LEAF Leaf Group Ltd

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A

Amendment No. 1

(Mark One)

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For the fiscal year ended December 31, 2020

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OR

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For the transition period from                      to

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Commission file number 001-35048

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(Registrant’s telephone number, including area code)

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Securities registered pursuant to Section 12(b) of the Act:

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Securities registered pursuant to Section 12(g) of the Act: None.

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐    No ☒

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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐   No ☒

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No ☐

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒    No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒

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As of June 30, 2020, the aggregate market value of the registrant’s common stock, $0.0001 par value, held by non-affiliates of the registrant was approximately $56.7 million (based upon the closing sale price of the common stock on that date on the New York Stock Exchange).

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As of April 26, 2021, there were 35,999,786 shares of the common stock, $0.0001 par value, outstanding.

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Documents Incorporated by Reference

None.

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Explanatory Note

This Amendment No. 1 to Form 10-K (this “Amendment”) amends the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, originally filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2021 (the “Original Filing”). The Company is filing this Amendment to amend Part III of the Original Filing to include the information required by and not included in Part III of the Original Filing. This information was previously omitted from the Original Filing in reliance on General Instruction G(3) to the Annual Report on Form 10-K, which permits the above-referenced information to be incorporated in the Annual Report on Form 10-K by reference from a definitive proxy statement, if such definitive proxy statement is filed no later than 120 days after December 31, 2020. At this time, the Company is filing this Amendment to include such information because the Company no longer intends to file its definitive proxy statement within 120 days of the end of its fiscal year ended December 31, 2020.

Except as set forth in Part III and IV below or as described above, no other changes are made to the Original Filing other than updating the cover page of the Original Filing. Unless expressly stated, this Amendment does not reflect events occurring after the filing of the Original Filing, nor does it modify or update in any way the disclosures contained in the Original Filing. Accordingly, this Amendment should be read together with our Original Filing and our other filings made with the SEC subsequent to the filing of the Original Filing.

As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Item 15 of Part IV of the Original Filing has been amended to contain currently dated certifications from our Chief Executive Officer and Chief Financial Officer. The currently dated certifications are attached hereto as Exhibits 31.1 and 31.2. Because no financial statements are contained in this Amendment, we are not including certifications pursuant to 18 U.S.C. 1350.

References herein to the “Company,” “Leaf Group,” “we,” “our,” and “us” refer to Leaf Group Ltd.

Proposed Merger with Graham

On April 3, 2021, we entered into an Agreement and Plan of Merger (the “merger agreement”) with Graham Holdings Company, a Delaware Corporation (“Graham”), and Pacifica Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Graham (the “merger subsidiary”), pursuant to which Merger Sub will be merged with and into the Company (the “merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent.

Subject to the terms and conditions set forth in the merger agreement (and as described in further detail in the preliminary proxy statement filed by the Company with the SEC on April 23, 2021), if the merger is consummated, then, at the effective time of the merger, each share of Company common stock, par value $0.0001 per share (the “common stock”), issued and outstanding immediately prior to the effective time of the merger (other than shares held by the Company as treasury stock, owned by Graham or the merger subsidiary or as to which holders thereof have properly and validly exercised their statutory rights of appraisal in accordance with Section 262 of the Delaware General Corporation Law) will be automatically converted into the right to receive cash in an amount equal to $8.50, without interest and less any applicable withholding taxes (the “merger consideration”).

At the effective time of the merger, by virtue of the merger and without any action on the part of the holders, (i) each outstanding option to purchase shares of common stock (each referred to as a “stock option”) issued under the Company’s Amended and Restated 2010 Incentive Award Plan (referred to as the “2010 Plan”) will be cancelled and, in consideration thereof, the holder of such stock option will receive an amount in cash equal to, net of applicable tax withholding, the product of (x) the excess, if any, of the merger consideration over the exercise price per share of common stock underlying such stock option, multiplied by (y) the total number of shares of common stock subject to such stock option, (ii) each outstanding restricted stock unit of the Company (each referred to as an “RSU”) issued under the 2010 Plan that is vested immediately prior to the effective time of the merger (or would become vested by the terms thereof as a result of the merger) will be cancelled and, in consideration thereof, the holder of such RSU will receive an amount in cash equal to, net of applicable tax withholding, the merger consideration in respect of each share of common stock subject to such RSU, and (iii) each outstanding RSU that is not vested immediately prior to the effective time of the merger (and would not become vested by the terms thereof as a result of the merger) will, as of the effective time, be cancelled and, in consideration thereof, the holder of such unvested RSU will receive the amount described in clause (ii),

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subject to and conditioned on the same terms and conditions (including any terms and conditions relating to vesting and acceleration thereof) as applicable to such unvested RSU awards.

Prior to the execution of the merger agreement, all stock options held by Company employees were vested according to their terms. Thus, the merger will have no effect on the vesting of any outstanding stock options held by employees. Stock options held by the Company’s non-employee directors that are not otherwise vested prior to the effective time of the merger will become automatically vested as of the effective time of the merger, pursuant to their terms. In addition, and for the avoidance of doubt, any stock option with an exercise price equal to or greater than the merger consideration will be cancelled for no consideration.

