Exhibit 10.2
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS ([***]), HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
NUTANIX, INC.
2016 EQUITY INCENTIVE PLAN
GLOBAL RESTRICTED STOCK UNIT AGREEMENT
(OPERATIONAL METRICS PERFORMANCE-BASED RESTRICTED STOCK UNITS)
Unless otherwise defined herein, the terms defined in the Nutanix, Inc. 2016 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Global Restricted Stock Unit Agreement, including the Notice of Restricted Stock Unit Grant (the “Notice of Grant”), the Terms and Conditions of Restricted Stock Unit Grant, attached hereto as Exhibit A, and the Country-Specific Terms and Conditions, attached hereto as Exhibit B (collectively this “Award Agreement”).
NOTICE OF RESTRICTED STOCK UNIT GRANT
Participant: Rajiv Ramaswami
Participant has been granted the right to receive an Award of Restricted Stock Units, subject to the terms and conditions of the Plan and this Award Agreement, as follows:
Grant Number
Date of Grant
Target Restricted Stock Units 327,083
Vesting Schedule:
The Restricted Stock Units will vest in accordance with the Performance Condition Appendix attached hereto.
In the event Participant ceases to be the Company’s Chief Executive Officer for any or no reason before Participant vests in the Restricted Stock Units (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment or service agreement, if any), the Restricted Stock Units and Participant’s right to acquire any shares of Class A common stock (“Shares”) hereunder will immediately terminate.
Participant has reviewed the Plan and this Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of the Plan and this Award Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon
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any questions relating to the Plan and this Award Agreement. Participant further agrees to notify the Company upon any change in the residence address indicated above.
Participant is required to accept this Award electronically by accessing the E*Trade Financial Services, Inc. (“E*Trade”) website at WWW.ETRADE.COM. By clicking on the “Accept” button on the e*trade website, Participant accepts this Award and agrees to be bound by the terms of this AWARD Agreement (including Exhibits A AND B hereto) and the Plan. Participant further acknowledges that such electronic acceptance of this AWARD Agreement shall have the same binding effect as a written or hard copy signature.
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PERFORMANCE CONDITION APPENDIX
The number of Restricted Stock Units (“RSUs”) that will be eligible to vest and to be released to Participant (1) may be more or less than the Target Restricted Stock Units (“Target RSUs”) set forth in the Notice of Grant, but (2) may not exceed 200% of the Target Restricted Stock Units set forth in the Notice of Grant.
Target RSUs will be eligible to vest and to be released based on the achievement of performance metrics, targets and applicable weighting as set forth below.
ARR RSUs
Fifty percent (50%) of the Target RSUs (such portion, the “ARR RSUs”) will be eligible to vest and to be released based on the Company’s level of achievement of the ARR target (the “ARR Target”) as of the last day of the Performance Period.
The actual number of ARR RSUs that will be eligible to vest and to be released to Participant with respect to the ARR Target will be determined based upon achievement under the ARR Payout Table as follows:
ARR Payout Table | |
ARR Hurdles | Payout Percentage of the ARR RSUs in the Aggregate that Become Eligible RSUs (as defined below) |
$[***] | 200% |
$[***] | 150% |
$[***] | 100% |
Less than $[***] | 0% |
For the avoidance of doubt, achievement between applicable hurdles in the ARR Payout Table above will not result in any linear scaling of the payout percentage.
FCF RSUs
Fifty percent (50%) of the Target RSUs (such portion, the “FCF RSUs”) will be eligible to vest and to be released based on the Company’s level of achievement of the Free Cash Flow target
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(the “FCF Target”) measured over the last four completed fiscal quarters ending on the last day of the Performance Period.
The actual number of FCF RSUs that will be eligible to vest and to be released to Participant with respect to the FCF Target will be determined based upon achievement under the FCF Payout Table as follows:
FCF Payout Table | |
Free Cash Flow Hurdles | Payout Percentage of the FCF RSUs in the Aggregate that Become Eligible RSUs (as defined below) |
$[***] | 200% |
$[***] | 150% |
$[***] | 100% |
Less than $[***] | 0% |
For the avoidance of doubt, achievement between applicable hurdles in the FCF Payout Table above will not result in any linear scaling of the payout percentage.
Adjustment of ARR Target and/or FCF Target
Notwithstanding anything to the contrary, in the event of a merger, acquisition or a carve-out sale of a business unit that has a value of at least $[***] (a “Material Transaction”), then each of the ARR Target and/or the FCF Target shall be adjusted by the Administrator to reflect the impact of the Material Transaction on the Company. Value in the Material Transaction will be measured as of the closing of the transaction and will be the cash, securities or the combination thereof paid at closing and inclusive of amounts withheld to secure claims of indemnified parties in an escrow or a holdback in the Material Transaction. Company securities payable in the Material Transaction will be valued consistent with the value ascribed to such securities in the Material Transaction.
