Important notice regarding the availability of Proxy materials for the meeting to be held virtually on June 3, 2024 at 10:00 a.m., Eastern Daylight Time at www.virtualshareholdermeeting.com/VRNS2024.

This Notice of the 2024 Annual Meeting of Shareholders of Varonis Systems Inc. (“we”, “us”, “Varonis”, or the “Company”) and the accompanying Proxy Statement are being distributed or made available, as the case may be, on or about April 19, 2024, and the Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 are available at www.proxyvote.com.

In 2023, Varonis began its transition to a SaaS delivery model, which showed growing momentum throughout the year due to strong demand from both new and existing customers. We continued to innovate to provide customers with additional automation and coverage to better protect their data wherever it lives. We finished the year with a number of key highlights including:

This Proxy Statement is being furnished to the shareholders of Varonis Systems, Inc., a Delaware corporation, in connection with the solicitation of proxies by our Board of Directors for use at the 2024 Annual Meeting of Shareholders to be held at the date and place detailed below. This summary highlights information about the Company and certain information contained elsewhere in this Proxy Statement. You should read the entire Proxy Statement carefully before voting.

You are being asked to vote on the following three nominees for directors to serve in Class I, with a term expiring at the 2027 Annual Meeting of Shareholders. Information about each director’s experiences, qualifications, attributes and skills can be found in the section below titled “Proposal No. 1: Election of Directors”.

Our Board takes a holistic approach to building its composition with directors who collectively add significant value to the Company’s strategic decisions and who enable the Board as a whole to provide oversight of management and accountability to our shareholders. The Board and the Nominating and Corporate Governance Committee believe the skills, qualities, attributes, experience and diversity of backgrounds of our directors provide us with a diverse range of perspectives to effectively address our evolving needs and represent the best interests of our shareholders.

The Nominating and Corporate Governance Committee and the Board seek candidates with a broad diversity of knowledge, experience and demonstrated expertise in areas of importance to our Company. In addition, although the Company has no formal policy with respect to the consideration of traditional diversity factors such as race and gender in the nominating process, the Company is disclosing its Board Diversity Matrix in compliance with Nasdaq Rule 5606(a) – as well as certain additional diversity categories listed below the matrix – to reflect the diverse attributes that the Company values on its Board.

Pursuant to our Amended and Restated Certificate of Incorporation, the Board of Directors is divided into three classes. We refer to these classes as Class I, Class II and Class III, with members of each class holding office for staggered three-year terms. The terms of our directors will expire upon the election and qualification of successor directors (which may be incumbent directors) as follows: for Class I directors, at the Annual Meeting; for Class II directors, at the 2025 Annual Meeting of Shareholders; and for Class III directors, at the 2026 Annual Meeting of Shareholders.

The Board of Directors presently has 11 members. As stated above, the term of each of the three Class I directors expires at the Annual Meeting. If elected at the Annual Meeting, each of the director nominees will serve until the 2027 Annual Meeting of Shareholders and until a successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal.

Directors are elected by a plurality of the votes cast by the holders of shares entitled to vote on the election of directors. Accordingly, the three nominees receiving the highest number of affirmative “for” votes will be elected. Each person nominated for election has consented to being named in this Proxy Statement and to serve if elected. The nominees are not being nominated pursuant to any arrangement or understanding with any person.

Shares represented by executed proxies will be voted, if authority to do so is not withheld, “for” the election of the nominees named below. If any nominee becomes unavailable for election as a result of any presently unforeseen reason, the persons named as proxies will have the right to use their discretion to vote shares pursuant to such proxy for a substitute. Our Board of Directors has no reason to believe that any substitute nominee or nominees will be required, and all of the nominees have indicated that they will be willing and able to serve as directors.

The following is a brief biography of each nominee and each director whose term will continue after the Annual Meeting.

Pursuant to Section 14A of the Exchange Act, every six years, shareholders are entitled to indicate, on a non-binding basis, their preference as to how frequently they would like to cast a non-binding vote to approve the compensation of our named executive officers. Shareholders may indicate whether they would prefer such vote occur every one, two or three years or abstain from voting. While the Board intends to consider carefully the results of this vote, the vote is advisory in nature and is not binding on the Company or the Board.

At the Company’s 2018 annual meetings of shareholders, our shareholders indicated their preference to hold a non-binding vote to approve the compensation of our named executive officers each year, and since 2018, the Board of Directors has annually submitted to a vote of the shareholders such non-binding proposal to approve the compensation of our named executive officers. The Board of Directors believes that a non-binding vote on executive compensation every year is appropriate for the Company and its shareholders based on a number of considerations, including the views previously expressed by our shareholders. It is expected that the next non-binding vote on the frequency of future votes on executive compensation will be held at the Company’s 2030 Annual Meeting of Shareholders.

The affirmative vote of the holders of shares representing a majority of the voting power of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting will be required to approve this Proposal No. 2.

The Company is requesting that shareholders vote, on a non-binding basis, to approve the compensation of our named executive officers as disclosed in accordance with the rules and regulations of the SEC in the “Compensation Discussion and Analysis” section and the compensation tables and accompanying narrative discussion in the “Executive Compensation” section of this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on our named executive officers’ compensation as a whole.

Our executive compensation scheme is designed to motivate and reward exceptional performance in a straightforward and effective way, while also recognizing the size, scope, and notable achievements of our business. We believe that the compensation of our named executive officers reflects the Company’s performance in a challenging macro-economic environment measured against challenging performance goals and that the information we have provided in the “Executive Compensation” section of this Proxy Statement and, in particular, the information discussed in the section titled “Compensation Discussion and Analysis,” demonstrates that our executive compensation program has been designed appropriately and is working to ensure management’s interests are aligned with our shareholders’ interests to support long-term value creation.

This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. In accordance with the results of the vote we conducted at the 2018 Annual Meeting of Shareholders on the frequency of say-on-pay votes, we present a say-on-pay vote every year.

The say-on-pay vote is advisory and therefore is not binding on us, our Compensation Committee or our Board of Directors. The say-on-pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which our Compensation Committee will be able to consider when determining executive compensation going forward. Our Board of Directors and our Compensation Committee value the opinions of our shareholders. To the extent there is any significant vote against the compensation of our named executive officers, as disclosed in this Proxy Statement, we will endeavor to communicate with shareholders to better understand the concerns that influenced the vote and consider those concerns and our Compensation Committee will evaluate whether any actions are necessary to address those concerns.

We encourage shareholders to review the executive compensation disclosure in the “Compensation Discussion and Analysis” section and the compensation tables and accompanying narrative discussion in the “Executive Compensation” section of this Proxy Statement for the details of how our executive compensation policies and procedures operate and are designed to achieve the Company’s compensation objectives.

The affirmative vote of the holders of shares representing a majority of the voting power of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting will be required to approve this Proposal No. 3. We ask our shareholders to vote in favor of the following resolution at the Annual Meeting:

“RESOLVED, that the compensation paid to the named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the ‘Compensation Discussion and Analysis’ and the compensation tables and related narrative discussion under ‘Executive Compensation’ is hereby approved.”

The Audit Committee is responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company’s financial statements. The Audit Committee has selected E&Y as our independent registered public accounting firm for the fiscal year ending December 31, 2024. E&Y has audited our financial statements since the fiscal year ended December 31, 2007. Representatives of E&Y are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

Although shareholder ratification is not required by our bylaws or otherwise, the Board of Directors is submitting the selection of E&Y to our shareholders for ratification because we value our shareholders’ views on the Company’s independent registered public accounting firm. If our shareholders do not ratify the selection, it will be considered notice to the Board of Directors and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders.

As part of the evaluation of its independent registered public accounting firm, the Audit Committee periodically considers whether there should be a regular rotation of the independent registered public accounting firm. In addition, in connection with the mandated rotation of the independent registered public accounting firm’s lead audit partner, the Audit Committee and the Audit Committee Chairperson are directly involved in the selection of E&Y’s lead audit partner. The Audit Committee and the Board of Directors believe that the continued retention of E&Y to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and our shareholders.

The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2023 and December 31, 2022 by E&Y, our independent registered public accounting firm.

All fees described above were pre-approved by the Audit Committee in accordance with the requirements of Regulation S-X under the Exchange Act, as described below.

Our Audit Committee has established a policy for the pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services, all of which are permitted to be provided by an independent registered public accounting firm under applicable securities laws.

Before it may be engaged for the fiscal year’s audit, the independent registered public accounting firm submits to the Audit Committee for approval a description of services it expects to render during that year.

The Audit Committee pre-approves particular services or categories of services on a case-by-case basis. In assessing whether to approve the use of our independent registered public accounting firm for permitted non-audit services, our Audit Committee tries to minimize relationships that could appear to impair the objectivity of our independent registered public accounting firm. The fees are budgeted, and the Audit Committee requires the independent registered public accounting firm and management to report actual fees versus budgeted fees periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the Audit Committee must pre-approve the services before engaging the independent registered public accounting firm for such services.

The affirmative vote of the holders of shares representing a majority of the voting power of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting will be required to ratify the selection of E&Y.

We are asking shareholders to approve the Amended and Restated Varonis Systems, Inc. 2023 Omnibus Equity Incentive Plan (the “2023 Plan” and, as restated, the “Restated 2023 Plan”) to increase the number of shares of Company common stock available for issuance under the 2023 Plan by 4,400,000. The Restated 2023 Plan was adopted by our Board on April 18, 2024, subject to approval by our shareholders at the Annual Meeting. If approved by the Company’s shareholders the Restated 2023 Plan will become effective on June 3, 2024 (the “Effective Date”).

