Fiscal 2022.   For fiscal 2022, the Compensation Committee approved base salaries in the following amounts for our NEOs:
Named Executive Officer
2022 Salary
Percentage
Increase
William P. Angrick, III
$ 420,000 0%
Jorge A. Celaya
$ 392,403 3%
John P. Daunt
$ 362,208 3.5%
Steven J. Weiskircher
$ 348,295 3.6%
Mark A. Shaffer
$ 344,435 4.8%
The Compensation Committee chose to continue to emphasize long-term equity incentives for Mr. Angrick and as a result, his base salary will not change for fiscal 2022. The base salary levels for Messrs. Celaya, Daunt, Weiskircher and Shaffer increased by the percentages indicated above to remain competitive with the marketplace and to reward individual performance in fiscal 2021.
Annual Incentive Compensation
Summary.   Each of our NEOs are eligible to participate in the Liquidity Services, Inc. Annual Incentive Plan (the “AIP”). The AIP, which is administered by the Compensation Committee, provides our NEOs the opportunity to earn annual incentive compensation in the form of “at risk” performance-based cash bonuses. These cash bonuses are designed to motivate our NEOs to achieve certain corporate financial performance objectives (the “Performance Objectives”) consistent with the Company’s strategic plan. The more successful the Company’s performance (as measured against the Performance Objectives), the higher the potential payout under the AIP. The AIP was effective as of October 1, 2020. As such, fiscal 2021 is the first year in which our NEOs have participated in the AIP. However, prior to the adoption of the AIP, our NEOs were eligible to earn cash bonuses on similar terms. Payouts of such bonuses varied significantly from year to year based on the Company’s financial performance. For example, over the last five years, the payout to our Chairman and CEO has ranged from 36% to 225% of his base salary.
At the beginning of each fiscal year, the Compensation Committee sets the Performance Objectives as well as the range of possible payouts for each of our NEOs. As part of this process, the Compensation Committee selects the financial metrics against which the Company’s performance will be measured. These metrics typically include those that management uses to gauge the Company’s performance (e.g., adjusted EBITDA). The Compensation Committee also establishes a threshold, target and maximum achievement level for each metric. If the Company’s performance falls below the threshold level for a metric, there is no payout on that metric. If the threshold level is met, our NEOs are eligible for a payout on that metric. The amount of such payout is dependent upon where the Company’s actual performance falls when measured
 
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against the achievement levels for the metric. If the Company’s actual performance exceeds the threshold level on one metric but fails to do so on another, the payout to our NEOs would be limited accordingly as further described below.
The Compensation Committee endeavors to set appropriate threshold, target and maximum achievement levels. These levels are evaluated annually with input from the Compensation Consultant and are consistent with the Company’s business plan and strategic objectives. The Compensation Committee cannot specify the degree of difficulty required to meet target achievement levels but believes that achievement would require substantial and sustained performance by the Company.
As mentioned above, the range of possible payouts a NEO is eligible to receive is set by the Compensation Committee at the beginning of each fiscal year. The Compensation Committee sets a target bonus for each NEO, which the NEO will be eligible to receive if the Company’s performance equals the target achievement levels on each metric. The target bonus is set as a percentage of base salary based upon (1) the relative scope and responsibility of the NEO’s position and his respective impact on overall Company performance; and (2) comparative compensation data. If the Company’s performance exceeds the threshold achievement level but does not reach the target achievement level for a metric, the NEO will be eligible for a payout below target for that metric. If the Company’s performance exceeds the target achievement level for a metric, the NEO will be eligible for a payout above target for that metric subject to any applicable cap established by the Compensation Committee. Additional information on the range of possible payouts to our NEOs for fiscal 2021 is provided below. Notwithstanding the foregoing, our NEOs are not entitled to any payout under the AIP. The Compensation Committee retains the discretion to increase or decrease payouts based on the Company’s (or the NEO’s) performance during the fiscal year.
Fiscal 2021 Performance Objectives and Achievement Levels.   At its December 2020 meeting, the Compensation Committee established the Performance Objectives for fiscal 2021. The metrics chosen were consolidated gross profit and consolidated adjusted EBITDA with the consolidated adjusted EBITDA metric weighted more heavily (60%) than the consolidated gross profit metric (40%). The Compensation Committee selected these metrics because they are key metrics used by management to measure the Company’s performance.
