Compensia did not provide any services to us other than the consulting services to our compensation committee. The compensation committee regularly reviews the objectivity and independence of the advice provided by its compensation consultant on executive compensation matters. The compensation committee has evaluated Compensia’s engagement, and based on the factors set forth in Exchange Act Rule 10C-1(b)(4), as well as the applicable listing standards of The New York Stock Exchange, and such other factors as were deemed relevant under the circumstances, has determined that its relationship with Compensia and the work of Compensia on behalf of the compensation committee did not raise any conflict of interest, and that Compensia is independent within the meaning of the listing standards of The New York Stock Exchange.
For purposes of assessing our executive compensation against the competitive market, our compensation committee reviews and considers the compensation levels and practices of a select group of peer companies. This compensation peer group consists of technology companies that are similar to us in terms of revenue, market capitalization, geographical location, growth stage and industry sector.
| |
▪ | industry sector – broad software, but with a focus on business-to-business system software companies;
|
| |
▪ | revenue – approximately 0.33x to approximately 3.0x our last four fiscal quarter revenue of approximately $391 million (approximately $146 million to $1.1 billion); |
| |
▪ | market capitalization – approximately 0.25x to approximately 4.0x our market capitalization of approximately $2.1 billion (approximately $1.5 billion to $9.1 billion); and |
| |
▪ | financial characteristics – a market capitalization multiple of greater than 5.0x and strong annual growth of approximately 20%+.
|
We also considered several key secondary factors, including headcount, gross profit, geographic location, and stage of development (that is, proximity to its initial public offering).
As a result, our compensation committee approved a revised compensation peer group consisting of the following companies:
| | | | | | | | |
Box | Guidewire Software | Pivotal Software |
Cornerstone OnDemand | HubSpot | Proofpoint |
Dropbox | LogMeIn | Splunk |
Fair Isaac | New Relic | Tableau Software |
FireEye | Nutanix | Twilio |
RingCentral | Paycom Software | Zendesk |
Alteryx Nutanix
Appian Okta
Box Paycom Software
Cornerstone OnDemand Pivotal Software
FireEye Proofpoint
Guidewire Software Pure Storage
Hortonworks RingCentral
HubSpot Tableau Software
Imperva Twilio
MongoDB Zendesk
New Relic
In December 2018,September 2019, our compensation committee, with the assistance of Compensia, our compensation committee once again reviewed and updated our then-compensation peer group to reflect our market capitalization and to account for changes in the qualification criteria of peer companies. In evaluating the companies comprising the compensation peer group at that time, Compensia considered the same criteria that it used in developing our compensation peer group in anticipationNovember 2018, which are described above.
Based on a review of our merger with Hortonworks. This updated peer group was used for compensation evaluations and decisions made with respect to our executive officers in January, February, and March of 2019 and with respect to Mr. Murthy who became one of our executive officers in connection with the merger. The companies in this updated compensation peer group were selected on the basis of their similarity to the combined financial position of us and Hortonworks, based on the following criteria:
| |
▪ | industry sector – data/open-source-related software and services companies, and broader SaaS-related companies; and |
| |
▪ | revenue – approximately 0.5x to approximately2.0x our projected combined revenue of approximately $800 million (approximately $490 million to $1.4 billion). |
We also considered several key secondary factors, including market capitalization, headcount, gross profit, geographic location, and stage of development (including, proximity to its initial public offering).
As a result,analysis prepared by Compensia, our compensation committee approved a revised compensation peer group consisting of the following companies:
Box Nutanix
Cornerstone OnDemandGuidewire Software Paycom Software
Dropbox Cornerstone OnDemand HubSpot Pivotal Software
DocuSign LogMeIn Proofpoint
Dropbox MongoDB RingCentral
Fair Isaac Proofpoint
FireEye RingCentral
Guidewire Software Splunk
HubSpot Tableau Software
LogMeIn Twilio
New Relic Splunk
FireEye Nutanix Zendesk
Our compensation committee used this compensation peer group as a reference for its compensation decisions for the rest of Fiscal Year 2020 and into the beginning of Fiscal Year 2021.
To analyze the compensation practices of the companies in our compensation peer group, Compensia gathered data from public filings (primarily proxy statements) of the peer group companies, as well as from applicablerelevant Radford High-Technology Surveys. This market data was then used as a reference point for our compensation committee to assess our current compensation levels in the course of its deliberations on compensation forms and amounts.
Our compensation committee reviews our compensation peer group each year (or, more frequently if there have been significant changes to either or business model or market capitalization) and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group.
Compensation Elements
In Fiscal Year 2019,2020, the principal elements of our executive compensation program, and the purposes for each element, were as follows:
|
| | | | | | | | | | |
Element | Type of Element | Compensation Element | Objective |
Base Salary | Fixed | Cash | Designed to attract and retain highly talented executives by providing fixed compensation amounts that are competitive in the market and reward performanceperformance. |
Annual Cash Bonus Awards | Variable | Cash | Designed to motivate our executives to achieve annual business objectives, as contained in our annual operating plan, and provide financial incentives to achieve these annual objectivesobjectives. |
Long Term Incentive Compensation
| Variable | Equity awards in the form of restricted stock unit awards that will be settled for shares of our common stock | Designed to align the interests of our executives and our stockholders by motivating them to create sustainable long-term stockholder valuevalue. |
Base Salary
Fiscal Year 2020 Compensation Decisions
Base Salary
Base salary represents the fixed portion of the compensation of our executive officers, including our named executive officers, and is an important element of compensation intended to attract and retain highly-talented individuals. Generally, we use base salary to provide each executive officer with a specified level of cash compensation during the year with the expectation that he or she will perform his or her responsibilities to the best of his or her ability and in our best interests.
Generally, we establish the initial base salaries of our executive officers through negotiations at the time we hire the individual executive officer, taking into account his or her position, qualifications, experience, prior salary level, the base salaries of our other executive officers, and the base salaries rates being paid for comparable positions at the companies in the compensation peer group. Thereafter, our compensation committee reviews the base salaries of our executive officers each year as part of its annual compensation review, with input from our CEO (except with respect to his own base salary) and makes adjustments as it determines to be reasonable and necessary to reflect the scope of an executive officer’s performance, individual contributions and responsibilities, position in the case of a promotion, and market conditions.
Pre-Merger Base Salary Adjustments
In March 2018, our compensation committee reviewedFor Fiscal Year 2020, the base salary for Mr. Bearden and the monthly stipend for Mr. Cole was determined in connection with their respective appointment as our Chief Executive Officer. The base salaries offor our incumbent executive officers, including our incumbentother named executive officers taking into consideration an updated competitive market analysis prepared by its compensation consultant and the recommendations of our CEO, as well as the other factors described in “—Compensation-Setting Process – Setting Target Total Direct Compensation” above. Following this review, the compensation committee approved base salary increases for some of our incumbent executive officers, including our CEO, effective April 1, 2018, to bring their base salaries to levels that were comparable to those of similarly-situated executives at the companies in our compensation peer group. Our compensation committee also determined to leave the base salaries of some of our executive officer, including our CFO,maintained at their fiscal 2018Fiscal Year 2019 levels.
The base salaries approved for our incumbent named executive officers in March 2018 were as follows:
|
| | | |
Named Executive Officer | Fiscal 2018 Base Salary | Fiscal 2019 Base Salary | Percentage Adjustment |
Mr. Reilly | $400,000 | $425,000 | 6.25% |
Mr. Frankola | $360,000 | $360,000 | --- |
Mr. Olson | $275,000 | $284,000 | 3.27% |
Post-Merger Base Salary Adjustments
In January 2019, following the completion of the merger with Hortonworks, our compensation committee reviewed the base salaries of the continuing senior executive team of the combined companies, including our named executive officers, taking into consideration a competitive market analysis prepared by its compensation consultant and the recommendations of our CEO, as well as the other factors described in “—Compensation-Setting Process – Setting Target Total Direct Compensation” above. Following this review, the compensation committee approved base salary increases for our executive officers, other than our CEO, effective January 3, 2019, to bring their base salaries to levels that were comparable to those of similarly-situated executives at the companies in our revised compensation peer group. In February 2019, the compensation committee also approved the base salary increase for our CEO, effective January 3, 2019, taking into consideration the various factors described in “—Compensation-Setting Process – Setting Target Total Direct Compensation” above and to bring his base salary to a level that was comparable to those of CEOs at the companies in our revised compensation peer group.
The base salaries approved for certain of our named executive officers in January 2019 were as follows:
|
| | | |
Named Executive Officer | Fiscal 2019 Base Salary | Fiscal 2020 Base Salary | Percentage Adjustment |
Mr. Reilly | $425,000 | $500,000 (1) | 18% |
Mr. Frankola | $360,000 | $400,000 | 11% |
Mr. Olson | $284,000 | $350,000 | 23% |
Mr. Murthy | --- (2) | $380,000 | --- |
| | | | | |
(1)Named Executive Officer | Mr. Reilly’s base salary effective as of January 3, 2019 was not determined in January 2019, but later approved by our compensation committee in February 2019. |
| Fiscal 2020 Base Salary (or Stipend) |
(2)Robert Bearden | Mr.$600,000 (1) |
Jim Frankola | $400,000 |
Arun Murthy joined us in January 2019 following the completion of our merger with Hortonworks. | $380,000 |
Martin Cole | N/A (2) |
Thomas Reilly | $500,000 |
_____________
(1)The Mr. Bearden’s base salaries paid tosalary was established in connection with his appointment as our named executive officers during fiscal 2019 are set forth in the “—Summary Compensation Table” below.President and Chief Executive Officer, effective January 13, 2020.
(2) In connection with his appointment as our interim CEO effective August 1, 2019, Mr. Cole received a monthly stipend of $40,000 (approximating Mr. Reilly’s base salary at the time of his retirement) reduced by any fees he received for service as a member of our board of directors.
Annual Cash Bonuses
In Fiscal Year 2019,2020, we used an annual cash bonus plan to motivate our executive officers, including certain of our named executive officers, and other employees who are members of our leadership team to achieve our key annual business objectives. In March 2018,2019, our compensation committee approved and adopted the terms of the Cloudera Bonus Plan – Executive Officers and Leadership Team (the “Fiscal 20192020 Bonus Plan”) to provide an annual incentive compensation opportunity for our executive officers based on the achievement of both corporate performance metrics, as reflected in our Fiscal Year 20192020 annual operating plan, and individual performance metrics under the Fiscal 2019 Bonus Plan applicable to Fiscal Year 2019 (the “2019 Performance Metrics”). Each of our incumbent named executive officers was a participant in the Fiscal 2019 Bonus Plan and subject to the 2019 Performance Metrics.
plan.
The Fiscal 20192020 Bonus Plan provided each participant with the opportunity to earn an annual cash bonus based on our actual achievement of the pre-established performance level for each of three financial performance measures - bookings, revenue, and operating cash flow - for Fiscal Year 2019.2020 (the “Fiscal 2020 Performance Metrics”). Each of these corporate performance metrics was weighted separately and differently. All annual cash bonuses were subject to threshold performance for each performance metric, and each of the metrics was measured independently of the others.
Our compensation committee reserved the discretion to modify actual bonus payments based on a number of factors, including individual performance.
factors.
Target Annual Cash Bonus Opportunities
For purposes of the Fiscal 20192020 Bonus Plan, cash bonus payments were based upon an eligible percentage of each participant’s base salary. In March 2018,2019, our compensation committee reviewed the target annual cash bonus opportunities of our incumbent named executive officers, taking into consideration the recommendations of our CEO (except with respect to his own target annual cash bonus opportunity) as well as the other factors described in “—Compensation-Setting Process – Setting Target Total Direct Compensation”Compensation” above. Following this review, theour compensation committee approved the following target annual cash bonus opportunities for our incumbent named executive officers as follows:
|
| | |
Named Executive Officer(1) | Fiscal Year 2019 Target Annual Cash Bonus Opportunity (as a percentage of base salary) | Fiscal Year 2019 Target Annual Cash Bonus Opportunity ($) |
Mr. Reilly | 100% | $425,000 |
Mr. Frankola | 70% | $252,000 |
Mr. Olson | 50% | $142,000 |
| |
(1) | Mr. Murthy joined us in January 2019, following the completion of our merger with Hortonworks. Thus, he was not eligible to participate in the Fiscal 2019 Bonus Plan. |
Potential annual cash bonus payments for our named executive officers underset forth below, which were unchanged from the Fiscal 2019 Bonus Plan could range from zero to 150% of theirprior year except that Mr. Murthy’s target annual cash bonus opportunity.opportunity was determined pursuant to his employment agreement entered into with the Company in connection with our merger with Hortonworks. Mr. Cole was not entitled to an annual cash bonus pursuant to his arrangement as our Interim CEO.
| | | | | | | | |
Named Executive Officer | FY20 Target Bonus (% of salary) | FY20 Target Bonus |
Robert Bearden | N/A | $ 24,725 (1) |
Jim Frankola | 70% | $280,000 |
Arun Murthy | 60% | $228,000 |
Thomas Reilly | 100% | $500,000 |
_____________
(1)Mr. Bearden’s employment offer letter provides for a target annual cash target bonus opportunity of $500,000. His actual cash bonus for Fiscal Year 2020 and was paid at target was pro-rated to reflect his start date of January 13, 2020.
Corporate Performance Metrics
For purposes of the Fiscal 20192020 Bonus Plan, in the first quarter of Fiscal Year 2020, our compensation committee selected bookings (weighted 50%), revenue (weighted 20%), and operating cash flow (weighted 30%) as the 2019Fiscal 2020 Performance Metrics. Bookings is generally calculated as the annual value of a contract with a customer for a subscription consulting or training service, which has been documented in writing and approved by authorized representatives of both the customer and the Company, and is as set forth in our annual operating plan, and revenue and operating cash flow are determined as reported in the Company’s annual audited financial statements. The compensation committee selected these performance metrics based on its belief that they were the best indicators of our successful execution of our annual operating plan, and our ability to continue to grow while moving towards profitability.
In March 2018,2019, our compensation committee set the target performance levels and related performance payoutachievement payment levels for each of the 2019Fiscal 2020 Performance Metrics for purposes of funding the bonus pool under the Fiscal 20192020 Bonus Plan.
In June 2019, our board of directors revised our annual operating plan to reflect that the initial targets with respect to bookings, revenue and cash flow, which had been set in the early stages of Cloudera's integration with Hortonworks, were too aggressive. Our compensation committee did not make any corresponding adjustments to the Fiscal 2020 Bonus Plan for our executive officers at that time as our chief executive officer search process was underway. In December 2019, our compensation committee adjusted the Fiscal 2020 Bonus Plan bookings target to correspond with the revised operating plan target levels since the resources necessary to support achievement of the original bookings targets of both the Fiscal 2020 Bonus Plan and our annual operating plan were decreased in connection with the June operating plan revisions. As revised, the adjusted bookings target represented a meaningful increase from the Fiscal Year 2019 bookings achievement. The revenue metric and operating cash flow metric for the Fiscal 2020 Bonus Plan were not changed for executives. For Fiscal Year 2019,2020, the target performance level for bookings, which was $572as set forth in our Fiscal Year 2020 annual operating plan, was $920 million (after giving effect to the adjustment described above), the target performance level for revenue was $466$858 million, and the target performance level for operating cash flow was ($38 million)$35 million (exclusive of merger-related spending). The compensation committee believed that these targets, including the revised bookings target, were consistent with our philosophy of setting rigorous performance goals and would continue to encourage strong corporate and individual performance.
The weighting of the bookings metric remained the same, and our compensation committee made no changes e to the revenue or operating cash flow metrics for our named executive officers.
The threshold, target, and maximum (“excellence”) performance and the related funding levels for each of the 2019Fiscal 2020 Performance Metrics were as follows:
| | | | | | | | |
| ACHIEVEMENT | PAYMENT % (1) |
| | |
Bookings (Weighted 50%)
| | |
Threshold | 75% | 50% |
Target | 100% | 100% |
Excellence | 120% | 150% (maximum) |
Revenue (Weighted 20%) | | |
Threshold | 85% | 50% |
Target | 100% | 100% |
Excellence | 115% | 150% (maximum) |
Operating Cash Flow (Weighted 30%) (2) | | |
Threshold | 75% | 75% |
Target | 100% | 100% |
Excellence | 150% | 150% (maximum) |
Bookings (Weighted 50%)___________________________
|
| | |
Bookings | Achievement Percentage (1) | Payment Percentage (1) |
Below Threshold | <75% | 0 |
Threshold | 75% | 50% |
Target | 100% | 100% |
Excellence | 120% | 150% (maximum) |
(1) In the event of actual performance between the threshold and target, and target and excellence performance levels, the payout percentage was to beis calculated between each designated segment on a linear basis.
Revenue (Weighted 20%)
|
| | |
Revenue | Achievement Percentage (1) | Payment Percentage (1) |
Below Threshold | <85% | 0 |
Threshold | 85% | 50% |
Target | 100% | 100% |
Excellence | 115% | 150% (maximum) |
(1) In the event of actual performance between the threshold and target, and target and excellence, performance levels, the payout percentage was to be calculated between each designated segment on a linear basis.
Operating Cash Flow (Weighted 30%)
|
| | |
Operating Cash Flow (1) | Achievement Percentage (1) | Payment Percentage (2) |
Below Threshold | <75% | 0 |
Threshold | 75% | 75% |
Target | 100% | 100% |
Excellence | 150% | 150% (maximum) |
(1)(2) Performance for the operating cash flow metric is calculated as 1% incremental achievement for every $1 million improvement in operating cash flow.
(2) In the event of actual performance between the threshold and target, and target and excellence performance levels, the payout percentage was to be calculated between each designated segment on a linear basis.
If performance for a specific 2019Fiscal 2020 Performance Metric was achieved at target, the bonus payment attributable to that metric would be paid out at target based on its percentage weighting. Exceeding the target performance level would result in an increased bonus payment of up to 150% of the target annual cash bonus opportunity for that specific weighted metric. Further, the threshold performance level for each 2019Fiscal 2020 Performance Metric was the minimum performance level that had to be achieved before our named executive officers could earn any annual bonus payment with respect to that
metric. If the threshold performance level was not achieved, then no awardbonus payment would
be made under the Fiscal 20192020 Bonus Plan with respect to that metric.