After the proposed increase, up to a total of 6,796,671 shares will be available for new equity award grants under the Restated 2023 Plan after June 3, 2024. Awards granted between April 3, 2024 and the Effective Date are expected to be minimal. However, for the avoidance of doubt, if our shareholders approve the Restated 2023 Plan, grants made from the 2023 Plan between April 3, 2024 and the Effective Date will be deducted from the shares already available under the Restated 2023 Plan.

Other than the increase in the number of shares of Common Stock reserved for issuance described above, we are not proposing to make any other material changes to the 2023 Plan. The Restated 2023 Plan will continue to provide incentive compensation through the grant of incentive stock options, non-qualified stock options, restricted shares, restricted stock units, performance shares, stock appreciation rights and other stock-based and cash awards.

As of April 3, 2024, 2,396,671 shares of Common Stock remained available for future grants of awards under the 2023 Plan. The closing price of a share of Common Stock on the New York Stock Exchange on April 3, 2024 was $46.47.

We believe the ability to grant awards under the Restated 2023 Plan is necessary to enable us to attract, motivate and retain directors and key employees, and to provide incentives for such individuals through Common Stock ownership and other rights that promote and recognize the financial success and growth of our Company.

Based upon recent equity award requirements, we believe that the proposed increase of 4,400,000 shares of Common Stock to be reserved for issuance under the Restated 2023 Plan will be sufficient for equity awards for at least one year. However, the number of shares of Common Stock required for future grants is not currently known and is dependent upon several factors that cannot be predicted, including but not limited to the price of the Company’s Common Stock on future grant dates. See “Summary of the 2023 Plan-Key Equity Plan Data” for more details.

If shareholders do not approve the Restated 2023 Plan, the 2023 Plan will continue in its current form, such that the pool of shares of Common Stock available thereunder will become depleted and be insufficient for equity awards made following our annual grants in 2024. As a result, in future years, we may not be able to continue to offer equity packages to our current employees and new employees, and thus may be less competitive than other companies that offer equity. We believe that this could impede our plans for growth and impair our ability to operate our business. In addition, if we are unable to grant competitive equity awards, we may be required to offer additional cash-based incentives to replace equity as a means of competing for talent, which we believe could adversely affect our reported earnings and financial results. We also believe that equity grants are a more effective compensation vehicle than cash awards because they better align the financial interests of employees with the interests of shareholders, and promote actions that result in long-term value creation.

If this Proposal No. 5 receives the requisite shareholder approval, the Company intends to register the additional shares of Common Stock available for issuance under the Restated 2023 Plan on a registration statement on Form S-8 under the Securities Act as soon as reasonably practicable following receipt of approval.

In the same form as the 2023 Plan, the Restated 2023 Plan incorporates certain governance best practices, including:

The following is a summary of certain material features of the Restated 2023 Plan, which does not purport to be a complete description of all the provisions of Restated 2023 Plan, and is qualified in its entirety by reference to the complete terms of the Restated 2023 Plan attached hereto as Appendix A (which shows text deleted from the 2023 Plan as stricken and text added to it as underlined).

Shareholders are urged to read the actual text of the proposed Restated 2023 Plan. To the extent there is a conflict between this summary and the Restated 2023 Plan, the terms of the Restated 2023 Plan will govern.

Officers, directors and employees of the Company and its subsidiaries and consultants or others who may provide services to the Company and its subsidiaries are eligible to receive awards under the Restated 2023 Plan. As of April 3, 2024, five executive officers and approximately 2,255 employees were eligible to participate in the Restated 2023 Plan. Additionally, all of our non-employee directors, which currently consists of ten individuals, will be eligible to participate.

The Restated 2023 Plan will be administered by the Compensation Committee. Subject to the terms of our Restated 2023 Plan, the committee (or its designee) may select, from those eligible participants, the persons who will receive awards, the types of awards to be granted, any purchase price to be paid for shares covered by the awards, and the vesting (including acceleration of vesting), forfeiture and other terms and conditions of the awards, and will have the authority to make all other determinations necessary or advisable for the administration of the Restated 2023 Plan. The Compensation Committee will also have the ability to construe and interpret the terms and provisions of the Restated 2023 Plan (and any related award agreement) and to prescribe, amend and rescind rules relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws.

Subject to adjustment as provided in the Restated 2023 Plan, as of the effective date of the Restated 2023 Plan, a total of 6,796,671 shares of Common Stock will be authorized for issuance for awards granted under the Restated 2023 Plan (which total includes shares of Common Stock underlying awards that are currently outstanding or are no longer available for issuance under the Restated 2023 Plan). Shares of Common Stock underlying awards under the 2013 Plan that on or after Effective Date are forfeited, cancelled, exchanged or surrendered or otherwise terminate, expire or are settled without a distribution of shares of Common Stock, will be added to the number of available share issuable under the Restated 2023 Plan.

If any shares of Common Stock subject to an award are forfeited, cancelled, exchanged or surrendered or if an award otherwise terminates, expires or is settled without a distribution of shares of Common Stock, such shares will again be available for future grants. Shares tendered or withheld to pay any tax withholding liability in respect of full value awards will likewise become available for further grants. Shares tendered or withheld to pay any exercise price or tax withholding liability in respect of stock options will not be available for future grants. No more than 6,796,671 shares of Common Stock will be issued pursuant to the exercise of incentive stock options.

No dividends or dividend equivalents will be paid with respect to options or stock appreciation rights. Dividends declared prior to the vesting of any award will only be paid if and to the extent the award vests.

Equity awards under the Restated 2023 Plan will be subject to a minimum one-year vesting period, with certain limited exceptions, including (i) for substitute awards granted in connection with mergers or acquisitions, (ii) awards granted to non-employee directors vesting on the earlier of the one-year anniversary of the date of grant and the next annual meeting of shareholders held at least 50 weeks after the immediately preceding year’s annual meeting, (iii) accelerated exercisability or vesting in cases of employment termination, death or disability, or a termination of a participant’s service other than for cause and (iv) at the Compensation Committee’s discretion, up to 5% of the shares of Common Stock authorized for issuance under the Restated 2023 Plan.

The following awards may be made under the Restated 2023 Plan.

A stock option is the right to purchase shares of our Common Stock at a fixed exercise price for a fixed period of time. Non-qualified stock options and “incentive stock options” or “ISOs” (within the meaning of Section 422 of the Code) may be issued under the Restated 2023 Plan. The terms and conditions of any options granted to a participant will be set forth in an award agreement and determined by the Compensation Committee. The exercise price of any stock option must be at least equal to the fair market value of our common stock on the date the option is granted, and the maximum term is ten years.

A stock appreciation right, or “SAR,” is the right to receive the appreciation in the fair market value of our Common Stock between the exercise date and the date of grant for that number of shares of our Common Stock with respect to which the SAR is exercised. A SAR may be granted in conjunction with an option or alone. We may pay the appreciation in either cash, in shares of our Common Stock with equivalent value, or in some combination, as determined by the Compensation Committee. The Compensation Committee determines the exercise price of SARs, the vesting schedule and other terms and conditions of SARs.

Restricted stock awards are awards of shares of our Common Stock that vest in accordance with terms and conditions established by the Compensation Committee. Unless the Compensation Committee determines otherwise, shares that do not vest typically will be subject to forfeiture to the extent the vesting schedule and/or specified performance or other criteria have not been satisfied.

Restricted stock units and performance shares represent a right to receive cash or shares of our Common Stock that vest in accordance with terms and conditions established by the Compensation Committee, including, in the case of performance shares, achievement of performance goals. Unless the Compensation Committee determines otherwise, shares that do not vest typically will be subject to forfeiture to the extent the vesting schedule and/or specified performance or other criteria have not been satisfied. The Compensation Committee may set performance vesting criteria based upon the achievement of company-wide, divisional, business unit or individual goals or any other basis determined by the administrator, in its discretion.

Our Compensation Committee may make other forms of equity-based awards under our Restated 2023 Plan, including, for example, stock bonus awards and dividend equivalent awards. In addition, our Restated 2023 Plan authorizes us to make annual and other cash incentive awards based on achieving performance goals that are established by our Compensation Committee.

In general, awards made under the Restated 2023 Plan may not be transferred or assigned, except as may be permitted by our Compensation Committee. An option or stock appreciation right granted under the Restated 2023 Plan may be exercised only by the recipient during his or her lifetime.

In the event of certain changes in our capitalization, such as a reorganization, stock split, merger or similar change in our corporate structure or the number of outstanding shares of our common stock, our Compensation Committee will make appropriate adjustments to the aggregate and individual share limits and to the number, class and/or exercise price under outstanding awards in order to prevent undue diminution or enlargement of the benefits or potential benefits available under our Restated 2023 Plan. The Compensation Committee may also provide, in its sole discretion, for the cancellation of any outstanding award in exchange for a payment in cash or other property having an aggregate fair market value of the shares of common stock covered by such award, reduced by any aggregate exercise price or purchase price.

Our Board of Directors has the authority to amend or terminate the Restated 2023 Plan, provided such action does not adversely affect then outstanding awards. Amendments to the Restated 2023 Plan will be subject to shareholder approval if such approval is necessary in order to satisfy applicable legal or stock exchange listing requirements.

In the event of a Change in Control (as defined in the Restated 2023 Plan), an award will remain outstanding following the Change in Control to the extent it is assumed by a successor or is replaced with awards that are of substantially comparable value and remains subject to the same terms and conditions, provided, however, that any performance conditions determined by the Compensation Committee to be impracticable to maintain following the Change in Control will be deemed satisfied at the greater of target and actual performance as of the Change in Control. If a participant’s employment is terminated without Cause (as defined in the Restated 2023 Plan) within 12 months of Change in Control or awards are not continued or assumed by the successor, then any unvested awards will be deemed fully vested and any outstanding performance conditions will be deemed achieved at the greater of target and actual performance.