The Compensation Committee set the following achievement levels:
Consolidated Gross Profit
Threshold
Achievement
Level
Target
Achievement
Level
Maximum
Achievement
Level
$115.0M
$130.0M
$150.0M
Consolidated Adjusted EBITDA
Threshold
Achievement
Level
Target
Achievement
Level
Maximum
Achievement
Level
$12.5M
$31.5M
$42.5M
The achievement levels for each of these metrics for fiscal 2021 represent a significant increase over those set for the same metrics for fiscal 2019 and fiscal 2020. In fiscal 2019, the target achievement level was $99.4 million for the gross profit metric and $(6.7) million for the adjusted EBITDA metric. For fiscal 2020, the target achievement level was $120.3 million for the gross profit metric and $2.0 million for the adjusted EBITDA metric. The Compensation Committee strives to set target at a level which requires considerable improvement to the Company’s financial performance year-over-year, further emphasizing our pay-for-performance approach to executive compensation.
As noted below under the heading “Fiscal 2021 Results and Payouts,” the Company’s financial performance in fiscal 2021 exceeded the maximum achievement levels described above and resulted in payouts that were capped at 150% of the target payout for both the gross profit metric and the adjusted EBITDA metric.
 
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Fiscal 2021 Target and Maximum Awards.   As described above, the amount ultimately paid out to each NEO depends on the Company’s actual performance as measured against the Performance Objectives. The below table shows the target and maximum awards for fiscal 2021:
Named Executive Officer
Fiscal 2021
Target Award as
Percentage of
Base Salary
Fiscal 2021
Annual
Incentive
Target
Fiscal 2021
Maximum Award as
Percentage of
Base Salary
Fiscal 2021
Annual
Incentive
Maximum
William P. Angrick, III
150% $ 630,000 225% $ 945,000
Jorge A. Celaya
80% $ 304,779 120% $ 457,169
John P. Daunt
70% $ 244,971 105% $ 367,457
Steven J. Weiskircher
50% $ 168,096 75% $ 252,144
Mark A. Shaffer
50% $ 164,330 75% $ 246,494
The target award as a percentage of base salary for Messrs. Angrick, Celaya, Weiskircher and Shaffer for fiscal 2021 remained the same as fiscal 2020. Mr. Daunt’s award target was increased from 65% to 70% of his base salary to better reflect his impact on overall Company performance and to align his compensation with market data.
Fiscal 2021 Results and Payouts.   At the end of fiscal 2021, our Chairman and CEO assessed the Company’s performance against the Performance Objectives and made a recommendation to the Compensation Committee regarding payouts to our NEOs. The Compensation Committee considered the recommendations, independently assessed the Company’s performance against the Performance Objectives and approved the payouts described below.
For fiscal 2021, the Company’s actual performance exceeded the maximum achievement level on both the consolidated adjusted EBITDA metric and the gross profit metric. As a result, the Compensation Committee approved payouts to our NEOs of 150% of target on each metric.
Fiscal 2021 results and related payments appear in the table below.
Name and Principal Position
Consolidated
Gross Profit
Consolidated
Adjusted
EBITDA
2021
Incentive
Target
2021
Actual
Payout
2021 Actual
Payout as a
% of Target
William P. Angrick, III
Chairman and Chief Executive Officer
150%
150%
$630,000
$945,000
150%
Jorge A. Celaya
Chief Financial Officer
150%
150%
$304,779
$457,169
150%
John P. Daunt
Chief Commercial Officer
150%
150%
$244,971
$367,457
150%
Steven J. Weiskircher
Chief Technology Officer
150%
150%
$168,096
$252,144
150%
Mark A. Shaffer
Chief Legal Officer and Corporate Secretary
150%
150%
$164,330
$246,494
150%
Fiscal 2022 Annual Incentive Compensation.   The Performance Objectives for our NEOs for fiscal 2022 are based on the same Performance Objectives chosen by the Compensation Committee for fiscal 2021 — consolidated gross profit and consolidated adjusted EBITDA. These metrics were chosen because they continue to be key metrics used by management to measure the Company’s performance. The weighting of the metrics for fiscal 2022 also remained the same as in fiscal 2021 — 40% for the consolidated gross profit metric and 60% for the consolidated adjusted EBITDA metric. Additionally, as in fiscal 2021, the Compensation Committee chose to cap payouts at 150% of target for fiscal 2022.