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LEAF GROUP LTD.

INDEX TO FORM 10-K

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capital to entrepreneurs building the next generation of consumer brands. From May 2014 to March 2020, Ms. Benton was an Investment Partner at Kaktus Capital, and in May 2014, she joined Mitchell Madison Group as a Senior Consultant where she leads the consumer and retail practice. In this role, Ms. Benton assists clients in a wide array of areas including retail strategy, supply chain management, cost reduction and control, organizational design, and operational scaling. Prior to joining Mitchell Madison Group, Ms. Benton held a number of senior-level operating roles at Nasty Gal, a women’s fashion retailer, from May 2012 to April 2014, including serving as its President and Chief Operating Officer. Prior to that, she was the Chief Operating Officer of ShoeDazzle from November 2009 to April 2012, an online women’s fashion footwear company. Prior to that, she was the Executive Vice President, Operations and Inside Sales for Teleflora, a provider of consumer and florist products and services. Ms. Benton also serves as a director of Coterie, a baby consumer brand focused on providing premium, high-quality products designed to make parents’ lives easier. Ms. Benton served a director of TomboyX, a company offering gender-neutral underwear to a diverse customer base, from June 2018 to May 2019; Carbon38, a luxury activewear lifestyle brand, from March 2015 to August 2020; The Bouqs Company, a cut-to-order, farm-to-table flower retailer, from February 2015 to August 2020; and Vow To Be Chic, a bridesmaid dress rental company that discontinued operations, from April 2016 to May 2018. Ms. Benton received an a masters of business administration and an undergraduate degree in Health Sciences from Queen’s University, Canada.

We believe that Ms. Benton is qualified to serve as a member of our Board because of her over 15 years of consulting and operational experience with a strong focus on e-commerce and retail businesses.

Beverly K. Carmichael has served on our Board since July 2018 and is currently chair of our compensation committee and a member of our nominating and corporate governance committee and our audit committee. From December 2017 to April 2019, Ms. Carmichael served as the Executive Vice President and Chief People, Culture, and Resource Officer of Red Robin Gourmet Burgers, Inc. Ms. Carmichael previously served as Senior Vice President and Chief People Officer of Cracker Barrel Old Country Store from January 2014 to December 2017. Prior to that, she was Founder and Chief Executive Officer of Star HR, LLC from April 2010 to April 2014 where she provided customized HR solutions to small businesses and start-up companies. Ms. Carmichael also served as an Adjunct Professor/Advisor at the Michael F. Price College of Business from 2010 through 2013. She served as Executive Vice President, Chief People Officer at Ticketmaster from August 2006 to August 2009. Prior to joining Ticketmaster, she was Vice President of HR – Talent Acquisition, Learning and Organizational Development at Rockwell Collins from 2005 to 2006. Prior to her time with Rockwell Collins, Ms. Carmichael spent 10 years at Southwest Airlines Co. in various roles including Senior Vice President, Labor and Employee Relations; Vice President, People (Human Resources); and Chief Counsel, Labor and Employment. She also spent four years as a litigation and employment law attorney at the law firm of Manatt Phelps & Phillips. Ms. Carmichael earned both a juris doctorate and a bachelor of business administration. from the University of Oklahoma.

We believe that Ms. Carmichael is qualified to serve as a member of our Board because of her over 25 years of experience in human resources and employment law in both operational and legal roles.

Suzanne Hopgood has served on our Board since November 2020 and is currently a member of our compensation committee. Ms. Hopgood founded The Hopgood Group, LLC, a business consulting company, in 1985 and is the Managing Member. From 2014 to 2018, Ms. Hopgood served on the board of directors of Mace Security International, a manufacturer of safety and security products. From 2004 to 2010, Ms. Hopgood served on the board of directors of Acadia Realty Trust, a real estate investment trust focused on retail properties in the United States. Ms. Hopgood has also served as chief executive officer and on the board of a various of public and private companies. Ms. Hopgood received a bachelor in science in business administration from the University of New Hampshire.

We believe that Ms. Hopgood is qualified to serve as a member of our Board because of her experience leading public companies and her focus on corporate governance.

Rob Krolik has served on our Board since November 2020 and is currently chair of our audit committee and a member of our compensation committee. Since 2018, Mr. Krolik has served as the General Partner and Chief Financial Officer of Burst Capital, a venture capital firm focused on investments in software and service companies. Prior to joining Burst Capital, Mr. Krolik served as the Chief Financial Officer of Yelp, a website and mobile application that

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publishes crowd-sourced reviews of businesses, from 2011 until 2016. From 2009 to 2011, Mr. Krolik was the Chief Financial Officer of Move.com, a company that provides real estate information across a variety of websites. Mr. Krolik has served on the board of directors of The Real Real since 2019. Mr. Krolik received a bachelor of business administration from the University of Texas at Austin. Mr. Krolik is a certified public accountant (inactive).