Without shareholder approval, except in connection with an equitable adjustment or a Change in Control, the Restated 2023 Plan prohibits authorizing the repricing of outstanding stock options and SARs, whether by amending an existing award or by substituting a new award at a lower price, or the payment of cash or other securities in exchange for out-of-the-money awards.

The Company may cancel any award or require the participant to reimburse any previously paid compensation provided under the Plan or an award agreement in accordance with the Company’s clawback policy. Please see “Information Regarding the Board of Directors and Corporate Governance-Other Policies and Practices-Claw-back Policy” for a description of our Claw-back Policy.

The following is a brief summary of the principal United States federal income tax consequences of awards under the Restated 2023 Plan. This summary is not intended to be exhaustive and does not describe state, local or foreign tax laws.

The grant of an incentive stock option will not result in any immediate tax consequences to the Company or the participant. In addition, a participant will not recognize taxable income, and we will not be entitled to any deduction, upon the exercise of an incentive stock option while the participant is an employee or within three months following termination of employment (longer in the case of death). In such event, the excess of the fair market value of the shares acquired over the option price will be includible in the participant’s alternative minimum taxable income for the year of exercise for purposes of the alternative minimum tax. If the participant does not dispose of the shares acquired within one year after their receipt (and within two years after the option was granted), gain or loss recognized on the subsequent disposition of the shares will be treated as long-term capital gain or loss. Capital losses of individuals are deductible only against capital gains and a limited amount of taxable ordinary income. In the event of an earlier disposition, the participant will recognize taxable ordinary

income in an amount equal to the lesser of (i) the excess of the fair market value of the shares on the date of exercise over the option price; or (ii) if the disposition is a taxable sale or exchange, the amount of any gain realized. Any additional gain to the participant will be treated as capital gain, long-term or short-term, depending on how long the shares have been held. Upon such a disqualifying disposition, we will be entitled to a deduction in the same amount and at the same time as the participant recognizes such taxable ordinary income, subject to the limitations of Section 162(m) of the Code.

The grant of a non-qualified stock option will not result in any immediate tax consequences to the Company or the participant. Upon the exercise of a non-qualified stock option, the participant will recognize taxable ordinary income, and we will be entitled to a deduction, subject to the limitations of Section 162(m) of the Code, equal to the difference between the option price and the fair market value of the shares acquired at the time of exercise. Any gain or loss upon a subsequent sale or exchange of the shares will be capital gain or loss, long-term or short-term, depending on how long the shares have been held.

The grant of a SAR will not result in any immediate tax consequences to the Company or the grantee. Upon the exercise of a SAR, any cash received and the fair market value on the exercise date of any shares received will constitute taxable ordinary income to the grantee. We will be entitled to a deduction in the same amount and at the same time, subject to the limitations of Section 162(m) of the Code.

A participant normally will not recognize taxable income upon an award of restricted stock, and we will not be entitled to a deduction, until the termination of the restrictions. Upon such termination, the participant will recognize taxable ordinary income in an amount equal to the fair market value of the shares at that time, plus the amount of the dividends thereon to which the participant then becomes entitled. However, a participant may elect to recognize taxable ordinary income in the year the restricted stock is awarded in an amount equal to its fair market value at that time, determined without regard to the restrictions. We will be entitled to a deduction in the same amount and at the same time as the participant realizes income, subject to the limitations of Section 162(m) of the Code.

Any cash and the fair market value of any shares received in connection with the grant of a restricted stock unit under the Restated 2023 Plan will constitute taxable ordinary income to the participant in the year in which paid, and the Company will be entitled to a deduction in the same amount, subject to the limitations of Section 162(m) of the Code.

The grant of other stock-based and cash awards will generally constitute taxable ordinary income to the participant in the year in which paid, and the Company will generally be entitled to a deduction in the same amount, subject to the limitations of the Section 162(m) of the Code.

Dividend equivalents generally will be taxed at ordinary income rates when paid. In most instances, they will be treated as additional compensation that we will be able to deduct at that time, subject to the limitations of Section 162(m) of the Code.

Applicable taxes required by law will be withheld from all amounts paid in satisfaction of an award.

Section 162(m) of the Code denies deductions to publicly held corporations for compensation paid to certain senior executives that exceeds $1,000,000.

Section 409A of the Code imposes complex rules on nonqualified deferred compensation arrangements, including requirements with respect to elections to defer compensation and the timing of payment of deferred amounts. Depending on how they are structured, certain equity-based awards may be subject to Section 409A of the Code, while others are exempt. If an award is subject to Section 409A of the Code and a violation occurs, the compensation is includible in income when no longer subject to a substantial risk of forfeiture and the participant may be subject to a 20% penalty tax and, in some cases, interest penalties. The Restated 2023 Plan and awards granted under the Restated 2023 Plan are intended to be exempt from or comply with the requirements of Section 409A of the Code.

Our stock-based compensation, including the participation of employees and directors, results in a “burn rate” or share utilization rate presented in the table below. The table sets forth information regarding award grants, the burn rate for each of the last three years, and the average burn rate over the last three years. The burn rate has been calculated as the quotient of (i) the sum of all options, RSUs and PSUs granted in such year, divided by (ii) the weighted average number of shares of Common Stock outstanding at the end of such year. The “burn rate” is not adjusted for forfeitures and expirations, which would reduce the burn rate if taken into account.

The total potential dilution or “overhang” from the adoption of the Restated 2023 Plan is shown below. Equity awards are outstanding under the 2023 Plan, 2013 Plan, and 2019 Polyrize Security Plan. Other than the shares of common stock outstanding, all information is as of April 3, 2024.

Assuming the approval of our Restated 2023 Plan, overhang would be approximately 14.5%, calculated as total shares of Common Stock subject to outstanding equity awards, plus shares of Common Stock available for future grants under the Restated 2023 Plan, divided by shares of Common Stock outstanding.

We expect that the share reserve under the Restated 2023 Plan, if this proposal is approved by our shareholders, will be sufficient for awards for at least one year, depending on the mix of stock options and full-value awards granted under the Restated 2023 Plan. Expectations regarding future share usage could be impacted by a number of factors such as award type mix; hiring and promotion activity at the executive level; the rate at which shares are returned to the Restated 2023 Plan’s reserve upon the awards’ expiration, forfeiture or cash settlement; the future performance of our stock price; the consequences of acquiring other companies; and other factors. While we believe that the assumptions we used are reasonable, future share usage may differ from current expectations.

As of the date hereof, no awards have been granted using the additional 4,400,000 shares of Common Stock proposed to be reserved under the Restated 2023 Plan. Awards under the Restated 2023 Plan using these shares will be granted at the discretion of the Compensation Committee based on a number of factors and, accordingly, the benefits that will be granted or paid under the Restated 2023 Plan are not currently determinable.

The following table sets forth information as of April 3, 2024 with respect to the number of shares of Common Stock underlying awards that have been granted under the 2023 Plan to our named executive officers, director nominees and the specified groups set forth below, with any performance criteria deemed satisfied at the maximum level.

Our executive officers, employees who perform services for or on our behalf, and our non-employee directors (including both current directors and our three director nominees) will be eligible to receive awards under the Restated 2023 Plan if it is approved. Accordingly, such individuals have a substantial interest in the approval of this Proposal No. 5.

Approval of the Restated 2023 Plan requires the affirmative vote of the holders of a majority of the voting power of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting.

Our Board of Directors oversees the management of our business and affairs, as provided by Delaware law, and conducts its business through meetings of the Board of Directors and four standing committees: Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Technology Committee. In addition, from time to time, special committees may be established under the direction of the Board of Directors when necessary to address specific issues.

Our commitment to good corporate governance is reflected in several practices of our Board of Directors and its committees, as described below.

Our Board of Directors annually reviews its composition, structure, the composition of its committees and the independence of each director for both board and committee purposes. The determination of independence of members of the Board of Directors is based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships. In making this determination, the Board of Directors considers the relationships that each non-employee director has with us and all other facts and circumstances deemed relevant in determining their independence.

The Board of Directors has determined that all of its current directors and director nominees are “independent,” other than our Chief Executive Officer, President and Chairman, Mr. Yakov Faitelson, as that term is defined under the rules of The Nasdaq Stock Market LLC (“Nasdaq”) for purposes of serving on the Board of Directors.

The Board of Directors is of the view that “one size” does not fit all, and thus does not have a formal policy regarding whether the same person should serve as both the Chief Executive Officer (“CEO”) and Chairman of the Board of Directors. Instead, the Board of Directors believes that an effective leadership structure could be achieved either by combining or separating the CEO and Chairman positions, if the structure encourages free and open dialogue of competing views of directors and provides for strong checks and balances on management. Specifically, an effective governance structure must balance the powers of the CEO and the independent directors and enable the independent directors to oversee management effectively, while ensuring that the independent directors are fully informed about the Company’s business and strategy and, ready to discuss and debate key issues.

Periodically, our Board of Directors assesses the board leadership structure to ensure that it serves the interests of the Company and our shareholders and promotes the creation of long-term shareholder value. Currently, the Chairman of our Board is our CEO, and as a result of the Chairman’s non-independent status, our independent members of the Board of Directors elected an independent Lead Director.

The Board of Directors believes that its current leadership structure is appropriate for the Company at this time. The Board of Directors believes that the responsibilities of the Lead Director help to ensure appropriate oversight of the Company’s management by the Board of Directors and optimal functioning of the Board of Directors. The effectiveness of the Lead Director is enhanced by the Board of Directors’ independent character. For more information, see “Director Independence.”

The Nominating and Corporate Governance Committee is responsible for recommending to the Board of Directors candidates for all vacant directorships at shareholder meetings and reviews the full composition of the Board of Directors and its committees on an annual basis.

Pursuant to our Corporate Governance Guidelines, the Nominating and Corporate Governance Committee will consider nominees recommended by shareholders for election as directors.