 
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At its December 2021 meeting, in addition to setting the Performance Objectives for fiscal 2022, the Compensation Committee reviewed the target and maximum awards for our NEOs and set the following for fiscal 2022:
Named Executive Officer
Fiscal 2022
Target Award as
Percentage of
Base Salary
Fiscal 2022
Annual
Incentive
Target
Fiscal 2022
Maximum Award as
Percentage of
Base Salary
Fiscal 2022
Annual
Incentive
Maximum
William P. Angrick, III
150% $ 630,000 225% $ 945,000
Jorge A. Celaya
80% $ 313,922 120% $ 470,884
John P. Daunt
70% $ 253,546 105% $ 380,318
Steven J. Weiskircher
50% $ 174,148 75% $ 261,221
Mark A. Shaffer
50% $ 172,218 75% $ 258,326
The target award percentages for fiscal 2022 remained the same as in fiscal 2021 for each of our NEOs.
Long-Term Incentive Compensation
Summary.   We grant long-term equity compensation to our NEOs to attract, retain and reward our executives and strengthen the mutuality of interests between our NEOs and the Company’s stockholders. The Compensation Committee annually determines whether to grant options or other equity-based incentives to executives. In making its determinations, the Compensation Committee considers factors such as market data, the executive’s performance and the Company’s performance in the last year and the results achieved by the executive, the executive’s base salary and the Compensation Committee’s view regarding the future potential of long-term contributions of the executive. Recommendations of the Chairman and CEO are also considered.
The Compensation Committee historically had granted our NEOs long-term incentive awards in the form of options. As of September 30, 2021, 94,956 outstanding and exercisable options were older than six years from their grant date. One reason the Company has traditionally granted options is because they contribute to our pay-for-performance philosophy because grantees only receive value from the options if there is an increase in the value of the Company’s shares following the date of grant. If our stock price declines, the options may expire before ever being exercised. Based on a stock price of $21.61, the closing price of our common stock on the last trading day of fiscal 2021, approximately 4.2% of issued equity is “underwater” (i.e., the exercise price for such options exceeds $21.61). The underwater options represent approximately 0.5% of the Company’s total issued and outstanding common stock as of September 30, 2021. Any options that expire unexercised are returned to the share pool under the LTIP.
The following chart depicts the portion of the Company’s equity overhang that is underwater and may be potentially returned to the share pool. The peer group used for comparison purposes in the below chart is the same peer group developed in consultation with the Compensation Consultant as part of its review of the Company’s executive compensation practices (i.e., Agilysys, American Software, Benefitfocus, BigCommerce, CarParts.com, Cars.com, Channel Advisor, DHI Group, LivePerson, PetMed Express, Porch Group, PubMatic, QAD, Quotient Technology, Ritchie Bros., SPS Commerce, Stamps.com, Switch, The RealReal and TrueCar).
 
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Equity Overhang(1)(2)
The Company’s FYE21 total equity overhang includes ~1.99M shares available for grant as of 9/30/2021
[MISSING IMAGE: tm223064d1-bc_liquid4clr.jpg]
(1)
Total options and unvested restricted stock outstanding divided by total common shares issued and outstanding
(2)
Total options and unvested restricted stock outstanding plus shares available for future grant divided by total common shares issued and outstanding
As in fiscal 2020, our long-term incentive compensation program for fiscal 2021 provided grants of options and RSUs under the LTIP.
The Compensation Committee has historically granted long-term incentive compensation for each fiscal year after financial results are available for the prior fiscal year at a regularly scheduled meeting. As the Compensation Committee’s meeting schedule is established before the start of each fiscal year, the proximity of any grants to earnings announcements or other market events is coincidental. For annual awards, the Compensation Committee’s policy is to grant option and RSU awards on the date it approves them. The option exercise price is determined under the terms of the LTIP (typically, the closing price on the date of grant) and cannot be less than the fair market value of our common stock as of that date. Besides annual option awards, our NEOs may receive options with the commencement of employment or upon promotion. In these cases, the exercise price is typically the closing price of our common stock on the date the Compensation Committee approves the award.
Fiscal 2021 Long-Term Equity Compensation.   For fiscal 2021, the Compensation Committee chose to grant a mix of option and RSU awards to each of our NEOs. Each NEO received 70% of his equity compensation in the form of options and 30% in the form of RSUs. Half of the granted options and RSUs have time-based vesting criteria while the other half have performance-based vesting criteria. The time-based options and RSUs vest over a four-year period with 25% vesting on each of January 1, 2022. January 1, 2023, January 1, 2024 and January 1, 2025. The performance-based options and RSUs vest based on the Company’s achievement of certain stock price appreciation milestones over a four-year period. Beginning on January 1, 2022 and on each April 1, July 1, October 1 and January 1 through January 1, 2025 (each, a “Measurement Date”), the Company’s stock price will be measured based on the average closing stock price over the 20 trading days preceding each Measurement Date. If the measured average closing stock price exceeds a stock price appreciation milestone, a set percentage of the award will vest. The following table explains the stock price appreciation milestones and vesting:
 
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Stock Price Appreciation
Grant Date Share Price of $9.46(1)
Stock Price Appreciation
Milestone
Percentage of Award
Vesting on Achievement of
Stock Price Appreciation
Milestone
Cumulative Percentage of
Award Vested
$10.00
15% 15%
$12.00
25% 40%
$14.00
25% 65%
$16.00
35% 100%
(1)
$9.46 was the closing price on December 1, 2020, the grant date for fiscal 2021 equity compensation.