Annual Cash Bonus Formula
The following formula was used to calculate the actual annual cash bonus payments for participants in the Fiscal 20192020 Bonus Plan:
Achievement of Corporate Performance Metrics
In March 2019,2020, our compensation committee reviewed our performance with respect to each of the 2019Fiscal 2020 Performance Metrics (including the bookings metric as revised in December 2019) and determined the extent to which each metric had been achieved during the year. The compensation committee determined that we had achieved the performance results set forth in the table below for each metric, resulting in the payment percentage corresponding to that performance level as follows:
|
| | | | | | |
2019 Performance Metric | Target Performance Level ($) | Actual Performance ($) | Percentage Attainment (%) | Percentage Funding (%) | Percentage Weighting (%) | Weighted Payment Percentage (%) |
Bookings | $572 million | $497 million | 87% | 74% | 50% | 37% |
Revenue | $466 million | $453 million | 97% | 91% | 20% | 18% |
Operating Cash Flow | ($38 million) | $27 million | 164% | 150% | 30% | 45% |
Total | | | | | | 100% |
set forth below. Based on these results, our compensation committee determined to fund the bonus pool for the payment of cash bonusesachievement under the Fiscal 20192020 Bonus Plan at the 100%93.2% of target level.
| | | | | | | | | | | | | | | | | |
Performance Metric | Actual Performance
| Percentage Attainment
| Percentage Funding
| Percentage Weighting
| Weighted Payment Percentage |
Bookings | $933 million | 101% | 104% | 50% | 52% |
Revenue | $794 million | 93% | 75% | 20% | 15% |
Operating Cash Flow | $23 million | (12 million) | 88% | 30% | 26% |
Total Funding | | | | | 93.2% |
Achievement of Individual Performance Metrics
At that time, our compensation committee evaluated the individual performance against their individual performance objectives for Fiscal Year 2019 of each of our CEO, CFO and CSO in connection with determining the amount of their cash bonus payments. In the case of our CFO and CSO, our CEO evaluated each of his performance against his individual performance objectives for the year and formulated a recommendation for his cash bonus payment for consideration by the compensation committee. In the case of our CEO, the compensation committee evaluated our financial and operational performance for Fiscal Year 2019 and made a determination as to the impact such performance would have on his individual cash bonus payment. The impact of this determination of individual performance was reflected in the annual cash bonus payments set forth in the table below.
Annual Cash Bonus Payments
Based on the foregoing, our compensation committee approved the following annual cash bonus payments for our named executive officers for Fiscal Year 2019:
|
| | | |
Named Executive Officer (1) | Target Annual Cash Bonus Payment(2) | Annual Cash Bonus Payment | Percentage of Target Annual Cash Bonus Actually Paid |
Mr. Reilly | $426,680 | $385,000 | 90% |
Mr. Frankola | $254,183 | $293,884 | 116% |
Mr. Olson | $149,280 | $142,000 | 95% |
| |
(1) | Since Mr. Murthy did not join us until January 2019, he was not eligible to participate in the Fiscal 2019 Bonus Plan and received no bonus payment from us. |
| |
(2) | Bonus payment amounts were prorated to reflect the adjustment of annual base salaries effective April 1, 2018. Bonus payments amounts were prorated to reflect the adjustment of annual base salaries effective January 3, 2019. |
2020 as set forth below. Other than the amounts described above, we did not pay our executive officers, including our named executive officers, any other cash bonuses in Fiscal Year 2019.
2020. The actual annual cash bonus payments made to our named executive officers for Fiscal Year 20192020 are set forth in the “—Summary Compensation Table”Table” below.
| | | | | | | | | | | |
Named Executive Officer | Target Bonus Payment | Actual Bonus Payment | Percentage of Target |
Robert Bearden (1) | $24,725 | $24,725 | — |
Jim Frankola | $280,000 | $260,400 | 93 % |
Arun Murthy | $228,000 | $212,000 | 93 % |
__________
(1)Mr. Bearden’s bonus for Fiscal Year 2020 was based on his actual service as our Chief Executive Officer and was pro-rated to reflect his start date of January 13, 2020.
Pursuant to his transition agreement, in addition certain other severance payments and benefits described in more detail above, Mr. Reilly received a lump-sum payment equal to 100% of his annual target bonus for Fiscal Year 2020, pro-rated for his partial year of service. Mr. Cole was not entitled to an annual cash bonus pursuant to his arrangement as our Interim CEO.
Long-Term Incentive Compensation
We view long-term incentive compensation in the form of equity awards as a critical element of our executive compensation program. The realized value of these equity awards bears a direct relationship to our stock price, and, therefore, these awards are an incentive for our executive officers, including our named executive officers, to create value for our stockholders. Equity awards also help us retain qualified executive officers in a competitive market.
Long-term incentive compensation opportunities in the form of equity awards are granted to our CEO and our other executive officers by our compensation committee. As it does with other elements of compensation, the compensation committee determines the amount of long-term incentive compensation for our executive officers as part of its annual compensation review and after taking into consideration the outstanding equity holdings of each executive officer, the proportion of our total shares outstanding used for annual employee long-term incentive compensation awards (our “burn rate”) in relation to the annual burn rate ranges of the companies in our compensation peer group and other recently-public technology companies, and the factors described in “—Governance of Executive Compensation Program – Compensation-Setting Process”Process” above. The amounts of the equity awards are also intended to provide competitively-sized awards and resulting target total direct compensation opportunities that the compensation committee believes are reasonable and appropriate taking into consideration the factors described in the preceding sentence.
To date, our compensation committee has determined to grant our executive officers, including our named executive officers, long-term incentive compensation opportunities in the form of RSU awards which may vest and be settled for shares of our common stock. The compensation committee believes that because RSU awards representing the right to receive shares of our common stock upon settlement have value even in the absence of stock price appreciation, we are able to incent and retain our executive officers using fewer shares of our common stock. Since their value increases with any increase in the value of the underlying shares, RSU awards serve as an incentive which aligns with the long-term interests of our executive officers and stockholders. Unlike stock options, however, RSUs have real economic value when they vest even if the market price of our common stock declines or stays flat, thus delivering more predictable value to our executive officers. In addition, because they are subject to a multi-year vesting requirement, RSU awards serve our retention objectives since our executive officers must remain continuously employed by us through the applicable vesting dates to fully earn these awards. Finally, because of their “full value” nature, RSU awards deliver the desired grant date fair value using a lesser number of shares than an equivalent stock option, thereby enabling us to reduce the dilutive impact of our long-term incentive award mix and to use our equity compensation resources more efficiently and better manage the overall number of shares of our common stock granted to our executive officers.
Restricted Stock Unit Awards
Pre-Merger Equity Awards
In March 2018, our The compensation committee determined that theapproved a portion of our annual equity awards to be granted to our incumbent executive officers, including our incumbent named executive officers, should be in February 2019 and the form of time-based RSU awards that may be settled for shares of our common stock. The number of shares of common stock subject to the RSU awards granted to our incumbent executive officers were determined byremainder in July 2019. In February 2019, the compensation committee after considering the factors describedgranted RSU awards to Messrs. Frankola and Reilly in “—Governance of Executive Compensation Program – Compensation-Setting Process” above.
Our CEO received the largest equity award based on his overall responsibility for our performance and success. In addition, further differentiation was made among our incumbent executive officers based on our compensation committee’s review of the competitive market data for their respective positions, the size of the equity awards previously granted to them in anticipation of our initial public offering, andconnection with its desire to smooth transition to a normalized annual grant program.
The RSU awards grantedprogram, each subject to our incumbent named executive officers in March 2018 were as follows:
|
| | |
Named Executive Officer | Restricted Stock Unit Award (number of shares) | Aggregate Grant Date Fair Value ($) |
Mr. Reilly | 330,000 | $6,695,700.00 |
Mr. Frankola | 170,000 | $3,449,300.00 |
Mr. Olson | 100,000 | $2,029,000.00 |
The time-based RSU awards granted to our incumbent named executive officers vestvesting over a four-year period with 1/16th ofbased on the total number of shares subject to the award vesting on each quarterly anniversary date following March 15, 2018, the vesting commencement date, contingent upon the named executive officer’s continued employment by us through each applicableservice except as noted below The vesting date.
Post-Merger Equity Awards
In January 2019, our compensation committee determined to grant equityof Mr. Reilly’s RSU awards to several of the continuing senior executive team of the combined companies, including Mr. Murthy, taking into consideration and the recommendations of our CEO, as well as the other factors describedwas accelerated in “—Compensation-Setting Process—Setting Target Total Direct Compensation” above.
Infull in connection with his joining the combined senior executive team following the merger with Hortonworks in January 2019, our compensation committee granted Mr. Murthy, our Chief Product Officer, anReilly’s retirement effective July 31, 2019.
| | | | | |
Named Executive Officer | Shares underlying RSU Awards |
Jim Frankola | 510,019 (1) |
Tom Reilly | 455,373 |
___________
(1) Mr. Frankola was two RSU awards. The first RSU award that may vest and be settled for 582,878 shares of our common stock. This award was granted by our compensation committee after taking into consideration an updated competitive market analysis prepared by its compensation consultant, Mr. Murthy’s performance and criticality to our business, the scope of his post-merger role and duties, our individual retention objectives with respect to Mr. Murthy, and his existing unvested equity holdings as of the date of completion of the merger. In addition, we committed to granting Mr. Murthy an RSU for382,514 shares of our common stock equal to $1.6 million divided by the 10-day closing price averagevests over a four-year period. The second RSU award for the period prior to the closing date127,505 shares of our mergercommon stock vested in full on December 15, 2019.
In July 2019, the compensation committee approved the grant of RSU awards to Messrs. Frankola and Murthy as set forth below. In connection with Hortonworks,Mr. Murthy’s RSU award, the compensation committee amended Mr. Murthy’s employment offer letter to provide that the award would be earned and vest subject to time-based vesting through December 15th, 2020, in lieu of the achievement of performance criteria to be establishedover the same period as initially contemplated by our board of directors and his continued employment through the applicable performance period.offer letter.
| | | | | |
Named Executive Officer | Shares underlying RSU Awards |
Jim Frankola | 127,505 (1) |
Arun Murthy | 376,682 (2) |
___________
(1)Mr. Frankola was granted two RSU awards. The first RSU award of 582,878for 63,752 shares of our common stock became fully vested on December 15th, 2019, and the second RSU award for 63,753 shares of our common stock vests on December 15th, 2020.
(2)Mr. Murthy’s was granted two RSU awards. The first RSU award for 72,860 shares of our common stock became fully vested on December 15th, 2019, and the second RSU award for 72,859 shares of our common stock vests on December 15th, 2020.
In addition, after review of his existing awards in order to strengthen his retention with us, in December 2019, Mr. Murthy was granted an additional RSU award for 376,682 shares of our common stock, which vests over a period of four years, subject to Mr. Murthy’s continued service.
In connection with his appointment as our Interim Chief Executive Officer effective August 1, 2019, the compensation committee granted an RSU award to Mr. Cole in the amount reflected in the table below in his capacity as our interim Chief Executive Officer. Mr. Cole’s RSU award was eligible to vest over a one-year period through June 30, 2020, and the unvested portion his award was forfeited upon his resignation as our Interim Chief Executive Officer in January 2020. For more information, please see the section entitled “—Chief Executive Officer Transitions & Agreements.”
In connection with his appointment as our President and Chief Executive Officer, effective January 13, 2020, the compensation committee granted Mr. Bearden (x) an RSU award to acquire 538,809 shares of our common stock which will vest quarterly over one year commencing on December 15, 2019 and (y) an RSU award to acquire 1,077,619 shares of our common stock, which will vest quarterly over two years commencing March 15, 2021, but only if our board of directors (with less than two dissenters from such approval) determines its satisfaction with Mr. Bearden’s performance as our Chief Executive Officer. On May 6, 2020, Mr. Bearden voluntarily forfeited 275,000 shares subject to the New Hire RSU granted to Mr. Murthy vests (and becomes exercisable) over a three-year periodhim on January 13, 2020 in connection with 1/12thhis appointment as our President and Chief Executive Officer, representing approximately 17% of the total New Hire RSU, reducing the number of shares underlying that portioneligible to vest during the third year of the awardNew Hire RSU’s vesting schedule. For further information on each March 15Mr. Bearden’s New Hire RSU and his voluntary reduction of a portion thereof, see “th—Chief Executive Officer Transitions & Agreements, June 15th, September 15th, and December 15th following December 15, 2019, contingent upon his remaining continuously employed by us through each applicable vesting date.” above.
TheAmounts reflected in the table below exclude any equity awards granted to Messrs. Bearden and Cole in each of his capacity as a member of our board of directors prior to his appointment as our Chief Executive Officer For more information, please see the section entitled “—Chief Executive Officer Transitions & Agreements.”
| | | | | |
Named Executive Officer | Shares underlying RSU Awards |
Robert Bearden | 1,616,428 |
Martin Cole | 577,035 |
Health and Welfare Benefits
Our executive officers, including our named executive officers, during Fiscal Year 2019 are set forth in the “—Summary Compensation Table” and the “—Grants of Plan-Based Awards Table” below.
Welfare and Health Benefits
Our named executive officersmay from time to time, participate in our company-sponsored benefit programs on generally the same basis as our other salaried employees, including with respect to our 401(k) plan and health and welfare benefits. Currently, we match contributions made by participants in the plan on a dollar-for-dollar basis for 100% of the first 1% of compensation deferred, up to a limit of $5,000.
Additional benefits received by our executive officers, including our named executive officers, includesuch as flexible spending accounts, medical, dental, and vision insurance, business travel insurance, an employee assistance program, accidental death and dismemberment insurance, health savings accounts, short-term and long-term disability insurance, basic life insurance, commuter benefits, and reimbursement for mobile phone coverage. These benefits are providedWe endeavor to our executive officers on the same basis as to all of our employees.
We design our employee benefits programs to be affordable and competitive in relation to the market as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices and the competitive market.
Perquisites and Other Personal Benefits
Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not provide significant perquisites or other personal benefits to our executive officers, including our named executive officers, except as generally made available to our employees, or in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make him or her more efficient and effective, and for recruitment and retention purposes. During Fiscal Year 2019,2020, none of our named executive officers received perquisites or other personal benefits that were, in the aggregate, $10,000 or more for each individual, except that Mr. Reilly incurred the cost of spousal travel to and attendance at a company function and the related tax gross–up to cover the income tax aspects of such travel and attendance.individual. These perquisites are included in the “All“All Other Compensation”Compensation” column in the “Summary“Summary Compensation Table”Table” to the extent total perquisites or other personal benefits during Fiscal Year 20192020 were, in the aggregate $10,000 or more for the individual.
In the future, we may provide perquisites or other personal benefits in limited circumstances, such as those described in the precedingthis paragraph. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by our compensation committee.
Employment Arrangements
We have entered into written employment offer letters with our CEO, CSO and CPO and an employment agreement withexecutive officers, including each of our CFO.current named executive officers. Each of these arrangements was approved on our behalf by our compensation committee or our board of directors at the recommendation of the compensation committee. We believe that these arrangements were necessary to induce these individuals to forego other employment opportunities or leave their then-current employer for the uncertainty of a demanding position in a new and unfamiliar organization.
In filling each of our executive positions, our board of directors or our compensation committee, as applicable, recognized that it would need to develop competitive compensation packages to attract qualified candidates in a dynamic labor market. At the same time, our board of directors and the compensation committee were sensitive to the need to integrate new executive officers into the executive compensation structure that we were seeking to develop, balancing both competitive and internal equity considerations.
Each of our employment arrangements provides for “at will”“at-will” employment (meaning that either we or the executive officer may terminate the employment relationship at any time without cause) and generally sets forth the initial compensation arrangements for the named executive officer, including an initial base salary, participation in our employee benefit programs, an indication of eligibility for an annual cash incentive award opportunity and an equity award. We have also required each named executive officer to execute a form of our standard confidential information and invention
assignment agreement. In addition, these employment agreements include certain post-employment arrangements that are discussed below under “—Post-Employment Compensation.”
For detailed descriptionsPlease see “—Chief Executive Officer Transitions & Agreements” above for a discussion of the employment arrangements and post-employment arrangements we maintainedtransition agreements with our named executive officers during Fiscal Year 2019, see Messrs. Bearden, Cole and Reilly.
“—Potential Payments upon Termination orSeverance and Change in Control Arrangements” below.
Post-Employment Compensation
Mr. Bearden is eligible for certain payments and benefits upon the termination of his employment under specified circumstances pursuant to his employment offer letter with us, which terms were negotiated to induce him to join the company.
We have also entered into Severance and Change in Control Agreements (the “Severance Agreements”) with each of our executive officers, including each of our current named executive officers. officers other than Mr. Bearden. In April 2020, our compensation committee amended our form of Severance Agreements entered into with our named executive officers (other than Mr. Bearden) and certain other executives to provide for enhanced severance payments and benefits after conducting a detailed review of a competitive market analysis prepared by the compensation committee’s compensation consultant and reviewing internal pay parity considerations.
The Severance Agreements provide these individuals with certain protection in the event of their termination of employment under specified circumstances, including following a change in control of the Company. The Severance Agreements also prohibit the executive officer from engaging directly or indirectly in competition with us, recruiting or soliciting any of our employees or consultants, or disparaging us, our employees or officers, or the members of our board of directors.
We believe that these protections were necessary to induce certain of these individuals to leave their former employment for the uncertainty of a demanding position in a new and unfamiliar organization and help from a retention standpoint. These arrangements provide reasonable compensation to the executive officer if he leaves our employ under certain circumstances to facilitate his transition to new employment. Further, in some instances we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiringrequire a departing executive officer to sign a general release of claims in a form prescribed by us as a condition to receiving post-employment compensation payments or benefits.
Mr. Murthy’s Severance Agreement was entered into in connection with our merger with Hortonworks and differs from the other Severance Agreements in that it will only become effective 12 months following his starting date with us (or, if earlier, upon a change in control of the Company). Prior to the effectiveness of Mr. Murthy’s Severance Agreement, Mr. Murthy will remain eligible for certain severance and acceleration rights of equity held pursuant to his Hortonworks arrangements.