We believe that Mr. Krolik is qualified to serve as a member of our Board because of his business and accounting background, particularly his service as a Chief Financial Officer at various companies.

Harold Logan has served on our board since November 2020 and is currently a member of our nominating and corporate governance committee. Mr. Logan has held a number of roles in the automotive and software technology industries. He is currently the Manager of Fairfield Automotive Partners, a company building a BMW dealership. From 2009 to 2014, Mr. Logan served as the Chief Executive Officer of BuyBook Technologies, Inc., which was later acquired by Autotrader.com, Inc., a subsidiary of Cox Automotive Inc. Prior to his role at BuyBook, Mr. Logan worked at Manheim, Inc., an automobile auction company, where he served in a variety of roles including Senior Vice President of Strategic Planning and Chief Executive Officer of the company’s technology subsidiary. Mr. Logan currently serves and has previously served on the board of directors of multiple private companies in the automotive and technology industries. Mr. Logan received a bachelor of arts in economics from Harvard University and a master of business administration from Stanford University.

We believe that Mr. Logan is qualified to serve as a member of our Board because of his depth of business expertise and his experience serving on the board of directors of various corporations.

Jennifer Schulz has served on our Board since November 2016 and is currently chair of our nominating and corporate governance committee and a member of our audit committee. Since November 2013, Ms. Schulz has served as Group President, Vertical Markets for Experian North America, a division of Experian plc, a global information services company, where she is responsible for overseeing the Automotive, Health and Marketing Services businesses in North America. From May 2010 to September 2013, Ms. Schulz was the Senior Vice President of global product strategy, innovations and eCommerce for Visa Inc., a global payments and technology company. From 2008 to 2010, Ms. Schulz worked at Verifi, Inc., a SaaS-based electronic payment solutions company, first serving as Chief Operating Officer and then Chief Executive Officer, and from 2003 to 2008, Ms. Schulz held various operational and leadership positions at Visa. Ms. Schulz received an masters of business administration. from the University of Michigan’s Ross School of Business and a bachelor of arts from the University of Wisconsin.

We believe that Ms. Schulz is qualified to serve as a member of our Board because of her over 15 years of experience in the e-commerce, digital marketing and payments industries, serving in executive and operational leadership roles over that span. Ms. Schulz’s extensive industry knowledge, business expertise and leadership skills serve as a key resource to our Board.

Biographical information for Mr. Moriarty is set forth above under “—Directors.”

Brian Gephart joined Leaf Group in June 2019 as the Company’s Chief Accounting Officer and principal accounting officer. Mr. Gephart served as the Company’s interim Chief Financial Officer beginning in May 2020, and become the Company’s Chief Financial Officer in October 2020. Prior to joining the Company, Mr. Gephart served as

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Chief Accounting Officer of JH Capital Group, a diversified specialty finance company providing a wide array of solutions for consumers and businesses across a broad range of assets, from August 2017 to April 2019. Prior to joining JH Capital Group, Mr. Gephart was a Director at PricewaterhouseCoopers LLP specializing in Capital Markets & Accounting Advisory Services, from 2011 to August 2017, where he advised a variety of private and public companies on capital market transactions, mergers and acquisitions and financial reporting and accounting matters. Mr. Gephart received a bachelor’s degree in Accounting from Hillsdale College and a masters of business administration from DePaul University. Mr. Gephart is a Certified Public Accountant.

Brian Pike joined Leaf Group in October 2014 as Chief Technology Officer. In May 2015, Mr. Pike was appointed to also serve as our Chief Operating Officer. From April 2012 to October 2014, Mr. Pike was Chief Technology Officer at The Rubicon Project, Inc., a technology company that automates the buying and selling of digital advertising, where he led the engineering organization through rapid growth and the company’s initial public offering. Prior to joining Rubicon, Mr. Pike served as Chief Technology Officer at Ticketmaster, a live entertainment ticketing and marketing company, from 2003 to 2010. Mr. Pike received a bachelor of science in Engineering from Stanford University and his masters of business administration from the Anderson School of Management at UCLA.

Adam Wergeles joined Leaf Group in April 2018 as our Executive Vice President, General Counsel. Prior to joining Leaf Group, Mr. Wergeles served as Executive Vice President, Business and Legal Affairs, and General Counsel for Serviz, Inc., a technology company that connects consumers with home service professionals. From December 2007 to March 2015, Mr. Wergeles served variously as the Chief Legal Officer, General Counsel and Secretary at ReachLocal, Inc. Mr. Wergeles holds a juris doctorate from the University of Southern California Law School and a bachelor of arts from Hamilton College.

CORPORATE GOVERNANCE

Our Board has adopted corporate governance guidelines to set forth a framework for its overall governance practices. These guidelines can be found in the corporate governance section of our investor relations website at http://ir.leafgroup.com/corporate-governance/corporate-governance-overview/default.aspx. In addition, these guidelines are available in print to any stockholder who requests a copy. Please direct all requests to our Corporate Secretary, Leaf Group Ltd., 1655 26^th Street, Santa Monica, California 90404.