Change in Control. Notwithstanding the foregoing, in the case of a Change in Control during the Performance Period, a final measurement of ARR and Free Cash Flow will be completed (to the extent measurable) as of the Change in Control (e.g., ARR will be measured as of the Change in Control and Free Cash Flow will be measured for the trailing 12-month period prior to the Change in Control) and any ARR RSUs will become Eligible RSUs based on the ARR Payout Table above and any FCF RSUs will become Eligible RSUs based on the FCF Payout Table above. To the extent a final ARR and/or Free Cash Flow is not measurable in accordance with the previous sentence, then each of the ARR RSUs and the FCF RSUs will be determined earned at 100% level of achievement. Any ARR RSUs and FCF RSUs that become Eligible RSUs
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will vest on the Vesting Date and any ARR RSUs and FCF RSUs that do not become Eligible RSUs as of the Change in Control will forfeit automatically.
For the avoidance of doubt, any existing double-trigger vesting acceleration provisions that apply to time-vested equity, whether under the Company’s Change of Control and Severance Policy, Executive Severance Policy, or any another separate agreement, for Participant will apply to those Eligible RSUs subject to time-based vesting following a Change in Control.
100% of Participant’s Eligible RSUs will vest and be released to Participant on the Vesting Date, subject to Participant continuing to be the Company’s Chief Executive Officer (“CEO”) through such Vesting Date. For the avoidance of doubt, Participant must serve as CEO on the Vesting Date for Eligible RSUs to vest and Participant’s ceasing to serve as CEO will result in forfeiture of any unvested RSUs hereunder, subject to the double-trigger vesting acceleration provisions set forth in the Company’s Change of Control and Severance Policy or another separate agreement.
All determinations regarding determination of ARR or Free Cash Flow or the payout in accordance with the payout tables above shall be made by the Administrator and all such determinations shall be final, conclusive, and binding on Participant, and will be given the maximum possible deference permitted by law. Any RSUs that become Eligible RSUs pursuant to the terms and conditions set forth herein will be deemed Eligible RSUs as of the date on which the Administrator has then determined achievement under the ARR Payout Table and the FCF Payout Table and the number of ARR RSUs and the FCF RSUs that become Eligible RSUs in accordance therewith (such date, the “Determination Date”).
On the Determination Date, any RSUs that do not become Eligible RSUs shall immediately be forfeited without consideration.
Any Shares to be issued upon achievement and certification of the performance measures related to the RSUs herein are subject to recoupment by the Company in accordance with the terms of the Company’s Compensation Recovery Policy, as it may be amended from time to time (the “Clawback Policy”). Accordingly, the Company reserves the right to recover any Shares to the extent that recovery under Clawback Policy is triggered in accordance with the recovery procedures set forth in the Clawback Policy.
For purposes of the above, the following terms shall have the following meanings:
“ACV” is defined as the total annualized value of a contract, excluding amounts related to professional services and hardware. The total annualized value for a contract is calculated by
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dividing the total value of the contract by the number of years in the term of such contract, using, where applicable, an assumed term of five years for contracts that do not have a specified term.
“ARR” for any given period, is defined as the sum of ACV for all non-life-of-device contracts in effect as of the end of a specific period. For the purposes of this calculation, it is assumed that the contract term begins on the date a contract is booked, unless the terms of such contract prevent the Company from fulfilling its obligations until a later period, and irrespective of the periods in which the Company would recognize revenue for such contract.
“Eligible RSUs” shall mean, with respect to the Performance Period, the number, if any, of RSUs that will be eligible to vest and to be released to Participant, calculated in accordance with the ARR Payout Table and/or the FCF Payout Table above.
“Free Cash Flow” means net cash provided by (used in) operating activities less purchases of property and equipment.
“Performance Period” means the period beginning on the Date of Grant and ending on July 31, 2027.
“Vesting Date” shall mean September 15, 2027.
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EXHIBIT A
TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT GRANT
Notwithstanding anything in the Plan or this Award Agreement to the contrary, if the vesting of the balance, or some lesser portion of the balance, of the Restricted Stock Units is accelerated in connection with Participant’s termination as a Service Provider (provided that such termination is a “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to death, and if (x) Participant is a “specified employee” within the
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meaning of Section 409A at the time of such termination as a Service Provider and (y) the payment of such accelerated Restricted Stock Units will result in the imposition of additional tax under Section 409A if paid to Participant on or within the six (6) month period following Participant’s termination as a Service Provider, then the payment of such accelerated Restricted Stock Units will not be made until the date six (6) months and one (1) day following the date of Participant’s termination as a Service Provider, unless Participant dies following his or her termination as a Service Provider, in which case, the Restricted Stock Units will be paid in Shares to Participant’s estate as soon as practicable following his or her death. It is the intent of this Award Agreement that it and all payments and benefits hereunder be exempt from, or comply with, the requirements of Section 409A so that none of the Restricted Stock Units provided under this Award Agreement or Shares issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to be so exempt or so comply. Each payment payable under this Award Agreement is intended to constitute a separate payment for purposes of U.S. Treasury Regulation Section 1.409A-2(b)(2). For purposes of this Award Agreement, “Section 409A” means Section 409A of the Code, and any final U.S. Treasury Regulations and U.S. Internal Revenue Service guidance thereunder, as each may be amended from time to time.
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Prior to any relevant taxable or tax withholding event, as applicable, Participant will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy all Tax-Related Items by withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer or withholding from proceeds of the sale of Shares acquired upon vesting of the Restricted Stock Units, either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization) without further consent from Participant.
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EXHIBIT B
COUNTRY-SPECIFIC
TERMS AND CONDITIONS
[separately attached]
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