We believe that these arrangements help maintain their continued focus and dedication to their assigned duties to maximize stockholder value if there is a potential transaction that could involve a change in control of the Company. The terms and conditions of the Severance Agreements were approved by our board of directors/ourOur compensation committee after an analysis of competitive market data, anddoes not consider the specific amounts payable under the post-employment compensation
arrangements when determining the annual compensation for Mr. Murthy, in connection with the merger with Hortonworks.
All payments and benefits in the event of a change in control of the Companyour executive officers. We do believe, however, that these arrangements are payable only if there is a subsequent loss of employment by an executive officer (a so-called “double-trigger” arrangement). In the case of the acceleration of vesting of outstanding equity awards, we use this double-trigger arrangementnecessary to protect against the loss of retention value following a change in control of the Company and to avoid windfalls, both of which could occur if vesting of either equity or cash-based awards accelerated automatically as a result of the transaction.offer compensation packages that are competitive. We do not use excise tax payments (or “gross-ups”) relating to a change in control of the Company and have no such obligations in place with respect to any of our executive officers, including our named executive officers.
We believe that having in place reasonable and competitive post-employment compensation arrangements in the event of a change in control of the Company are essential to attracting and retaining highly-qualified executive officers. Our compensation committee does not consider the specific amounts payable under the post-employment compensation arrangements when determining the annual compensation for our executive officers. We do believe, however, that these arrangements are necessary to offer compensation packages that are competitive.
For a summary of the material terms and conditions of the post-employment compensation arrangements we maintained with our named executive officers during Fiscal Year 2019,2020, as well as an estimate of the potential payments and benefits that they would have been eligible to receive if a hypothetical change in control or other trigger event had occurred on January 31, 2019,2020, see “—Potential Payments Upon Termination or Change in Control”Control” below.
Other Compensation Policies
Equity Award Grant Policy
Our general policy is to grant equity awards on regular, fixed dates determined in advance. Grants of equity awards in connection with the hiring of new employees or the promotion ofgrants to existing employees may be made by our equity incentive committee, consisting of our CEO. However, all equity grants to executive officers must be made by our compensation committee and grants to non-employee members of our board of directors may only be made by the full board of directors. The exercise price of all stock options rights must be equal to or greater than the closing price of our common stock as reported on the NYSE on the date of grant.
Stock Ownership Policy
In March 2019, our board of directors adopted a stock ownership policy for our executive officers and the non-employee members of our board of directors to further align their respective interests with the interests of our stockholders, and to further promote our commitment to sound corporate governance. This policy requireswas amended in December 2019 to increase the share ownership thresholds for our executive officers and non-employee directors to own a minimum number of shares of our common stock as follows:set forth below.
|
| | | | |
Position | Individual Ownership Level |
Chief Executive Officer | Lesser of five times base salary or 180,000 shares |
All Other Executive Officers | Lesser of two times base salary or 58,000 shares |
Non-Employee Directors | Lesser of threefive times annual cash retainer for service as board member or 7,500 shares(1) |
____________
(1) Excludes any additional cash retainer paid as a result of service as a board chairperson, lead independent director, committee chair or committee member or meeting fees (if any).
Each executive officer and non-employee director isare expected to meet his or her applicable ownership level within five years of becoming a subject to the stock ownership policy (which will be no earlier than the fifth anniversary of the date the stock ownership policy was adopted).
Unless and until an executive officer or non-employee director has met his or her applicable ownership level, such person is required to retain an amount equal to 50% of the net shares received as the result of the exercise, settlement, vesting, or payment of any equity awards granted to such person by the Company.
Hedging and Pledging Prohibitions
As part of our Insider Trading Policy, our employees (including our executive officersofficers) and the non-employee members of our board of directors are prohibited from: (i) engaging in transactions involving options or other derivative securities on our securities, such as puts and calls, whether on an exchange or in any other market; (ii) engaging in hedging or monetization transactions involving our securities, such as zero-cost collars and forward sale contracts; (iii) engaging in short sales of our securities, including short sales “against the box”; and (iv) using or pledging our securities as collateral in a margin account or as collateral for a loan unless the pledge has been approved by our Compliance Officer.
| |
▪ | engaging in transactions involving options or other derivative securities on our securities, such as puts and calls, whether on an exchange or in any other market;
|
| |
▪ | engaging in hedging or monetization transactions involving our securities, such as zero-cost collars and forward sale contracts;
|
| |
▪ | engaging in short sales of our securities, including short sales “against the box”; and
|
| |
▪ | using or pledging our securities as collateral in a margin account or as collateral for a loan unless the pledge has been approved by our Compliance Officer.
|
Compensation Recoupment Policy
In December 2019, our board of directors adopted a compensation recoupment and forfeiture policy pursuant to which the board may recoup or require the forfeiture of certain incentive-based compensation paid to executive officers in the event that: (i) the Company’s financial statements are adjusted to correct one or more errors that have a material impact on the Company’s financial statements and (ii) the board or compensation committee determines that the executive officer engaged in fraud or intentional misconduct that materially contributed to the need for such adjustments. In the event of the foregoing, the board may recoup or require forfeiture of any portion of the cash or equity-based incentive compensation that is in excess of what would have been earned by the executive officer considering the restated financial results. The board will disclose any recoupment or forfeiture of incentive compensation pursuant to this policy to the extent it determines that such disclosure would be appropriate and otherwise as required by applicable law.
Tax and Accounting Considerations
We take the applicable tax and accounting requirements into consideration in designing and implementing our executive compensation program.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally disallows the deductibility by any publicly held corporation of individual compensation expensesany remuneration in excess of $1 million paid to certain executive officers within a taxable year. Recent changes to Section 162(m) in connection with the passage of the Tax Cuts and Jobs Act repealed exceptions to the deductibility limit that were previously available for “qualified performance-based compensation,” effective for taxable years after December 31, 2017. As a result, all cash and equitywe expect that compensation paid to certain of our current and former executive officers, including our Named Executive Officers, in excess of $1 million generally will not be non-deductibledeductible unless it qualifies for transition reliefgrandfathering afforded to certain binding arrangements in effect on November 2, 2017 or specialtransition rules applicable to newly public companies. Because of uncertainties in the interpretation and implementation of the changes to Section 162(m) in the Tax Cuts and Jobs Act, including the scope of the transition relief, we can offer no assurance of such deductibility. Our compensation committee seeks to balance the cost and benefit of tax deductibility with our executive compensation goals designed to promote long-term stockholder interests, and continues to reserve discretion to approve new compensation or modify existing compensation arrangements that result in a loss of deductibility when it believes that such payments are appropriate to attract and retain executive talent. Moreover, because of uncertainties in the interpretation and implementation of the changes to Section 162(m) in the Tax Cuts and Jobs Act, including the scope of the grandfathering and transition relief, we can offer no assurance of such deductibility even if so intended.
Accounting for Stock-Based Compensation
Our compensation committee takes accounting considerations into account in designing compensation plans and arrangements for our executive officers and other employees. Chief among these is Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”), the standard which governs the accounting treatment of certain stock-based compensation. Among other things, ASC Topic 718 requires us to record a compensation expense in our income statement for all equity awards granted to our executive officers and other employees. This compensation expense is based on the grant date “fair value” of the equity award and, in most cases, will be recognized ratably over the award’s requisite service period (which, generally, will correspond to the award’s vesting schedule). This compensation expense is also reported in the compensation tables below, even though recipients may never realize any value from their equity awards.
Summary Compensation Table
The following table provides information concerning compensation awarded to, earned by or paid to each of our named executive officers for all services rendered in all capacities during the last three or fewer fiscal years during which such individuals where named executive officers.
|
| | | | | | | | | | | | |
Name and Principal Position | Fiscal Year | | Salary ($) | | Stock Awards ($)(1) | | | Non-Equity Incentive Plan Compensation ($) | | All Other Compensation ($) | | Total ($) |
Thomas J. Reilly | 2019 | | 426,554(2) | | 6,695,700 | | | 385,000(5) | | 18,803(14) | | 7,526,057 |
Chief Executive Officer | 2018 | | 391,667(3) | | 5,355,000 | | | 307,000(6) | | | | 6,053,667 |
2017 | | 341,667(4) | | 4,302,000 | | | 269,167(7) | | | | 4,643,667 |
Jim Frankola | 2019 | | 363,051(8) | | 3,449,300 | | | 293,884(5) | | | | 4,106,235 |
Chief Financial Officer | 2018 | | 358,753(9) | | 3,213,000 | | | 203,000(6) | | | | 3,774,333 |
2017 | | 338,339(10) | | 2,516,670 | | | 137,594(7) | | | | 2,854,589 |
Arun Murthy(8)
Chief Product Officer | 2019 | | 44,612(11) | | 7,192,715 | | | --- | | | | 7,237,327 |
Michael A. Olson | 2019 | | 282,500(12) | | 3,827,172 | | | 142,000(5) | | | | 4,251,672 |
Chief Strategy Officer | 2018 | | 270,833(13) | | 2,588,250 | | | 113,750(6) | | | | 2,972,833 |
2017 | | 250,000 | | 2,151,000 | | | 100,938(7) | | | | 2,401,000 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | Fiscal Year | | Salary ($) | | | Bonus ($) | Stock Awards ($)(1) | | | Non-Equity Incentive Plan Compensation ($) | |
All Other Compensation ($) | | Total ($) |
Robert Bearden(2) Chief Executive Officer | 2020 | | | 31,923(2) | | 24,725(3) | 6,325,618(4) | | | — | | | 35,000(5) | | 6,417,266 |
Martin Cole(6) Former Interim Chief Executive Officer | 2020 | | | 202,500 | | | 3,450,669(7) | | | — | | | 864,046(8) | | 4,517,215 |
Thomas J. Reilly(9) | 2020 | | | 250,000 | | | 12,430,641(10) | | | — | | | 6,127,336(11) | | 18,807,977 |
Former Chief Executive Officer | 2019 | | | 426,554 | | | 6,695,700 | | | 385,000(12) | | 18,803(13) | | 7,526,057 |
| 2018 | | 391,667 | | | | 5,355,000 | | | 307,000(14) | | — | | | 6,053,667 |
Jim Frankola | 2020 | | 400,000 | | | | 7,703,838 | | | 260,400(15) | | 864(16) | | 8,365,102 |
Chief Financial Officer | 2019 | | 363,051 | | | | 3,449,300 | | | 293,884(12) | | — | | | 4,106,235 |
| 2018 | | 358,753 | | | | 3,213,000 | | | 203,000(14) | | — | | | 3,774,333 |
Arun Murthy | 2020 | | 380,000 | | | | 5,380,283 | | | 212,000(15) | | 633(17) | | 5,972,916 |
Chief Product Officer | 2019 | | 44,612(16) | | | | 7,192,715 | | | — | | | — | | | 7,237,327 |
_________________
| |
(1) | (1)The amounts reported in this column represent the aggregate grant date fair value of the RSUs granted to our named executive officers under our 2008 Equity Incentive Plan in the years ended January 31, 2017 and 2018 and under our 2017 Equity Incentive |
Plan in the year ended January 31, 2018 and under our 2017 Equity Incentive Plan in the years ended January 31, 2019 and 2020 as computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the dollar amount recognized for financial statement reporting purposes of the equity awards reported in this column are set forth in Note 910 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2019.2020. Note that the amounts reported in this column reflect the accounting value for these equity awards and do not correspond to the actual economic value that may be receivedrealized by our named executive officers from the equity awards.
| |
(2) | Mr. Reilly’s salary was increased to $425,000 effective April 1, 2018, and was further increased to $500,000 effective January 3, 2019. |
(2)Mr. Bearden became our President and Chief Executive Officer on January 13, 2020. Mr. Bearden’s salary for the fiscal year ended January 31, 2020 represents his annual base salary of $600,000 on a pro-rated basis to reflect his partial year of service as our President and Chief Executive Officer.
(3)Mr. Bearden’s bonus for the fiscal year ended January 31, 2020 represents his annual target bonus of $500,000 on a pro-rated basis to reflect his partial year of service as our President and Chief Executive Officer.
(4)As discussed under the section entitled “Compensation Discussion and Analysis—Chief Executive Officer Transitions and Agreements”, pursuant to Mr. Bearden’s employment offer letter, Mr. Bearden was granted (i) an RSU award to acquire 538,809 shares of our common stock that will vest quarterly over one year following December 15, 2019 and (ii) an RSU award to acquire 1,077,619 shares of our common stock that will vest quarterly commencing March 15, 2021 if our board of directors (with less than two dissenters from such approval) determines its satisfaction with Mr. Bearden’s as our Chief Executive Officer. On May 6, 2020, Mr. Bearden voluntarily forfeited 275,000 shares subject to the New Hire RSU granted to him on January 13, 2020 in connection with his appointment as our President and Chief Executive Officer, representing approximately 17% of the total New Hire RSU, reducing the number of shares eligible to vest during the third year of the New Hire RSU’s vesting schedule. For further information on Mr. Bearden’s New Hire RSU and his voluntary reduction of a portion thereof, see “Compensation Discussion and Analysis—Chief Executive Officer Transitions and Agreements” above. For accounting purposes and, as a result, for disclosure purposes in this Summary Compensation Table, only the initial 538,809 RSUs are deemed granted in fiscal year 2020, and the balance will be deemed granted in fiscal year 2021 if our board of directors approves Mr. Bearden’s satisfactory performance at that time.
(5)This amount reflects the compensation that Mr. Bearden received for his service as a non-employee director prior to his appointment as our President and Chief Executive Officer as set forth in the “Director Compensation Table” contained elsewhere in this proxy statement. Since becoming our Chief Executive Officer, Mr. Bearden has not received any compensation in his capacity as a director.
(6)Mr. Cole served as our Interim Chief Executive Officer from August 1, 2019 through January 12, 2020.
(7)Mr. Cole forfeited a portion of these RSUs upon his resignation as our Interim Chief Executive Officer which is further discussed in Footnote (6) to the Grants of Plan-Based Awards Table below.
(8)This amount includes (A) a 401(k) plan matching contribution of $2,800; (B) the compensation Mr. Cole received in his capacity as a non-employee director prior to his appointment as our Interim Chief Executive Officer as set forth in the “Director Compensation Table” contained elsewhere in this proxy statement (as our Interim Chief Executive Officer, Mr. Cole received a monthly stipend of $40,000, reduced by any fees he received for his service as a non-employee director. He received $37,500 in fees in his capacity as a director while serving as our Interim Chief Executive Officer, and his monthly stipend was reduced accordingly. He continued to vest in the equity awards he was granted in his capacity as a director while serving as our Interim Chief Executive Officer): (i) $87,500 of director fees and (ii) $230,002 of the aggregate grant date fair value of equity awards calculated in accordance with ASC 718 and included in the “Stock Awards” column of the Director Compensation Table; (C) a $40,000 stipend Mr. Cole received during his transition period to Interim Chief Executive Officer in July 2019; and (D) the payments received in connection with his resignation as a member of our noard of directors, which included (i) a lump sum cash payment amount equal to $32,500, and (ii) acceleration of vesting with respect to 100% of Mr. Cole’s then-unvested RSUs granted to him in his role as member of our board of directors with an incremental value of $471,244. For additional information, see the section entitled “Compensation Discussion and Analysis—Chief Executive Officer Transitions and Agreements”.
(9)Mr. Reilly retired as our Chief Executive Officer effective July 31, 2019.
(10)This amount includes (i) $357,734 due to the extension of his post-termination exercise period of options in connection with Mr. Reilly’s retirement as further described in Footnote (11) to this table and represents the incremental fair value of these options not presented in the grant date fair value and as calculated in accordance with ASC Topic 718 and (ii) $5,765,991 due to the rescission of a stock option exercise as further described in Footnote (11) to this table and represents the incremental fair value of these options not presented in the grant date fair value and as calculated in accordance with ASC Topic 718.
(11)This amount includes (A) a 401(k) plan matching contribution of $2,445.84 and (B) the payments Mr. Reilly became entitled to receive in connection with his retirement as our Chief Executive Officer, which included (i) a lump sum cash payment amount equal to $1,250,000, (ii) payments by us of premiums required to maintain his healthcare insurance for up to 24 months, the cost of which we estimate will be $51,560, and (iii) full acceleration of all stock option awards and restricted stock unit awards, with an incremental value equal to $4,823,330. This amount does not include the following expenses that are included in the “Stock Awards” column of this table: (A) the additional stock-based compensation expense of $357,734 calculated in accordance with ASC Topic 718 related to the extension of his post-termination exercise period through the earliest of one-year following his separation date or the original expiration term of the options pursuant to the Transition Agreement entered into with Mr. Reilly on June 5, 2019 and (B) the additional stock-based compensation expense of $5,765,991 calculated in accordance with ASC Topic 718 for the rescission of a stock option exercise and relates to a share acquisition and restriction agreement pursuant to which Mr. Reilly rescinded his net exercise of stock options granted to him in June 2013, reimbursed us in cash for the exercise price and tax withholding and re-acquired the approximately 5.9 million shares that had been forfeited in connection with the net exercise (as previously disclosed in a Current Report on Form 8-K filed by us with the SEC on August 5, 2019, in connection with this agreement, Mr. Reilly also committed to purchase at least $5.0 million of our common stock in open market purchases and to refrain from certain dispositions or transfers of our securities for certain periods of time). For additional information, see the section entitled “Compensation Discussion and Analysis—Chief Executive Officer Transitions and Agreements”.
(12)These amounts reflect bonuses earned by Messrs. Reilly and Frankola based upon our achievement of financial objectives and milestones. Mr. Reilly was eligible to earn a target bonus of $425,000. Mr. Frankola was eligible to earn a target bonus of $252,000.
(13)The amount reported represents (i) $18,293 in spousal travel reimbursements, including an associated tax gross-up of $8,715 and (ii) a $510 holiday gift.
(14)These amounts reflect bonuses earned by Messrs. Reilly and Frankola based upon our achievement of financial objectives and milestones. Mr. Reilly was eligible to earn a target bonus of $391,667. Mr. Frankola was eligible to earn a target bonus of $239,167.
