UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Filed by the Registrant |
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Filed by a Party other than the Registrant |
Check the appropriate box: |
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under §240.14a-12 |
NUTANIX, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if
Other Than the Registrant)
Payment of Filing Fee (Check all boxes that apply): |
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No fee required |
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Fee paid previously with preliminary materials. |
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
Vision
We make hybrid multicloud simple and free customers
to focus on
achieving their business outcomes
Mission
Delight customers with an open hybrid multicloud
platform with rich
data services to run and manage
any application, anywhere
MESSAGE FROM THE CEO
Dear Stockholders,
Fiscal year 2022 (FY22) was pivotal
for us. It provided an important data point in demonstrating the long-term benefits of our subscription business model transition.
Our thoughtful investment and
the hard work Nutanix employees have put in over the last couple of years is paying off. In FY22, we achieved 27% year-over-year
growth in Annual Contract Value (ACV) billings, >90% Gross Retention Rate (GRR), significant improvement in operating margin,
and finally, full-year positive Free Cash Flow for the first time since 2018. These metrics are all signs of a healthy subscription
business tracking well towards our long-term financial targets for generating stockholder value.
We also brought in world class
talent, continued delivering on our hybrid multicloud roadmap, streamlined our go-to-market engine, nurtured strategic partnerships,
and above all continued to delight our customers in a turbulent macroeconomic environment.
Strategic Vision
In today’s IT landscape,
every organization has a cloud mandate and is in different stages of this journey. Companies have a growing number of applications
(750 million new apps by 2026(1)). These applications run everywhere and generate and consume massive amounts of data
– in data centers, at edge sites, and in multiple public clouds, with each of these typically being bespoke environments
with their own individual set of management, security and operational tooling. And to boot, there is a scarcity of talent to make
this all work. It isn’t an exaggeration to say that most companies are struggling with how to implement, manage and secure
this hybrid cloud world.
Nutanix is focused on simplifying
this world by hiding the underlying cloud complexities for our customers, freeing them to focus on their business. We are delighting
customers with a simple, open, hybrid multicloud software platform with rich data services to build, run, and manage any application.
With this platform, companies going digital can modernize their data centers, adopt a cloud operating model for their applications
and data, seamlessly extend their environments from their premises into the public cloud, and manage all their data for both existing
and modern new applications.
This value proposition is resonating
with our customers across the world and they are now looking at us as a strategic partner for their digital transformation, well
beyond our roots as a pioneer of hyperconverged infrastructure.
Delivering on Product Strategy
The first step in realizing our
vision was to simplify our product portfolio. Nutanix had 15+ product offerings, each individually taken to market with unique
pricing and metering. We have now streamlined the portfolio into four key solution areas – cloud infrastructure, cloud management,
unified storage, and database services. We also simplified how we price these offerings. As a result, we are beginning to see shorter
deal cycles, improved value retention, and customers adopting more of our portfolio. Some of our largest deals in the second half
of FY22 were on this new simplified packaging of our portfolio – an early indication of the traction our new offerings are making
in the market.
2022 PROXY STATEMENT 01
Second, we are continuing to
invest and expand our product leadership across our entire portfolio. With every release, our cloud platform has delivered higher
performance, increased resiliency and scale for the most mission-critical workloads, enabling us to broaden our adoption across
new and existing customers. We have also extended this goodness from the private cloud to the public cloud through our Nutanix
Cloud Clusters (NC2) platform. This offering initially supported Amazon Web Services (AWS) and now includes support for Microsoft
Azure starting the first quarter of FY23.
Finally, our product and engineering
teams continue to innovate in delivering a rich set of data services to help companies build applications once and run them anywhere.
Nutanix Database Service (NDB) is the first such offering and has been adopted by some of the largest companies in the world.
Streamlined Go-To-Market Engine
In FY22, we focused on boosting
the productivity of our sales organization, building and scaling our renewals engine, and optimizing our overall go-to-market cost
structure to be more in line with our industry peers.
We continued to see increased
productivity from our sales teams, driven by simplified pricing and packaging, continued investment in training and enablement,
maturing of previously hired reps, and improved leverage from our partners. In parallel, we successfully built a cost-effective
renewals engine that executed well even as our renewals business grew significantly. Our GRR continues to be within our target
of 90% or greater. In FY23, we will focus on further scaling our renewals engine as renewals continue to grow as a percentage of
our overall business.
Our focus on productivity, growth
in our renewals business, and expense management and efficiency helped reduce our sales and marketing costs as a percentage of
revenue from 89% in FY20 to 62% in FY22, and we expect this trend to continue in FY23.
Profitable Growth: True-North
for Nutanix
In FY22, we laid the foundation
for the continued evolution of Nutanix toward becoming a profitable, growing cloud subscription software company. In FY23, we plan
to continue to build on this foundation, delivering both top-line growth and increasing cash flows, with a combination of an increasing
share of efficient renewals, new business growth, and diligent expense management, while continuing to delight customers with our
industry-leading hybrid multicloud platform.
Thank you for your continued
trust and faith in us.
Rajiv Ramaswami
President and Chief Executive Officer
(1) |
IDC, 750 Million New Logical Applications: More Background, doc
#US48441921, Dec 2021. |
(2) |
Certain information contained herein, including projections,
may relate to or be based on studies, publications, surveys and other data obtained from third-party sources and our own internal
estimates and research. While we believe these third-party studies, publications, surveys and other data are reliable as of
the date hereof, they have not been independently verified, and we make no representation as to the adequacy, fairness, accuracy,
or completeness of any information obtained from third-party sources. |
2022 PROXY STATEMENT 02
Cautionary Note Regarding
Forward-Looking Statements. This letter and the accompanying proxy statement contain forward-looking statements, which statements
involve substantial risks and uncertainties. Other than statements of historical fact, all statements contained in this proxy statement,
including statements regarding our future results of operations and financial position, our business strategy and plans and our
objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,”
“potentially,” “estimate,” “continue,” “anticipate,” “plan,” “intend,”
“could,” “would,” “expect,” or words or expressions of similar substance or the negative thereof,
that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. Forward-looking statements
included in this letter and the accompanying proxy statement include statements regarding (i) the benefits of our subscription business model transition, (ii) tracking towards our long-term financial targets, (iii)
the growing number of applications, (iv) shorter deal cycles, (v) improved value retention, (vi) customer adoption of more
of our portfolio, (vii) our new offerings' market traction, (viii) increased productivity from our sales teams, (ix) our Gross
Retention Rate, (x) further scaling our renewals engine, (xi) the continued reduction in our sales and marketing costs as
a percentage of revenue, and (xii) Nutanix becoming a profitable, growing cloud subscription software company, delivering
both top-line growth and increasing cash flows. We have based these forward-looking statements largely on our current expectations and projections about
future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term
and long-term business operations and objectives and financial needs in light of the information currently available to us. These
forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in our Annual
Report on Form 10-K for the fiscal year ended July 31, 2022 filed with the Securities and Exchange Commission on September 21,
2022. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is
not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking
statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and trends discussed
in this proxy statement may not occur and actual results could differ materially and adversely from those anticipated or implied
in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events.
2022 PROXY STATEMENT 03
NOTICE OF 2022 ANNUAL MEETING
OF STOCKHOLDERS
To Be Held Virtually on
Friday, December 9, 2022
at 9:00 a.m., Pacific Time
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REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS: |
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Internet
Visit the website listed on your proxy
card |
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Telephone
Call the telephone number on your proxy
card |
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Mail
Sign, date, and return your proxy card in the
enclosed envelope |
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Vote
during the Meeting
Vote online during the Annual Meeting |
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Important
Notice Regarding the Availability of Proxy
Materials for the Annual Meeting of Stockholders Meeting to be Held on
December 9, 2022: This Notice, the Proxy Statement and the Annual Report are
available at www.proxyvote.com. |
To the Stockholders of Nutanix, Inc.:
On behalf of our Board of Directors,
it is our pleasure to invite you to attend the 2022 annual meeting of stockholders (including any adjournment or postponement thereof,
the “Annual Meeting”) of Nutanix, Inc. The Annual Meeting will be held virtually via live webcast at www.virtualshareholdermeeting.com/NTNX2022
on Friday, December 9, 2022 at 9:00 a.m., Pacific Time.
We are holding the Annual Meeting for the following
purposes:
Proposals |
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Board vote recommendation |
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For further
details |
1. |
Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation
to Declassify the Board of Directors and Provide for the Annual Election of Directors |
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FOR |
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Page 22 |
2. |
Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation
to Eliminate Supermajority Voting Requirements |
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FOR |
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Page 23 |
3. |
Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation
to Eliminate Inoperative Provisions and Update Certain Other Miscellaneous Provisions |
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FOR |
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Page 24 |
4. |
Election of Three Class III Directors Named in the Proxy Statement |
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FOR |
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Page 26 |
5. |
Ratification of Selection of Deloitte & Touche LLP as Independent Registered Public
Accounting Firm for Fiscal Year 2023 |
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FOR |
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Page 34 |
6. |
Advisory Vote to Approve the Compensation of our Named Executive Officers |
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FOR |
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Page 37 |
7. |
Approval of Amendment and Restatement of Amended and Restated 2016 Employee Stock Purchase
Plan |
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FOR |
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Page 64 |
2022 PROXY STATEMENT 04
We are also holding the Annual
Meeting to conduct any other business properly brought before the meeting.