Board Leadership Structure

Our Board does not have a policy on whether the role of the chair and chief executive officer should be separate and, if it is to be separate, whether the chair should be selected from the independent directors. Currently, Ms. Benton, who is an independent director, serves as the Chair of the Board. Our Board believes that the current Board leadership structure is best for our Company and our stockholders at this time.

Our Board is currently comprised of six independent members and one non-independent member. We have four standing Board committees comprised solely of directors who are considered independent under all applicable New York Stock Exchange (the “NYSE”) listing standards.

Risk Oversight

Our Board is primarily responsible for overseeing our risk management processes. Our Board, as a whole, determines the appropriate level of risk for our Company, assesses the specific risks that we face and reviews management’s strategies for adequately mitigating and managing the identified risks. Although our Board administers this risk management oversight function, our audit committee, nominating and corporate governance committee and compensation committee support our Board in discharging its oversight duties and address risks inherent in their respective areas. We believe this division of responsibilities is an effective approach for addressing the risks we face and that our Board leadership structure supports this approach. In particular, the audit committee is responsible for considering and discussing our significant accounting and financial risk exposures and the actions management has taken to control and monitor these exposures, and the nominating and corporate governance committee is responsible for considering and discussing our significant corporate governance risk exposures and the actions management has taken to

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control and monitor these exposures. As needed and when requested, the audit committee and the nominating and corporate governance committee receive reports from management regarding an assessment of such risks. The compensation committee, with input from its independent compensation consultant, assists our Board in reviewing and assessing whether any of our compensation policies and programs could potentially encourage excessive risk-taking. In considering our employee compensation policies and practices, the compensation committee annually reviews our policies related to payment of salaries and wages, commissions, benefits, bonuses, stock-based compensation and other compensation-related practices and considers the relationship between risk management policies and practices, corporate strategy and compensation. Based on this review, the compensation committee has concluded that our employee compensation policies and practices, including executive compensation, do not encourage risk taking to a degree that is likely to have a materially adverse impact on us or our operations.

While the Board oversees our risk management, our management is responsible for day-to-day risk management processes. Our Board expects management to consider risk and risk management in each business decision, to proactively develop and monitor risk management strategies and processes for day-to-day activities and to effectively implement risk management strategies adopted by the audit committee and the Board.

Director Independence

Our Board has determined that each director, except for Mr. Moriarty, are independent under the NYSE listing standards and Leaf Group’s corporate governance guidelines. In making these determinations, the Board considered all relationships between us and each director and each director’s family members.

Board Committees

Our Board maintains a standing audit committee, nominating and corporate governance committee and compensation committee. Each of the audit committee, the nominating and corporate governance committee and the compensation committee operates under a written charter that satisfies the applicable standards of the SEC and the NYSE. The charter of each of the audit committee, the nominating and corporate governance committee and the compensation committee is available on the investor relations page of our website at http://ir.leafgroup.com/corporate-governance/corporate-governance-overview/default.aspx. In addition, the charters for each of our committees are available in print to any stockholder who requests a copy. Please direct all requests to our Corporate Secretary, Leaf Group Ltd., 1655 26th Street, Santa Monica, California 90404. The membership of all of our standing Board committees as of March 31, 2021 is as follows:

Audit Committee

We have an audit committee that has responsibility for, among other things, overseeing management’s maintenance of the reliability and integrity of our accounting policies and financial reporting and our disclosure practices; overseeing management’s establishment and maintenance of processes to assure that an adequate system of internal control is functioning; reviewing our annual and quarterly financial statements; appointing and evaluating our independent registered public accounting firm and considering and approving any non-audit services proposed to be performed by such independent accountants; and discussing with management and our Board our policies with respect to

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risk assessment and risk management, as well as our significant financial risk exposures and the actions management has taken to limit, monitor or control such exposures, if any.

The current members of our audit committee are Mr. Krolik, Ms. Schulz and Ms. Carmichael, with Mr. Krolik serving as the committee’s chair since February 2021. All members of our audit committee meet the requirements for financial literacy, and each of the members meets the requirements for independence, under Rule 10A-3 promulgated under the Exchange Act, and the applicable rules and regulations of the NYSE. Our Board has also determined that each of Mr. Krolik and Ms. Schulz is an audit committee “financial expert,” as that term is defined by the applicable rules of the SEC, and has the requisite financial sophistication as defined under the applicable rules and regulations of the NYSE.