(15)The amounts for Messrs. Frankola and Murthy reflect the annual non-equity incentive compensation earned by each individual under the Company’s executive officer bonus plan for the fiscal year performance periods indicated (these bonuses were paid in the subsequent year but are reported for the fiscal year for which they were earned). For more information, see the “Grants of Plan Based Awards Table” below.
(16)This amount represents a 401(k) plan matching contribution.
(17)This amount represents a 401(k) plan matching contribution.
(18)Mr. Murthy’s compensation disclosed in this table does not include the compensation he received from Hortonworks before our merger with Hortonworks in January 2019. Mr. Murthy’s base salary was increased to $400,000set as $380,000 effective April 1, 2017.
| |
(4) | Mr. Reilly’s base salary was increased to $350,000 effective April 1, 2016. |
| |
(5) | These amounts reflect bonuses earned by Messrs. Reilly, Frankola and Olson based upon our achievement of financial objectives and milestones. Mr. Reilly was eligible to earn a target bonus of $425,000. Mr. Frankola was eligible to earn a target bonus of $252,000. Mr. Olson was eligible to earn a target bonus of $142,000. |
| |
(6) | These amounts reflect bonuses earned by Messrs. Reilly, Frankola and Olson based upon our achievement of financial objectives and milestones. Mr. Reilly was eligible to earn a target bonus of $391,667. Mr. Frankola was eligible to earn a target bonus of $239,167. Mr. Olson was eligible to earn a target bonus of $135,417. |
| |
(7) | These amounts reflect bonuses earned by Messrs. Reilly, Frankola and Olson based upon our achievement of financial objectives and milestones. Mr. Reilly was eligible to earn a target bonus of $316,667. Mr. Frankola was eligible to earn a target bonus of $161,875. Mr. Olson was eligible to earn a target bonus of $118,750. |
| |
(8) | Mr. Frankola’s base salary was increased to $400,000 effective January 3, 2019. |
| |
(9) | Mr. Frankola’s base salary was increased to $360,000 effective April 1, 2017. This amount includes $358,333 base salary and $420 gym reimbursement. |
| |
(10) | Mr. Frankola’s base salary was increased to $350,000 effective April 1, 2016. This amount includes $337,919 base salary and $420 gym reimbursement. |
| |
(11) | Mr. Murthy’s compensation disclosed in this table does not include the compensation he received from Hortonworks before our merger with Hortonworks in January 2019. Mr. Murthy’s base salary was set as $380,000 effective January 3, 2019. |
| |
(12) | Mr. Olson’s base salary was increased to $284,000 effective April 1, 2018, and was further increased to $350,000 effective January 3, 2019 |
| |
(13) | Mr. Olson’s base salary was increased to $275,000 effective April 1, 2017. |
| |
(14) | The amount reported represents (i) $18,293 in spousal travel reimbursements, including an associated tax gross-up of $8,715 and (ii) a $510 holiday gift. |
January 3, 2019.
Grants of Plan-Based Awards Table
The following table provides information concerning each grant of an award made during the year ended January 31, 20192020 for each of our named executive officers under any plan. This information supplements the information about these awards set forth in the Summary Compensation Table.
|
| | | | | | | | | | | | | | |
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | |
Estimated Future Payouts Under Equity Incentive Plan Awards | | |
Name | Type of Award | Grant Date | Threshold ($) | Target ($) | Maximum ($) | | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares or Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(2) |
Thomas J. Reilly | Cash | N/A | 245,341 |
| 426,680 |
| 640,020 |
| | | | | | |
|
RSUs(3) |
03/23/2018 | — |
|
— |
|
— |
| |
— |
— |
— |
330,000 |
6,695,700 |
Jim Frankola |
Cash |
N/A | 146,155 |
| 254,183 |
| 381,275 |
| | | | | | |
|
RSUs(3) |
03/23/2018 | — |
|
— |
|
— |
| |
— |
— |
— |
170,000 |
3,449,300 |
Arun Murthy |
Cash |
N/A | — |
| — |
| — |
| | | | | | |
|
RSUs(4) |
01/17/2019 | — |
|
— |
|
— |
| |
— |
— |
— |
582,878 |
7,192,715 |
Michael A. Olson |
Cash |
N/A | 85,836 |
|
149,280 |
| 223,920 |
| | | | | | |
|
RSUs(3) |
03/23/2018 | — |
|
— |
| — |
| |
— |
— |
— |
100,000 |
3,827,172 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | | | | |
Estimated Future Payouts Under Equity Incentive Plan Awards | | | | |
Name | Type of Award | Grant Date | Threshold ($) | | Target ($) | | Maximum ($) | | | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares or Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(2) |
Robert Bearden |
RSUs |
6/20/2019(3) | — | | |
— | |
— | | |
— |
— |
— |
40,140 | $ | 230,002.20 | |
|
RSUs |
1/13/2020(4) | — | | |
— | |
— | | |
— |
— |
— |
538,809 | $ | 6,325,617.66 | |
Martin Cole |
RSUs |
6/20/2019(5) | — | | |
— | |
— | | |
— |
— |
— |
40,140 | $ | 230,002.20 | |
| RSUs | 7/31/2019(6) | — | | | — | | | — | | | | — | | — | | — | | 577,035 | $ | 3,450,669.30 | |
Thomas J. Reilly |
RSUs |
2/12/2019(7) | — | | |
— | |
— | | |
— |
— |
— |
455,373 | $ | 6,306,916.05 | |
Jim Frankola |
Cash |
N/A | 161,000 | | 280,000 | | 420,000 | | | | | | | |
|
RSUs |
2/1/2019(8) | — | | |
— | |
— | | |
— |
— |
— |
382,514 | $ | 5,206,015.54 | |
|
RSUs |
2/1/2019(9) | — | | |
— | |
— | | |
— |
— |
— |
127,505 | $ | 1,735,343.05 | |
|
RSUs |
7/31/2019(9) | — | | |
— | |
— | | |
— |
— |
— |
63,752 | $ | 381,236.96 | |
|
RSUs |
7/31/2019(10) | — | | |
— | |
— | | |
— |
— |
— |
63,753 | $ | 381,242.94 | |
Arun Murthy |
Cash |
N/A |
131,000 | | 228,000 | | 342,000 | | | | | | | |
|
RSUs |
7/31/2019(11) | — | | |
— | |
— | | |
— |
— |
— |
72,860 | $ | 435,702.80 | |
|
RSUs |
7/31/2019(12) | — | | |
— | |
— | | |
— |
— |
— |
72,859 | $ | 435,696.82 | |
|
RSUs |
12/26/2019(13)) | — | | |
— | |
— | | |
— |
— |
— |
376,682 | $ | 4,508,883.54 | |
|
| | | | |
(1) | Reflects threshold, target and maximum potential payments for awards under our annual cashFY 2020 bonus plan for executive officers described in the section above entitled “Compensation“Compensation Discussion and Analysis—Compensation Elements—Annual Cash Bonuses.Bonuses.” Under these awards, the named executive officers (other than Messrs. Bearden and Cole) were eligible to receive a cash payout subject to the achievement of pre-established corporate performance metrics. Pursuant to his transition agreement, in addition to his annual base salary and certain other severance payments and benefits described in more detail below in “—Potential Payments upon Termination or Change in Control” below, Mr. Reilly received (i) a lump-sum payment equal to 100% of his annual target bonus, pro-rated for his partial year of service during such fiscal year, as well as (ii) a lump-sum payment equal to 100% of his annual target bonus, which are both included under the column “All Other Compensation” in the “Summary Compensation Table”. Mr. Reilly’s target bonus payments were paid pursuant to his transition agreement and so is not reflected in the table above. Mr. Bearden’s bonus for the fiscal year was paid at “target” pro-rated to reflect his partial year of service as our President and Chief Executive Officer starting from January 13, 2020 and so is not reflected in the table above. Mr. Cole was not entitled to an annual bonus pursuant to his arrangement as our Interim Chief Executive Officer. |
| | | | | |
(2) | The amounts reported in this column represent the grant date fair value of each award as computed in accordance with FASB ASC 718. The assumptions used in calculating the grant date fair value of the RSUs reported in this column are set forth in Note 910 to the audited consolidated financial statements included in our annual report on Form 10-K for the year ended January 31, 2019.2020. Note that the amounts reported in these columns reflect the accounting cost for these awards and do not correspond to the actual economic value that may be receivedrealized by our named executive officers from the awards. |
(3) | TheThis RSU award was granted to Mr. Bearden for his service as our non-employee director prior to his appointment as our President and Chief Executive Officer, which is included in, not in addition to, what is disclosed in the “Director Compensation Table” contained elsewhere in this proxy statement. 100% of these RSUs vest aton the one year anniversary of the vesting commencement date (the “VCD”), which is June 15, 2019, subject to continued service to us through the vesting date. The outstanding RSUs are subject to acceleration of vesting upon a ratechange in control as described in the section entitled “Director Compensation” above. |
(4) | As discussed under the section entitled “Compensation Discussion and Analysis—Chief Executive Officer Transitions and Agreements”, pursuant to Mr. Bearden’s employment offer letter, Mr. Bearden was granted (i) an RSU award to acquire 538,809 shares of 1/16thour common stock that will vest quarterly over one year following December 15, 2019 and (ii) an RSU award to acquire 1,077,619 shares of our common stock that will vest quarterly commencing March 15, 2021 if our board of directors (with less than two dissenters from such approval) determines its satisfaction with Mr. Bearden’s as our Chief Executive Officer. On May 6, 2020, Mr. Bearden voluntarily forfeited 275,000 shares subject to the New Hire RSU granted to him on January 13, 2020 in connection with his appointment as our President and Chief Executive Officer, representing approximately 17% of the total New Hire RSU, reducing the number of shares eligible to vest during the third year of the New Hire RSU’s vesting schedule. For further information on Mr. Bearden’s New Hire RSU and his voluntary reduction of a portion thereof, see “Compensation Discussion and Analysis —Chief Executive Officer Transitions and Agreements” above. For accounting purposes and, as a result, for disclosure purposes in this Grants of Plan-Based Awards Table, only the initial 538,809 RSUs are deemed granted in fiscal year 2020, and the balance (as adjusted for the forfeiture) will be deemed granted in fiscal year 2021 if our board of directors approves Mr. Bearden’s satisfactory performance at that time. |
(5) | This RSU award was granted to Mr. Cole for his service as our non-employee director prior to his appointment as our Interim Chief Executive Officer, which is included in, not in addition to, what is disclosed in the “Director Compensation Table” contained elsewhere in this proxy statement. 100% of these RSUs vest on the one year anniversary of the VCD, which is June 15, 2019, subject to continued service to us through the vesting date. The outstanding RSUs are subject to acceleration of vesting upon a change in control as described in the section entitled “Director Compensation” above. In connection with Mr. Cole’s resignation from our board, these RSUs vested in full. |
(6) | This RSU award was granted to Mr. Cole for his service as our Interim Chief Executive Officer. These RSUs vest quarterly on the last day of each of the full three (3) month periods at the rate of 37.50% on September 30, 2019, 31.50% on December 31, 2019, and 15.50% for each of March 31, 2020 and June 30, 2020, subject to continued service to us through each vesting date; the ongoing quarter during which Mr. Cole’s service terminates will vest so long as Mr. Cole provides service as our Interim Chief Executive Officer for at least one day during such ongoing quarter. Mr. Cole forfeited the fourth quarter of this RSU award upon his resignation as our Interim Chief Executive Officer. |
(7) | 1/16th of these RSUs vest on each quarterly anniversary of the VCD, which is December 15, 2018, subject to continued service to us through each vesting commencement date. The outstanding RSU awardsRSUs were subject to acceleration of vesting as described in “—Potential Payments upon Termination or Change in Control” below. Pursuant to Mr. Reilly’s executive transition agreement, dated June 5, 2019, these RSUs vested in full in connection with his departure as our Chief Executive Officer. |
(8) | 1/16th of these RSUs vest on each quarterly anniversary of the VCD, which is December 15, 2018, subject to continued service to us through each vesting date. The outstanding RSUs are subject to acceleration of vesting as described in “—Potential Payments upon Termination or Change in Control” below. |
(4)(9) | Pursuant100% of these RSUs vested on the one year anniversary of the VCD, which is December 15, 2018.
|
(10) | 100% of these RSUs vest on the one year anniversary of the VCD, which is December 15, 2019, subject to our employmentcontinued service to us through the vesting date. The outstanding RSUs are subject to acceleration of vesting as described in “—Potential Payments upon Termination or Change in Control” below. |
(11) | These RSUs were one of the two awards granted as a result of the amendment to Mr. Murthy’s offer letter with Mr. Murthy in connection with the merger with Hortonworks, our initial compensation arrangements with Mr. Murthy include theproviding for a grant of an RSU award to acquire such numberan aggregate total of 145,719 shares of our common stock equal to $8.0 million divided bystock. For additional information, see the 10-day closing price average forsection entitled “Compensation Discussion and Analysis—Fiscal Year 2020 Compensation Decisions—Long Term Incentive Compensation—Restricted Stock Unit Awards.” 100% of these RSUs vest on the period prior to the closing date of our merger with Hortonworks, with (i) 80%one year anniversary of the VCD, which is December 15, 2018, subject to continued service to us through the vesting date. The outstanding RSUs are subject to acceleration of vesting as described in “—Potential Payments upon Termination or Change in Control” below. |
(12) | These RSUs were one of the two awards granted as a result of the amendment to Mr. Murthy’s offer letter providing for a grant of an RSU award to acquire an aggregate total of 145,719 shares of our common stock subject to such award subject to service-based vesting over approximately a three-year period with 1/12thstock. For additional information, see the section entitled “Compensation Discussion and Analysis—Fiscal Year 2020 Compensation Decisions—Long Term Incentive Compensation—Restricted Stock Unit Awards.” 100% of these RSUs vest on the one year anniversary of the total number of shares underlying that portion of the award vesting quarterly followingVCD, which is December 15, 2019, subject to his continued employment byservice to us through the vesting date. The outstanding RSUs are subject to acceleration of vesting as described in “—Potential Payments upon Termination or Change in Control” below. |
(13) | 1/16th of these RSUs vest on each quarterly anniversary of the VCD, which is December 15, 2019, subject to continued service to us through each applicable vesting date, and (ii) with the remaining 20% of the shares of our common stockdate. The outstanding RSUs are subject to such award to be earned and vest subject to the achievementacceleration of performance criteria to be established by our board of directors and Mr. Murthy’s continued employment through the applicable performance period. The service based portion of this equity award grant was granted in January 2019 when the compensation committee granted Mr. Murthy an RSU award that may vest and be settled for 582,878 shares of our common stock and which is subject to the vesting schedule as described in this footnote.“—Potential Payments upon Termination or Change in Control” below. |
Outstanding Equity Awards at Fiscal Year End Table
The following table presents, for each of the named executive officers, information regarding outstanding stock options and RSU awards held as of January 31, 2019.2020.