Shareholders may recommend director nominees for consideration by the Nominating and Corporate Governance Committee and the Board of Directors, by supplying in writing to the Company the information required by the Company’s bylaws for shareholder nominations. After we verify that the person submitting the recommendation is indeed a shareholder and that the recommendation is otherwise properly submitted, the recommendation will be brought to the attention of the Nominating and Corporate Governance Committee, and, if the Nominating and Corporate Governance Committee so decides, the Board of Directors. The Nominating and Corporate Governance Committee and Board of Directors evaluate nominees recommended by shareholders in the same way they evaluate other nominees.

Shareholders who wish to nominate persons directly for election to the Board of Directors at the Company’s annual meeting of shareholders must meet the deadlines and other requirements set forth in the bylaws. Recommendations and nominations of directors must be mailed to the Company at 1250 Broadway, 28^th Floor, New York, NY 10001, United States, Attn.: General Counsel. For more information, see “Other Matters — Shareholder Proposals and Nominations for 2024 Annual Meeting of Shareholders.”

Candidates for the Board of Directors are generally selected based on desired skills and experience in the context of the existing composition and the needs of the Board of Directors and its committees at that time, including the requirements of applicable SEC and Nasdaq rules. The Nominating and Corporate Governance Committee does not assign specific weight to any particular criteria, and no particular criterion is necessarily applicable to all candidates. In its consideration of the specific needs of the Board of Directors and the Company, the Nominating and Corporate Governance Committee considers diverse backgrounds so that the Board of Directors’ composition reflects a broad spectrum of experience and expertise.

In identifying prospective director candidates for the Board of Directors, the Nominating and Corporate Governance Committee may seek referrals from other members of the Board, management, shareholders and other sources. The Nominating and Corporate Governance Committee also may, but need not, retain a professional search firm in order to assist it in these efforts. The Nominating and Corporate Governance Committee and the Board of Directors utilize the same criteria for evaluating candidates regardless of the source of the referral.

When recommending to the Board of Directors the slate of director nominees for election at an annual meeting of shareholders and reviewing directors not up for re-election, the Nominating and Corporate Governance Committee strives to maintain a healthy degree of board refreshment and prevent excessive entrenchment, while weighing the strong contributions delivered by directors with deep knowledge of our Company’s history and strategic long-term goals. Since 2015, six new directors have joined our Board of Directors, and with three of these directors joining since the beginning of 2021.

The Nominating and Corporate Governance Committee and the Board of Directors seek candidates with a broad diversity of knowledge, experience and demonstrated expertise in an area or areas of importance to our Company, as described above in “Board Skills and Experience”. The Nominating and Corporate Governance Committee also considers traditional diversity factors such as race and gender but currently has no formal policy, guidelines or procedures with respect to consideration of diversity in the nominating process.

Directors are expected to attend Board of Directors meetings and meetings of committees on which they serve, and to meet as frequently as necessary in order to properly discharge their responsibilities. During the 2023 fiscal year, the Board of Directors met five times. Disclosure regarding meetings of the committees of the Board of Directors during the 2023 fiscal year can be found under “Committees of the Board of Directors.”

The Board of Directors has established various committees to assist it with the performance of its responsibilities. The Board of Directors designates the members of these committees and the committee chairs based on the recommendations of the Nominating and Corporate Governance Committee. The chairperson of each committee develops the agenda for its respective committee, and each committee regularly provides a full report to the Board of Directors.

There are currently four standing committees: the Audit Committee; the Compensation Committee; the Nominating and Corporate Governance Committee; and the Technology Committee. Members serve on these committees until their resignation or until otherwise determined by the Board of Directors. Our Board of Directors may establish other committees to facilitate the management of our business.

The Board of Directors has adopted written charters for each of its standing committees, which are available on the Company’s investor website at https://ir.varonis.com/corporate-governance. Each committee reviews its charter annually and, when appropriate, presents recommended amendments to the Board of Directors for consideration and approval. The composition and functions of each committee are described below.

We have made a concerted effort to engage with our shareholders both during and outside of the proxy season in order to have a better understanding of their perspectives on our Company. This dialogue has helped inform the Board of Directors’ decision-making and ensures our interests remain well-aligned with those of our shareholders.

We regularly attend investor conferences and hold one-on-one meetings with shareholders and potential investors. In addition, we have telephonic calls with shareholders and analysts on a periodic basis and review correspondence submitted by shareholders to management and/or the Board of Directors.

In 2023, in addition to our normal investor relations efforts, we reached out to shareholders representing approximately 95% of our outstanding shares of common stock, including our 50 largest shareholders, as part of our proxy outreach, offering to discuss matters of interest.

Over the past several years, after considering investor perspectives, we made a number of changes:

The Board of Directors and management welcome feedback from shareholders. Shareholders are strongly encouraged to reach out to the Board of Directors or management to discuss issues important to them and should continue using the communication methods disclosed in this Proxy Statement.

The Board of Directors works with management to set the short-term and long-term strategic objectives of the Company and to monitor progress on those objectives. In establishing and monitoring strategy, the Board of Directors, along with management, considers and regularly reviews the risks and opportunities that impact the long-term sustainability of the Company’s business model and whether the strategy is consistent with the Company’s risk appetite.

The Board of Directors oversees these efforts in part through its various committees based on each committee’s responsibilities and expertise, as set forth in its respective charter. The entire Board of Directors meets periodically with senior management responsible for our risk management, and the applicable committees meet periodically with the employees responsible for risk management in the committees’ respective areas of oversight. The Audit Committee receives periodic reports from internal audit. Our Audit Committee, Technology Committee and Board of Directors each receive information technology and cybersecurity risk updates from the Company’s Chief Information Officer and Vice President of Technical Services, Chief Information Security Officer, and the Executive Vice President of Engineering and Chief Technology Officer. In addition, the Audit Committee also receives legal and operational updates from our General Counsel. The Nominating and Corporate Governance Committee oversees risks related to our workforce and corporate governance matters and receives reports relating to human capital management from our human resources team, and reports relating to corporate governance from our General Counsel. The Compensation Committee oversees risks related to our compensation programs, and receives reports from its independent external consultant, and our human resources, legal and finance teams.

It is the responsibility of the committee chairpersons to report findings regarding material risk exposures to the Board of Directors as quickly as possible. The primary areas of risk oversight of the committees are described below. This allocation of responsibility may change, from time to time, based on the evolving needs of the Company.

We have adopted a Code of Business Conduct and Ethics (the “Code”) that is applicable to all of our employees, officers and directors, including our Chief Executive Officer and senior financial officers. The Code is available on our website at https://ir.varonis.com/corporate-governance. Any amendment to the code, or any waiver of its requirements, will be disclosed on our website within four business days of the waiver or amendment through a website posting to the extent required by the rules and regulations of the SEC.

None of the members of our Compensation Committee is or was an officer or employee of the Company, other than Ms. Iohan, who served as our Chief Financial Officer until 2017, or had any relationship requiring related party transaction disclosure under SEC rules. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee (or other committee serving an equivalent function) of any entity that has one or more executive officers serving on the Board of Directors or Compensation Committee.

The Board of Directors has adopted Corporate Governance Guidelines to assure that the Board of Directors will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The guidelines are also intended to align the interests of directors and management with those of our shareholders. The Corporate Governance Guidelines set forth the practices that the Board of Directors intends to follow with respect to board composition and selection, board meetings and involvement of senior management, CEO performance evaluation and succession planning, and board committees and compensation. The Corporate Governance Guidelines are available on our website at https://ir.varonis.com/corporate-governance.

The Nominating and Corporate Governance Committee evaluates each director annually through written questionnaires to obtain his or her assessment of the effectiveness of the Board of Directors and the committees of the Board of Directors. The purpose of these assessments is to identify opportunities for improvement on a number of relevant metrics such as composition, conduct of meetings, relationship between the Board of Directors and management, succession planning and strategy and performance.

We have adopted various policies intended to mitigate risks associated with our executive and director compensation programs.

Shareholders and other interested persons may contact the Board of Directors to provide comments, to report concerns or to ask questions, at the following address:

Those interested in communicating with a member of the Board of Directors or a group of such members, including the Lead Director, the Nominating and Corporate Governance Committee, the Compensation Committee, the Audit Committee, the Technology Committee or the non-employee/independent directors as a group, should specify in the correspondence to whom on the Board of Directors the correspondence is directed. The Company’s management will forward such correspondence, as appropriate. Complaints or concerns relating to our financial reporting, accounting, internal accounting controls or auditing will be referred to the Chairperson of our Audit Committee.

The Company’s independently administered ethics helpline is available to employees and others 24 hours a day, seven days a week to report issues or seek guidance confidentially. Employees may confidentially and anonymously submit complaints about accounting, internal accounting controls, auditing matters or violations of our Code. All such communications should contain sufficiently specific information to permit the Audit Committee to pursue the matter. We also maintain a formal non-retaliation policy that prohibits retaliation against, or discipline of, an employee who raises an ethical concern in good faith.

We started Varonis because we believed that the explosive increase in digital collaboration necessitated modern, automated security controls — without them, the risks would eventually outweigh the benefits, and make digital collaboration unsustainable. We also believe that high ethical standards and the support and empowerment of our employees are also necessary to sustain and thrive.

We consult with, and consider the interests of, all stakeholders in pursuing the long-term success of our business. Our transparent disclosures, ethical business practices, active stakeholder engagement, and supportive human capital management are fundamental pillars of our corporate responsibility and sustainability practices, and we view them as integral components of our long-term performance strategy.

We pride ourselves on robust human capital management practices to meet the needs of our employees. We recognize that our people are our greatest asset, and that our success as a company ultimately depends on the strength, wellness and dedication of our workforce.