Nominating and Corporate Governance Committee

We have a nominating and corporate governance committee that has responsibility for, among other things, recommending persons to be selected by our Board as nominees for election as directors and to fill any vacancies on our Board; considering and recommending to our Board qualifications for the position of director and policies concerning the term of office of directors and the composition of our Board; and considering and recommending to our Board other actions relating to corporate governance. The members of our nominating and corporate governance committee are Ms. Carmichael, Ms. Schultz and Mr. Logan, with Ms. Schulz serving as the committee’s chair since May 2020. All members of our nominating and corporate governance committee meet the independence requirements of the NYSE. When recommending persons to be selected by the Board as nominees for election as directors, the nominating and corporate governance committee considers such factors as the individual’s personal and professional integrity, ethics and values; experience in corporate management; experience in the Company’s industry; experience as a Board member of other publicly held companies; academic expertise in an area of the Company’s operations; and practical and thoughtful business judgment. In addition, the nominating and corporate governance committee considers diversity of relevant experience, expertise and background and other individual qualifications and attributes that contribute to board heterogeneity, including characteristics such as gender, race and national origin, in identifying nominees for directors. The nominating and corporate governance committee may delegate any or all of its responsibilities to a subcommittee, but only to the extent consistent with the Company’s certificate of incorporation, bylaws, corporate governance guidelines, NYSE rules and other applicable law.

As all of the members of our then-constituted nominating and corporate governance committee were up for election at the 2020 annual meeting of stockholders, our Board formed an ad hoc committee consisting of all other independent directors at that time for the purpose of nominating directors for election at the 2020 annual meeting of stockholders.

Compensation Committee

We have a compensation committee that has responsibility for, among other things, reviewing management and employee compensation policies, plans and programs; monitoring performance and compensation of our executive officers and other key employees; preparing recommendations and periodic reports to our Board concerning these matters; and administering our equity incentive plans.

The members of our compensation committee are Mr. Krolik, Ms. Carmichael and Ms. Hopgood, with Ms. Carmichael serving as the committee’s chair since November 2020. Our Board has determined that each of Mr. Krolik, Ms. Carmichael and Ms. Hopgood is independent and a non-employee director under all applicable rules and regulations of the SEC, the NYSE and the Internal Revenue Code of 1986, as amended (the “Code”).

The compensation committee has the ability to delegate certain of its responsibilities to subcommittees in accordance with the Company’s certificate of incorporation, bylaws, Section 162(m) of the Code as applicable, NYSE rules and other applicable law, but has not currently authorized any such delegations.

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Communication with the Board

Interested persons, including stockholders, may communicate with our Board by sending a letter to our Corporate Secretary at our principal executive offices at 1655 26th Street, Santa Monica, California 90404. Our Corporate Secretary will submit all correspondence to the Chair of the Board or to the lead independent director (if applicable), or to any specific director to whom the correspondence is directed.

Code of Business Conduct and Ethics

Our Board has adopted a code of business conduct and ethics that applies to all of our employees, executive officers and directors. Our code of business conduct and ethics can be found in the corporate governance section on the investor relations page of our website at http://ir.leafgroup.com/corporate-governance/corporate-governance-overview/default.aspx. In addition, our code of business conduct and ethics is available in print to any stockholder who requests a copy. Please direct all requests to our Corporate Secretary, Leaf Group Ltd., 1655 26th Street, Santa Monica, California 90404.

Limitations on Hedging and Pledging Stock

Our Insider Trading Compliance Program, which applies to all of our directors and employees, including our executive officers, prohibits aggressive or speculative stock trading techniques, including the purchase or sale of put or call options related to our common stock, which is listed on the NYSE. Furthermore, our Insider Trading Compliance Program only permits the pledge of shares to act as collateral for a margin loan when an executive officer, director or employee is not subject to a designated blackout period, thereby limiting the ability of officers, directors and employees to have margin loans secured by our common stock.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of our Company. Specific due dates have been established by the SEC, and we are required to disclose in this proxy statement any failure to file required ownership reports by these dates.

Based solely on a review of copies of such forms that we received from such persons with respect to their transactions in fiscal 2020, and the written representations received from certain reporting persons that no other reports were required, we believe that all directors, executive officers and persons who own more than 10% of our common stock have complied with the Section 16(a) reporting requirements, with the following exceptions: (i) one Form 4 report for a single transaction for the acquisition of an RSU award by Brian Gephart that was filed late due to an inadvertent administrative error and (ii) and one Form 4 report for a single transaction for the acquisition of an RSU award by Harold Logan that was filed late due to an inadvertent administrative error.

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Narrative Disclosure to Summary Compensation Table

Below are summaries of the key terms of the employment agreements applicable to our named executive officers (referred to herein as the “employment agreements”).

Sean Moriarty. On January 5, 2016, we entered into an Amended and Restated Employment Agreement with Mr. Moriarty (the “Moriarty Agreement”) that became effective as of January 5, 2016 with a three-year term, unless terminated earlier. The term of the 2016 Moriarty Agreement is subject to automatic one-year renewal terms unless either we or Mr. Moriarty give written notice of termination at least 90 days prior to the end of the applicable term.