These items of business are more fully described in
the proxy statement accompanying this Notice.
The record date for the Annual
Meeting is October 11, 2022. Only stockholders of record of our Class A common stock at the close of business on the record date
may vote at the Annual Meeting.
On or about October 24 , 2022, we
mailed to our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy
statement and annual report. This notice provides instructions on how to vote via the Internet or by telephone and includes instructions
on how to receive a paper copy of our proxy materials by mail. The accompanying proxy statement and our annual report can be accessed
directly at the following Internet address: www.proxyvote.com. You will be asked to enter the sixteen-digit control number located
on your notice or proxy card.
In the event of a technical malfunction
or other situation that the meeting chair determines may affect the ability of the Annual Meeting to satisfy the requirements for
a meeting of stockholders to be held by means of remote communication under applicable Delaware corporate law, or that otherwise
makes it advisable to adjourn the Annual Meeting, the chair or secretary of the Annual Meeting will convene the meeting at 12:00 p.m.
Pacific Time on the date specified above and at our address specified above solely for the purpose of adjourning the meeting to
reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances,
we will post information regarding the announcement on our investor relations website at http://ir.nutanix.com.
By Order of the Board of Directors,
Rajiv Ramaswami
President and Chief Executive Officer
San Jose, California
October 24 ,
2022
You are cordially invited
to attend the virtual Annual Meeting. YOUR VOTE IS IMPORTANT. Whether or not you expect to attend the Annual Meeting, you are urged
to vote and submit your proxy by following the voting procedures described in the proxy card. Even if you have voted by proxy,
you may still vote during the Annual Meeting. If your shares are held of record by a broker, bank or other agent and you wish to
vote during the Annual Meeting, you must follow the instructions from your broker, bank or other agent.
2022 PROXY STATEMENT 05
PROXY STATEMENT
For the 2022 Annual Meeting of
Stockholders
To Be Held on Friday, December
9, 2022 at 9:00 a.m., Pacific Time
Our Board of Directors is soliciting
your proxy to vote at the 2022 annual meeting of stockholders (including any adjournment or postponement thereof, the “Annual
Meeting”) of Nutanix, Inc. to be held via live webcast at www.virtualshareholdermeeting.com/NTNX2022 on Friday, December
9, 2022 at 9:00 a.m., Pacific Time.
For the Annual Meeting, we have
elected to furnish our proxy materials, including this proxy statement and our Annual Report on Form 10-K for the fiscal year ended
July 31, 2022, to our stockholders primarily via the Internet. On or about October 24 , 2022, we mailed to our stockholders a Notice
of Internet Availability of Proxy Materials (the “Notice”) that contains notice of the Annual Meeting and instructions
on how to access our proxy materials on the Internet, how to vote at the Annual Meeting, and how to request printed copies of the
proxy materials. Stockholders may request to receive all future materials in printed form by mail or electronically by e-mail by
following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of the proxy
materials on the Internet to help reduce the environmental impact and cost of our annual meetings.
Only stockholders
of record of our Class A common stock at the close of business on October 11, 2022, the record date for the Annual Meeting, will
be entitled to vote at the Annual Meeting. On the record date, there were 230,085,836 shares
of Class A common stock outstanding and entitled to vote. A list of stockholders entitled to vote at the Annual Meeting will be
available for examination during normal business hours for a period of ten days ending on the day before the Annual Meeting at
our principal place of business at 1740 Technology Dr., Suite 150, San Jose, California 95110.
A copy of our Annual Report on
Form 10-K for the fiscal year ended July 31, 2022, which was filed with the Securities and Exchange Commission (the “SEC”)
on September 21, 2022, accompanies this proxy statement. You also may obtain, without charge, copies of this proxy statement and
our Annual Report by writing to our Secretary at Nutanix, Inc., 1740 Technology Drive, Suite 150, San Jose, California 95110 or
by following the directions set forth in the Notice.
In this proxy statement, we refer
to Nutanix, Inc. as “Nutanix,” “we,” “us” or “our company” and the Board of Directors
of Nutanix, Inc. as “our Board.” The content of any websites referred to in this proxy statement are not deemed to
be part of, and are not incorporated by reference into, this proxy statement.
2022 PROXY STATEMENT 07
PROXY VOTING ROADMAP
This roadmap highlights certain
information contained elsewhere in this proxy statement. This roadmap does not contain all of the information that you should consider,
and we encourage you to read the entire proxy statement before voting.
Annual Meeting Information
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Time and Date |
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Virtual Meeting Site |
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Record Date |
9:00 a.m. Pacific
Time Friday, December 9, 2022 |
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www.virtualshareholdermeeting.com/NTNX2022 |
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October 11, 2022 |
Proposal 1: Approval of Amendment and Restatement
of Amended and Restated Certificate of Incorporation to Declassify the Board of Directors and Provide for the Annual Election of
Directors (See Page 22)
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OUR
BOARD RECOMMENDS A VOTE
FOR THIS PROPOSAL 1. |
Our Board is currently comprised
of eight members. In accordance with our amended and restated certificate of incorporation (our “Current Charter”),
our Board is divided into three classes with staggered three-year terms. After considering the advantages and disadvantages of
declassification, our Board has determined it is advisable and in the best interests of our company and our stockholders to amend
and restate our Current Charter, in accordance with the General Corporation Law of the State of Delaware (the “DGCL”),
to phase out of the classified board structure so that our Board is fully declassified by the 2025 annual meeting of stockholders.
The text of the amendment and restatement of our Current Charter (the “Proposed Charter”) is attached as Appendix B
to this proxy statement and incorporated herein by reference.
If this proposal is approved
by our stockholders, commencing with the election of directors at our next annual meeting, all directors whose terms are expiring
shall be elected annually for terms of one year, and each director elected after this Annual Meeting shall hold office until the
next succeeding annual meeting of stockholders and until his or her successor has been duly elected and qualified, subject, however,
to such director’s earlier death, resignation, retirement, disqualification or removal. To ensure a smooth transition to
the new declassified structure of our Board and to permit the current directors to serve out the three-year terms to which the
stockholders elected such directors, this proposal will not shorten the term of any director elected before this Annual Meeting
or at this Annual Meeting. Thus, at the 2023 annual meeting of stockholders, if re-nominated, the Class I directors would be up
for re-election for one-year terms and until his or her successor has been duly elected and qualified, subject, however, to such
director’s earlier death, resignation, retirement, disqualification or removal. At the 2024 annual meeting of stockholders,
the Class I and Class II directors will be up for re-election for one-year terms and until his or her successor has been duly elected
and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.
At the 2025 annual meeting of stockholders, all directors will be up for re-election for one-year terms and until his or her successor
has been duly elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification
or removal.
This proposal, if approved, would
not change our Board’s authority to change the present number of directors and to fill any vacancies or newly created directorships.
Any director appointed to fill newly created director seats or vacancies would hold office for the remaining term of his or her
predecessor.
In addition, a provision in a
Delaware corporation’s organizational documents that provides that a director may only be removed “for cause” by
the stockholders is not valid if the corporation has a nonclassified board of directors. As a result, the Proposed Charter provides
that directors may be removed in accordance with relevant Delaware law principles.
2022 PROXY STATEMENT 08
This proposal is
a result of our Board’s ongoing review of our corporate governance policies. A classified board structure can be viewed as
diminishing a board’s accountability to stockholders because such structure does not enable stockholders to express a view
on each director’s performance by means of an annual vote. Annual voting allows stockholders to express their views on the
individual performance of each director and on the entire board of directors more frequently than with a classified board structure
and provides stockholders a more active role in shaping and implementing corporate governance policies. Our Board believes that
approval of a phase out of the classified board structure will ensure a smooth transition to the new declassified structure of
our Board. Our Board believes that it is in the best interests of our company and our stockholders to approve the Proposed Charter
to further adopt best-in-class corporate governance practices and to declassify our Board and provide for the annual election of
directors. Accordingly, our Board unanimously recommends a vote FOR the
approval of the Proposed Charter.
Approval of Proposal
1 requires FOR votes from the holders of a 66⅔%
of the voting power of the outstanding shares of our capital stock entitled to vote on the proposal. Abstentions and broker non-votes
will have the same effect as a vote AGAINST the
proposal. Approval of Proposal 1 is also conditioned on the approval of Proposals 2 and 3. If either Proposal 2 or 3 is not approved,
our Board will not implement Proposal 1, even if it is approved by the requisite vote of our stockholders.