Cybersecurity: As a company that was founded to help companies protect their data wherever it lives, we understand the critical nature of a robust cybersecurity program, and that such a program requires constant evaluation and updates. We regularly conduct internal and external assessments and perpetually update and improve our policies so that existing controls comply with what we believe are the highest security, privacy, and compliance standards. As described above, one of the areas of Technology Committee and Board of Directors oversight specifically relates to cybersecurity, and our Technology Committee and Board of Directors receives regular presentations from management on industry-pertinent cyber risks, breaches, and any other topic deemed materially important. We also ensure that employees complete general cybersecurity training on an annual basis and phishing training several times per year (both of which are tracked by management), and all new employees must complete a 10-part awareness training on phishing and privacy within 60 days of onboarding. In addition, the security of our products is always top of mind, and we work closely with third-party auditing firms to ensure our products meet strict industry standards and are audited and reviewed regularly. In addition, we have an information security management system that is certified to the ISO 27001 standard and maintain a thorough compliance program, which includes SOC 2, SOC 3, ISO 27017, ISO 27018, ISO 27701, CSA STAR Certification and Common Criteria certifications. We are committed to maintaining leading data protection standards, and maintain a Website User and Marketing Privacy Policy, a Software Privacy Policy, and a Candidate, Employees and Contractors Privacy Policy. This and other information can be found in our Security Privacy Standards and Practices, which is available on our website at www.varonis.com/trust, and which outlines (1) our approach to security; (2) how we secure the Varonis environment; (3) our operational security; (4) how we secure customer data; (5) how we secure our staff; (6) how we secure our solution; (7) how we identify, detect and respond to threats; and (8) our risk management and compliance programs.

Diversity, Equity and Inclusion: We conduct diversity and code of conduct trainings with employees and managers to share our views on the importance of diversity and the promotion of an inclusive and diverse workplace, where all individuals are respected and feel they belong regardless of their age, race, national origin, gender, religion, disability, sexual orientation or gender identity. We have three Employee Resource Groups, led by our employees, designed to foster connection, understanding and inclusiveness. We also require all employees to participate in unconscious bias training to improve awareness. We work with diversity focused candidate application platforms to increase access to diverse talent. Our customers are located in over 90 countries and our global workforce operates across cultures, functions, language barriers and time zones to provide them dedicated and ongoing support.

Compensation and Benefits: We strive to ensure that our employees receive competitive and fair compensation and innovative benefit offerings, tying incentive compensation to both business and individual performance, offering competitive maternal and paternal leave policies, providing meaningful retirement and health benefits and maintaining an employee stock purchase plan.

Employee Satisfaction & Engagement: We support the overall well-being of our employees from a physical, emotional, financial and social perspective, and are proud that in recent years, we have been named one of the top places to work in several of our locations, including New York City and North Carolina. We also regularly seek input from employees, including through broad employee satisfaction and pulse surveys on specific issues, intended to assess our degree of success in promoting an environment where employees are engaged, satisfied, productive and possess a strong understanding of our business goals. We are pleased that in a 2024 internal survey, 96% of our employees said that that were made to feel welcome upon joining Varonis. Our global well-being programs include a long-standing practice of remote working arrangements, flexible paid time off, life planning benefits, wellness platforms and employee assistance. In addition, we ensure ongoing check-ins with employees by HR and managers to provide additional channels of support.

Employee Recognition: We offer rewards and recognition programs to our employees, including awards to recognize employees who best exemplify our values and spot awards to recognize employee contributions. We believe that these recognition programs help drive strong employee performance. We conduct semi-annual employee performance reviews, where each employee is evaluated by their personal manager and also conducts a self-assessment, a process which empowers our employees. Employee performance is assessed based on a variety of key performance metrics, including the achievement of objectives specific to the employee’s department or role. Employees have access to an internal platform to recognize their peers based on their professional and socially responsible contributions to the Company.

Employee Training & Development: We focus on creating opportunities for employee growth, development, training and education, including opportunities to cultivate talent and identify candidates for new roles from within the company, as well as management and leadership development programs. Employee training and education includes online certification, in-person certification and new hire training bootcamps. We also conduct manager training programs on an annual basis, which include in-depth managerial and coaching skills, as well as tailored feedback. We have established an internal mentoring program in which seasoned employees mentor new managers based on defined goals. Lastly, as described above, all employees undergo extensive security and privacy training upon joining the Company and at least annually thereafter.

Community: We believe it is important to give back and promote community outreach and support through corporate giving and employee volunteerism in the communities in which we live and work. We partner with several organizations, providing life skills trainings, coding and basic IT skills, financial literacy and more; all programs are led by our employees on a volunteering basis. We also provide corporate matching of employee charitable donations and flexible volunteering during work time, letting our employees know that we support the charitable efforts that matter to them.

Business Ethics: Our Code serves as a guide of legal and ethical principles and sets forth our expectations for our directors, executive officers and employees. On an annual basis, our Board of Directors reviews and may periodically recommend enhancements to the Code. Recent updates to our Code included (i) enhancing our policy and procedures regarding discrimination and harassment, (ii) providing additional clarity regarding reporting unethical behavior and (iii) further clarifying our policy regarding our commitment to honest and accurate reporting.

The following sets forth certain information with respect to our executive officers as of April 19, 2024. Biographical information with regard to Mr. Faitelson is presented under “Continuing Directors” in this Proxy Statement.

The Audit Committee operates pursuant to a written charter approved by the Board of Directors, which is available on our investor website at https://ir.varonis.com/corporate-governance. The composition of the Audit Committee, the attributes of its members and its responsibilities, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The Audit Committee reviews and assesses the adequacy of its charter and the Audit Committee’s performance on an annual basis.

The Audit Committee is a committee of the Board of Directors made up solely of independent directors as required by the SEC and Nasdaq rules. The Audit Committee consists of three members: Mr. Gavin, Mr. Segev and Mr. van den Bosch. Mr. Gavin is the Chairperson of our Audit Committee.

Pursuant to the Audit Committee’s charter, the Company’s management is responsible for the financial reporting process, including the establishment and maintenance of internal controls and the preparation of the consolidated financial statements in accordance with generally acceptable financial principles. E&Y, the Company’s independent registered public accounting firm, is responsible for auditing those financial statements and expressing an opinion as to their conformity with U.S. generally accepted accounting principles. In addition, E&Y is responsible for auditing and expressing an opinion on the Company’s internal controls over financial reporting. The Audit Committee’s responsibility is to oversee these activities as well as the appointment, retention, compensation and performance of the independent auditors. It is not the responsibility of the Audit Committee to verify independently the information provided to it, prepare or certify the Company’s financial statements, or guarantee the audits or reports prepared by E&Y.

During fiscal year 2023, the Audit Committee fulfilled its duties and responsibilities as outlined in the charter. In addition to the meeting of the Board of Directors, the Audit Committee meets one time each quarter to review the quarterly Form 10-Q or annual Form 10-K. Also, the Audit Committee meets as needed to address other matters. In the performance of its oversight function, the Audit Committee has:

Based on the Audit Committee’s reviews and discussions with management and E&Y, and subject to the limitations on the Audit Committee’s role and responsibilities referred to above and in the Audit Committee’s charter, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for filing with the SEC.

Respectfully submitted by the members of the Audit Committee of the Board of Directors:

The following table sets forth, as of April 8, 2024, information regarding beneficial ownership of our capital stock by:

Beneficial ownership is determined according to the rules of the SEC and generally means that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power of that security, or has the right to acquire beneficial ownership of that security within 60 days. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons named in the table below have or will have sole voting and investment power with respect to all shares of common stock shown that they beneficially own, subject to community property laws where applicable.

Our calculation of the percentage of beneficial ownership is based on 111,589,110 shares of our common stock outstanding as of April 8, 2024. Shares of common stock underlying stock options exercisable within 60 days of April 8, 2024 or RSUs vesting within 60 days of April 8, 2024 are deemed to be outstanding for computing the percentage ownership of the person holding these options and the percentage ownership of any group of which the holder is a member, but are not deemed outstanding for computing the percentage of any other person. The table is based upon information supplied by officers, directors and principal shareholders, Schedules 13G filed with the SEC and other SEC filings under Section 16 of the Exchange Act. Except as otherwise indicated in the table below, addresses of named beneficial owners are c/o Varonis Systems, Inc., 1250 Broadway, 28^th Floor, New York, NY 10001.

The following individuals were our “named executive officers” (the “NEOs”) in fiscal 2023:

The core of our strategy is protecting our customer’s data wherever it lives and delivering automated security outcomes, which creates value for our customers, shareholders, partners and communities.

The compensation of the Company’s named executive officers is tied to both Company and individual performance. The compensation program for the named executive officers is designed to reward them for their overall contribution to Company performance, including the Company’s execution against its business plan.

We achieved another year of very strong financial performance in fiscal 2023 and saw momentum on our transition to a SaaS delivery model, with the transition being well-received by new and existing customers. This adoption led to strong ARR performance and cash flow generation, driving shareholder value creation.

Our executive compensation program is overseen by our Compensation Committee and is intended to align with the Company’s short and long-term strategy. The Compensation Committee primarily assists the Board in fulfilling its oversight responsibilities with respect to compensation matters by ensuring best practices, which, among other things, include:

The Compensation Committee consists of Mr. Comolli, Ms. Iohan, Mr. Kess and Ms. Prishkolnik. Mr. Kess is the chairman of our Compensation Committee. This section discusses our compensation program, policies and practices as they relate to our named executive officers whose compensation information is presented in the tables that follow.

The Compensation Committee’s fundamental philosophy is to closely link executive compensation with the achievement of pre-established performance goals and to promote a culture of aligning executive interests with those of the Company and its shareholders. The Compensation Committee’s objectives in the design and operation of our compensation program for our executive officers are as follows:

The Compensation Committee also strives to ensure that overall compensation is fair for the services rendered, market competitive and that the compensation structure is transparent. As such, the key components of executive compensation are limited to a base salary, an annual incentive cash award based on the achievement of pre-established performance goals and long-term incentive compensation in the form of stock-based awards. The Compensation Committee strives to ensure that our executive compensation aligns management with the Company’s annual and long-term plans and strategy.