The Moriarty Agreement sets forth Mr. Moriarty’s fiscal 2016 annual base salary of $400,000. Mr. Moriarty’s annual base salary remained the same through 2020 as the annual base salary set forth under the Moriarty Agreement. Due to the COVID-19 pandemic, Mr. Moriarty voluntarily reduced his salary in 2020 by 50% effective April 1, 2020, but had his full salary reinstated effective with the payroll payable on June 30, 2020. The Moriarty Agreement also provides Mr. Moriarty with the opportunity to earn an annual discretionary cash performance bonus targeted at 80% of his base salary in effect for any calendar year, based on the achievement of individual and Company-based performance criteria established by the Company’s Board or compensation committee, after consultation with Mr. Moriarty. For fiscal 2017, Mr. Moriarty’s bonus target was increased to 100% of his annual base salary, and such bonus target remained the same for fiscal 2019 and 2020. Under the Moriarty Agreement, Mr. Moriarty is eligible to earn an additional discretionary cash bonus if the performance metric(s) applicable to his annual bonus opportunity is or are attained at the “target” level and the full target bonus becomes payable to him. Mr. Moriarty is also entitled to participate in customary health, welfare and fringe benefit plans. The Moriarty Agreement provides for various equity grants. The Moriarty Agreement also provides that Mr. Moriarty would be entitled to benefits in the event he is terminated by the Company without “cause” or by Mr. Moriarty for “good reason.” For more information see “—Potential Payments Upon Termination or Change in Control” below.

Brian Gephart. On May 15, 2019, we entered into an employment agreement with Mr. Gephart (the “Gephart Agreement”) in connection with his appointment as Chief Accounting Officer, which was amended on October 16, 2020 in connection with Mr. Gephart’s appointment as Chief Financial Officer. The Gephart Agreement provides for an annual base salary of $325,000, subject to increase at the discretion of the compensation committee. Due to the COVID-19 pandemic, Mr. Gephart voluntarily reduced his salary in 2020 by 15% effective April 1, 2020, but had his full salary reinstated effective with the payroll payable on June 30, 2020. In addition, we increased Mr. Gephart’s base salary twice in 2020, from $265,000 to $300,000 in connection with his promotion to interim Chief Financial Officer on May 19, 2020 and again from $300,000 to $325,000 in connection with his promotion to Chief Financial Officer on October 16, 2020. The Gephart Agreement also provides Mr. Gephart with the opportunity to earn an annual discretionary cash performance bonus targeted at 50% of his annual base salary, based on the attainment of individual and/or Company-based performance criteria established by the Company’s board of directors or compensation committee. Mr. Gephart is entitled to participate in customary health, welfare and fringe benefit plans. The Gephart Agreement provides for various equity grants. The Gephart Agreement also provides that Mr. Gephart would be entitled to benefits in the event he is terminated by the Company without “cause” or by Mr. Gephart for “good reason.” For more information see “—Potential Payments Upon Termination or Change in Control” below.

Brian Pike. On May 21, 2015, we entered into an Amended and Restated Employment Agreement with Mr. Pike (the “Pike Agreement”) that became effective as of May 21, 2015. The Pike Agreement provides for an annual base salary of $350,000. Mr. Pike’s annual base salary has remained the same as the annual base salary set forth under the Pike Agreement. Due to the COVID-19 pandemic, Mr. Pike voluntarily reduced his salary in 2020 by 25% effective

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April 1, 2020, but had his full salary reinstated effective with the payroll payable on June 30, 2020. The Pike Agreement also provides Mr. Pike with an opportunity to earn an annual discretionary cash performance bonus targeted at 50% of his annual base salary actually paid for such calendar year, based on the attainment of Company performance metrics applicable to senior employees and/or individual performance objectives, in each case as established and approved by the Company’s Board or the compensation committee. Mr. Pike is entitled to participate in customary health, welfare and fringe benefit plans. The Pike Agreement provides for various equity grants.

In March 2019, we amended the Pike Agreement to enhance the benefits Mr. Pike would be entitled to in the event he is terminated by the Company without “cause” or by Mr. Pike for “good reason.” For more information see “—Potential Payments Upon Termination or Change in Control” below.

In April 2020, we further amended the Pike Agreement to provide that Mr. Pike’s employment shall continue until terminated under certain conditions.

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Pension Benefits and Nonqualified Deferred Compensation

We do not offer any defined benefit pension plans or nonqualified deferred compensation arrangements for our employees.

Retirement Savings and Other Benefits

We maintain a 401(k) retirement savings plan for our employees based in the U.S., including the named executive officers, who satisfy certain eligibility requirements. We match 50% of contributions made by all participants (including our named executive officers) in the 401(k) plan, up to a contribution level of 6% of the respective participant’s annual gross salary for the then-current calendar year (the “Company 401(k) Match”). The Company 401(k) Match vests in full following the completion of the participant’s first year of employment, and each matching contribution under the Company 401(k) Match following the first year of employment is fully vested at the time of contribution. Effective May 2020, in response to the effects of the COVID-19 pandemic on the Company, we suspended the Company 401(k) Match to all of our full-time U.S. employees, including our named executive officers. The Company 401(k) Match was reinstated effective January 1, 2021.