The long-term equity compensation awards for fiscal 2021 were approved by the Compensation Committee at its December 1, 2020 meeting. In determining the award for each of our NEOs, the Compensation Committee considered the award granted to each NEO in fiscal 2020, each NEO’s job responsibilities, the awards granted to similarly situated executives at peer group companies, each NEO’s experience and individual performance and recommendations of the Chairman and CEO.
The target value of each NEO’s equity compensation for fiscal 2021 as a percentage of base salary is as shown in the table below.
Named Executive Officer
Target Value
of Annual Award
as a Percentage of
Base Salary
William P. Angrick, III
336%
Jorge A. Celaya
160%
John P. Daunt
256%
Steven J. Weiskircher
159%
Mark A. Shaffer
143%
The following award types were granted to our NEOs in fiscal 2021:
Award Type
Vesting Schedule
Performance Goals
Time-Based Options
12/48th on 1/1/2022 and 1/48th monthly thereafter for 36 months
N/A
Time-Based RSUs
25% on 1/1/2022 and 25% on each of 1/1/2023, 1/1/2024 and 1/1/2025
N/A
Performance-Based Options
Vesting from 1/1/2022 through 1/1/2025
Based on the average stock price over the 20 trading days preceding each January 1st, April 1st, July 1st, and October 1st
Performance-Based RSUs
Vesting from 1/1/2022 through 1/1/2025
Based on the average stock price over the 20 trading days preceding each January 1st, April 1st, July 1st, and October 1st
The number of options and RSUs granted to our NEOs in fiscal 2021 is included in the “Grants of Plan Based Awards for Fiscal 2021” table.
Fiscal 2022 Long-Term Equity Compensation.   In December 2021, the Compensation Committee determined to grant our NEOs a mix of options and RSUs for fiscal 2022. For each NEO, 70% of his equity compensation for fiscal 2022 will be RSUs and 30% will be options. Half of the granted options and RSUs have time-based vesting criteria while the other half have performance-based vesting criteria. The time-based options and RSUs vest over a four-year period with 25% vesting on each of January 1, 2023, January 1, 2024,
 
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January 1, 2025 and January 1, 2026. The performance-based options and RSUs vest based on the Company’s achievement of certain stock price appreciation milestones over a four-year period.
Other Compensation and Benefit Programs
Our NEOs are eligible to participate in benefit plans available to substantially all of our employees, including the Liquidity Services, Inc. 401(k) Profit Sharing and Trust Plan (the “401(k) Plan”), medical insurance, dental insurance, life insurance and disability insurance programs. We do not provide our NEOs with any additional benefits or perquisites not available to all other employees.
Employment Agreements
We have entered into employment agreements with each of our NEOs that provide for, among other things, specified payments in the event of termination of employment under certain circumstances. The terms of these agreements are described under “Employment Agreements” below. The Compensation Committee believes it is important to provide our executives with some measure of financial security if their employment with the Company is terminated without cause or in connection with certain unforeseen circumstances. The Compensation Committee believes that these arrangements encourage an executive to comply with post-termination restrictive non-competition covenants and to cooperate with the Company both before and after the executive’s employment is terminated. The Compensation Committee believes these arrangements are reasonable and that it is beneficial to have agreements in place that specify the exact terms and benefits an executive receives if the Company elects to terminate such executive’s employment. Such agreements encourage executives to make sound decisions in the interest of our long-term performance, regardless of personal employment risk.
Stock Ownership and Anti-Hedging Requirements
In fiscal 2014, the Board adopted an Executive Stock Ownership Policy obligating NEOs to hold a number of shares of our common stock as shown in the below table.
Executive
Ownership Requirement as a
Percentage of Base Salary
CEO 600%
Other NEOs
150%
Each NEO has five years after such NEO’s date of hire or designation as a NEO to satisfy this requirement. Each of our NEOs has satisfied or is on track to satisfy the stock ownership requirement within the applicable timeframe.