If any of Proposals 1, 2 or 3
is not approved by the requisite vote of our stockholders, then the Proposed Charter will not be filed with the Secretary of State
of the State of Delaware and our Current Charter will remain in place and our Board will remain classified.
Proposal 2: Approval of Amendment And Restatement
of Amended And Restated Certificate of Incorporation to Eliminate Supermajority Voting Requirements (See Page 23)
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OUR
BOARD RECOMMENDS A VOTE FOR THIS
PROPOSAL 2. |
In addition to the proposed amendment
to our Current Charter to declassify our Board, we are also seeking stockholder approval of the amendment and restatement of our
Current Charter to further improve the quality of our corporate governance by reducing certain voting requirements. Our Current
Charter requires the affirmative vote of the holders of at least 66⅔% in voting power of the then outstanding shares of our capital
stock entitled to vote, voting together as a single class, for stockholders to approve certain amendments to our Current Charter,
for stockholders to amend our bylaws and for stockholders to remove directors for cause (together, the “supermajority voting
requirements”). We are seeking stockholder approval to eliminate these supermajority voting requirements from our Current
Charter and to replace such requirements with a majority voting standard. The text of the Proposed Charter is attached as Appendix
B to this proxy statement and incorporated herein by reference.
If this proposal is approved
by our stockholders, the voting standard for stockholder approval of any future amendments to the Proposed Charter or our bylaws
and for stockholders to remove directors, would be by the affirmative vote of the holders of at least a majority of the voting
power of the outstanding shares of our stock entitled to vote thereon, voting together as a single class, which is the default
voting standard under the DGCL. Our Board of Directors will retain the right to amend, alter, change, or repeal any provision of
our certificate of incorporation and bylaws without seeking approval of our stockholders, where permitted by the DGCL.
This proposal is
a result of our Board’s ongoing review of our corporate governance policies. Our Board believes that it is in the best interests
of our company and our stockholders to eliminate the supermajority voting requirements in order to further enhance stockholder
input, feedback and engagement through the annual stockholder meeting process. Accordingly, our Board unanimously recommends a
vote FOR the approval of the Proposed Charter.
Approval of Proposal
2 requires FOR votes from the holders of a 66⅔%
of the voting power of the outstanding shares of our capital stock entitled to vote on the proposal. Abstentions and broker non-votes
will have the same effect as a vote AGAINST the
proposal. Approval of Proposal 2 is also conditioned on the approval of Proposals 1 and 3. If either Proposal 1 or 3 is not approved,
our Board will not implement Proposal 2, even if it is approved by the requisite vote of our stockholders.
If any of Proposals 1, 2 or 3
is not approved by the requisite vote of our stockholders, then the Proposed Charter will not be filed with the Secretary of State
of the State of Delaware and our Current Charter will remain in place.
2022 PROXY STATEMENT 09
Proposal 3: Approval of Amendment and Restatement
of Amended and Restated Certificate of Incorporation to Eliminate Inoperative Provisions and Update Certain Other Miscellaneous
Provisions (See Page 24)
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OUR
BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 3. |
In addition to the proposed amendment
to our Current Charter to declassify our Board and eliminate the supermajority voting requirements, we are also seeking stockholder
approval of the amendment and restatement of our Current Charter to remove historical references to Class B common stock and make
certain other clarifying changes and updates, which we believe do not substantively affect stockholder rights. In connection with
the completion of our initial public offering, we adopted a dual class stock structure and authorized both Class A common stock
and Class B common stock. In January 2022, all outstanding shares of Class B common stock automatically converted into the same
number of shares of Class A common stock pursuant to the terms of our Current Charter. In connection with this conversion, we filed
a certificate of retirement effecting the retirement of the shares of Class B common stock that were issued but no longer outstanding,
which had the effect of amending our Current Charter such that the Company’s total authorized shares of capital stock were
reduced by the number of retired shares of Class B stock. We are now seeking stockholder approval of the amendment and restatement
of our Current Charter to remove all provisions related to Class B common stock, and make certain other clarifying changes and
updates, which we believe do not substantively affect stockholder rights. The text of the Proposed Charter is attached as Appendix
B to this proxy statement and incorporated herein by reference.
If this proposal is approved
by our stockholders, all references to Class B common stock will be removed from our Current Charter and other clarifying changes
and updates will be made.
This proposal is
a result of our Board’s desire to streamline our Current Charter and remove historical provisions that are no longer applicable.
Our Board believes that it is in the best interests of our company and our stockholders to approve the Proposed Charter in order
to remove provisions related to Class B common stock and make certain other clarifying changes and updates. Accordingly, our Board
unanimously recommends a vote FOR the approval of
the Proposed Charter.
Approval of Proposal
3 requires FOR votes from the holders of a 66⅔%
of the voting power of the outstanding shares of our capital stock entitled to vote on the proposal. Abstentions and broker non-votes
will have the same effect as a vote AGAINST the
proposal. Approval of Proposal 3 is also conditioned on the approval of Proposals 1 and 2. If either Proposal 1 or 2 is not approved,
our Board will not implement Proposal 3, even if it is approved by the requisite vote of our stockholders.
If any of Proposals 1, 2 or 3
is not approved by the requisite vote of our stockholders, then the Proposed Charter will not be filed with the Secretary of State
of the State of Delaware and our Current Charter will remain in place.
2022 PROXY STATEMENT 10
Proposal 4: Election of Three Class III Directors
(See Page 26)
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OUR BOARD
RECOMMENDS A VOTE FOR DAVID HUMPHREY, RAJIV RAMASWAMI, AND GAYLE SHEPPARD AS CLASS
III DIRECTORS. |
Nominees
Our Class III directors currently
consist of David Humphrey, Rajiv Ramaswami, and Gayle Sheppard. Mr. Humphrey, Mr. Ramaswami, and Ms. Sheppard have each been nominated
to continue to serve as Class III directors, and each of them has agreed to stand for re-election at the Annual Meeting. The following
provides summary information about each Class III director nominee.
Name |
Age |
Audit
Committee |
Compensation
Committee |
Nominating
and
Corporate
Governance
Committee |
Security
and Privacy
Committee |
Independent? |
Director Since |
David Humphrey |
45 |
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2020 |
Rajiv Ramaswami
President and CEO |
56 |
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2020 |
Gayle Sheppard |
69 |
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2022 |
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Member |
Corporate Governance Highlights
Board Composition |
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• 7 out of
our 8 directors are independent.
• 2 out of 8 directors are women. |
Average Tenure |
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• Average tenure of our Board is 3.1 years. |
Independent Chair of our Board |
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• We have an independent Chair of our Board. |
Independent Board Committees |
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• We have an Audit Committee,
a Compensation Committee, and a Nominating and Corporate Governance Committee, each of which is composed entirely of independent
directors.
• In March 2022, our Board established
the Security and Privacy Committee, which is composed entirely of independent directors, to assist our Board in its oversight
of our management of technology and information security risks and compliance with data protection and privacy laws. |
Single Voting Class; One Share, One Vote |
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• In January 2022, we eliminated
our dual-class stock structure resulting in a single class of common stock with equal voting rights.
• Each share of our Class A
common stock is entitled to one vote. |
Majority Voting Standard; Irrevocable Offer to Resign |
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• In
October 2022, we introduced majority voting in uncontested director elections.
• Directors tender an irrevocable
offer to resign if they do not receive majority vote and our Board will accept such offer to resign absent a compelling reason. |
2022 PROXY STATEMENT 11
Annual Board and Committee
Self-Assessments |
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• Our
Board and its committees conduct annual self-assessments. |
No “Poison Pill” |
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• We
do not have a stockholder rights plan, or “poison pill,” in place. |
Annual Auditor Ratification |
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• Stockholders
have the opportunity to ratify the Audit Committee’s selection of our independent registered public accounting firm
annually. |
Executive Sessions |
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• Directors
regularly hold executive sessions without management present. |
Stock Ownership
Guidelines |
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• Directors
are subject to stock ownership guidelines. |
Our Board believes
that it is in the best interests of our company and our stockholders to approve the appointment of David Humphrey, Rajiv Ramaswami,
and Gayle Sheppard to three-year terms as Class III directors. Accordingly, our Board unanimously recommends a vote FOR
the approval of the election of three Class III directors.
Approval of Proposal
4 requires FOR votes from the holders of a majority
of the votes cast. Withhold votes and broker non-votes have no legal effect on the outcome.
Proposal 5: Ratification of Selection of Independent
Registered Public Accounting Firm (See Page 34)
|
OUR
BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 5. |
The Audit Committee has re-appointed
Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending July 31, 2023, and
has further directed that management submit this selection for ratification by our stockholders at the Annual Meeting. Although
ratification by our stockholders is not required by law, we have determined that it is good practice to request ratification of
this selection by our stockholders. In the event that Deloitte & Touche LLP is not ratified by our stockholders, the Audit
Committee will review its future selection of Deloitte & Touche LLP as our independent registered public accounting firm.