| | | | Option Awards | | Stock Awards | | Option Awards | | | | Stock Awards | |
| Grant Date(1) | | Number of Securities Underlying Unexercised Options | | | Number of Shares that Have Not Vested(2) | | Market Value of Shares that Have Not Vested($)(3) | | Grant Date(1) | | Number of Securities Underlying Unexercised Options | | | | Number of Shares that Have Not Vested(2) | | | Market Value of Shares that Have Not Vested($)(3) |
Name | | Exercisable | | Unexercisable | | Exercise Price($) | | Expiration Date | | | | | Name | | | Exercisable | | Unexercisable | | | Exercise Price($) | | Expiration Date | | | | | |
Robert Bearden | | Robert Bearden | 8/21/2013(4) | | 438,908 | | | — | | | 3.65 | | 8/20/2023 | | | | |
| | | 06/20/2019(5) | | 40,140 | | | 413,040.60 |
| | | 1/13/2020(6) | | 538,809 | | | 5,544,344.61 |
Martin Cole | | Martin Cole | — | | — | | | — | | | — | | | — | | | — | | | — |
Thomas J. Reilly | 6/28/2013(4) | | 7,304,755 | | — |
| | 3.21 | | 6/27/2023 | | | | | Thomas J. Reilly | 6/28/2013(7) | | 7,304,755 | | — | | | 3.21 | | 7/31/2020 | | | | |
| 3/26/2015(5) | | 70,458 | | 18,542 | | 16.24 | | 3/25/2025 | | | | | | 3/26/2015(8) | | 89,000 | | — | | | | 16.24 | | 7/31/2020 | | | | |
Jim Frankola | | Jim Frankola | 10/9/2012(9) | | 152,053 | | — | | | 1.72 | | 10/8/2022 | | | | |
| 3/26/2015(6) | | | | 51,750 | | | 698,625 |
| | 11/8/2013(10) | | 29,944 | | — | | | 3.64 | | 11/7/2023 | | | | |
| 3/17/2016(7) | | | | 83,334 | | | 1,125,009 |
| |
| 3/8/2017(8) | | | | 168,750 | | | 2,278,125 |
| |
| 3/23/2018(9) | | | | 268,125 | | | 3,619,688 |
| |
Jim Frankola | 10/9/2012(10) | | 352,053 | | — |
| | 1.72 | | 10/8/2022 | | | | | |
| 11/8/2013(11) | | 79,166 | | 20,834 |
| | 3.64 | | 11/7/2023 | | | | | | 1/31/2015(11) | | 41,000 | | — | | | 16.02 | | 1/30/2025 | | | | |
| 11/8/2013(12) | | 52,083 | | — |
| | 3.64 | | 11/7/2023 | | | | | | 3/17/2016(12) | | | | | 7,313 | | | 75,250.77 |
| 1/31/2015(13) | | 41,000 | | — |
| | 16.02 | | 1/30/2025 | | | | | | 3/8/2017(13) | | | | | 56,250 | | | 578,812.50 |
| 3/17/2016(14) | | | | 36,563 | | | 493,601 |
| | 3/23/2018(14) | | | | | 95,625 | | | 983,981.25 |
| 3/8/2017(15) | | | | 101,250 | | | 1,366,875 |
| | 2/1/2019(15) | | | | | 286,886 | | | 2,952,056.94 |
| 3/23/2018(16) | | | | 138,125 | | | 1,864,688 |
| | 7/31/2019(16) | | | | | 63,753 | | | 656,018.37 |
Arun Murthy | 1/3/2019(17) | | 112,683 | | — |
| | 3.65 | | 8/20/2023 | | | | | Arun Murthy | 8/21/2013(17) | | 112,683 | | — | | | | 3.65 | | 8/20/2023 | | | | |
| 1/3/2019(18) | | 169,649 | | — |
| | 10.90 | | 9/11/2024 | | | | | | 9/12/2014(18) | | 169,649 | | — | | | | 10.90 | | 9/11/2014 | | | | |
| 1/3/2019(19) | | | | 8,156 | | | 110,106 |
| | 1/17/2019(19) | | | | | 582,878 | | | 5,997,814.62 |
| 1/3/2019(20) | | | | 163,125 | | | 2,202,188 |
| | 7/31/2019(20) | | | | | 72,859 | | | 749,719.11 |
| 1/3/2019(21) | | | | 287,100 | | | 3,875.850 |
| | 12/26/2019(21) | | | | | 376,682 | | | 3,876,057.78 |
| 1/17/2019(22) | | | | 582,878 | | | 7,868,853 |
| |
Michael A. Olson | 3/30/2012(23) | | 165,300 | | — |
| | 1.68 | | 3/29/2022 | | | | | |
| 6/28/2013(24) | | 1,583,334 | | — |
| | 3.21 | | 6/27/2023 | | | | | |
| 1/31/2015(25) | | 20,500 | | 20,500 |
| | 16.02 | | 1/30/2025 | | | | | |
| 1/31/2015(26) | | | | — | | | — |
| |
| 3/17/2016(27) | | | | 41,667 | | | 562,505 |
| |
| 3/8/2017(28) | | | | 81,563 | | | 1,101,101 |
| |
| 3/23/2018(29) | | | | 81,250 | | | 1,096,875 |
| |
| 1/17/2019 | | | | 145,719 |
| | 1,967,207 |
| |
________________
| |
(1) | Except for Mr. Murthy, outstanding equity awards with a grant date prior to April 27, 2017, the effective date of our 2017 Equity Incentive Plan, were granted under our 2008 Stock Incentive Plan and outstanding equity awards with a grant date on or after April 27, 2017 were granted under our 2017 Equity Incentive Plan. All of the outstanding equity awards are subject to acceleration of vesting as described in “—Potential Payments upon Termination or Change in Control” below. |
| |
(2) | The outstanding RSUs were modified as of March 2017. See “Management’s Discussion and Analysis of Financial Conditions and Results of Operations-Significant Impacts of Stock-based Compensation Expense” in our final prospectus on Form 424(b)(4) (No. 333-220494) as filed with the SEC on September 28, 2017 and incorporated herein by reference. |
| |
(3) | The market value for our common stock is based on the closing price of our common stock on the NYSE as of January 31, 2019 of $13.50. |
| |
(4) | 1/4th of the option vested on June 18, 2014 and 1/48th vests monthly thereafter. |
| |
(5) | 1/24th of the option vests monthly beginning on June 18, 2017. |
| |
(6) | Our board of directors approved this award on March 26, 2015. These RSUs vest and are settled upon the satisfaction of both a service-based requirement and a liquidity event requirement. The vesting commencement date (the “VCD”) for these RSUs is June 15, 2017. The service-based requirement will be satisfied with respect to 1/8th of the RSUs on each quarterly anniversary of the VCD.(1) Outstanding equity awards with a grant date prior to April 27, 2017, the effective date of our 2017 Equity Incentive Plan, were granted under our 2008 Stock Incentive Plan and outstanding equity awards with a grant date on or after April 27, 2017 were granted under our 2017 Equity Incentive Plan. All of the outstanding equity awards are subject to acceleration of vesting as described in “—Potential Payments upon Termination or Change in Control” below. (2) The outstanding RSUs were modified as of March 2017. See “Management’s Discussion and Analysis of Financial Conditions and Results of Operations-Significant Impacts of Stock-based Compensation Expense” in our final prospectus on Form 424(b)(4) (No. 333-220494) as filed with the SEC on September 28, 2017 and incorporated herein by reference. (3) The market value for our common stock is based on the closing price of our common stock on the NYSE as of January 31, 2020 of $10.29. (4) Pursuant to the terms of the Merger Agreement, Mr. Bearden received a stock option to purchase 438,908 shares of our common stock at the exercise price of $3.65 per share in exchange for his stock option to acquire 336,328 shares of Hortonworks common stock at the exercise price of $4.76 per share that was granted by Hortonworks prior to our merger with Hortonworks. The shares subject to this stock option fully vested on August 19, 2017. (5) 100% of these RSUs vest on the one year anniversary of the VCD, which is June 15, 2019, subject to continued service to us through each the date. These RSUs were granted to Mr. Bearden in his capacity as a non-employee director prior to his
appointment as our Chief Executive Office and were included in, and are not in addition to, the awards disclosed in the “Director Compensation Table” contained elsewhere in this proxy statement. (6) As discussed under the section entitled “Compensation Discussion and Analysis—Chief Executive Officer Transitions and Agreements”, pursuant to Mr. Bearden’s employment offer letter, Mr. Bearden was granted (i) an RSU award to acquire 538,809 shares of our common stock that will vest quarterly over one year following December 15, 2019 and (ii) an RSU award to acquire 1,077,619 shares of our common stock that will vest quarterly commencing March 15, 2021 if our board of directors (with less than two dissenters from such approval) determines its satisfaction with Mr. Bearden’s as our Chief Executive Officer. On May 6, 2020, Mr. Bearden voluntarily forfeited 275,000 shares subject to the New Hire RSU granted to him on January 13, 2020 in connection with his appointment as our President and Chief Executive Officer, representing approximately 17% of the total New Hire RSU, reducing the number of shares eligible to vest during the third year of the New Hire RSU’s vesting schedule. For further information on Mr. Bearden’s New Hire RSU and his voluntary reduction of a portion thereof, see “Compensation Discussion and Analysis —Chief Executive Officer Transitions and Agreements” above. For accounting purposes and, as a result, for disclosure purposes in this Outstanding Equity Awards at Fiscal Year End table, only the initial 538,809 RSUs are deemed granted in fiscal year 2020, and the balance (as adjusted for the forfeiture) will be deemed granted in fiscal year 2021 if our board of directors approves Mr. Bearden’s satisfactory performance at that time. (7) 1/4th of the option vested on June 18, 2014 and 1/48th vests monthly thereafter, subject to continued service to us through each vesting date. The shares subject to this stock option fully vested on June 1, 2017. In connection with Mr. Reilly’s retirement, this stock option was amended to remain exercisable until July 31, 2020, which is the one-year anniversary following Mr. Reilly’s termination date. These options were previously net exercised by Mr. Reilly but such net exercise was rescinded upon agreement of the Company and Mr. Reilly, with Mr. Reilly reimbursing the Company in cash for the exercise price and tax withholding, as discussed further under the section entitled “Compensation Discussion and Analysis—Chief Executive Officer Transitions and Agreements” and in our previous disclosure on our Current Report on Form 8-K, filed with the SEC on August 5, 2019. (8) 1/24th of the option vested monthly beginning on June 18, 2017, subject to continued service to us through each vesting date. The shares subject to this stock option fully vested on June 18, 2019. In connection with Mr. Reilly’s retirement, this stock option was amended to remain exercisable until one-year following Mr. Reilly’s termination date. (9) 1/4th of the option vested at October 1, 2013 and an additional 1/48th vested monthly thereafter subject to continued service to us through each vesting date. The shares subject to this stock option fully vested on October 1, 2016. (10) 1/48th of the option vested monthly beginning on December 1, 2015, subject to continued service to us through each vesting date. The shares subject to this stock option fully vested on November 1, 2019. (11) 1/24th of the option vested monthly beginning on January 1, 2017, subject to continued service to us through each vesting date. The shares subject to this stock option fully vested on January 1, 2019. (12) These RSUs vest upon the satisfaction of both a service-based requirement and a liquidity event requirement. The VCD for these RSUs is March 15, 2016. The service-based requirement will be satisfied with respect to 1/16th of the RSUs on each quarterly anniversary of the VCD, subject to continued service to us through each vesting date. The liquidity event requirement was satisfied upon Mr. Reilly’s continued employment through April 27, 2017, the effective date of our initial public offering. On that date, those RSUs for which the service-based vesting requirement has been satisfied vested and 1/8th of the RSUs will continue to vest on each quarterly anniversary the VCD thereafter. |
| |
(7) | Our board of directors approved this award on March 17, 2016. These RSUs vest and are settled upon the satisfaction of both a service-based requirement and a liquidity event requirement. The VCD for these RSUs is March 15, 2017. The service-based requirement will be satisfied with respect to 1/12th of the RSUs on each quarterly anniversary of the VCD. The liquidity event |
requirement was satisfied upon Mr. Reilly’sFrankola’s continued employment through April 27, 2017, the effective date of our initial public offering. On that date, those RSUs for which the service-based vesting requirement has been satisfied vested and 1/12th16th of the RSUs will continue to vest on each quarterly anniversary of the VCD thereafter.thereafter subject to continued service to us through each vesting date.
| |
(8) | Our board of directors approved this award on March 8, 2017. These RSUs vest and settled upon the satisfaction of both a service-based requirement and a liquidity event requirement. The VCD for these RSUs is March 15, 2017. The service-based requirement will be satisfied with respect to 1/16th of the RSUs on each quarterly anniversary of the VCD. The liquidity event requirement was satisfied upon Mr. Reilly’s continued employment through April 27, 2017, the effective date of our initial public offering. On that date, those RSUs for which the service-based vesting requirement has been satisfied vested and 1/16th of the RSUs will continue to vest on each quarterly anniversary of the VCD thereafter. |
| |
(9) | Our board of directors approved this award on March 23, 2018. 1/16th of the RSUs vest and settle on each quarterly anniversary of the VCD, which is March 15, 2018. |
| |
(10) | 1/4th of the option vested at October 1, 2013 and an additional 1/48th vested monthly thereafter. |
| |
(11) | 1/48th of the option vests monthly beginning on December 1, 2015. |
| |
(12) | 1/48th of the option vests monthly beginning on December 1, 2014. |
| |
(13) | 1/24th of the option vests monthly beginning on January 1, 2017. |
| |
(14) | Our board of directors approved this award on March 17, 2016. These RSUs vest and are settled upon the satisfaction of both a service-based requirement and a liquidity event requirement. The VCD for these RSUs is March 15, 2016. The service-based requirement will be satisfied with respect to 1/16th of the RSUs on each quarterly anniversary of the VCD.(13) These RSUs vest upon the satisfaction of both a service-based requirement and a liquidity event requirement. The VCD for these RSUs is March 15, 2017. The service-based requirement will be satisfied with respect to 1/16th of the RSUs on each quarterly anniversary of the VCD, subject to continued service to us through each vesting date. The liquidity event requirement was satisfied upon Mr. Frankola’s continued employment through April 27, 2017, the effective date of our initial public offering. On that date, those RSUs for which the service-based vesting requirement has been satisfied vested and 1/16th of the RSUs will continue to vest on each quarterly anniversary of the VCD thereafter. |
| |
(15) | Our board of directors approved this award on March 8, 2017. These RSUs vest and settled upon the satisfaction of both a service-based requirement and a liquidity event requirement. The VCD for these RSUs is March 15, 2017. The service-based requirement will be satisfied with respect to 1/16th of the RSUs on each quarterly anniversary of the VCD. The liquidity event requirement was satisfied upon Mr. Frankola’s continued employment through April 27, 2017, the effective date of our initial public offering. On that date, those RSUs for which the service-based vesting requirement has been satisfied vested and 1/16th of the RSUs will continue to vest on each quarterly anniversary of the VCD thereafter. |
| |
(16) | Our board of directors approved this award on March 23, 2018. 1/16 of the of the RSUs vest and settle on each quarterly anniversary of the VCD, which is March 15, 2018. |
| |
(17) | Pursuant to the terms of the Merger Agreement, Mr. Murthy received this stock option in exchange for a stock option to acquire 86,345 shares of Hortonworks common stock at the exercise price of $4.76 per share. The stock option is fully vested. |
| |
(18) | Pursuant to the terms of the Merger Agreement, Mr. Murthy received this stock option in exchange for a stock option to acquire 130,000 shares of Hortonworks common stock at the exercise price of $14.22 per share. The stock option is fully vested. |
| |
(19) | Pursuant to the terms of the Merger Agreement, Mr. Murthy received these RSUs that will settle for shares of our common stock in exchange for RSUs that settle for 6,250 shares of Hortonworks common stock. 1/8th of the RSUs vest and be settled on each three-month anniversary of the VCD, subject to Mr. Murthy’s continued employment. The VCD for these RSUs is March 7, 2017. |
| |
(20) | Pursuant to the terms of the Merger Agreement, Mr. Murthy received these RSUs that will settle for shares of our common stock in exchange for RSUs that settle for 125,000 shares of Hortonworks common stock. 1/4th of the RSUs vested and settled on February 15, 2019 and 1/3rd of the balance vest and be settled on each three-month anniversary of February 15, 2019, subject to Mr. Murthy’s continued employment. |
| |
(21) | Pursuant to the terms of the Merger Agreement, Mr. Murthy received these RSUs that will settle for shares of our common stock in exchange for RSUs that settle for 220,000 shares of Hortonworks common stock. The VCD for these RSUs is March 15, 2019 and vest in full on the one-year anniversary of the VCD without interim vesting for any portion. |
| |
(22) | Our board of directors approved this award on January 17, 2019. The RSUs vest over approximately a three-year period with 1/12th of the total number of shares underlying the award vesting quarterly following December 15, 2019, subject to Mr. Murthy’s continued employment by us through each applicable vesting date. |
| |
(23) | 1/4th of the option vested on March 29, 2013 and 1/48th vested monthly thereafter. |
| |
(24) | 1/48th of the option vests monthly beginning on June 27, 2013. |
| |
(25) | 1/24th of the option vests monthly beginning on January 1, 2017. |
| |
(26) | Our board of directors approved this award on January 31, 2015. These RSUs vest and are settled upon the satisfaction of both a service-based requirement and a liquidity event requirement. The VCD for these RSUs is December 15, 2016. The service-based requirement will be satisfied with respect to 1/8th of the RSUs on each quarterly anniversary of the VCD. The liquidity event requirement was satisfied upon Mr. Olson’s continued employment through April 27, 2017, the effective date of our initial public offering. On that date, those RSUs for which the service-based requirement has been satisfied vested and 1/8th of the RSUs will continue to vest on each quarterly anniversary the VCD thereafter. |
| |
(27) | Our board of directors approved this award on March 17, 2016. These RSUs vest and are settled upon the satisfaction of both a service-based requirement and a liquidity event requirement. The VCD for these RSUs is March 15, 2017. The service-based requirement will be satisfied with respect to 1/12th of the RSUs on each quarterly anniversary of the VCD. The liquidity event |
requirement was satisfied upon Mr. Olson’s continued employment through April 27, 2017, the effective date of our initial public offering. On that date, those RSUs for which the service-based vesting requirement has been satisfied vested and 1/12th16th of the RSUs will continue to vest on each quarterly anniversary of the VCD thereafter.thereafter subject to continued service to us through each vesting date.
| |
(28) | Our board of directors approved this award on March 8, 2017. These RSUs vest and settled upon the satisfaction of both a service-based requirement and a liquidity event requirement. The VCD for these RSUs is March 15, 2017. The service-based requirement will be satisfied with respect to 1/16th(14) 1/16 of the RSUs on each quarterly anniversary of the VCD. The liquidity event requirement was satisfied upon Mr. Olson’s continued employment through April 27, 2017, the effective date of our initial public offering. On that date, those RSUs for which the service-based vesting requirement has been satisfied vested and 1/16th of the RSUs will continue to vest on each quarterly anniversary of the VCD thereafter. |
(29) Our board of directors approved this award on March 23, 2018. 1/16th of the RSUs vest and settle on each quarterly anniversary of the VCD, which is March 15, 2018, subject to continued service to us through each vesting date.
(15) 1/16th of these RSUs vest on each quarterly anniversary of the VCD, which is December 15, 2018, subject to continued service to us through each vesting date.
(16) 100% of these RSUs vest on the one year anniversary of the VCD, which is December 15, 2019, subject to continued service to us through the vesting date.
(17) Pursuant to the terms of the Merger Agreement, Mr. Murthy received this stock option in exchange for a stock option to acquire 86,345 shares of Hortonworks common stock at the exercise price of $4.76 per share. The shares subject to this stock option fully vested on August 19, 2017.
(18) Pursuant to the terms of the Merger Agreement, Mr. Murthy received this stock option in exchange for a stock option to acquire 130,000 shares of Hortonworks common stock at the exercise price of $14.22 per share. The shares subject to this stock option fully vested on September 12, 2018.
(19) The RSUs vest over approximately a three-year period with 1/12th of the total number of shares underlying the award vesting quarterly following December 15, 2019, subject to Mr. Murthy’s continued employment by us through each vesting date.
(20) 100% of these RSUs vest on the one year anniversary of the VCD, which is December 15, 2019, subject to continued service to us through the vesting date.
(21) 1/16th of these RSUs vest on each quarterly anniversary of the VCD, which is December 15, 2019, subject to continued service to us through each vesting date.