Potential Payments Upon Termination or Change in Control

The following summarizes the payments and benefits that our named executive officers would be entitled to receive upon certain qualifying terminations of employment and/or a change in control. We believe that severance and change in control protections are important components of our named executive officers’ compensation packages because these protections provide security and stability that help enable our named executive officers to focus on their duties and responsibilities to the Company and to act with the best interests of the Company and its stockholders in mind at all times, even under circumstances where the interests of the Company and its stockholders may be adverse to the executive’s job security.

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On April 3, 2021, we entered into the merger agreement with Graham and the merger subsidiary. The merger provided for thereunder would constitute a change in control of the Company and, if the same is consummated, our named executive officers would be entitled to certain payments and benefits as described below, and in each case in the terms and subject to the conditions described below.

Sean Moriarty

Termination of Employment

Pursuant to the Moriarty Agreement, if Mr. Moriarty’s employment is terminated by the Company without “cause”, by Mr. Moriarty for “good reason” or as a result of Mr. Moriarty’s death or “disability” (each, as defined in the Moriarty Agreement), then, in addition to payments of accrued compensation and benefits through the date of termination, Mr. Moriarty would be entitled to receive the following benefits:

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Pursuant to the terms of the PSU award granted to Mr. Moriarty in March 2019 (the “PSU Award”), upon a qualifying termination (as defined in the Moriarty Agreement) the PSU Award would be eligible for accelerated vesting upon certain circumstances. Following the end of the fiscal year 2020 performance period, however, the compensation committee determined that the performance-based vesting conditions were not achieved and, therefore, no portion of the PSU award vested and the award was forfeited in its entirety.

Mr. Moriarty’s right to receive the severance payments, benefits and equity accelerations described above is subject to his delivery and non-revocation of an effective general release of claims in favor of the Company. In addition, to the extent that any payment or benefit to be received by Mr. Moriarty would be subject to an excise tax under Section 4999 of the Code, such payments and/or benefits will be subject to a “best pay cap” reduction if such reduction would result in a greater net after-tax benefit to Mr. Moriarty than receiving the full amount of such payments.

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Brian Gephart

Pursuant to the Gephart Agreement (as amended and restated in October, 2020), Mr. Gephart is entitled to certain benefits in the event Mr. Gephart’s employment is terminated by reason of a qualifying termination other than in connection with a “change in control” (as defined in the Gephart Agreement), Mr. Gephart will be entitled to:

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In the event that Mr. Gephart’s employment is terminated by reason of a qualifying termination within 90 days before or 12 months after a “change in control,” Mr. Gephart shall also be entitled to:

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Mr. Gephart’s right to receive the severance payments, benefits and equity accelerations described above is subject to Mr. Gephart’s delivery and non-revocation of an effective general release of claims in favor of the Company. In addition, to the extent that any payment or benefit to be received by Mr. Gephart would be subject to an excise tax under Section 4999 of the Code, such payments and/or benefits will be subject to a “best pay cap” reduction if such reduction would result in a greater net after-tax benefit to Mr. Gephart than receiving the full amount of such payments.

Brian Pike

Pursuant to Pike Agreement, in the event Mr. Pike’s employment is terminated by reason of a qualifying termination other than in connection with a “change in control” (as defined in the employment agreement), Mr. Pike will be entitled to:

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In the event that Mr. Pike’s employment is terminated by reason of a qualifying termination within 90 days before or 12 months after a “change in control,” Mr. Pike shall also be entitled to:

Mr. Pike’s right to receive the severance payments, benefits and equity accelerations described above is subject to Mr. Pike’s delivery and non-revocation of an effective general release of claims in favor of the Company. In addition, to the extent that any payment or benefit to be received by Mr. Pike would be subject to an excise tax under Section 4999 of the Code, such payments and/or benefits will be subject to a “best pay cap” reduction if such reduction would result in a greater net after-tax benefit to Mr. Pike than receiving the full amount of such payments.

OUTSIDE DIRECTOR COMPENSATION PROGRAM

The Company has a compensation program (the “Outside Director Compensation Program”) for non-employee directors (the “Outside Directors”). The Outside Director Compensation Program is intended to fairly compensate each Outside Director with cash and equity compensation for the time and effort necessary to serve as a member of our Board, and to better align the interests of our Board members with the interest of our stockholders. In October 2020, we revised the Outside Director Compensation Program to better align with standard market practices.