Principal Accountant Fees
and Services
The following table provides
the aggregate fees for services provided by Deloitte & Touche LLP for the fiscal years ended July 31, 2021 and 2022.
|
Fiscal Year Ended
July 31, |
|
2021
($) |
|
2022
($) |
Audit fees(1) |
3,511,013 |
|
3,574,000 |
Audit-related
fees(2) |
210,000 |
|
— |
Tax fees(3) |
600,018 |
|
548,816 |
TOTAL FEES |
4,321,031 |
|
4,122,816 |
(1) |
Consists of fees billed for professional services
rendered in connection with the audit of our consolidated financial statements, including audited financial statements presented
in our Annual Report on Form 10-K, review of the interim consolidated financial statements included in our quarterly reports
and services normally provided in connection with regulatory filings. |
(2) |
Consists of fees billed for assurance and related services
that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not
reported under “Audit Fees.” |
(3) |
Consists of fees billed for professional services for tax
compliance, tax advice and tax planning. These services include assistance regarding federal, state and international tax
compliance. |
2022 PROXY STATEMENT 12
Our Board believes
that it is in the best interests of our company and our stockholders to approve the ratification of the selection of Deloitte &
Touche LLP as our independent registered public accounting firm for the fiscal year ending July 31, 2023. Accordingly, our Board
unanimously recommends a vote FOR the approval of
the ratification of our auditors.
Approval of Proposal
5 requires FOR votes from the holders of a majority
in voting power of the shares present at the Annual Meeting or represented by proxy thereat and entitled to vote on the proposal.
Broker non-votes will not be considered entitled to vote on this proposal, and therefore will not affect the outcome of Proposal
5, but abstentions will have the same effect as a vote AGAINST the
proposal.
Proposal 6: Advisory Vote
to Approve the Compensation of Our Named Executive Officers (See Page 37)
|
OUR
BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 6. |
We endeavor to maintain sound
governance standards consistent with our executive compensation policies and practices. The Compensation Committee evaluates our
executive compensation program on a regular basis to ensure consistency with our short-term and long-term goals, given the dynamic
nature of our business and the market in which we compete for executive talent.
Our executive compensation program
is designed to attract, motivate, and retain highly qualified executive officers who drive our success and to align the interests
of our executive officers with the long-term interests of our stockholders. The section “Compensation Discussion and Analysis”
provides an overview of our executive compensation philosophy, the overall objectives of our executive compensation program, and
each component of the program. In addition, we explain how and why the Compensation Committee arrived at the specific compensation
policies and decisions involving our executive compensation program.
The say-on-pay vote
is advisory, and therefore not binding on us. The say-on-pay vote will, however, provide information to us regarding stockholder
sentiment about our executive compensation philosophy, policies and practices, which the Compensation Committee will be able to
consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our Board believes that
our executive compensation program was designed appropriately and is working to ensure management’s interests are aligned
with our stockholders’ interests to support long-term value creation. Accordingly, our Board unanimously recommends a vote
FOR the approval of the compensation of our named
executive officers.
Approval of Proposal
6 requires FOR votes from the holders of a majority
in voting power of the shares present at the Annual Meeting or represented by proxy thereat and entitled to vote on the proposal.
Broker non-votes will not be considered entitled to vote on this proposal, and therefore will not affect the outcome of Proposal
6, but abstentions will have the same effect as a vote AGAINST the
proposal.
2022 PROXY STATEMENT 13
Proposal 7: Approval of Amendment and Restatement
of Amended and Restated 2016 Employee Stock Purchase Plan (See Page 64)
|
OUR
BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 7. |
At the Annual Meeting, stockholders
are being asked to approve the amendment and restatement of our Amended and Restated 2016 Employee Stock Purchase Plan (the “ESPP”)
as described below, including to increase the number of shares of our Class A common stock, or the Shares, authorized for sale
under the ESPP. The amendment and restatement will be referred to as the ESPP Amendment. The ESPP was initially adopted by our
Board in 2015 and was approved by our stockholders in 2016. The ESPP became effective in 2016 in connection with our initial public
offering. A prior amendment to the ESPP was approved by our stockholders in 2019.
The ESPP is intended to provide
an incentive to our employees who are eligible to participate by allowing them to purchase Shares at a price equal to 85% of the
lower of the fair market value of the Share on either the first or last trading day of the applicable purchase period. As a result,
the ESPP helps us align our employees’ interests with those of our stockholders and also assists us in recruiting, retaining
and motivating qualified personnel who help us achieve our business goals, ultimately creating long-term value for our stockholders.
As of the
Record Date, 1,363,314 Shares remained available for sale under the ESPP. Due to (i) the increase in our employee population,
from approximately 5,340 employees as of July 31, 2019 to approximately 6,450 employees as of July 31, 2022, and (ii) the
current rate of shares being purchased under the ESPP, we currently estimate that the remaining Share reserve would only last
us through approximately the March 20, 2023 purchase date. As a result, the ESPP Amendment would increase the number of
Shares currently available for sale under the ESPP by 12,442,247 Shares, bringing the total number of Shares that remain
available for sale under the ESPP to 13,805,561 Shares,
which represents approximately 6% of our
outstanding Shares as of the close of business on the Record Date. Our company’s stockholders are being asked to
approve the ESPP Amendment so that we may continue to operate the ESPP in light of its important role in encouraging equity
ownership among our employees and assisting our company to recruit, retain and motivate qualified personnel. Other than the
ESPP Amendment and the prior amendment to the ESPP approved by our stockholders in 2019, we have not made any material
amendments to the ESPP since it became effective in 2016.
This proposal is
a result of our Board’s ongoing review of our employee compensation policies. We believe that participation in our ESPP is
important to our employees and key to our ongoing recruiting efforts, and therefore the ESPP Amendment is important to our continued
success. Our Board believes that it is in the best interests of our company and our stockholders to approve the ESPP Amendment.
Accordingly, our Board unanimously recommends a vote FOR the
approval of the ESPP Amendment.
Approval of Proposal
7 requires FOR votes from the holders of a majority
in voting power of the shares present at the Annual Meeting or represented by proxy thereat and entitled to vote on the proposal.
Broker non-votes will not be considered entitled to vote on this proposal, and therefore will not affect the outcome of Proposal
7, but abstentions will have the same effect as a vote AGAINST the
proposal.
If our stockholders do not approve
the ESPP Amendment, our ESPP will remain in effect without the ESPP Amendment, but our goals of recruiting, retaining and motivating
talented employees will be more difficult to meet.
2022 PROXY STATEMENT 14
CORPORATE GOVERNANCE
We are strongly
committed to good corporate governance practices. These practices provide an important framework within which our Board and management
can pursue our strategic objectives for the benefit of our stockholders. Our Board has adopted corporate governance guidelines
that set forth the role of our Board, director independence standards, Board structure and functions, director selection considerations,
and other governance policies. In addition, our Board has adopted written charters for its standing committees (the Audit Committee,
the Compensation Committee, the Nominating and Corporate Governance Committee, and the Security and Privacy Committee), as well
as a code of business conduct and ethics that applies to all of our employees, officers and directors. The Nominating and Corporate
Governance Committee reviews the corporate governance guidelines annually and recommends changes to our Board as warranted. The
corporate governance guidelines, the committee charters, and the code of business conduct and ethics, and any waivers or amendments
to the code of business conduct and ethics, are all available in the “Governance Documents”
section of our investor relations website at http://ir.nutanix.com.
Board of Directors and its Committees
Current Composition of the Board of Directors
and its Committees
Name |
|
Age |
|
Audit
Committee |
|
Compensation
Committee |
|
Nominating
and Corporate
Governance
Committee |
|
Security
and Privacy
Committee |
|
Independent? |
|
Director Since |
Class III directors whose terms expire at the Annual Meeting |
David Humphrey |
|
45 |
|
|
|
|
|
|
|
|
|
|
|
2020 |
Rajiv Ramaswami
President and CEO |
|
56 |
|
|
|
|
|
|
|
|
|
|
|
2020 |
Gayle Sheppard |
|
69 |
|
|
|
|
|
|
|
|
|
|
|
2022 |
Class I directors whose terms expire after fiscal year 2023 |
Max de Groen |
|
37 |
|
|
|
|
|
|
|
|
|
|
|
2020 |
Steven J. Gomo |
|
70 |
|
|
|
|
|
|
|
|
|
|
|
2015 |
Class II directors whose terms expire after fiscal year 2024 |
Craig Conway |
|
68 |
|
|
|
|
|
|
|
|
|
|
|
2017 |
Virginia Gambale
Chair of the Board |
|
63 |
|
|
|
|
|
|
|
|
|
|
|
2020 |
Brian Stevens |
|
59 |
|
|
|
|
|
|
|
|
|
|
|
2019 |
Chair
Member
Gender and Ethnic Diversity |
Independent Directors |
|
|
|
|
2022 PROXY STATEMENT 15
Director Independence
Our Class A common stock
is listed on the Nasdaq Global Select Market tier of The Nasdaq Stock Market LLC. Under Nasdaq listing rules, a director will only
qualify as an “independent director” if (i) the director meets the objective tests for independence set forth in Nasdaq
listing rules and (ii) the director does not have a relationship that, in the opinion of the company’s board of directors,
would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In addition, under
Nasdaq listing rules, compensation committee members must not have a relationship with the company that is material to the director’s
ability to be independent from management in connection with the duties of a compensation committee member. Additionally, audit
committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). In order to be considered independent for purposes of Rule 10A-3, a member of an audit
committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors
or any other board committee, accept, directly or indirectly, any consulting, advisory or other compensatory fee from the company
or any of its subsidiaries or be an affiliated person of the company or any of its subsidiaries.