Various key features of our executive compensation program are set forth below.

The Compensation Committee reviews executive compensation at its meetings throughout the year and sets executive compensation based primarily on both the Company’s performance and executive management’s performance in executing the Company’s business strategy and optimizing the Company’s business performance. The Compensation Committee also considers, among other factors, the scope of an executive’s duties and responsibilities, individual executive performance, tenure with the Company and importance to the Company’s future success. Our Chief Executive Officer reviews the performance of

our other named executive officers and makes recommendations to the Compensation Committee with respect to compensation adjustments for such officers. However, the Compensation Committee determines in its sole discretion whether to make any adjustments to the compensation paid to the named executive officers, including the Chief Executive Officer. The Compensation Committee also considers discussions with shareholders and the results of say-on-pay votes when making compensation decisions. In 2023, the Compensation Committee considered that 94% of our shareholders voted in favor of our executive compensation program. In addition, in 2023, we reached out to shareholders representing approximately 95% of our outstanding shares of common stock, including our 50 largest shareholders, offering to discuss matters of interest, including executive compensation matters. For more detail, see “Engagement with Shareholders.”

The duties and responsibilities of the Compensation Committee are set forth in its charter, which can be found on our website at https://ir.varonis.com/governance/governance-documents.

For 2023, a significant portion of each named executive officer’s total compensation was allocated to compensation in the form an annual performance-based incentive cash award and/or stock-based awards, in order to provide incentives to maintain and increase long-term shareholder value. The Compensation Committee also reviewed and considered total compensation in setting each element of compensation for our named executive officers. For more information, see “2023 Executive Compensation Elements—Mix of Pay.”

The Compensation Committee has engaged Compensia, Inc. (“Compensia”), a national compensation consulting firm, to provide research and analysis and to make recommendations as to the form and level of executive compensation. The Compensation Committee also sought input from Compensia on executive compensation matters for 2023, including the design and competitive positioning of our executive compensation program, our peer group, appropriate compensation levels and evolving compensation trends.

The Compensation Committee considered the independence of Compensia as consultant to the Compensation Committee. In connection with this process, the Compensation Committee reviewed, among other items, documents from Compensia addressing the firm’s independence. In 2023, the Compensation Committee evaluated the work performed by Compensia and each of its senior advisors, and concluded that the engagement did not raise any conflict of interest.

Our Chief Executive Officer provides the Compensation Committee with his views on the performance of each of the NEOs and also reviews the report prepared by Compensia providing research and analysis as to the form and level of executive compensation. The Chief Executive Officer also discusses his own compensation with the Chair of the Compensation Committee. While the Chief Executive Officer made recommendations to the Compensation Committee regarding the 2023 compensation of each of the NEOs (other than himself) based on his assessment of Company and individual performance as well as his review of Compensia’s report analyzing the compensation of our executive officers for 2023, the Compensation Committee determines the form and level of executive compensation in its sole discretion.

As part of its review of executive compensation for 2023, the Compensation Committee reviewed the executive compensation arrangements at peer group companies. Our peer group includes comparable software companies that were selected based on specific financial criteria, including, but not limited to, revenue and market capitalization. For 2023, based in part on the advice of Compensia, the Compensation Committee removed the following companies from the peer group used in 2022: Anaplan Inc., Appian Corporation, Paylocity, and Sailpoint Technologies Holdings. Based in part on the advice of Compensia, these companies were removed either due to acquisitions, a change in revenue and/or market capitalization, or a change in business focus. The Compensation Committee added the following companies to the peer group for 2023: Coupa Software, Okta, Verint Systems, Upwork, and Workiva.

For 2023, our peer group consisted of the following companies:

In the course of its deliberations, the Compensation Committee reviewed executive compensation data compiled from the peer group companies, as contained in a report prepared by Compensia, in order to evaluate and confirm whether our executive compensation was within a reasonably competitive range and to set executive compensation for 2023. The Compensation Committee, however, did not set executive compensation or each element of compensation at a specific target percentile within the peer group. The Compensation Committee focuses on providing compensation that is fair for the services rendered and reflects an executive’s experience, performance and scope of responsibilities, closely linking executive compensation with the achievement of Company performance goals under the annual cash incentive program and long-term equity compensation program and promoting a culture of aligning executive interests with those of the Company and its shareholders.

The key elements of our executive compensation program for the year ended December 31, 2023 comprised three primary components, summarized below:

Executive officers are also eligible to receive other benefits as described below under “Other Elements of Compensation-Perquisites and Other Benefits.”

We believe that our executive pay mix strongly supports our pay-for-performance culture. The combination of annual cash incentive compensation and long-term equity incentive compensation for our Chief Executive Officer and other named executive officers is balanced to avoid the risk of emphasizing short-term gains at the expense of long-term performance. The focus on long-term incentives demonstrates our strong commitment to the alignment of management and shareholder interests over time.

Our equity pay practices have also evolved over time to more closely align with our performance goals and more directly tie executive pay to key drivers of our business and our long-term strategy. In 2019, our CEO began to receive 50% of his long-term incentive award compensation in the form of PSUs. In 2021, our other NEOs at that time began to receive PSUs as a portion of their long-term incentive award compensation. For Messrs. Melamed and O’Boyle, this portion represented 50% of their long-term incentive award compensation, and for Mr. Bass, this portion represented 33%. In 2024, Mr. Gottlieb received 25% of his long-term equity incentive award in the form of PSUs. In addition, for 2021, we eliminated the 10% individual performance component that was a discretionary part of the Annual Cash Incentive Compensation Program. For 2023, the PSU component of the Long-Term Equity Incentive awards was tied to two performance metrics. The Compensation Committee chose SaaS mix and Free Cash Flow in order to further promote shareholder alignment. SaaS mix is a key financial metric to measure the Company’s progress and ability to transition to selling a SaaS platform to its new customers and upsell SaaS to existing customers, and free cash flow is an important component of how management measures the business.

Base salary is the primary element of our “fixed” pay for all named executive officers, and which serves to attract and retain top executive talent. Our executive officers, including our named executive officers, receive a base salary to compensate them for services rendered during the fiscal year. The Compensation Committee reviews and, as appropriate, adjusts the base salaries for our NEOs. The factors that the Compensation Committee considers in setting base salaries include tenure, the scope of job responsibilities, individual execution of Company strategies and contributions to Company success, Company-wide performance and comparability to market compensation.

Base salaries for all named executive officers have not been increased since 2018, excluding changes based on foreign currency fluctuations.

The purpose of the annual cash incentive program is to incentivize and reward Messrs. Faitelson and Melamed for the attainment of corporate financial goals on a quarterly basis. Although our quarterly results reflect seasonality in the sale of our products and services, with demand typically lowest in the first quarter and strongest in the fourth quarter, the dollar amount opportunity each quarter is equally weighted and difficult to attain, ensuring that management is properly motivated by challenging performance targets.

While we established sales commission plans for certain of our employees and executive officers to encourage and reward contributions to our long-term top-line growth, for our most senior executive officers, including our Chief Executive Officer and our Chief Financial Officer and Chief Operating Officer, our Compensation Committee believes that because these officers possess relatively greater responsibility and stewardship for the overall performance of our Company, they should instead participate in a cash incentive plan using multiple performance metrics. Accordingly, Messrs. Faitelson and Melamed participated in our 2023 Cash Incentive Plan, under which bonuses are earned in the form of quarterly bonus awards. For 2023, the Compensation Committee, based on a review of factors including the scope of job responsibilities, tenure, individual execution of Company strategies and contributions to Company success, Company-wide performance and comparability to market compensation (by reference to the report prepared by Compensia), maintained the target bonus opportunities for Messrs. Faitelson and Melamed from 2021, which have not been changed since 2018. Thus, effective as of January 1, 2023, the target cash incentive award opportunity for each of these NEOs was as follows:

Each of Messrs. Faitelson’s and Melamed’s annual cash incentive compensation for 2023 was earned for the applicable quarterly period based on the weighting of factors as follows:

The Compensation Committee set the quarterly target amounts under the 2023 Cash Incentive Plan for each performance metric at the beginning of the fiscal year. No quarterly payouts could be made unless we achieved a certain pre-established threshold level of corporate performance in respect of either the ARR or TTM Margin target for the applicable quarterly period. The 2023 Cash Incentive Plan also provided for (i) a payout at 90% of the target bonus opportunity amount for the applicable quarterly period if either of our ARR or TTM Margin performance equaled or exceeded the “threshold” amounts for such period, (ii) a payout at 100% of the target bonus opportunity amount for the applicable quarterly period if we attained both of the ARR targets and TTM Margin targets for such period, (iii) a payout capped at 115% of the target bonus opportunity amount for the applicable quarterly period if either of our ARR or TTM Margin performance equaled or exceeded the “stretch” amounts for such period, and (iv) a payout capped at 120% of the target bonus opportunity amount for the applicable quarterly period if both of our ARR and TTM Margin performance equaled or exceeded the “stretch” amounts for such period.

The Compensation Committee chose to use ARR and TTM Margin as the corporate performance metrics under the 2023 Cash Incentive Plan, as both metrics are leading indicators of the Company’s progress during this transition period. ARR is a key financial measure for subscription-based businesses and aligns with how our customers are increasingly purchasing our solutions through subscriptions and in the cloud, and TTM Margin is a key financial measure that that demonstrates the Company’s ability to maintain its cost structure and show operating leverage improvements during the SaaS transition. TTM Margin was calculated as ARR at the end of the period minus the Company’s Non-GAAP expenses (COGS and operating expenses) reported for the prior 12-month period ending on that date. Additionally, these measures work to promote the alignment of shareholder interests with those of our executive officers, because they represent key financial measures used by us and analysts reporting on our financial results and may significantly impact our stock price. The cap on total payouts of the ARR and TTM Margin components were set to manage potential incentive compensation costs and avoid incentivizing undue risk in our executive compensation program, while still maintaining appropriate incentives for these named executive officers.