Cash compensation. Under the Outside Director Compensation Program, each Outside Director is entitled to receive an annual cash retainer of $50,000 for serving on the Board, payable in quarterly installments in arrears. In addition, each Outside Director that serves as the chair of the audit committee, compensation committee or nominating and corporate governance committee is entitled to receive an additional annual cash retainer of $25,000, $15,000 or $10,000, respectively. Outside Directors that serve as non-chair members of the audit committee, compensation committee or nominating and corporate governance committee are entitled to receive additional annual cash retainers of $12,500, $7,500 or $5,000, respectively. In addition to cash compensation received for serving as an Outside Director, the non-executive Chair of the Board is entitled to receive an annual cash retainer of $50,000 (prior to our revisions, such retainer was $100,000). As part of the cost reduction initiatives implemented at the beginning of the COVID-19 pandemic, our Board agreed to forego the 2020 annual equity compensation grant to outside directors under our Outside Director Compensation Program and to forego all cash retainer compensation under our Outside Director Compensation Program for the first and second quarters of 2020, resulting in a 50% reduction in annual cash compensation. We determined to recommence the cash retainer compensation for our outside directors under our Outside Director Compensation Program, effective as of July 1, 2020.

Equity compensation. Pursuant to the Board’s Outside Director Compensation Program, each Outside Director is entitled to receive an initial one-time equity grant with an aggregate grant date fair value of approximately $150,000 upon the Outside Director’s initial election to the Board (the “Initial Grant”). The Initial Grant consists of (i) an RSU award with a grant date fair value of approximately $150,000, provided, however that each Outside Director may elect to take up to 50% in a one-time non-qualified stock option award with a grant date fair value of approximately $75,000 and a per share exercise price equal to the closing price of a share of our common stock on the grant date. Prior to our revisions of the Outside Director Compensation Program, the Initial Grant was split such that each Outside Director’s Initial Grant was in the form of RSUs and non-qualified stock options in equal parts, measured by dollar value. One-third (1/3) of the Initial Grant vests on the first anniversary of the Outside Director’s appointment to our Board, and the remaining two-thirds (2/3) of the Initial Grant vests in substantially equal quarterly installments over two years, provided, however, that in the event such Outside Director elects to take a portion of his or her Initial Grant as a non-qualified stock option, such two-thirds portion shall vest in equal monthly installments over two years, subject, in all cases, to continued Board service through each applicable vesting date. In addition to the Initial Grant, on the date of each annual stockholder meeting, any Outside Director who will continue in service following such meeting (excluding any Outside Director that already received an Initial Grant in the same calendar year prior to the date of the annual stockholder meeting) is entitled to receive an annual equity award granted as of the close of business on the date of such

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annual stockholder meeting (the “Annual Grant”) with an aggregate grant date fair value of approximately $75,000. The Annual Grant consists of an RSU award with a grant date fair value of approximately $75,000, provided, however, that each Outside Director may elect to take up to 50% in a non-qualified stock option award with a grant date fair value of approximately $37,500 and a per share exercise price equal to the closing price of a share of our common stock on the grant date. Prior to our revisions of the Outside Director Compensation Program, the Annual Grant was split such that each Outside Director’s Initial Grant was in the form of RSUs and non-qualified stock options in equal parts, measured by dollar value. The Annual Grants vest in four substantially equal quarterly installments, provided, however, that in the event such Outside Director elects to take a portion of his or her Annual Grant as a non-qualified stock option, such stock option shall vest in 12 equal monthly installments, subject in each case to continued Board service through each applicable vesting date. Prior to our revisions of the Outside Director Compensation Program, the Annual Grants vested over three years. Additionally, prior to our revisions of the Outside Director Compensation Program, if the Board had a non-executive Chair, the non-executive Chair of the Board was entitled to an additional annual RSU award with a grant date fair value of approximately $50,000, which vested in substantially equal annual installments over two years, subject to continued Board service through each applicable vesting date, and was automatically granted as of the close of business on the first business day of such calendar year. As discussed above, as part of the cost reduction initiatives implemented at the beginning of the COVID-19 pandemic, our Board agreed to forego the 2020 annual equity compensation grant to outside directors under our Outside Director Compensation Program. We determined to recommence annual equity compensation grants to outside directors in October 2020. As a result, such annual grants were made in November 2020 consistent with the Outside Director Compensation Program in effect prior to our revisions to the program and resulted in grants of 6,545 RSUs and options to purchase 11,666 shares of the Company’s common stock at $5.73 per share to each of Ms. Benton, Ms. Schulz, Ms. Carmichael and Mr. Pleasants. In addition, Initial Grants were made to directors who joined the Board during 2020.

The vesting of all equity grants to Outside Directors who serve on our Board on the day preceding any annual meeting automatically accelerate in full if an Outside Director ceases to be an Outside Director due to his death or disability, or if an Outside Director stands for election but is not elected to the Board, or upon a “change of control” (as such term is defined in the 2010 Plan).

The following table sets forth information concerning the compensation earned by or paid to each of our non-employee directors during the year ended December 31, 2020. Mr. Moriarty is a named executive officer and all of his compensation is presented below in the Summary Compensation Table and related explanatory information and tables under “Executive Compensation.” Mr. Moriarty is not entitled to additional compensation for serving as a director while he is employed by the Company.

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Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Leaf Group Ltd., 1655 26th Street, Santa Monica, California 90404.

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*Represents beneficial ownership of less than 1%.

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All schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

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