Our Board has undertaken
a review of the independence of each of our directors and considered whether each director (i) meets the objective tests for independence
set forth in Nasdaq listing rules and (ii) has a material relationship with us that would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director. As a result of this review, our Board determined that seven out of
our eight current directors are independent directors. Our independent directors are Mr. Conway, Mr. de Groen, Ms. Gambale, Mr.
Gomo, Mr. Humphrey, Ms. Sheppard, and Mr. Stevens. In addition, our Board determined that former director Ms. Bostrom was an independent
director during the time that she served as a director during fiscal year 2022.
Board Diversity Matrix
Board Diversity Matrix (As of September 30, 2022) |
|
Total Number of Directors |
|
|
|
|
8 |
|
|
|
|
|
|
Female |
|
Male |
|
|
|
Non-Binary |
|
Did Not
Disclose
Gender |
|
Part I: Gender Identity |
|
|
|
|
|
|
|
|
|
|
Directors |
2 |
|
6 |
|
|
|
0 |
|
0 |
|
Part II: Demographic Background |
|
|
|
|
|
|
|
|
|
|
African American or Black |
0 |
|
0 |
|
|
|
0 |
|
0 |
|
Alaskan Native or Native American |
0 |
|
0 |
|
|
|
0 |
|
0 |
|
Asian |
0 |
|
1 |
|
|
|
0 |
|
0 |
|
Hispanic or Latinx |
0 |
|
0 |
|
|
|
0 |
|
0 |
|
Native Hawaiian or Pacific Islander |
0 |
|
0 |
|
|
|
0 |
|
0 |
|
White |
2 |
|
5 |
|
|
|
0 |
|
0 |
|
Two or More Races or Ethnicities |
0 |
|
0 |
|
|
|
0 |
|
0 |
|
LGBTQ+ |
|
|
|
|
0 |
|
|
|
|
|
Did Not Disclose Demographic Background |
|
|
|
|
0 |
|
|
|
|
|
2022 PROXY STATEMENT 16
Board Leadership Structure
The Nominating and Corporate
Governance Committee periodically considers our Board’s leadership structure and makes such recommendations to our Board
as the Nominating and Corporate Governance Committee deems appropriate. Our corporate governance guidelines also provide that if
our Board does not have an independent Chair of the Board, our Board will appoint a lead independent director.
Currently, our board leadership
structure separates the positions of CEO and Chair of the Board. Mr. Ramaswami has served as our President and CEO since December
2020, and Ms. Gambale, an independent director, has served as our Chair of the Board since June 2021. Separating the positions
of CEO and Chair of the Board allows our CEO to focus on our day-to-day business, while allowing our Chair of the Board to lead
our Board in its oversight of management. Our Board believes that its independence and oversight of management are maintained effectively
through this leadership structure, the composition of our Board, and sound corporate governance policies and practices.
Executive Sessions of Non-Employee Directors
To encourage and enhance
communication among non-employee directors, and as required under applicable Nasdaq rules, our corporate governance guidelines
provide that the non-employee directors will meet in executive sessions without management directors or company management on a
periodic basis, but no less than twice a year.
Communications with our Board of Directors
Stockholders or interested
parties who wish to communicate with our Board or with an individual director may do so by mail to our Board or the individual
director, care of our Chief Legal Officer at Nutanix, Inc., 1740 Technology Drive, Suite 150, San Jose, California 95110. The communication
should indicate that it contains a stockholder or interested party communication. In accordance with our corporate governance guidelines,
all such communication will be reviewed by the Chief Legal Officer, in consultation with appropriate directors as necessary, and,
if appropriate, will be forwarded to the director or directors to whom the communications are addressed or, if none are specified,
to the Chair of the Board.
Committees of the Board of Directors
Our Board has
established an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and a Security and Privacy
Committee. The composition and responsibilities of each of these committees are described below. Our Board may establish other
committees to facilitate the management of our business. Copies of the charters of the Audit Committee, the Compensation Committee,
and the Nominating and Corporate Governance Committee are available in the “Governance
Documents” section of our investor relations website at http://ir.nutanix.com/company/esg.
Members serve on these committees until their resignation or until otherwise determined by our Board.
2022 PROXY STATEMENT 17
Chair:
Steven J. Gomo
Members:
• Max de Groen
• Virginia Gambale
|
Audit Committee
The Audit Committee is comprised
of Mr. de Groen, Ms. Gambale, and Mr. Gomo, each of whom is a non-employee director. Mr. Gomo is the chair of the Audit Committee.
Our Board has determined that each member of the Audit Committee satisfies the requirements for independence and financial literacy
under applicable SEC rules and Nasdaq listing rules. Our Board has also determined that Messrs. de Groen and Gomo each qualifies
as an “audit committee financial expert,” as defined in SEC rules, and satisfies the financial sophistication requirements
of Nasdaq. The Audit Committee is responsible for, among other things:
• selecting and hiring our independent registered public accounting firm;
• evaluating the performance and independence of our registered public accounting firm;
• pre-approving the audit and any non-audit services to be performed by our independent registered public accounting firm;
• reviewing our internal controls and the integrity of our audited financial statements;
• reviewing the adequacy and effectiveness of our disclosure controls and procedures;
• overseeing procedures for the treatment of complaints on accounting, internal accounting controls or audit matters;
• reviewing and discussing with management and the independent registered public accounting firm, our audited and quarterly unaudited financial statements, the results of our annual audit, and our publicly-filed reports;
• reviewing and discussing with management and the independent registered public accounting firm, our major financial risk exposures and the steps management has taken to monitor and control those exposures;
• reviewing and overseeing any related person transactions; and
• preparing the audit committee report in our annual proxy statement.
|
Chair:
Max de Groen
Members:
• Craig Conway
• Gayle Sheppard
• Brian Stevens
|
Compensation Committee
The Compensation Committee
is comprised of Mr. Conway, Mr. de Groen, Ms. Sheppard, and Mr. Stevens, each of whom is a non-employee director. Mr. de Groen
is the chair of the Compensation Committee. Our Board has determined that each member of the Compensation Committee meets the requirements
for independence under applicable SEC rules and Nasdaq listing rules, including a determination that each member of the Compensation
Committee is a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act. The Compensation Committee
is responsible for, among other things:
• reviewing and approving our CEO’s and other executive officers’ annual base salaries, incentive compensation plans, including the specific goals and amounts, equity compensation, employment agreements, severance arrangements and change of control agreements, and any other benefits, compensation or arrangements;
• administering our equity compensation plans;
• overseeing our overall compensation philosophy, compensation plans and benefits programs;
• reviewing the compensation disclosures in our annual proxy statement; and
• reviewing and monitoring matters related to human capital management, including talent acquisition and retention and diversity.
|
Compensation Committee Interlocks and Insider
Participation
None
of the members of the Compensation Committee has been an officer or employee of our company. None of our executive officers currently
serves, or during fiscal year 2022 has served, as a member of the compensation committee or director (or other board committee
performing equivalent functions or, in the absence of any such committee, the entire board of directors) of any entity that has
one or more executive officers serving on the Compensation Committee or our Board.
2022 PROXY STATEMENT 18
Chair:
Virginia Gambale
Members:
• Craig Conway
• Steven J. Gomo
• David Humphrey
|
Nominating and Corporate Governance Committee
The Nominating and Corporate
Governance Committee is comprised of Mr. Conway, Ms. Gambale, Mr. Gomo, and Mr. Humphrey, each of whom is a non-employee director.
