Item 5.02 Departure of Directors or Certain Officers; Election of Directors;


          Appointment of Certain Officers; Compensatory Arrangements of Certain
          Officers.



(e)

On June 9, 2020, the Compensation Committee (the "Committee") of the Board of Directors of Q2 Holdings, Inc. (the "Company") approved an Executive Incentive Compensation Plan (the "Bonus Plan") for the Company's executive officers to be effective for fiscal 2020 and beyond. All executive officers who are not on any other sales or commission-based cash bonus plan are eligible to participate in the Bonus Plan. Participants in the Bonus Plan will be eligible to earn periodic bonuses through achievement of performance targets to be established by the Committee each fiscal year, with the degree of performance achievement determining the bonus amount earned relative to the participant's target bonus amount. Each participant in the Bonus Plan is assigned a target bonus amount, either as a percentage of base salary or as a specified dollar amount. Participants in the Bonus Plan generally must be employed on the date the bonuses are actually paid in order to receive payment. The Company expects to adopt bonus plans under the Bonus Plan for each fiscal year consistent with the terms of the Bonus Plan as described above.

A copy of the Bonus Plan is furnished as Exhibit 10.1 hereto and is incorporated herein by reference. The foregoing description of the Bonus Plan does not purport to be complete and is qualified in its entirety by reference to such exhibit.

On June 9, 2020, pursuant to the Bonus Plan, the Committee also approved the 2020 Bonus Plan (the "2020 Bonus Plan") for the Company's named executive officers to be effective for the fiscal year ending December 31, 2020.

The 2020 base salaries and target bonus payments as a percentage of the base salary for each of the Company's named executive officers are set forth in the following table:


                                                                          Target Bonus as %
          Named Executive Officer                 2020 Base Salary(1)      of Base Salary

Matthew P. Flake


  President and Chief Executive Officer         $             520,000            57%

Jennifer N. Harris


  Chief Financial Officer                                     368,400            55%

Adam D. Blue


  Executive Vice President and Chief
Technology Officer                                            300,000            55%

William M. Furrer


  Chief Strategy and Marketing Officer                        290,000            55%

(1) Base salary amounts reflect no change from 2019.

The 2020 Bonus Plan provides for the payment of cash bonuses based upon achievement of established performance measures and payout formulas determined by the Committee. To the extent earned, bonuses under the 2020 Bonus Plan will be paid in a single annual payout following completion of the 2020 fiscal year.

The 2020 Bonus Plan provides for the bonus amounts to be determined based on the following metrics:

Weighting of Performance Measure as % of Potential Bonus Payment


        Non-GAAP Revenue                   Adjusted EBITDA
              50%                                50%

The non-GAAP revenue performance measure ("revenue performance measure") consists of GAAP revenue, adjusted to exclude the impact to deferred revenue from purchase accounting. The adjusted EBITDA performance measure ("EBITDA performance measure") consists of adjusted EBITDA, determined by the Company by adjusting GAAP net loss for such items as interest, taxes, depreciation and amortization, stock-based compensation, acquisition-related costs, amortization of technology and intangibles, unoccupied lease charges and the impact to deferred revenue from purchase accounting. The 2020 Bonus Plan provides that the revenue and EBITDA performance measures are to be measured against non-GAAP revenue and adjusted EBITDA targets based on the Company's 2020 internal operating plan.

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Potential payouts under the 2020 Bonus Plan with respect to the revenue and EBITDA performance measures are based on performance within a range of each performance measure's target. The targeted range of attainment opportunities for each performance measure are set forth in the following table:


                                                                    Corresponding
                                Percentage of    Percentage of         Weighted
                                   Revenue           EBITDA        Potential Payout
                                 Performance      Performance       Percentage Per
                                   Measure          Measure          Performance
      Achievement Level            Attained         Attained           Measure
Minimum                              90%              80%                50%
Target                           100% to 105%     95% to 105%            100%
Maximum                              110%             110%               120%


Item 5.07          Submission of Matters to a Vote of Security Holders.

The Company held its 2020 annual meeting of stockholders on June 9, 2020. Holders of an aggregate of 48,963,069 shares of the Company's common stock at the close of business on April 22, 2020 were entitled to vote at the meeting, of which 46,797,900, or 95.6%, of the eligible shares were represented in person or by proxy. The matters voted upon at the meeting and the results of those votes are as follows:

Proposal 1: Election of Directors to hold office for one-year terms or until their respective successors are elected and qualified, or their earlier death, resignation or removal.



                         For        Withheld    Broker Non-votes
R. Lynn Atchison     44,593,284      375,104           1,829,512
Charles T. Doyle     40,153,951    4,814,437           1,829,512
Carl James Schaper   39,926,910    5,041,478           1,829,512

Based on the votes set forth above, all of the director nominees were duly elected.

Proposal 2: Ratification of the appointment of Ernst & Young LLP as independent registered public accounting firm for the fiscal year ending December 31, 2020.



    For       Against    Abstaining
46,537,758    109,726       150,416

Based on the votes set forth above, the selection of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2020 was ratified.



Proposal 3: Advisory vote to approve the compensation of the Company's named
executive officers.

    For        Against     Abstaining    Broker Non-votes
39,616,509    5,196,093       155,786           1,829,512

Based on the votes set forth above, the stockholders approved on an advisory basis the compensation of the Company's named executive officers.

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Item 9.01.   Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.                  Description

10.1 Executive Incentive Compensation Plan

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