Stock Option Exercise and Stock Vested Table
The following table presents, for each of our named executive officers, the number of shares of our common stock acquired upon the exercise of stock options or vesting and settlement of RSUs during the year ended January 31, 20192020 and the aggregate value realized upon the exercise of stock options and the vesting and settlement of RSUs.
|
| | | | | | |
| Stock Option Awards | Stock Awards |
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) |
Thomas J. Reilly | 31,152 |
| 241,117 |
| 307,041 | 5,056,606 |
Jim Frankola | 122,334 |
| 1,204,740 |
| 153,625 | 2,528,921 |
Arun Murthy | — |
| — |
| 8,156 | 91,429 |
Michael A. Olson | — |
| — |
| 135,833 | 2,247,444 |
| | | | | | | | | | | | | | | | | | | | |
| Stock Option Awards | | | | Stock Awards | |
Name | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($)(1) | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) |
Robert Bearden | — | | | — | | | — | | — | |
Martin Cole | — | | | — | | | 544,560 | 5,600,806.40 |
Thomas J. Reilly | — | | | — | | | 1,027,332 | 6,711,322.69 |
Jim Frankola | 322,139 | | 889,758.23 | | 403,635 | 4,073,852.15 |
Arun Murthy | — | | | — | | | 539,397 | 5,457,412.04 |
|
| | | | |
(1) | The aggregate value realized upon the exercise of a stock option represents the difference between the aggregate market price of the shares of our common stock on the date of exercise and the aggregate exercise price of the stock option. |
(2) | The aggregate value realized upon the vesting and settlement of an RSU is based on the closing price on the NYSE of a share of common stock on the date settlement. |
Employment Severance and Change in Control Agreements
Offer Letters and Employment AgreementsArrangements
We have entered into employment agreements or offer letters with each of Messrs. Bearden, Cole, Reilly, MurthyFrankola and Olson and an employment agreement with Mr. Frankola.Murthy. Each of these arrangements provide for at-will employment and generally include the named executive officer’s initial base salary, an indication of eligibility for an annual cash incentive award opportunity and equity awards. In addition, each of our named executive officers has executed a form of our standard confidential information and invention assignment agreement. Any potential payments and benefits due upon a termination of employment or a change in control of us are further described in “Potential Payments upon Termination or Change in Control” below.
Thomas J. ReillyRobert Bearden
We entered into an employment offer letter with Mr. Reilly,Bearden, our chief executive officer,Chief Executive Officer, dated May 22, 2013.January 13, 2020. This offer letter agreement has no specific term and constitutes at-will employment. Pursuant to the offer letter, (i) Mr. Reilly’sBearden’s annual base salary as of January 31, 2020 was $600,000, (ii) he is eligible to receive an annual target bonus of $500,000 based on performance objectives as agreed between Mr. Bearden and the compensation committee of our board of directors (which was paid on a pro-rated basis subject to Mr. Bearden’s continued service through the end of the 2020 Fiscal Year and which was guaranteed at target for the first two quarters of the 2021 Fiscal Year); (iii) he was granted an RSU to acquire 538,809 shares of our common stock that will vest quarterly over one year following
December 15, 2019; (iv) he will be eligible to vest in an RSU to acquire 1,077,619 shares of our common stock quarterly over two years commencing March 15, 2021 if our board of directors (with less than two dissenters from such approval) determines its satisfaction with Mr. Bearden’s as our Chief Executive Officer and (iv) he will be entitled to certain severance and acceleration benefits as discussed below under the section entitled “Potential Payments upon Termination or Change in Control—Severance Agreements for Current Named Executive Officers—Robert Bearden.” For further information on this arrangement, see also “—Compensation Discussion and Analysis -Chief Executive Officer Transitions and Agreements” above.
Martin Cole
We entered into a letter agreement with Mr. Cole, our former Interim Chief Executive Officer, dated August 1, 2019. This offer letter agreement had no specific term and constituted at-will employment. The letter agreement provided for, effective as of July 1, 2019, the date on which Mr. Cole commenced a transition period for the role of Interim Chief Executive Officer, a monthly stipend equal to $40,000, which was $425,000,reduced by any cash director fees paid to Mr. Cole in a month while he served as Interim Chief Executive Officer. For his service as our Interim Chief Executive Officer, Mr. Cole also received RSUs to acquire 577,035 shares of common stock that vest quarterly commencing July 1, 2019. Mr. Cole resigned as Interim Chief Executive Officer effective January 13, 2020. For severance payments and benefits in connection with his resignation, see the section entitled “Potential Payments upon Termination or Change in Control—Severance Agreements for Former Named Executive Officers—Martin Cole” below. For further information on this arrangement, see also “—Compensation Discussion and Analysis - Chief Executive Officer Transitions and Agreements” above.
Thomas J. Reilly
We entered into an employment offer letter with Mr. Reilly, our former Chief Executive Officer, dated May 22, 2013. This offer letter agreement had no specific term and constituted at-will employment. During the fiscal year ended January 31, 2020 until Mr. Reilly retired as our Chief Executive Officer on July 31, 2019, he received $250,000, which was a prorated portion of his annual base salary, and he iswas eligible to receive an annual cash bonus pursuant to Clouderathe Fiscal 2020 Bonus Plan –Plan. In connection with his retirement as Chief Executive OfficersOfficer, effective July 31, 2019, we entered into an Executive Transition Agreement with Mr. Reilly on June 5, 2019 (the “Transition Agreement”). For additional information on the terms of the Transition Agreement and Leadership Team (the “Fiscal 2019 Bonus Plan”).the severance payments and benefits in connection with his retirement, see the section entitled “Potential Payments upon Termination or Change in Control—Severance Agreements for Former Named Executive Officers—Thomas J. Reilly” below.
Jim Frankola
We entered into an employment agreement with Mr. Frankola, our chief financial officer,Chief Financial Officer, dated September 10, 2012. This employment agreement has no specific term and constitutes at-will employment. Mr. Frankola’s annual base salary as of January 31, 20192020 was $360,000,$400,000, and he is eligible to receive an annual cash bonus pursuant to the Fiscal 20192020 Bonus Plan.
Arun Murthy
We entered into an employment offer letter with Mr. Murthy, our chief product officer,Chief Product Officer, dated December 31, 2018, in connection with our merger with Hortonworks.Hortonworks, which was amended on July 31, 2019. This offer letter agreement has no specific term and constitutes at-will employment. Mr. Murthy’s annual base salary as of January 31, 20192020 was $380,000, and he is eligible to receive an annual cash bonus equal to 60% of his annual base salary (determined pursuant to his employment agreement entered into with us in connection with our merger with Hortonworks), based on the achievement of applicable performance objectives and/or conditions established by us in our sole discretion.
Michael A. Olson
We entered into an employment offer letter with Mr. Olson, our chief strategy officer and former president and chief executive officer, dated October 2008. This offer letter agreement constitutes at-will employment. Mr. Olson’s annual base salary as of January 31, 2019 was $284,000, and he is eligible to receive an annual cash bonus pursuant to the Fiscal 2019 Bonus Plan.
Potential Payments upon Termination or Change in Control
Severance Agreements for Current Named Executive Officers
Robert Bearden
Pursuant to his offer letter, we have agreed to make certain payments and provide certain benefits upon termination of employment by us without “cause” (as defined in the offer letter) or by Mr. Bearden for “good reason” (as defined in the offer letter). These payments and benefits depend on whether or not such termination occurs in connection with a “change in control” (as defined in the offer letter) and will be subject to Mr. Bearden’s execution and non-revocation of a general release of claims in a form prescribed by us.
If the termination occurs in connection with a change in control (during the period commencing three months prior to and ending twelve months following a change in control), Mr. Bearden will be entitled to receive:
(i) a lump sum payment equal to the sum of:
(a) 18 months of his annual base salary,
(b) his annual target bonus (calculated as if all applicable bonus targets were achieved) and
(c) a prorated portion of his annual target bonus (calculated as if all applicable bonus targets were achieved and based on the number of days employed during the bonus period, less any amounts previously paid);
(ii) COBRA premiums (or a taxable payment in an amount equal to such premiums) until the earlier of the end of an 18-month period or the date when receiving similar coverage with a new employer; and
(iii) accelerated vesting of 100% of any then-unvested shares and other equity awards. Notwithstanding anything to the contrary, if the successor or acquiring corporation of us refuses to assume, convert, replace or substitute Mr. Bearden’s then-unvested shares or other equity awards in connection with a change in control, the then-unvested shares and other equity awards shall become fully vested effective immediately prior to the change in control.
If the termination does not occur in connection with a change in control (outside the period commencing three months prior to and ending twelve months following a change in control), Mr. Bearden will be entitled to receive:
(i) a lump sum payment equal to the sum of:
(a) 18 months of his annual base salary,
(b) his annual target bonus (calculated as of all applicable bonus targets were achieved) and
(c) a prorated portion of his annual target bonus (calculated as if all applicable bonus targets were achieved and based on the number of days employed during the bonus period, less any amounts previously paid);
(ii) COBRA premiums (or a taxable payment in an amount equal to such premiums) until the earlier of the end of an 18-month period or the date when receiving similar coverage with a new employer; and
(iii) accelerated vesting of 100% of any then-unvested shares subject to the RSUs granted pursuant to his offer letter that would have vested during the twelve-month post-termination window.
Pursuant to the offer letter, Mr. Bearden has also agreed to refrain from competing with us while employed with our company and to refrain from soliciting any of our employees or consultants during, and for the one-year period following, his employment.
Jim Frankola and Arun Murthy
We entered into Severance and Change in Control Agreements (the “Severance(each, the “Prior Severance Agreement”) with each of Messrs. Reilly, Olson, andMr. Frankola in December 2016 and with Mr. Murthy in December 2018. The Severance Agreement with Mr. Murthy will become effective onOn April 9, 2020, the earliercompensation committee of our board of directors approved the amendment and restatement of the 12-month anniversary of January 3, 2019 or aSeverance and Change in Control ofAgreements entered into between the Company (as definedand its executive officers, including Messrs. Frankola and Murthy (each, “the Amended Severance Agreement”), which amendments are discussed in the Severance Agreement). Mr. Murthy’s existing Hortonworks Separation Benefits (as defined in the offer letter between Arun Murthy and us, dated December 31, 2018) will remain in effect until the day immediately prior to the effective date of such Severance Agreement, at which date all of his Hortonworks Separation Benefits shall terminate and shall be superseded in their entirety by the terms and conditions of the Severance Agreement. Pursuant to the Amended and Restatement Employment Agreement entered into by Mr. Murthy and Hortonworks as of September 28, 2018 (the “Hortonworks Employment Agreement”, as described more fully below), the existing Hortonworks Separation Benefits include payments depending on whether or not Mr. Murthy’s involuntary termination is connection with a Change in Control (as defined in the Hortonworks Employment Agreement).detail below. Pursuant to these Prior Severance
Agreements, we have agreed to make certain payments and provide certain benefits upon termination of employment by us without Cause“cause” (as defined in the applicable Prior Severance Agreement) or by the employee for Good Reason“good reason” (as defined in the applicable Prior Severance Agreement). These payments and benefits depend on whether or not such termination occurs in connection with a Change“change in Controlcontrol” (as defined in the applicable Prior Severance Agreement) and will be subject to the named executive officer’s execution and non-revocation of a general release of claims in a form prescribed by us.
IfUnder the terms of the Prior Severance Agreements, if the termination ofoccurs in connection with a named executive officer occurs duringchange in control (during the period commencing three months prior to and ending twelve months following a change in control, the named executive officercontrol), each of Messrs. Frankola and Murthy will be entitled to receive:
(i) a lump sum payment equal to the sum of:
(a) his annual base salary,
(b) his annual target bonus (calculated as if all applicable bonus targets were achieved) and
(c) a prorated portion of his annual target bonus (calculated as if all applicable bonus targets were achieved and based on the number of days employed during the bonus period);
(ii) COBRA premiums (or a taxable payment in an amount equal to such premiums) until the earlier of the end of a twelve-month period or the date when receiving similar coverage with a new employer;
(iii) accelerated vesting of 100% of all outstanding equity awards; and
(iv) a twelve-month post-termination exercise window for all outstanding non-qualified stock options.
IfIn addition, under the terminationterms of a named executive officerthe Prior Severance Agreements, if the termination does not occur duringin connection with a change in control (outside the period commencing three months prior to and ending twelve months following a change in control, the named executive officercontrol), each of Messrs. Frankola and Murthy will be entitled to receive:
(i) a lump sum payment equal to the sum of:
(a) his annual base salary and
(b) a prorated portion of his annual target bonus (calculated as if all applicable bonus targets were achieved and based on the number of days employed during the bonus period);
(ii) COBRA premiums (or a taxable payment in an amount equal to such premiums) until the earlier of the end of a twelve-month period or the date when receiving similar coverage with a new employer; and
(iii) a twelve-month post-termination exercise window for all outstanding non-qualified stock options.
PursuantThe Amended Severance Agreements (i) make certain modifications to the applicable definitions of “cause” and “good reason” (ii) extend the “change in control period” during which the executive officers may receive enhanced severance payments and benefits from the period commencing three months prior to a change in control of the Company and ending twelve months following such change in control, to the period commencing three months prior to a change in control of the Company and ending twenty-four months following such change in control (the “CIC Period”) and (iii) increase cash severance payments and provide for the partial accelerated vesting of equity awards in the event of a qualifying termination outside of the CIC Period as discussed below. Any benefits under the Amended Severance Agreement will be subject to the executive officer’s execution and non-revocation of a general release of claims in a form prescribed by us. Each of the Amended Severance Agreement is otherwise substantively the same as the respective Prior Severance Agreement.
Under the Amended Severance Agreement, “cause” has been revised to include the executive officer’s failure to follow our policies that results in, or could reasonably be expected to result in, material harm to Cloudera and “good reason” has been revised to include a reduction of more than 10% in the executive officer’s total target cash compensation as our employee (previously 10% of base salary).
Under the Amended Severance Agreement, if the termination of the executive officer occurs in connection with a change in control (during the period commencing three months prior to and ending twenty-four months (previously twelve months) following a change in control), the executive officer will be entitled to receive:
(i)a lump sum payment equal to the sum of:
(a)his then-current annual base salary;
(b)his then-current annual target bonus (calculated as if all applicable bonus targets were achieved and to the extent the target bonus is paid more frequently than annually, bonus amounts will be aggregated to represent a full year); and
(c)a prorated portion of his annual target bonus (calculated as if all applicable bonus targets were achieved and based on the number of days worked during the bonus period and to the extent the target bonus is paid more frequently than annually, bonus amounts will be aggregated to represent a full year);
(ii)twelve months of COBRA premiums (or a taxable payment in an amount equal to such premiums);
(iii)accelerated vesting of 100% of all outstanding equity awards (and with respect to awards that would otherwise vest upon satisfaction of performance criteria, this acceleration will apply at the target level of the performance criteria unless specifically provided otherwise in the equity award agreement); and
(iv)a twelve-month post-termination exercise window for all outstanding non-qualified stock options.
If the termination of the executive officer does not occur in connection with a change in control (outside the period commencing three months prior to and ending twenty-four months (previously twelve months) following a change in control), the executive officer will be entitled to receive:
(i)a lump sum payment equal to the sum of:
(a)his then-current annual base salary;
(b)50% of his then-current annual target bonus (calculated as if all applicable bonus targets were achieved and to the extent the target bonus is paid more frequently than annually, bonus amounts will be aggregated to represent a full year) (previously not provided); and
(c)a prorated portion of his annual target bonus (calculated as if all applicable bonus targets were achieved and based on the number of days worked during the bonus period and to the extent the target bonus is paid more frequently than annually, bonus amounts will be aggregated to represent a full year);
(ii)twelve months of COBRA premiums (or a taxable payment in an amount equal to such premiums);
(iii)twelve months of additional vesting of any then-unvested shares subject to outstanding equity awards (and with respect to awards that would otherwise vest upon satisfaction of performance criteria, this acceleration will apply at the target level of the performance criteria unless specifically provided otherwise in the equity award agreement) (previously not provided); and
(iv)a twelve-month post-termination exercise window for all outstanding non-qualified stock options.
Under both the Prior Severance Agreements and the Amended Severance Agreements, each of the named executive officersMessrs. Frankola and Murthy has also agreed to refrain from competing with us while employed with our company and to refrain from soliciting any of our employees or consultants during, and for the one-year period following, his employment.
Arun Murthy’s Hortonworks Separation Benefits
Before Mr. Murthy’s Severance Agreement becomes effective, his existing Hortonworks Separation Benefits shall remain in effect, which, pursuantemployment, and will be required to the Hortonworks Employment Agreement, include payments as described below.
Involuntary Termination of Employment under the Hortonworks Employment Agreement
In the event that Mr. Murthy’s employment is terminated by us without Cause (as defined in the Hortonworks Employment Agreement) and subject to deliveringsign a fully effective release of claims in exchange for any of these payments and benefits.
Severance Agreements for Former Named Executive Officers
Martin Cole
In connection with Mr. Cole’s resignation as Interim Chief Executive Officer and as a member of our board of directors, each effective January 13, 2020, we entered into a separation agreement with Mr. Cole, pursuant to which he will bebecame entitled to the following payments and benefits: (i) a lump sum cash severancepayment amount equal to twelve$32,500, and (ii) acceleration of vesting with respect to 100% of Mr. Cole’s then-unvested RSUs granted to Mr. Cole in his role as a member of our board of directors (and excluding the then-unvested RSUs granted to Mr. Cole in his role as Interim Chief Executive Officer).
Thomas J. Reilly
In connection with his retirement as Chief Executive Officer, effective July 31, 2019, we entered into an Executive Transition Agreement with Mr. Reilly on June 5, 2019 (the “Transition Agreement”). Pursuant to the Transition Agreement, Mr. Reilly became entitled to the following severance payments and benefits: (i) a lump sum cash payment equal to 12 months of his basethen-base salary and prorated100% of his annual target incentive compensation for the quarter (in the case of incentive compensation paid onbonus, (ii) a quarterly basis) or the year (in the case of incentive compensation paid on an annual basis) in which the termination occurs, payable over twelve months, plus a monthlylump sum cash payment equal to our contribution towards100% of his (and if applicable,annual target bonus for the fiscal year ended January 31, 2020, prorated for his qualified and participating dependents’)partial year of service, (iii) payment by the Company of premiums required to maintain his health insurance for twelveup to 24 months, or(iv) full acceleration of all of his COBRA health continuation period, whichever ends earlier. In addition, except to the extent any equity award granted or purchased contains more favorable terms, he will receive eighteen months’ acceleration on allthen outstanding and unvested stock option awards and RSU awards and (v) extended post-termination exercisability of his vested stock options restricted stock and other stock-based awards held(including by him. Furthermore,“net exercise” in certain circumstances) until the earliest to occur of one-year following Mr. Reilly’s separation date or the extent Mr. Murthy enters into a non-competition agreement, he will receive an additional amount of cash severance, health benefits continuation and equity acceleration based on the lengthoriginal expiration term of such non-competition period, which will be payable over anoptions. Mr. Reilly’s receipt of the foregoing payments and benefits were subject his execution of a release of claims against the Company. For additional number of months equal toinformation the non-competition period.section entitled “Compensation Discussion and Analysis—Chief Executive Officer Transitions and Agreements”.