Ms. Gambale is the chair of the Nominating and Corporate Governance Committee. Our Board has determined that each member of
the Nominating and Corporate Governance Committee meets the requirements for independence under Nasdaq listing rules. The
Nominating and Corporate Governance Committee is responsible for, among other things:
• determining the qualifications required to be a member of our Board and recommending to our Board the criteria to be considered in selecting director nominees;
• evaluating and making recommendations regarding the composition, organization and governance of our Board and its committees;
• evaluating and making recommendations regarding the creation of additional committees or the change in mandate or dissolution of committees;
• developing and monitoring a set of corporate governance guidelines;
• overseeing and periodically reviewing our environmental, social and governance activities, programs and public disclosure; and
• reviewing and approving conflicts of interest of our directors and officers, other than related-person transactions reviewed by the Audit Committee.
|
Chair:
Brian Stevens
Members:
• David Humphrey
• Gayle Sheppard
|
Security and Privacy Committee
In March 2022,
our Board established the Security and Privacy Committee to assist our Board in its oversight of our management of technology
and information security risks and compliance with data protection and privacy laws. The Security and Privacy Committee is
comprised of Mr. Humphrey, Ms. Sheppard, and Mr. Stevens, each of whom is a non-employee director. Mr. Stevens is the chair
of the Security and Privacy Committee. The Security and Privacy Committee is responsible for, among other things:
• reviewing information security risk exposures (including cybersecurity and product security risk exposures) and the strategy,
systems, controls and processes to monitor and control these risk exposures;
• reviewing incident response, business continuity and disaster recovery planning and capabilities; and
• reviewing
compliance with applicable global data protection and privacy laws and regulations.
|
Other Committees
Pursuant to our amended and restated bylaws, our
Board may designate other standing or ad hoc committees to serve at the discretion of our Board from time to time. For example,
our Board has delegated certain authority to an equity award committee (comprised of Mr. Ramaswami).
Board and Committee Meetings and Attendance
Our Board is responsible
for the oversight of our company’s management and strategy and for establishing corporate policies. Our Board and its committees
meet throughout the year on a regular basis and also hold special meetings and act by written consent from time to time. During
fiscal year 2022, our Board met 12 times, the Audit Committee met 10 times, the Compensation Committee met 8 times, and the Nominating
and Corporate Governance Committee met 6 times. The Security and Privacy Committee began meeting formally in fiscal year 2023.
During fiscal year 2022, each director attended 75% or more of the aggregate of the meetings of our Board and of the committees
on which the director served at the time.
We encourage our directors
and nominees for director to attend our annual meeting of stockholders but do not require that they attend. Seven of our eight
then-incumbent directors attended our 2021 annual meeting of stockholders.
2022 PROXY STATEMENT 19
Risk Oversight
Our Board oversees an enterprise-wide
approach to risk management, which is designed to support the achievement of organizational objectives, including strategic objectives,
to improve long-term organizational performance and to enhance stockholder value. Our Board, as a whole, is responsible for determining
the appropriate level of risk for our company, assessing the specific risks that we face and reviewing management’s strategies
for adequately mitigating and managing the identified risks. Although our Board is responsible for administering this risk management
oversight function, the committees of our Board support our Board in discharging its oversight duties and addressing risks inherent
in their respective areas.
The Audit Committee considers
and discusses our major financial risk exposures and the steps our management has taken to monitor and control these exposures,
including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee
also monitors compliance with legal and regulatory requirements, in addition to oversight of the performance of our internal audit
function. The Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines.
The Compensation Committee assesses and monitors whether our compensation philosophy and practices have the potential to encourage
excessive risk-taking and evaluates compensation policies and practices that could mitigate such risks. The Security and Privacy
Committee monitors our technology and information security risk exposures (including cybersecurity and product security risk exposures).
At periodic meetings of our
Board and its committees, management reports to and seeks guidance from our Board and its committees with respect to the most significant
risks that could affect our business, such as legal, financial, tax and audit related risks. In addition, management provides the
Audit Committee with periodic reports on our compliance programs and investment policy and practices.
Environmental, Social, and Governance
In demonstrating our commitment
to environmental, social, and governance issues and the important part they play in our success, we published our second annual
Environmental, Social, and Governance Report in 2022. We encourage you to read our Environmental, Social, and Governance Report
at http://ir.nutanix.com/company/esg. The report provides a high-level overview on our views, approach to, and performance
around environmental, social, and governance matters. The report is not incorporated by reference herein and is not a part of this
proxy statement.
Nominations Process and Director Qualifications
Nomination to the Board of Directors
Candidates for
nomination to our Board are selected by our Board based on the recommendation of the Nominating and Corporate Governance Committee
in accordance with the committee’s charter, our policies, our amended and restated certificate of incorporation and amended
and restated bylaws, our corporate governance guidelines, the criteria adopted by our Board regarding director candidate qualifications,
and the requirements of applicable law. In recommending candidates for nomination, the Nominating and Corporate Governance Committee
considers candidates recommended by directors, officers, and employees, as well as candidates that are properly submitted by stockholders
in accordance with our policies and amended and restated bylaws, using the same criteria to evaluate all such candidates. A stockholder
that wishes to recommend a candidate for election to our Board may send a letter directed to our Chief Legal Officer at Nutanix,
Inc., 1740 Technology Drive, Suite 150, San Jose, California 95110. The letter must include, among other things, the candidate’s
name, home and business contact information, detailed biographical data, relevant qualifications, a representation and undertaking
from the candidate to serve a full term on our Board if elected, and information regarding any relationships between the candidate
and our company. Additional information regarding the process for properly submitting stockholder nominations for candidates for
membership on our Board is set forth above under “Questions and Answers About Proxy Materials
and Voting” and in our amended and restated bylaws.
Evaluations of candidates
generally involve a review of background materials, internal discussions and interviews with selected candidates as appropriate
and, in addition, the Nominating and Corporate Governance Committee may engage consultants or third-party search firms to assist
in identifying and evaluating potential nominees.
2022 PROXY STATEMENT 20
Bain Board Nomination Rights
In August 2020, we entered into an investment
agreement with BCPE Nucleon (DE) SPV, LP (collectively with its affiliates, “Bain”) relating to the issuance and sale
to Bain of $750 million in an initial aggregate principal amount of our 2.50% convertible senior notes due 2026. Pursuant
to this investment agreement, we appointed two Bain nominees, David Humphrey and Max de Groen, to our Board in September 2020.
In general, Bain will continue to be entitled to have two nominees designated to our Board. However, if, at any time, Bain beneficially
owns less than 50% of the common stock underlying the convertible senior notes (on an as-converted basis, and assuming full physical
settlement), Bain will be entitled to have only one nominee designated to our Board, and if, at any time, Bain beneficially owns
less than 25% of the common stock underlying the convertible senior notes (on an as-converted basis, and assuming full physical
settlement), Bain will not be entitled to have any nominee designated to our Board. Further, Bain will not have a right to nominate
(i) a second member to our Board, if Bain beneficially owns less than 9.09% of all of our common stock then outstanding (on
an as-converted basis, and assuming full physical settlement), even if Bain otherwise beneficially owns at least 50% of the common
stock underlying the convertible senior notes (on an as-converted basis, and assuming full physical settlement), or (ii) any
member to our Board, if Bain collectively beneficially owns less than 4.0% of all of our common stock then outstanding (on an as-converted
basis, and assuming full physical settlement), even if Bain otherwise beneficially owns at least 25% of the common stock underlying
the convertible senior notes (on an as-converted basis, and assuming full physical settlement).
Director Qualifications
With the goal of developing
a diverse, experienced and highly qualified board of directors, the Nominating and Corporate Governance Committee is responsible
for developing and recommending to our Board the desired qualifications, expertise and characteristics of members of our Board,
including qualifications that the committee believes must be met by a committee-recommended nominee for membership on our Board
and specific qualities or skills that the committee believes are necessary for one or more of the members of our Board to possess.
In addition to the qualifications,
qualities, and skills that are necessary to meet U.S. state and federal legal, regulatory and Nasdaq listing requirements and the
provisions of our amended and restated certificate of incorporation, amended and restated bylaws, corporate governance guidelines,
and charters of the board committees, the Nominating and Corporate Governance Committee requires the following minimum qualifications
to be satisfied by any nominee for a position on our Board: (i) the highest personal and professional ethics and integrity,
(ii) proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment, (iii) skills
that are complementary to those of the existing directors, (iv) the ability to assist and support management and make significant
contributions to our success, and (v) an understanding of the fiduciary responsibilities that are required of a member of
our Board and the commitment of time and energy necessary to diligently carry out those responsibilities. When considering nominees,
the Nominating and Corporate Governance Committee may take into consideration many other factors including, among other things,
the candidates’ character, integrity, judgment, independence, area of expertise, corporate experience, length of service,
and potential conflicts of interest, the candidates’ other commitments, diversity with respect to professional background,
education, race, ethnicity, gender, age and geography, and the size and composition of our Board and the needs of our Board and
its committees. Our Board and the Nominating and Corporate Governance Committee believe that a diverse, experienced and highly
qualified board of directors fosters a robust, comprehensive and balanced decision-making process for the continued effective functioning
of our Board and success of our company. Accordingly, through the nomination process, the Nominating and Corporate Governance Committee
seeks to promote board membership that reflects diversity, factoring in gender, race, ethnicity, differences in professional background,
education, skill, and experience, and other individual qualities and attributes that contribute to the total mix of viewpoints
and experience. The Nominating and Corporate Governance Committee evaluates the foregoing factors, among others, and does not assign
any particular weighting or priority to any of the factors.