The relevant performance targets under the 2023 Cash Incentive Plan, which are disclosed below, are pre-established and automatically adjusted for each quarterly period. Quarterly payouts earned for corporate performance between these performance targets were determined through linear interpolation.

For fiscal 2023, based on corporate performance, Mr. Faitelson was awarded cash quarterly bonuses in the aggregate amount of $528,000, and Mr. Melamed was awarded cash quarterly bonuses in the aggregate amount of $300,000. Each of Messrs. Faitelson and Melamed thus achieved 120.0% of their target bonus opportunities. These bonus amounts included, for Mr. Faitelson, aggregate amounts of $264,000 allocated to ARR (weighted at 50% of total bonus payout) and $264,000 allocated to TTM Margin (weighted at 50% of total bonus payout), and for Mr. Melamed, aggregate amounts of $150,000 allocated to ARR (weighted at 50% of total bonus payout) and $150,000 allocated to TTM Margin (weighted at 50% of total bonus payout).

The following table illustrates in summary format the operation of the 2023 Cash Incentive Plan, including the amounts actually awarded:

As our Vice Chairman – Sales, Mr. O’Boyle participated in his own individual 2023 Sales Compensation Plan. Under this plan, Mr. O’Boyle was entitled to annual sales commissions based on the revenues which we generated from the sale of our products and services worldwide. For 2023, the Compensation Committee, advised by Compensia and based on a review of factors including the scope of job responsibilities, tenure, individual execution of Company strategies and contributions to Company success, Company-wide performance, and comparability to market compensation, maintained the annualized target commission opportunity as a percentage of salary from 2022 for Mr. O’Boyle. Effective as of January 1, 2023, the annual target sales commission opportunity for Mr. O’Boyle was $350,000.

Pursuant to his 2023 Sales Compensation Plan, Mr. O’Boyle had the opportunity to earn an annualized target commission for the year if the annualized earned net revenues target was met, or a pro rata portion of the target compensation if the annualized earned net revenues criteria, as applicable, fell below such target.

For any amount in excess of 100% of the annualized earned net revenues target for 2023, he was entitled to receive 1.5% of any such excess. “Earned net revenues” refer to credited sales value that was actually collected by us. Thus, Mr. O’Boyle, who participated in the 2023 Sales Compensation Plan, only

became entitled to receive his commission bonus payment after we collected the net revenues relating to such payments for those prior years. For 2023, Mr. O’Boyle was eligible to receive a portion of his commission upon the execution of a sale and the remainder upon collection of outstanding fees owed for that sale. The earned net revenues target under the 2023 Sales Compensation Plan is $498.5 million.

Mr. O’Boyle received in 2023 an aggregate amount of commissions equal to $280,897, which represented the sum of (i) $135,750 resulting from collected net credited sales value under the 2023 Sales Compensation Plan; and (ii) $145,147 resulting from collected net revenues under his Sales Compensation Plans from 2022 and 2021. Assuming 100% collection of 2023 net revenues, Mr. O’Boyle would receive an additional amount equal to $126,999 as a commission bonus pursuant to the 2023 Sales Compensation Plan (which would be aggregated with the $135,750 already earned under the 2023 Sales Compensation Plan toward the target commission opportunity of $350,000 set for Mr. O’Boyle in 2023).

Mr. Gottlieb is entitled to receive an annual discretionary bonus, subject to the Company’s and his performance each year, of up to $200,000, in accordance with the employment agreement that the Company entered into with him on March 12, 2021 (the “Agreement”). The bonus was provided in connection with Mr. Gottlieb relinquishing his equity partnership interest in a leading global law firm to join the Company and compensating Mr. Gottlieb for the significant decrease in cash compensation that he receives at the Company going forward as compared to what he would have expected to receive as an equity partner at his prior firm. In 2023, after considering the results of the Company’s performance and Mr. Gottlieb’s contribution to the strategic direction and commercial results, the Compensation Committee determined that Mr. Gottlieb should receive an annual cash bonus of $200,000.

In addition, during its annual executive compensation review in February 2024 and considering the Company’s transition to a SaaS business model that began in the fourth quarter of 2022, the Compensation Committee determined that the 2024 Cash Incentive Plan, applicable to Messrs. Faitelson and Melamed, should be tied to two performance metrics – ARR (weighted at 50%) and TTM Margin (weighted at 50%). The Compensation Committee set the quarterly target amounts under the 2024 Cash Incentive Plan for each performance metric at the beginning of the fiscal year. No quarterly payouts will be made unless we achieve a certain pre-established threshold level of corporate performance in respect of either the ARR or TTM Margin target for the applicable quarterly period. The 2024 Cash Incentive Plan also provides for (i) a payout at 90% of the target bonus opportunity amount for the applicable quarterly period if either of our ARR or TTM Margin performance equals or exceeds the “threshold” amounts for such period, (ii) a payout at 125% of the target bonus opportunity amount for the applicable quarterly period if we attain both of the ARR targets and TTM Margin targets for such period, (iii) a payout capped at 150% of the target bonus opportunity amount for the applicable quarterly period if either of our ARR or TTM Margin performance equals or exceeds the “stretch” amounts for such period, and (iv) a payout capped at 200% of the target bonus opportunity amount for the applicable quarterly period if both of our ARR and TTM Margin performance equals or exceeds the “stretch” amounts for such period. The Compensation Committee believes these key performance indicators to be appropriate, as they demonstrate to investors the growth of our business and our ability to maintain our cost structure during this transition period. The Compensation Committee increased the capped payout opportunity in the 2024 Cash Incentive Plan based on part on the advice of Compensia and to be more in line with market practice.

In 2023, the Compensation Committee granted stock-based awards under our 2013 Omnibus Equity Incentive Plan (the “2013 Plan”) to our named executive officers in order to provide long-term incentive compensation opportunities which align the long-term interests of management with those of the Company and its shareholders. The Compensation Committee believes that stock-based awards incentivize our named executive officers to optimize our long-term business performance and shareholder value. Stock-based awards to our named executive officers are approved on an annual basis in amounts determined by the Compensation Committee. In 2023, the long-term incentive awards to our NEOs, other than Mr. Gottlieb, are comprised of PSUs as well as time-vesting RSUs. Mr. Gottlieb only received RSUs as part of his compensation package to induce him to join the Company. In 2024, Mr. Gottlieb received 25% of his long-term equity incentive award in the form of PSUs.

In 2023, in considering the appropriate size of the equity award for our CEO, our compensation committee and Board of Directors considered the data provided by Compensia, the Compensation Committee’s independent compensation consultant, our CEO’s tenure, the multiple integral roles that he currently performs at the Company, the importance of his role and performance to the complex transition of the Company to a SaaS technology company, the close alignment of the targets to the transition and the need to ensure adequate retention incentives and alignment with the interests of the Company’s shareholders.

Below is a summary of the long-term incentive awards to our named executive officers in fiscal 2023.

The 2023 PSUs awarded to our NEOs are earned based on the achievement of SaaS mix and Free Cash Flow targets in fiscal 2023, as described below. The one-year performance period design of the 2023 PSUs is consistent with other companies in the technology sector, where the rapid expansion and evolution of many companies, including our Company as illustrated by the completion of our subscription transition in just over one year, makes performance more difficult to estimate over a longer period. Structuring the 2023 PSUs in this manner ensures a continued focus on long-term performance while directly tying long-term compensation to the achievement of business goals. Subject to the achievement of the PSU targets, all earned 2023 PSUs by our NEOs other than the CEO are subject to three-year annual vesting, beginning on February 29, 2024. The 2023 PSUs granted to our CEO only vest on February 28, 2026, subject to Mr. Faitelson’s achievement of the PSU targets and continued employment at the end of such period. If Mr. Faitelson’s employment terminates prior to this date, he will not receive the earned 2023 PSUs, as they will not be vested. The maximum payout opportunity was capped at 300% of target shares, which can only be earned if the Company achieves SaaS mix and Free Cash Flow targets that the Compensation Committee believes to be appropriately challenging.

We believe that our grant terms, which required our NEOs to meet challenging performance targets for the year ending December 31, 2023, optimized their “at-risk” compensation and encouraged them to lead our Company in line with a longer-term strategic business plan carefully set out at the inception of the grant period. We used (“SaaS mix”), which is defined as new SaaS ARR booked divided by new business ARR plus upsell ARR, and Free Cash Flow, which is calculated as cash flow from operations minus capital expenditures, as performance measures for the 2023 PSUs. SaaS mix is a key financial metric to measure the Company’s ability to transition to selling a SaaS platform to its new customers and upsell SaaS to existing customers, and free cash flow is an important component of how management measures the business. Additionally, the vesting period until February 29, 2026 for our CEO is intended to promote his retention at our Company as a critical executive in a competitive industry.

The following shows the 2023 PSU awards granted to our named executive officers:

The 2023 PSU performance targets for SaaS mix and Free Cash Flow were as follows:

As a result of the Company’s quick start to its SaaS transition, we ended the year with 23% of total company ARR coming from SaaS, which allowed us to reduce the overall expected timeline of the transition to be 4 years, down from 5 years. The Company’s SaaS mix and Free Cash Flow performance in 2023 was 57% and $54.3 million, respectively, and the PSUs are 50% weighted to SaaS mix and 50% weighted to Free Cash Flow. As such, the earned 2023 PSU payout percentage was 300.0%, subject to the vesting requirements. As a result, the 2023 PSUs earned by each NEO in 2023 are set forth below.