Potential Payments upon Termination Table
TheExcept where otherwise noted, the following table provides information concerning the estimated payments and benefits that would be provided in the circumstances described above foramounts payable to each of our named executive officers. Except where otherwise noted, payments and benefits are estimatedofficers, assuming that each individual’s employment terminated with or without a change in control of the triggering event took placeCompany occurring on January 31, 2019, and2020. For purposes of determining the value of accelerated vesting for equity awards as noted below, we have assumed a price per share of our common stock isas $10.29, which was the closing price on the NYSEper share of our common stock as of January 31, 2020 reported by NYSE. The amounts shown below do not reflect payments and benefits available under the Amended Severance Agreements for Messrs. Frankola and Murthy, which were adopted after our 2020 fiscal year end as described above.
Messrs. Reilly and Cole are not included in the table below because they ceased employment prior to January 31, 2020. Mr. Reilly received the following payments in connection with his retirement as our Chief Executive Officer: (i) a lump sum cash payment amount equal to $1,250,000, (ii) payments by us of premiums required to maintain his healthcare insurance for up to 24 months, the aggregate cost of which we estimate will be $51,560 (which is based on the payment of COBRA premiums from Mr. Reilly’s termination date in August 2019 ($13.50)through December 2019 in the aggregate amount of $9,546.65, and the estimated payment of monthly COBRA premiums of $2,211.23 per month for the remaining 19 months) and (iii) full acceleration of all stock option awards and RSUs, with the value of accelerated vesting equal to $7,097,878. Mr. Cole received the following payments in connection with his resignation as a member of our board of directors: (i) a lump sum cash payment amount equal to $32,500, and (ii) acceleration of vesting with respect to 100% of Mr. Cole’s then-unvested RSUs granted to him in his role as member of our board of directors with the value of accelerated vesting equal to $471,243. For additional information, see the section entitled “Compensation Discussion and Analysis—Chief Executive Officer Transitions and Agreements”.
There can be no assurance that a triggering event would produce the same or similar results as those estimated below if such event occurs on any other date or at any other price, or if any other assumption used to estimate potential payments and benefits is not correct. Due to the number of factors that affect the nature and amount of any potential payments or benefits, any actual payments and benefits may be different.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Upon Qualifying Termination - No Change in Control | | | | | | Upon Qualifying Termination - Change in Control | | | |
Name | Cash Severance ($)(1) | Continuation of Medical Benefits ($)(2) | | Value of Accelerated Vesting ($)(3) | | Total ($) | Cash Severance ($)(1) | Continuation of Medical Benefits ($)(2) | Value of Accelerated Vesting ($)(3) | Total ($) |
Robert Bearden | 1,426,027 | | 38,739(4) | 5,544,345 | | 7,009,111 | 1,426,027 | 38,739(4) | 17,046,085(5) | 18,510,851 |
Jim Frankola(6) | 680,000 | | 26,535(7) | — | | 706,535 | 960,000 | 26,535(7) | 5,246,120 | 6,232,655 |
Arun Murthy(8) | 608,000 | | 26,535(7) | — | | 634,535 | 836,000 | 26,535(7) | 10,623,592 | 11,486,127 |
(1)The severance amount was determined based on the annual base salaries and annual target bonuses in effect on January 31, 2020. Amounts for Mr. Bearden are pursuant his offer letter as described above under the section entitled “Potential Payments upon Termination or Change in Control—Severance Payments for Current Named Executive Officers—Robert Bearden.” Amounts for Messrs. Frankola and Murthy are pursuant to the Prior Severance Agreements, which were effective as of January 31, 2020.
(2)The continuation of medical benefits is calculated based on the payment of monthly COBRA premiums as of January 31, 2020 pursuant to Mr. Bearden’s offer letter as discussed above under the section entitled “Severance Agreements for Current Named Executive Officers—Robert Bearden” and pursuant to the Prior Severance Agreements for Messrs. Frankola and Murthy as discussed above under the section entitled “Severance Agreements for Current Named Executive Officers—Jim Frankola and Arun Murthy”
(3)The value of accelerated vesting of stock awards is calculated based on the per share closing price of our common stock on NYSE as of January 31, 2020 ($10.29). Amounts for Mr. Bearden are pursuant to his offer letter as discussed above under the section entitled “Severance Agreements for Current Named Executive Officers—Robert Bearden.” Amounts for Messrs. Frankola and Murthy are pursuant to their Prior Severance Agreements as discussed above under the section entitled “Severance Agreements for Current Named Executive Officers—Jim Frankola and Arun Murthy”, which were effective as of January 31, 2020.
(4)This is based on the payment of monthly COBRA premiums as of January 31, 2020 for an 18-month period.
(5)This includes the value of accelerated vesting with respect to an RSU award for 40,140 shares of common stock granted to Mr. Bearden in his capacity as a non-employee director prior to his appointment as our Chief Executive Office. For additional information see the sections entitled “Director Compensation Table” and “Potential Payments upon Termination or Change in Control—Severance Payments for Current Named Executive Officers—Robert Bearden” contained elsewhere in this proxy statement. On May 6, 2020, Mr. Bearden voluntarily forfeited 275,000 shares subject to the New Hire RSU granted to him on January 13, 2020 in connection with his appointment as our President and Chief Executive Officer, representing approximately 17% of the total New Hire RSU, reducing the number of shares eligible to vest during the third year of the New Hire RSU’s vesting schedule. For further information on Mr. Bearden’s New Hire RSU and his voluntary reduction of a portion thereof, see “Compensation Discussion and Analysis—Chief Executive Officer Transitions and Agreements” above. Had such RSU forfeiture been effective as of January 31, 2020, Mr. Bearden would receive, in lieu of the values currently reflected in the “Value of Accelerated Vesting” and “Total” columns above, an estimated $14,216,335 for the value of accelerated vesting, with a new total of $15,681,101.
(6)Pursuant to the terms of the Amended Severance Agreement, had such agreement been effective as of January 31, 2020, Mr. Frankola would receive the following estimated payments and benefits in lieu of the amounts reflected in the table above: if upon a qualifying termination without a change in control, $820,000 cash severance, $26,535 continuation of medical benefits, $2,615,667 value of accelerated vesting, totaling $3,462,202; and if upon a qualifying termination with a change in control, $960,000 cash severance, $26,535 continuation of medical benefits, $5,246,120 value of accelerated vesting, totaling $6,232,655.
(7)This is based on the payment of monthly COBRA premiums as of January 31, 2020 for a 12-month period.
(8)Pursuant to the terms of the Amended Severance Agreement, had such agreement been effective as of January 31, 2020 Mr. Murthy would receive the following estimated payments and benefits in lieu of the amounts reflected in the table above: if upon a qualifying termination without a change in control, $722,000 cash severance, $26,535 continuation of medical benefits, $3,717,993 value of accelerated vesting, totaling $4,466,528; and if upon a qualifying termination with a change in control, $836,000 cash severance, $26,535 continuation of medical benefits, $10,623,592 value of accelerated vesting, totaling $11,486,125.
Chief Executive Officer Pay Ratio
As required by SEC rules, we are providing the following information about the relationship between the annual total compensation of our Chief Executive Officer and the annual total compensation of our median compensated employee (our “CEO pay ratio”).
For fiscal 2020:
|
| | | | | | | | | | |
| Upon Qualifying Termination - No Change in Control | Upon Qualifying Termination - Change in Control |
Name | Cash Severance ($)(1) | Continuation of Medical Benefits ($)(2) | Value of Accelerated Vesting ($)(3) | Total ($) | Cash Severance ($)(1) | Continuation of Medical Benefits ($)(2) | Value of Accelerated Vesting ($)(3) | Total ($) |
Thomas J. Reilly | 926,680 | 22,912 | — |
| 949,592 | 1,353,360 | 22,912 | 7,721,447 | 9,097,719 |
Jim Frankola | 654,183 | 24,539 | — |
| 678,722 | 908,366 | 24,539
| 3,930,586 | 4,863,491
|
Arun Murthy(3) | 380,000 | 28,531 | — |
| 408,531 | 380,000 | 28,531 | 14,056,997 | 14,465,528 |
Michael A. Olson | 499,280 | 23,321 | — |
| 522,601 | 648,560 | 23,321 | 4,727,687 | 5,399,568
|
▪the median of the annual total compensation of all employees of our company (other than our Chief Executive Officer) was $183,651; | |
(1) | The severance amount was determined based on the annual base salaries and annual target bonuses in effect on January 31, 2019. |
| |
(2) | The continuation of medical benefits is calculated based on the payment of COBRA premiums for a 12-month period. |
| |
(3) | The value of accelerated vesting is calculated based on the per share closing price of our common stock on NYSE as of January 31, 2019 ($13.50) less, if applicable, the exercise price of each outstanding stock option. Accelerated vesting occurs only in the event of a qualifying termination during a change in control period. |
| |
(4) | The Severance Agreement with Mr. Murthy will become effective on the earlier of the 12-month anniversary of January 3, 2019 or a Change in Control (as defined therein). The payments and benefits disclosed in the above table are estimates assuming that the Severance Agreement was effective as of January 31, 2019. In the event where a qualifying termination occurred as of January 31, 2019 without a Change in Control, Mr. Murthy would receive the following estimated payments under his existing Hortonworks Separation Benefits: the base salary of $380,000, the prorated portion of his target annual incentive compensation of $200,000 under his Hortonworks bonus arrangement prior to our merger with Hortonworks, $28,531 continuation of medical benefits for a 12-month period and $7,499,619 of value of accelerated vesting. |
▪the annual total compensation of our President and Chief Executive Officer, Robert Bearden, was $7,425,618; and
▪the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees was 40 to 1.
We believe this ratio is a reasonable estimate calculated in a manner consistent with SEC rules.
During fiscal 2020, Mr. Reilly served as our President and Chief Executive Officer until his retirement effective July 31, 2019. At that time, Mr. Cole was appointed our Interim Chief Executive Officer and he served in that role until January 13, 2020. On January 13, 2020, Mr. Bearden was appointed our President and Chief Executive Officer. As permitted by SEC rules, we have chosen to use the annual total compensation of Mr. Bearden, who was serving as our Chief Executive Officer on January 31, 2020, to calculate our pay ratio.
We determined Mr. Bearden’s annual total compensation for the fiscal year ended January 31, 2020 was $7,425,618, which, as required by SEC rules, includes his annualized base salary and annual variable cash bonus for fiscal 2020. Because we are required to annualize his compensation for purposes of this disclosure, Mr. Bearden’s annual total compensation is greater than the total compensation as reported for him in our Fiscal 2020 Summary Compensation Table.
To identify the median employee, we examined the compensation of all our full-time, part-time, temporary or seasonal employees (other than our Chief Executive Officer) as of January 31, 2020, the last day of our fiscal year. As of January 31, 2020, our employee population consisted of 2,796 individuals working at our parent company and consolidated subsidiaries, with 1,460 employees located inside the United States and 1,336 employees located outside the United States. As permitted by SEC rules, we chose to exclude employees who are employed in certain jurisdictions from the determination of our median employee pursuant to the de minimis exemption, given the relatively small number of employees in those jurisdictions and the estimated additional time, effort and expense that would be required to obtain and analyze their compensation information. In total, we excluded 139 employees in 17 countries, who represent less than 5% of our total employee population, from the following jurisdictions: Austria (3), Brazil (16), Colombia (2), Costa Rica (11), Iceland (1), Indonesia (10), Israel (3), Italy (14), Japan (23), Mexico (4), Poland (1), South Africa (4), South Korea (13), Spain (11), Sweden (3), Switzerland (10), and United Arab Emirates (10). After taking into account the de minimis exemption, 2,657 employees were considered for identifying the median employee. We did not include any independent contractors or other non-employee workers in our employee population.
We used a consistently applied compensation measure consisting of actual annual base salary, actual annual variable cash compensation, and the fair value of equity awards granted to newly-hired employees and as part of our regular annual equity award grant cycle for the 12-month period from February 1, 2019 through January 31, 2020 to identify our median employee. We selected this compensation measure as it captures the principal forms of compensation delivered to our employees and this information is readily available with respect to our employees. For simplicity, we calculated annual base salary using a reasonable estimate of the hours worked during fiscal 2020 for hourly employees and actual salary paid for our remaining employees. We annualized base salaries for any full-time and part-time employees who commenced work during fiscal 2020 to reflect a full year. Equity awards granted during the year were included using the same methodology we use for our named executive officers in our fiscal 2020 Summary Compensation Table. Payments not made in U.S. dollars were converted to U.S. dollars using the applicable currency exchange rates in effect as of January 31, 2020. We did not make any cost-of-living adjustment.
Using this approach, we selected the individual at the median of our employee population, who was a full-time employeebased in Canada. We then calculated the fiscal 2020 annual total compensation for this individual using the same methodology we use for our named executive officers as set forth in our Summary Compensation Table (which excludes any retirement and health benefits).
Because SEC rules for identifying the median of the annual total compensation of all employees allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their employee population and compensation practices, the pay ratio reported by other companies may not be comparable
to our pay ratio, as other companies have different employee populations and compensation practices and may have used different methodologies, exclusions, estimates and assumptions in calculating their pay ratios. As explained by the SEC when it adopted these rules, the rule was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow stockholders to better understand and assess each particular company’s compensation practices and pay ratio disclosures.
401(k) Plan
We maintain a retirement plan for the benefit of our employees. The plan is intended to qualify as a tax-qualified 401(k) plan so that contributions to the 401(k) plan, and income earned on such contributions, are not taxable to participants until withdrawn or distributed from the 401(k) plan (except in the case of contributions under the 401(k) plan designated as Roth contributions). The 401(k) plan provides that each participant may contribute up to 100% of his or her pre-tax compensation, up to an annual statutory limit. Participants who are at least 50 years old can also contribute additional amounts based on statutory limits for “catch-up” contributions. Under the 401(k) plan, each employee is fully vested in his or her deferred salary contributions. Employee contributions are held and invested by the plan’s trustee as directed by participants. Our 401(k) plan provides for discretionary matching of employee contributions. For the calendar 20182019 plan year, we matched each participant’s salary deferral contributions, but in no case more than 100% of the first 1% of compensation deferred. For the calendar 2019 plan, year we will match each participant’s salary deferral contributions, but in no case more than 100% of the first 1% of compensation deferred.
Limitation of Liability and Indemnification of Directors and Officers
Our restated certificate of incorporation contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by the Delaware General Corporate Law, as so amended (the “DGCL”). Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for the following:
•any breach of their duty of loyalty to us or our stockholders;
•any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
•unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or
•any transaction from which they derived an improper personal benefit.
Our amended and restated bylaws provide that we shall indemnify, to the fullest extent permitted by law, any person who is or was a party or is threatened to be made a party to any action, suit or proceeding, by reason of the fact that he or she is or was one of our directors or officers or is or was serving at our request as a director or officer of another corporation, partnership, joint venture, trust or other enterprise. Our amended and restated bylaws provide that we may indemnify our employees or agents. Our amended and restated bylaws also provide that we must advance expenses incurred by or on behalf of a director or officer in advance of the final disposition of any action or proceeding, subject to limited exceptions.
We have insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or officer, including claims relating to public securities matters, and to us with respect to payments that may be made by us to these officers and directors pursuant to our indemnification obligations or otherwise as a matter of law.
We have entered into indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained in the DGCL. These indemnification agreements require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements also require us to advance all expenses incurred by the directors and executive officers in investigating or defending any such action, suit or proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.
At present, other than the class actions and shareholder derivative actions identified in Note 9 in the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended January 31, 2020 filed with the SEC on March 27, 2020,we are not aware of any pending litigation or proceeding involving any person who is or was one of our directors, officers, employees or other agents or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Rule 10b5-1 Sales Plans
Certain of our directors and executive officers have adopted written plans, known as Rule 10b5-1 plans, in which they have contracted with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. The director or executive officer may amend or terminate the plan in specified circumstances.
EQUITY COMPENSATION PLAN INFORMATION
The following table presents information as of January 31, 20192020 with respect to compensation plans under which shares of our common stock may be issued.
| | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Securities (#) | | Weighted- Average Exercise Price of Outstanding Options ($)(1) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(#) | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Securities (#) | | | Weighted- Average Exercise Price of Outstanding Options ($)(1) | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(#) | |
| (a) | | (b) | | (c) | | (a) | | | (b) | | | (c) | |
Equity compensation plans approved by security holders(2) | 54,175,799 | | $ | 5.8374 | | 23,716,043(3) | | Equity compensation plans approved by security holders(2) | 47,532,661 | | $ | 5.09 | | 13,269,006(3) | |
Equity compensation plans not approved by security holders | ——(4)(5) | | —— | | —— | | Equity compensation plans not approved by security holders | ——(4)(5) | | —— | | —— | |
Total | 54,175,799 | | | $ | 5.8374 | | | 23,716,043 | | Total | 47,532,661 | | | $ | 5.09 | | | 13,269,006 | |
_______________
| |
(1) | (1) The weighted-average exercise price does not reflect the shares that will be issued in connection with the settlement of RSUs, since RSUs have no exercise price. |
| |
(2) | Includes our 2008 Equity Incentive Plan, Gazzang 2008 Stock Purchase and Option Plan, 2017 Equity Incentive Plan and excludes purchase rights accruing under the 2017 Employee Stock Purchase Plan. |
| |
(3) | There are no shares of common stock available for issuance under our 2008 Equity Incentive Plan, but that plan will continue to govern the terms of options and RSUs granted thereunder. Any shares of common stock that are subject to outstanding awards under the 2008 Equity Incentive Plan that are issuable upon the exercise of stock options that expire or become unexercisable for any reason without having been exercised in full will generally be available for future grant and issuance as shares of common stock under our 2017 Equity Incentive Plan. In addition, the number of shares reserved for issuance under our 2017 Equity Incentive Plan increased automatically by 13,440,931 on February 1, 2019 and will increase automatically on the first day of February of each of 2020 through 2027 by the number of shares equal to 5% of the total issued and outstanding shares of our common stock as of the immediately preceding January 31 or a lower number approved by our board of directors. As of January 31, 2019, there were 2,715,436 shares of common stock available for issuance under the 2017 Employee Stock Purchase Plan. The number of shares reserved for issuance under our 2017 Employee Stock Purchase Plan increased automatically by 2,688,186 on February 1, 2019 and will increase automatically on the first day of February of each year during the term of the 2017 Employee Stock Purchase Plan by the number of shares equal to 1% of the total outstanding shares of our common stock as of the immediately preceding January 31 or a lower number approved by our board of directors. |
| |
(4) | Excludes outstanding options to acquire 4,067,645 shares of our common stock as of January 31, 2019 that were assumed in connection with our merger with Hortonworks. The weighted average exercise price of these outstanding options was $8.9748 as of January 31, 2019. In connection with the merger with Hortonworks, Cloudera has only assumed outstanding options and RSUs, but not the Hortonworks plans themselves, and therefore, no further options may be granted under the Hortonworks plans. The Hortonworks plans were previously approved by the Hortonworks stockholders, but were not approved by our stockholders since we did not assume the Hortonworks plans in connection with the merger. |
| |
(5) | Excludes outstanding RSUs to acquire 7,379,812 shares of our common stock as of January 31, 2019 that were assumed in connection with our merger with Hortonworks. In connection with the merger with Hortonworks, Cloudera has only assumed outstanding options and RSUs, but not the Hortonworks plans themselves, and therefore, no further RSUs may be granted under the Hortonworks plans. The Hortonworks plans were previously approved by the Hortonworks stockholders, but were not approved by our stockholders since we did not assume the Hortonworks plans in connection with the merger. |
(2) Includes our 2008 Equity Incentive Plan, Gazzang 2008 Stock Purchase and Option Plan, 2017 Equity Incentive Plan and excludes purchase rights accruing under the 2017 Employee Stock Purchase Plan.