The brief biographical
description of each director set forth in “Proposal 4 – Election of Directors”
includes the primary individual experience, qualifications, attributes and skills of each of our directors that led to the conclusion
that each director should serve as a member of our Board at this time.
2022 PROXY STATEMENT 21
Proposal 1: Approval of Amendment and Restatement
of Amended and Restated Certificate of Incorporation To Declassify the Board of Directors and Provide For the Annual Election of
Directors
|
OUR BOARD
RECOMMENDS A VOTE FOR
THIS PROPOSAL 1. |
Background
Our Board is currently comprised
of eight members. In accordance with our Current Charter, our Board is divided into three classes with staggered three-year terms.
After considering the advantages
and disadvantages of declassification, our Board has determined it is advisable and in the best interests of our company and our
stockholders to amend and restate our Current Charter, in accordance with the DGCL, to phase out of the classified board structure
so that our Board is fully declassified by the 2025 annual meeting of stockholders.
If this proposal is approved
by our stockholders, commencing with the election of directors at our next annual meeting, all directors whose terms are expiring
shall be elected annually for terms of one year, and each director elected after this Annual Meeting shall hold office until the
next succeeding annual meeting of stockholders and until his or her successor has been duly elected and qualified, subject, however,
to such director’s earlier death, resignation, retirement, disqualification or removal. To ensure a smooth transition to
the new declassified structure of our Board and to permit the current directors to serve out the three-year terms to which the
stockholders elected the directors, this proposal will not shorten the term of any director elected before this Annual Meeting
or at this Annual Meeting. Thus, at the 2023 annual meeting of stockholders, if re-nominated, the Class I directors would be up
for re-election for one-year terms and until his or her successor has been duly elected and qualified, subject, however, to such
director’s earlier death, resignation, retirement, disqualification or removal. At the 2024 annual meeting of stockholders,
the Class I and Class II directors will be up for re-election for one-year terms and until his or her successor has been duly elected
and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.
At the 2025 annual meeting of stockholders, all directors will be up for re-election for one-year terms and until his or her successor
has been duly elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification
or removal.
This proposal, if approved,
would not change our Board’s authority to change the present number of directors and to fill any vacancies or newly created
directorships. Any director appointed to fill newly created director seats or vacancies would hold office for the remaining term
of his or her predecessor.
In addition, a provision
in a Delaware corporation’s organizational documents that provides that a director may only be removed “for cause”
by the stockholders is not valid if the corporation has a nonclassified board of directors. As a result, the Proposed Charter provides
that directors may be removed in accordance with relevant Delaware law principles.
Proposed Amendment
The text of the Proposed
Charter is attached as Appendix B to this proxy statement and incorporated herein by reference.
Summary and Recommendation of our Board
This proposal is a result
of our Board’s ongoing review of our corporate governance policies. A classified board structure can be viewed as diminishing
a board’s accountability to stockholders because such structure does not enable stockholders to express a view on each director’s
performance by means of an annual vote. Annual voting allows stockholders to express their views on the individual performance
of each director and on the entire board of directors more frequently than with a classified board structure and provides stockholders
a more active role in shaping and implementing corporate governance policies. Our Board believes that approval of a phase out of
the classified board structure will further enhance stockholder input, feedback and engagement through the annual stockholder meeting
process.
2022 PROXY STATEMENT 22
Our Board believes that it
is in the best interests of our company and our stockholders to approve the Proposed Charter to further adopt best-in-class corporate
governance practices and to declassify our Board and provide for the annual election of directors. Accordingly, our Board unanimously
recommends a vote FOR the approval of the Proposed Charter.
Vote Required
Approval of
Proposal 1 requires FOR votes from the
holders of a 66⅔% of the voting power of the outstanding shares of our capital stock entitled to vote on the proposal. Abstentions
and broker non-votes will have the same effect as a vote AGAINST the
proposal. Approval of Proposal 1 is also conditioned on the approval of Proposals 2 and 3. If either Proposal 2 or 3 is not approved,
our Board will not implement Proposal 1, even if it is approved by the requisite vote of our stockholders.
If Proposals 1, 2 and 3 are
approved by the requisite number of our stockholders, we expect to file the Proposed Charter with the Secretary of State of the
State of Delaware following the Annual Meeting, which Proposed Charter will become effective at the time of filing.
Notwithstanding the foregoing,
at any time prior to the effectiveness of the filing of the Proposed Charter with the Secretary of State of the State of Delaware,
our Board reserves the right to abandon the Proposed Charter and not to file the Proposed Charter, even if the Proposed Charter
is approved by our stockholders, if our Board, in its discretion, determines that the Proposed Charter is no longer in the best
interests of our Company or our stockholders.
If any of Proposal 1, 2 or
3 is not approved by the requisite vote of our stockholders, then the Proposed Charter will not be filed with the Secretary of
State of the State of Delaware and our Current Charter will remain in place and our Board will remain classified.
Proposal 2: Approval of Amendment and Restatement
of Amended and Restated Certificate of Incorporation to Eliminate Supermajority Voting Requirements
|
OUR BOARD
RECOMMENDS A VOTE FOR
THIS PROPOSAL 2. |
Background
In addition to the proposed
amendment to our Current Charter to declassify our Board, we are also seeking stockholder approval of the amendment and restatement
of our Current Charter to further improve the quality of our corporate governance by reducing certain voting requirements.
Our Current Charter requires
the affirmative vote of the holders of at least 66⅔% in voting power of the then outstanding shares of our capital stock entitled
to vote, voting together as a single class, for stockholders to approve certain amendments to our certificate of incorporation,
for stockholders to amend our bylaws and for stockholders to remove directors for cause (together, the “supermajority voting
requirements”). We are seeking stockholder approval to eliminate these supermajority voting requirements from our Current
Charter and to replace such requirements with a majority voting standard.
After considering the advantages
and disadvantages of maintaining our current consent threshold, our board of directors has determined it is advisable and in the
best interests of the Company and our stockholders to amend and restate our Current Charter to remove the supermajority voting
requirements.
If Proposal 2 is approved
by our stockholders, the voting standard for stockholder approval of any future amendments to our certificate of incorporation
or our bylaws, and for stockholders to remove directors, would be by the affirmative vote of the holders of at least a majority
of the voting power of the outstanding shares of our stock entitled to vote thereon, voting together as a single class, which is
the default voting standard under the DGCL. Our Board will retain the right to amend, alter, change, or repeal any provision of
our certificate of incorporation or our bylaws without seeking approval of our stockholders, where permitted by the DGCL.
2022 PROXY STATEMENT 23
Proposed Amendment
The text of the Proposed
Charter is attached as Appendix B to this proxy statement and incorporated herein by reference.
Related Changes to our Bylaws
On October 6, 2022, our Board
of Directors approved the amendment and restatement of our amended and restated bylaws in order to, among other things, replace
the provision requiring a supermajority vote in order for our stockholders to amend our bylaws with a majority vote threshold.
Summary and Recommendation of our Board
This proposal is a result
of our Board’s ongoing review of our corporate governance policies. Our Board believes that it is in the best interests of
our company and our stockholders to approve the Proposed Charter in order to eliminate the supermajority voting requirements in
order to further enhance stockholder input, feedback and engagement through the annual stockholder meeting process. Accordingly,
our Board unanimously recommends a vote FOR the approval of the Proposed Charter.
Vote Required
Approval of
Proposal 2 requires FOR votes from the
holders of a 66⅔% of the voting power of the outstanding shares of our capital stock entitled to vote on the proposal. Abstentions
and broker non-votes will have the same effect as a vote AGAINST the
proposal. Approval of Proposal 2 is also conditioned on the approval of Proposals 1 and 3. If either Proposal 1 or 3 is not approved,
our Board will not implement Proposal 2, even if it is approved by the requisite vote of our stockholders.
If Proposals 1, 2 and 3 are
approved by the requisite number of our stockholders, we expect to file the Proposed Charter of Amendment with the Secretary of
State of the State of Delaware following the Annual Meeting, which Proposed Charter will become effective at the time of filing.
Notwithstanding the foregoing,
at any time prior to the effectiveness of the filing of the Proposed Charter with the Secretary of State of the State of Delaware,
our Board reserves the right to abandon the Proposed Charter and not to file the Proposed Charter, even if the Proposed Charter
is approved by our stockholders, if our Board, in its discretion, determines that the Proposed Charter is no longer in the best
interests of our Company or our stockholders.
If any of Proposals 1, 2
or 3 is not approved by the requisite vote of our stockholders, then the Proposed Charter will not be filed with the Secretary
of State of the State of Delaware and our Current Charter will remain in place.
