Potential Payments Upon Termination or Change in Control
Please see the section titled “Employment Agreements and Offer Letters” above for a description of the severance arrangements for our executive
officers.
The options granted to our executive officers include the following provisions for acceleration of vesting:
Frank Slootman. The stock options, restricted shares and/or restricted stock units granted to Mr. Slootman provide that if
he is subject to an involuntary termination within 12 months after a change in control of the Company, 100% of his unvested option shares, restricted shares and/or restricted stock units will vest. Any awards granted to Mr. Slootman in the
future under our 2007 Equity Incentive Plan will also include this provision. In addition, the stock options granted to Mr. Slootman prior to 2007 provide that if Mr. Slootman’s employment is terminated for any reason other than
cause or disability, then, provided Mr. Slootman signs a release of claims, Mr. Slootman will receive 6 months of additional vesting.
Daniel R. McGee, Peter J. Rukavina Michael P. Scarpelli and David L. Schneider. The stock options, restricted shares and/or restricted stock units granted to Messrs. McGee, Rukavina, Scarpelli and Schneider
provide that if the individual is subject to an involuntary termination within 12 months after a change in control of the Company, 50% of his unvested option shares, restricted shares and/or restricted stock units will vest. Any awards granted
to Messrs. McGee, Scarpelli and Schneider in the future under our 2007 Equity Incentive Plan will also include this provision.
Notwithstanding the foregoing, for any awards granted to our named executive officers in the future under our 2007 Equity Incentive Plan, if the surviving company in a merger does not assume such options or replace them with comparable
awards, then 50% of the unvested shares, restricted shares and/or restricted stock units (100% in the case of Mr. Slootman) subject to each of their options will vest at the time of such change in control regardless of whether they are subject
to an involuntary termination. This acceleration of vesting shall be in place of (and not in addition to) any acceleration of vesting that our executive officers would otherwise be entitled to under our 2007 Equity Incentive Plan. Options
granted to our executive officers under our 2002 Stock Plan will accelerate as to all shares if the surviving corporation does not assume the options or replace them with comparable options.
The following definitions apply to our executive officers’ stock options:
“Cause” means (1) an unauthorized use or disclosure of our confidential information or trade secrets, (2) a material failure to comply
with our written policies or rules, (3) conviction of, or plea of “guilty” or “no contest” to, a felony, (4) gross misconduct, (5) a continuing failure to perform assigned duties after written notice from our Board
of Directors or (6) failure to cooperate in good faith with a governmental or internal investigation of the Company or its officers, directors or employees, if requested by the Company.
“Change in control” means (1) a merger of the Company after which our own stockholders own 50% or less of the surviving corporation or its
parent company, (2) a sale of all or substantially all of our assets, (3) a change in the composition of our Board of Directors, as a result of which less than half of the incumbent directors either had been directors two years before the
change in composition of the Board of Directors or were appointed or nominated by the Board by a majority of the directors who had been directors two years before or had been selected in this manner, or (4) an acquisition of 50% or more of our
outstanding stock by any person or group, other than a person related to the Company, such as a holding company owned by our stockholders.
“Involuntary termination” means (1) a termination by us for reasons other than cause or (2) a voluntary resignation following (a) a change in the officer’s position with the Company that materially reduces his
scope of authority or level of responsibility, (b) a reduction in the officer’s base salary (other than pursuant to generally applicable reductions to similarly situated employees) or (c) receipt of notice that the officer’s
principal workplace will be relocated more than 40 miles (we refer to a resignation following (a), (b) or (c) as a resignation
29