(3) There are no shares of common stock available for issuance under our 2008 Equity Incentive Plan, but that plan will continue to govern the terms of options and RSUs granted thereunder. Any shares of common stock that are subject to outstanding awards under the 2008 Equity Incentive Plan that are issuable upon the exercise of stock options that expire or become unexercisable for any reason without having been exercised in full will generally be available for future grant and issuance as shares of common stock under our 2017 Equity Incentive Plan. In addition, the number of shares reserved for issuance under our 2017 Equity Incentive Plan increased automatically by 14,758,388 on February 1, 2020 and will increase automatically on the first day of February of each of 2021 through 2027 by the number of shares equal to 5% of the total issued and outstanding shares of our common stock as of the immediately preceding January 31 or a lower number approved by our board of directors. As of January 31, 2020, there were 2,905,694 shares of common stock available for issuance under the 2017 Employee Stock Purchase Plan. The number of shares reserved for issuance under our 2017 Employee Stock Purchase Plan increased automatically by 2,951,677 on February 1, 2020 and will increase automatically on the first day of February of each year during the term of the 2017 Employee Stock Purchase Plan by the number of shares equal to 1% of the total outstanding shares of our common stock as of the immediately preceding January 31 or a lower number approved by our board of directors.
(4) Excludes outstanding options to acquire 3,202,826 shares of our common stock as of January 31, 2020 that were assumed in connection with our merger with Hortonworks. The weighted average exercise price of these outstanding options was $8.77 as of January 31, 2020. In connection with the merger with Hortonworks, we have only assumed outstanding options and RSUs, but not the Hortonworks plans themselves, and therefore, no further options may be granted under the Hortonworks plans. The Hortonworks plans were previously approved by the Hortonworks stockholders, but were not approved by our stockholders since we did not assume the Hortonworks plans in connection with the merger.
(5) Excludes outstanding RSUs to acquire 1,378,870 shares of our common stock as of January 31, 2020 that were assumed in connection with our merger with Hortonworks. In connection with the merger with Hortonworks, Cloudera has only assumed outstanding options and RSUs, but not the Hortonworks plans themselves, and therefore, no further RSUs may be granted under the Hortonworks plans. The Hortonworks plans were previously approved by the Hortonworks stockholders, but were not approved by our stockholders since we did not assume the Hortonworks plans in connection with the merger.
REPORT OF THE COMPENSATION COMMITTEE
This report of the compensation committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.
Our compensation committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and based on such review and discussions, the compensation committee recommended to our board of directors that the Compensation Discussion and Analysis be included in this Proxy Statement.proxy statement.
Submitted by the Compensation Committee
Michael A. Stankey, Chair
Martin ColeNicholas Graziano
Paul Cormier
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In addition to the compensation arrangements, including employment, termination of employment and change of control arrangements described in “Executive Compensation,” the following is a description of each transaction since February 1, 20182019 and each currently proposed transaction in which:
•we have been or are to be a participant;
•the amount involved exceeds $120,000; and
•any of our directors, executive officers or holders of more than 5% of our capital stock, or any immediate family member of or person sharing the household with any of these individuals, had or will have a direct or indirect material interest.
Thomas Reilly Share Acquisition Agreement
On July 31, 2019, we entered into a share acquisition and restriction agreement with Mr. Reilly, our former Chief Executive Officer during the year ended January 31, 2020, pursuant to which Mr. Reilly committed to purchase at least $5 million of our common stock in open market purchases and to refrain from certain dispositions in company securities for a period of one year.
Intel Enterprise Subscription Agreement
We entered into an Enterprise Subscription Agreement with Intel, as amended from time to time (the “ESA”) pursuant to which Intel, a holder of more than 5% of our capital stock, became our customer. Under the ESA, Intel may use our platform in support of its big data initiatives and other internal needs. The term has been extended until April 23, 2023 pursuant to Amendment 3 to the ESA. We have received approximately $10.8$3.9 million for the year ended January 31, 20192020 in payments from Intel for subscriptions and services under the ESA. We anticipate receiving approximately $11.3$7.5 million in future payments from Intel under the terms of the ESA, as amended.
Intel Collaboration and Optimization Agreement
In conjunction with the Series F-1 preferred stock financing, we entered into a collaboration and optimization agreement with Intel, which was amended and restated as of February 1, 2018. This agreement governs our collaboration with Intel on the development, marketing and distribution of specified open source data management software, including the optimization of such software for use with Intel’s processors and architecture. Either party may terminate the agreement under certain circumstances, including if the parties fail to meet certain collaboration goals. Moreover, Intel may terminate the agreement with or without cause upon twelve months written notice at any time after March 21, 2021. The agreement automatically renews following the expiration of the initial term on March 21, 2021 for an additional twelve-month term, and thereafter will be automatically extended for additional twelve-month periods, unless either party provides written notice of non-renewal at least 180 days before the expiration of the renewal term.
Marketing and Miscellaneous Cooperation with Intel
We have received approximately $0.1 million$150,000 from Intel during the year ended January 31, 20192020 for miscellaneous marketing, services and other items related to the operation of the strategic partnership.
Deutsche Bank AG
We have received approximately $13.6 million for the year ended January 31, 2019 in payments from Deutsche Bank AG for subscriptions and services in the ordinary course of business. Our board of directors includes Kimberly L. Hammonds, a former Member of the Management Board and Group Chief Operating Officer of Deutsche Bank AG.
Indemnification Agreements
We have entered into indemnification agreements with each of our directors and executive officers. The indemnification agreements and our amended and restated bylaws require us to indemnify our directors to the fullest extent not prohibited by DGCL. Subject to certain limitations, our amended and restated bylaws also require us to advance expenses incurred by our directors and officers. For more information regarding these agreements, see the section titled “Executive Compensation—Limitation of Liability and Indemnification of Directors and Officers.”
Review, Approval or Ratification of Transactions with Related Parties
Our written related person transactions policy provides that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of our common stock and any members of the immediate family of and any entity affiliated with any of the foregoing persons are not permitted to enter into a material related person transaction with
us without the review and approval of our audit committee or a committee composed solely of independent directors in the event it is inappropriate for our audit committee to review such transaction due to a conflict of interest. The policy provides that any request for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of our common stock or with any of their immediate family members or affiliates, in which the amount involved exceeds $120,000 will be presented to our audit committee for review, consideration and approval. In approving or rejecting any such proposal, we expect that our audit committee will consider the relevant facts and circumstances available and deemed relevant to the audit committee, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
REPORT OF THE AUDIT COMMITTEE
This report of the audit committee is required by the SEC, and is not “soliciting material,” is not to be deemed “filed” with the SEC and is not to be incorporated by reference in any filing of Cloudera under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any filing, unless and only to the extent that we specifically incorporate it by reference.
In fulfilling its oversight role, the audit committee reviewed and discussed our audited financial statements with management and the independent registered public accounting firm. The audit committee met 9ten (10) times during fiscal year ended January 31, 2019,2020, including meetings with Ernst & Young LLP, our independent registered public accounting firm to review our quarterly and annual financial statements and their review or audit of such statements. It is not the duty of the audit committee to plan or conduct audits or to determine that the financial statements are complete and accurate and conform to generally accepted accounting principles. Management is responsible for the preparation, presentation, and integrity of our financial statements, accounting and financial reporting principles, the effectiveness of our internal controls over financial reporting, and procedures designed to ensure compliance with accounting standards, applicable laws and regulations. Ernst & Young LLP is responsible for performing an independent audit of our consolidated financial statements in accordance with generally accepted auditing standards in accordance with the standards of the Public Company Accounting Oversight Board (the “PCAOB”), and expressing an opinion on the conformity of those financial statements with generally accepted accounting principles and as to the effectiveness of our internal control over financial reporting.
The audit committee discussed with Ernst & Young LLP the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. Ernst & Young LLP also provided to the audit committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence, and the audit committee discussed with Ernst & Young LLP its independence from us.
Based upon the audit committee’s review and discussions referred to above, the audit committee recommended to the board of directors that our audited consolidated financial statements be included in Cloudera’s Annual Report on Form 10-K for the year ended January 31, 2019,2020, filed with the SEC on March 29, 2019.27, 2020.
In addition, the audit committee selected Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending January 31, 20202021 and is seeking ratification of such selection by our stockholders.
Submitted by the Audit Committee of the Board of Directors
Keven Klausmeyer (Chair)
Peter Fenton
Michael A. Stankey
ADDITIONAL INFORMATION
Stockholder Proposals for the 20202021 Annual Meeting of Stockholders
Under our amended and restated bylaws, stockholders who wish to present proposals for action, or to nominate directors, at our 20202021 annual meeting of stockholders must give written notice of the proposal or nomination to our Corporate Secretary in accordance with the provisions of our amended and restated bylaws. Our amended and restated bylaws require that such notice be given not later than the close of business (5:00 PM, Pacific Time) on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the prior year’s annual meeting of stockholders. To be timely for the 2020 annual meeting of stockholders, a stockholder’s notice must be received by us between February 21, 202024, 2021 and March 22, 2020.26, 2021. Such proposals should be delivered or mailed to the attention of our Corporate Secretary at our principal executive offices, which are Cloudera, Inc., 395 Page Mill Road, Palo Alto, California 94306.
If the date of the 20202021 annual meeting is more than 30 days before or more than 60 days after the first anniversary of the 20192020 annual meeting, in order for a notice to be timely, it must be delivered no earlier than the close of business on the 120th day prior to and no later than the close of business on the 90th day prior to the 20202021 annual meeting date or, if later, the close of business on the 10th day following the day on which Public Announcement (as such term defined in the amended and restated bylaws) of the date of the 20202021 annual meeting is first made by us. In no event shall the Public Announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
These stockholder notices must contain information required by our amended and restated bylaws. We reserve the right to reject, rule out of order or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements. If a matter is properly brought before our next annual meeting under the procedures outlined in this section, the proxy holders named by our board of directors will have the discretion to vote on such matter without having received directions from stockholders delivering proxies to them for such meeting, provided that our proxy statement for our next meeting briefly describes the matter and how the proxy holders intend to vote on it.
In order for proposals to be eligible for inclusion in our proxy statement and proxy card for the 20202021 annual meeting pursuant to Rule 14a-8 under the Exchange Act, stockholder proposals would have to be received by our Corporate Secretary no later than January 11, 20207, 2021 and satisfy the conditions established by the SEC for stockholder proposals. In order for any other stockholder proposals to be eligible to be brought before the stockholders at the 20202021 annual meeting, the stockholders submitting such proposals must also comply with the procedures, including the deadlines, required by our then current bylaws, as referenced in the preceding paragraphs.
Delinquent Section 16(a) Reports
Section 16 of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of our common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such forms furnished to us and written representations from these officers and directors, we believe that all Section 16(a) filing requirements were met during the year ended January 31, 2019,2020, other than three late Forms 4 filed by Mr. Reilly to report vesting and release of certain RSUs and payment of federal and state tax withholding obligations on March 15, 2019 and June 15, 2019, and accelerated vesting and release of certain RSUs and payment of federal and state tax withholding obligations on July 31, 2019; one late Form 4 filed by Mr. Cole to report vesting and release of certain RSUs and payment of federal and state tax withholding obligations on September 30, 2019; three late Forms 4 filed by Mr. Frankola to report a grant of RSUs on February 1, 2019, and the vesting and release of certain RSUs as well as payment of federal and state tax withholding obligations on March 15, 2019 and December 15, 2019; two late Forms 4 filed by Mr. Murthy to report the vesting and release of certain RSUs and payment of federal and state tax withholding obligations on December 15, 2019 and an open market sale of our common stock on January 14, 2020; two late Forms 4 filed by Mr. Scott Reasoner, our Principal Accounting Officer, to report the vesting and release of certain RSUs on March 15, 2019, and the vesting and release of certain RSUs as well as payment of federal and state tax withholding obligations on December 15, 2019; two late Forms 4 filed by Mr. Stankey our director, to report distributionthe vesting and release of common stock from Greylock XII LPcertain RSUs on March 15, 2019 and Greylock XII-A LPDecember 15, 2019; and two late Forms 4 filed by Ms. Hammonds to Michael A. Stankey Revocable Trust UDA 5/30/14report the vesting and release of certain RSUs on June 11, 2018March 15, 2019 and September 10, 2018. Additionally, during the fiscal year ended January 31, 2018, all directors, executive officers, and persons who own more than 10% of a registered class of our equity securities timely complied with all Section 16(a) reporting requirements applicable to them, except for the reports disclosed in our definitive proxy statement for our 2018 annual meeting of stockholders and one Form 3 for Ms. Schooler, which was filed on January 7,December 15, 2019.
Available Information
We will mail, without charge, upon written request, a copy of our annual report on Form 10-K for the year ended January 31, 2019,2020, including the financial statements and list of exhibits, and any exhibit specifically requested. Requests should be sent to:
Cloudera, Inc.
395 Page Mill Road,
Palo Alto, California 94306
Attn: Investor Relations
The annual report is also available at https://investors.cloudera.com under “Financials & Filings” in the “SEC Filings” section of our website.
Electronic Delivery of Stockholder Communications
We encourage you to help us conserve natural resources, as well as significantly reduce printing and mailing costs, by signing up to receive your stockholder communications electronically via e-mail. With electronic delivery, you will be notified via e-mail as soon as future annual reports and proxy statements are available on the Internet, and you can submit your stockholder votes online. Electronic delivery can also eliminate duplicate mailings and reduce the amount of bulky paper documents you maintain in your personal files. To sign up for electronic delivery:
Registered Owner (you hold our common stock in your own name through our transfer agent, American Stock Transfer & Trust Company, LLC, or you are in possession of stock certificates): visitVisit www.astfinancial.com and log into your account to enroll.
Beneficial Owner (your shares are held by a brokerage firm, a bank, a trustee or a nominee): If you hold shares beneficially, please follow the instructions provided to you by your broker, bank, trustee or nominee.
Your electronic delivery enrollment will be effective until you cancel it. Stockholders who are record owners of shares of our common stock may call American Stock Transfer & Trust Company, LLC, our transfer agent, at (800) 937-5449 or visit www.astfinancial.com with questions about electronic delivery.
“Householding”—Stockholders Sharing the Same Last Name and Address
The SEC has adopted rules that permit companies and intermediaries (such as brokers) to implement a delivery procedure called “householding.” Under this procedure, multiple stockholders who reside at the same address may receive a single copy of our annual report and proxy materials, including the Notice of Internet Availability of Proxy Materials, unless the affected stockholder has provided contrary instructions. This procedure reduces printing costs and postage fees, and helps protect the environment as well.
This year, aA number of brokers with account holders who are our stockholders will be “householding” our annual report and proxy materials, including the Notice of Internet Availability of Proxy Materials. A single Notice of Internet Availability of Proxy Materials and, if applicable, a single set of annual report and other proxy materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that it will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. Stockholders may revoke their consent at any time by contacting Broadridge Financial Solutions, Inc. by calling (866) 540-7095 or writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York, 11717.
Upon written or oral request, we will promptly deliver a separate copy of the Notice of Internet Availability of Proxy Materials and, if applicable, our annual report and other proxy materials to any stockholder at a shared address to which a single copy of any of those documents was delivered. To receive a separate copy of the Notice of Internet Availability of Proxy Materials and, if applicable, annual report and other proxy materials, you may write our Investor Relations department at 395 Page Mill Road, Palo Alto, California 94306, Attn: Investor Relations, telephone number (888) 789-1488.
Any stockholders who share the same address and receive multiple copies of our Notice of Internet Availability of Proxy Materials or annual report and other proxy materials who wish to receive only one copy in the future can contact their bank, broker or other holder of record to request information about “householding” or our Investor Relations department at the address or telephone number listed above.
TRANSACTION OF OTHER BUSINESS
At the date of this proxy statement, the board of directors knows of no other business that will be conducted at the Annual Meeting other than as described in this proxy statement. If any other matter or matters are properly brought before the Annual Meeting, or any adjournment or postponement of the Annual Meeting, it is the intention of the persons named in the accompanying form of proxy to vote the proxy on such matters in accordance with their best judgment.
By Order of the Board of Directors,
David Howard
Chief Legal Officer and Corporate Secretary
May 7, 2020
|
| | |
| | By Order of the Board of Directors, |
| |
|
| | David Middler
Chief Legal Officer and Corporate Secretary
|
| | |
| | May 10, 2019 |