Pursuant to the Executive Stock Ownership Policy, a NEO may not purchase any financial instrument or enter into any transaction that hedges, pledges, or offsets any decrease in the market value of our common stock (including, but not limited to, prepaid variable forward contracts, equity swaps, collars, or exchange funds) except with the advance approval of the Board. On September 11, 2020, the Board approved in advance Mr. Angrick’s pledge of 1,400,000 shares of common stock. This approval was reviewed and extended on December 6, 2021 until such date as the Board revokes its approval. In reviewing and extending this approval, the Board took note of certain facts and circumstances that helped moderate risk to the Company from the pledge, including: (i) shares pledged by Mr. Angrick would be derived from shares purchased by Mr. Angrick for investment purposes as compared to shares received by Mr. Angrick as executive compensation; (ii) the pledge having a 50% loan-to-value ratio and only requiring funding for the difference between 50% of the original share value at the time of pledge and the then current price; (iii) the limited size of the pledge in reference to Mr. Angrick’s overall holdings; and (iv) Mr. Angrick’s lack of reliance on the pledged shares for compliance with the Executive Stock Ownership Policy. No other NEO has requested or been granted approval to enter into such a transaction.
A copy of the Executive Stock Ownership Policy is available on the Company’s website at https://investors.liquidityservices.com/corporate-governance.
 
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Claw-Back Policy
If the Company’s financial statements are restated due to material non-compliance with any financial reporting requirement under applicable securities laws, the Company’s claw-back policy states that bonus and other incentive awards, as well as any performance-based equity awards, are subject to forfeiture and/or recoupment if such awards would have been lower had they been determined or calculated based on the restated results. A copy of the claw-back policy is available on the Company’s website at https://investors.liquidityservices.com/corporate-governance.
Deductibility of Executive Compensation
As one of the factors in the review of compensation matters, the Compensation Committee considers the anticipated tax impact on the Company. The deductibility of some types of compensation for named executive officers depends upon the timing of a named executive officer’s vesting or exercise of previously granted rights. Prior to the 2017 Tax Act, compensation that satisfied conditions set forth under Section 162(m) of the Code to qualify as “performance-based compensation” was not subject to a $1 million limit on deductibility, and the limit did not apply to compensation paid to a company’s Chief Financial Officer. The 2017 Tax Act eliminates the performance-based compensation exception and applies the limit to Chief Financial Officers and certain former executive officers. However, it provides a transition rule with respect to remuneration provided under a written contract which was in effect on November 2, 2017 and which was not materially modified after that date. As a result of these changes, we expect that we will be unable to deduct all compensation in excess of $1 million paid to our Chief Executive Officer, Chief Financial Officer and other NEOs covered by the 2017 Tax Act, other than previously granted awards that comply with the transition rules. We continue to monitor the application of Section 162(m) and the associated Treasury regulations on an ongoing basis and the advisability of qualifying executive compensation for deductibility. Notwithstanding the repeal of the exemption for “performance-based compensation,” the Compensation Committee intends to maintain its commitment to structuring the Company’s executive compensation programs in a manner designed to align pay with performance.
Summary Compensation Table
The following table summarizes the compensation of our NEOs, which includes our principal executive officer, our principal financial officer and our three other most highly compensated executive officers serving as of September 30, 2021.
Name and Principal Position
Year
Salary(1)
Bonus
Stock
Awards(2)
Option
Awards(2)
Non-Equity
Incentive Plan
Compensation(3)
All Other
Compensation(4)
Total
William P. Angrick, III Chairman and Chief Executive Officer
2021
420,000 397,212 1,013,376 945,000 5,822 2,781,410
2020
420,000 614,609 739,525 708,101 10,275 2,492,510
2019
420,000 181,650 662,719 913,944 107,737 2,286,050
Jorge A. Celaya
Chief Financial Officer
2021
380,974 166,762 442,602 457,169 4,982 1,452,489
2020
373,504 254,495 292,761 335,846 7,258 1,263,864
2019
366,180 61,950 192,928 424,975 13,610 1,059,643
John P. Daunt
Chief Commercial Officer
2021
349,959 453,998 492,048 367,457 4,982 1,668,444
2020
318,000 183,147 211,167 232,325 3,903 948,542
2019
271,798 202,275 224,743 170,105 10,569 879,490
Steven J. Weiskircher
Chief Technology Officer
2021
336,192 145,812 387,930 252,144 7,368 1,129,446
2020
329,600 153,933