In addition, during its annual executive compensation review in February 2024 and considering the Company’s transition to a SaaS business model that began in the fourth quarter of 2022, the Compensation Committee determined that (i) the 2024 PSUs for NEOs should be tied to two performance metrics –SaaS as a percentage of total company ARR (weighted at 50%) and Free Cash Flow (weighted at 50%) and (ii) Mr. Gottlieb should receive a portion of his long-term incentive plan in the form of PSUs to better align his incentives with the interests of shareholders. Free Cash Flow is calculated as net cash provided by or used in operating activities less purchases of property and equipment and is an important measure of liquidity, which demonstrates our ability to maintain our cost structure during this transition period. SaaS as a percentage of total company ARR measures the pace of the transition’s completion. This performance measure has a 3-year performance period to align management’s incentives with those of shareholders with respect to the pace of the SaaS transition’s completion. The Compensation Committee believes SaaS as a percentage of total company ARR to be appropriate in order to motivate the company to complete the transition to a SaaS delivery model quickly.

In February 2023, the Compensation Committee approved a regular annual grant of time-based RSU awards under the 2023 Plan to Messrs. Faitelson, O’Boyle, Bass and Gottlieb. Mr. Melamed received his annual RSU award on March 2, 2023 in connection with entering into a new employment agreement (collectively, the “2023 RSU Awards”). One quarter of the 2023 RSU Awards will vest annually upon the last calendar day of the month of February, beginning on February 29, 2024, subject to the executive officer’s continued service with us on each applicable vesting date. The 2023 RSU Awards will be settled in shares of the Company’s common stock within 30 days of each applicable vesting date, subject to the terms and conditions set forth in the applicable RSU award agreement.

In determining the size of the awards granted to each named executive officer, the Compensation Committee intended to reward and motivate our named executive officers to drive the financial performance of the Company. The Compensation Committee targeted award sizes that would be within a reasonably competitive range of market practice among the Company’s peers.

The following shows the 2023 RSU Awards granted to our named executive officers:

The Company entered into an employment agreement with Mr. Gottlieb on March 12, 2021 in connection with him joining the Company. The Company entered into the Agreement in connection with him relinquishing his equity partnership interest in a leading global law firm to join the Company. The equity awards provided for in the Agreement compensated Mr. Gottlieb for both forgone compensation for time he worked at his prior firm and the expected significant decrease in cash compensation going forward as compared to what he would have received as an equity partner at his prior firm. In addition, the equity award compensated Mr. Gottlieb for the lost value associated with the relinquishment of his equity partnership interest in his prior firm to join the Company. Accordingly, the Agreement provided Mr. Gottlieb with guaranteed RSU awards in each of 2021, 2022 and 2023. In its business judgment, the

Compensation Committee believed that this one-time Agreement was in the best interests of the Company and its shareholders and necessary and appropriate in light of, among other factors: (i) Mr. Gottlieb’s relinquishment of his equity partnership interest, and (ii) his agreeing to substantially lower cash compensation. Mr. Gottlieb received his final RSU award pursuant to his Agreement in 2023 and is not entitled to any further guaranteed compensation.

We do not provide perquisites or other personal benefits to our named executive officers. Our compensation program for our named executive officers includes employee health and welfare benefits, including participation in the Company’s life, health and disability insurance and similar benefit programs (including our 401(k) plan) on the same general terms as other participants in these programs. We make matching contributions to our 401(k) plan for Messrs. Faitelson, Melamed, Gottlieb and O’Boyle. We also provide a car allowance to certain of our employees, including, among our named executive officers, Messrs. Faitelson, Melamed and O’Boyle.

In addition, with respect to Israeli employees, we provide recreation pay as well as contributions to an education fund and to a government-mandated pension fund. Israeli law generally requires severance pay equal to one month’s salary for each year of employment upon the termination of an employee’s employment due to retirement, death, or termination without cause (and other circumstances as defined under Israeli law). We make monthly contributions on behalf of our Israeli employees to a pension plan. Pension plan funds provide a combination of 6.5% of the monthly salary to the pension component (generally including disability insurance), 8.3% of the monthly salary to the severance component and employee contributions of 6% of his or her salary to the pension component. Our full-time Israeli employees are entitled to participate in an education fund plan, pursuant to which each employee who participates in the plan contributes an amount equal to 2.5% of his or her salary to the education fund and we contribute 7.5% of his or her salary, up to the maximum amount exempted from tax.

Each of Messrs. Faitelson, Melamed, O’Boyle and Gottlieb participates in the Varonis Systems Severance Plan (the “Severance Plan”). The Severance Plan took effect in February 2023. The Severance Plan supersedes the severance provisions previously applicable to our participating named executive officers, standardizing their severance payments and benefits and preserving several preexisting provisions.

Pursuant to the Severance Plan, in the event that a participant’s employment is terminated by the Company without “cause” other than due to death or disability or a participant resigns for “good reason” in each case, not in connection with a “change in control” (all as defined in the Severance Plan) and subject to the effectiveness of a release, the participant is entitled to the following: (i) cash severance equal to a percentage (ranging from 50% to 150%) of the sum of his/her base salary and his/her target bonus or commission for the year of termination; (ii) payment of any earned but unpaid bonus or commission in respect of the year prior to the year of termination, at the time such bonuses or commissions would otherwise be paid; and (iii) accelerated vesting of a portion of each equity award held, prorated based on the number of days employed by the Company since the last vesting date (with any performance-vesting awards to be deemed vested at the greater of target and actual level of performance determined at the time of such termination).

Additionally, pursuant to the Severance Plan, in the event that a participant’s employment is terminated by the Company without “cause” other than due to death or disability, or a participant resigns for “good reason,” in each case within six months prior to and 24 months following a “change in control” (all as defined in the Severance Plan) and subject to the effectiveness of a release, the participant is entitled to the following: (i) cash severance equal to a percentage (ranging from 100% to 250%) of the sum of his/her base salary and his/her target bonus or commission for the year of termination; (ii) an additional cash payment equal to the amount of target bonus or commission for the performance period including the date of termination, prorated based on the number of days employed by the Company during the performance period; (iii) payment of any earned but unpaid bonus in respect of the year prior to the year of termination at the time such bonuses or commissions would otherwise be paid; and (iv) accelerated vesting of all equity awards held (with any performance-vesting awards to be deemed vested at the greater of target and actual level of performance determined at the time of such termination).

In the case of Mr. Gottlieb, pursuant to his employment agreement that he entered into in order to induce him to join the Company, wherever termination is by us without “cause,” he is also entitled to acceleration of all unvested portions of his initial grant of 95,440 RSUs granted in May 2021.

Each named executive officer participating in the Severance Plan executed a restrictive covenant agreement containing standard twelve-month post-termination non-competition and non-solicitation covenants. The Severance Plan provides that, in the event a participating named executive officer breaches any of the restrictive covenants, the executive forfeits any unpaid, and must repay any paid, severance benefits.

Mr. Bass has elected not to participate in the Severance Plan, and the terms of any payments received by him upon a termination or change in control are instead governed by his employment agreement and his outstanding equity awards. In the event that he is terminated by the Company without “cause” or he resigns for “good reason” (all as defined in his employment agreement), and provided that he signs and does not revoke a general release of claims, Mr. Bass will be entitled to a cash payment equal to one-half times his base salary. In the event that he is terminated by the Company without “cause” or he resigns for “good reason” within the one-year period following a “change in control” (as defined in his employment agreement), and provided that he signs and does not revoke a general release of claims, Mr. Bass will be entitled to a cash payment equal to one time his base salary. The employment agreement with Mr. Bass also provides that upon a “change in control” (as defined in the 2013 Plan and related agreements), Mr. Bass will be entitled to immediate vesting of all of his outstanding equity-based awards provided he remains in continuous service of the Company or any affiliate or subsidiary as of the effective date of the “change in control.”

For all named executive officers, if the executive’s employment is terminated by us for “cause,” due to death or “disability” or due to the executive’s resignation without “good reason” (each as defined in the Severance Plan for Messrs. Faitelson, Melamed, O’Boyle and Gottlieb, and in Mr. Bass’s employment agreement for him), the executive will not be entitled to any further compensation or benefits other than any accrued but unpaid base salary (and/or unused vacation or paid time off, as applicable) and other accrued benefits of payments such as statutory severance entitlements, through the date of termination.

The Company does not provide “gross-up” payments or tax reimbursements, in each case, with respect to “excess parachute payments” under Section 280G of the Internal Revenue Code (“Section 280G”) pursuant to any agreements with the named executive officers. For those named executive officers participating in the Severance Plan, the Severance Plan includes a “best-net” cutback provision in the event any payments or benefits made to participants are treated as “parachute payments,” subject to the adverse tax consequence under Section 280G of the Internal Revenue Code.

For more information, see “Executive Compensation—Potential Payments upon Termination or Change in Control as of 2023 Fiscal Year End.”

We have adopted various policies and practices intended to mitigate risks associated with our executive and director compensation programs. For a description of our claw-back policy, anti-hedging and anti-pledging policies and executive and director stock ownership guidelines and retention requirements, see “Information Regarding the Board of Directors and Corporate Governance—Other Policies and Practices.”

The Compensation Committee, made up entirely of independent directors, reviewed and discussed the above Compensation Discussion and Analysis with the Company’s management. Based on this review and discussion, the Compensation Committee recommends to the Board of Directors that the Compensation Discussion and Analysis be included in these proxy materials.

Respectfully submitted by the members of the Compensation Committee of the Board of Directors:

The following summary compensation table sets forth the cash and non-cash compensation paid to or earned by our named executive officers. In each case, compensation is shown for the years during which compensation disclosure was required over the last three completed fiscal years of the Company: the fiscal years ended December 31, 2021, December 31, 2022 and December 31, 2023, respectively.