Proposal 3: Approval of Amendment and Restatement
of Amended and Restated Certificate of Incorporation to Eliminate Inoperative Provisions and Update Certain Other Miscellaneous
Provisions
|
OUR BOARD
RECOMMENDS A VOTE FOR
THIS PROPOSAL 3. |
Background
In addition to the proposed
amendment to our Current Charter to declassify our Board and eliminate the supermajority voting requirements, we are also seeking
stockholder approval of the amendment and restatement of our Current Charter to remove historical references to Class B common
stock and make certain other clarifying changes and updates, which we believe do not substantively affect stockholder rights. In
connection with the completion of our
2022 PROXY STATEMENT 24
initial public offering,
we adopted a dual class stock structure and authorized both Class A common stock and Class B common stock. In January 2022, all
outstanding shares of Class B common stock automatically converted into the same number of shares of Class A common stock pursuant
to the terms of our Current Charter. In connection with this conversion, we filed a certificate of retirement effecting the retirement
of the shares of Class B common stock that were issued but no longer outstanding, which had the effect of amending our Current
Charter such that the Company’s total authorized shares of capital stock were reduced by the number of retired shares of
Class B stock. We are now seeking stockholder approval of the amendment and restatement of our Current Charter to remove all provisions
related to Class B common stock, and make certain other clarifying changes and updates, which we believe do not substantively affect
stockholder rights.
Proposed Amendment
The text of the Proposed
Charter is attached as Appendix B to this proxy statement and incorporated herein by reference.
Summary and Recommendation of our Board
This proposal is a result
of our Board’s desire to streamline our Current Charter and remove historical provisions that are no longer applicable. Our
Board believes that it is in the best interests of our company and our stockholders to approve the Proposed Charter in order to
remove provisions related to Class B common stock and make certain other clarifying changes and updates. Accordingly, our Board
unanimously recommends a vote FOR the approval of the Proposed Charter.
Vote Required
Approval of
Proposal 3 requires FOR votes from the
holders of a 66⅔% of the voting power of the outstanding shares of our capital stock entitled to vote on the proposal. Abstentions
and broker non-votes will have the same effect as a vote AGAINST the
proposal. Approval of Proposal 3 is also conditioned on the approval of Proposals 1 and 2. If either Proposal 1 or 2 is not approved,
our Board will not implement Proposal 3, even if it is approved by the requisite vote of our stockholders.
If Proposals 1, 2 and 3 are
approved by the requisite number of our stockholders, we expect to file the Proposed Charter with the Secretary of State of the
State of Delaware following the Annual Meeting, which Proposed Charter will become effective at the time of filing.
Notwithstanding the foregoing,
at any time prior to the effectiveness of the filing of the Proposed Charter with the Secretary of State of the State of Delaware,
our Board reserves the right to abandon the Proposed Charter and not to file the Proposed Charter, even if the Proposed Charter
is approved by our stockholders, if our Board, in its discretion, determines that the Proposed Charter is no longer in the best
interests of our Company or our stockholders.
If any of Proposals 1, 2
or 3 is not approved by the requisite vote of our stockholders, then the Proposed Charter will not be filed with the Secretary
of State of the State of Delaware and our Current Charter will remain in place.
2022 PROXY STATEMENT 25
Proposal 4: Election of Directors
|
OUR BOARD
RECOMMENDS A VOTE FOR
DAVID HUMPHREY, RAJIV RAMASWAMI, AND GAYLE SHEPPARD AS CLASS III DIRECTORS. |
Our Board currently consists
of eight members. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to
serve from the time of election until the third annual meeting following their election. Our directors are currently divided into
three classes as follows:
• | Class I directors: Steven
J. Gomo and Max de Groen, whose terms will expire at the annual meeting of stockholders to be held after the end of the fiscal
year ending July 31, 2023; |
• | Class II directors: Craig
Conway, Virginia Gambale, and Brian Stevens, whose terms will expire at the annual meeting of stockholders to be held after the
end of the fiscal year ending July 31, 2024; and |
• | Class III directors: David
Humphrey, Rajiv Ramaswami, and Gayle Sheppard, whose terms will expire at the Annual Meeting, unless re-elected. |
Any additional directorships
resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible,
each class will consist of one-third of the directors. The division of our Board into three classes with staggered three-year terms
may delay or prevent a change of our management or a change of control of our company. Provided that Proposals 1, 2 and 3
are approved, our classified board structure will be phased out starting with the 2023 annual meeting of stockholders, and at that
meeting the directors whose terms are then expiring will be appointed to serve for a one-year term instead of a three-year term.
Mr. Humphrey, Mr. Ramaswami,
and Ms. Sheppard have each been nominated to continue to serve as Class III directors for a three-year term, and each of them
has agreed to stand for re-election at the Annual Meeting. Our management has no reason to believe that Mr. Humphrey, Mr. Ramaswami,
or Ms. Sheppard will be unable to serve as Class III directors. If elected at the Annual Meeting, Mr. Humphrey, Mr. Ramaswami,
and Ms. Sheppard would each serve until the annual meeting of stockholders to be held after the end of fiscal year 2025 and until
his or her successor has been duly elected, or if sooner, until his or her death, resignation or removal.
Vote Required
Directors are
elected by the affirmative vote of a majority of the votes cast, meaning that the number of shares voted FOR
a director’s election exceeds the number of votes cast AGAINST
such director’s election. Withhold votes and broker non-votes have no legal effect
on the outcome. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of
the three nominees named above. If any nominee becomes unavailable for election as a result of an unexpected occurrence, shares
that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by us. In October
2022, we amended and restated our Amended and Restated Bylaws to provide for majority voting in uncontested director elections
and updated our corporate governance guidelines to require directors to tender an irrevocable offer to resign if they do not receive
majority vote and our Board to accept such offer to resign absent a compelling reason.
Nominees
The Nominating and Corporate
Governance Committee seeks to assemble a board of directors that, as a group, can best perpetuate the success of the business and
represent stockholder interests through the exercise of sound judgment using its diversity of background and experience in various
areas. To that end, the committee has identified and evaluated nominees in the broader context of our board’s overall composition,
with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality,
sound business judgment and other qualities deemed critical to effective functioning of our Board.
Set forth below is biographical
information for the nominees and each person whose term of office as a director will continue after the Annual Meeting. This includes
information regarding each director’s experience, qualifications, attributes or skills that led our Board to recommend them
for board service.
2022 PROXY STATEMENT 26
Class III Nominees for Re-Election at the Annual Meeting
|
David Humphrey |
|
Age: 45
Director since: 2020
Independent
Committees:
• Nominating
and Corporate Governance
• Security
and Privacy |
Other public boards in the past five years:
• NortonLifeLock
Inc. (2016-2021)
• Genpact
Limited (2012-2019)
|
Professional background
Mr. Humphrey is currently a managing
director in the Technology, Media and Telecommunications Vertical and Co-Head of Bain Capital’s North America Private Equity
businesses. Prior to joining Bain Capital Private Equity, Mr. Humphrey was an investment banker in the mergers and acquisitions
group at Lehman Brothers where he advised companies on mergers and acquisitions across a range of industries. Mr. Humphrey
previously served as a member of the boards of directors of NortonLifeLock Inc. (formerly known as Symantec Corporation), a cybersecurity
software and services company, from August 2016 until January 2021, Genpact Limited, an IT services company, from October 2012
to November 2019, and Bright Horizons Family Solutions Inc., a child-care services company, from May 2008 to June 2017. Mr. Humphrey
currently also serves on the board of directors of several private companies.
Education
B.A. in Economics from Harvard College; M.B.A.
from Harvard Business School.
Key skills and experience
Our Board believes that Mr. Humphrey
is qualified to serve as a member of our Board because of his significant corporate finance and business expertise gained from
his experience in the venture capital and IT industries, including his time spent serving on the boards of directors of various
technology companies. |
|
Rajiv Ramaswami |
|
Age: 56
Director since: 2020
President and CEO
Committees:
• None
|
Other public boards in the past five years:
• NeoPhotonics
Corporation (2014-2022) |
Professional background
Mr. Ramaswami has served as our President and Chief Executive Officer since December 2020. A seasoned technology industry
executive, Mr. Ramaswami has more than 30 years of experience spanning software, cloud services, and network infrastructure.
He brings to our company a proven track record of building and scaling enterprises and teams, having a strong customer-centric
approach, operational execution and developing innovative products and solutions to drive growth and value creation. Prior
to joining Nutanix, Mr. Ramaswami served as Chief Operating Officer of Products and Cloud Services at VMware from October
2016 until December 2020. From April 2016 to October 2016, Mr. Ramaswami led VMware’s Networking and Security business as
Executive Vice President and General Manager. Mr. Ramaswami served as Executive Vice President and General Manager, Infrastructure
and Networking at Broadcom from February 2010 to January 2016, where he established Broadcom as a leader in data center, enterprise,
and carrier networking. Prior to Broadcom, he served in multiple General Manager roles at Cisco across switching, data center,
storage and optical networking business units. Earlier in his career, he held various leadership positions at Nortel, Tellabs,
and IBM. Mr. Ramaswami also served as a member of the board of directors of NeoPhotonics Corporation, a manufacturer of telecommunications
circuits, from March 2014 to August 2022. Mr. Ramaswami is an Institute of Electrical and Electronics Engineers Fellow and
holds 36 patents, primarily in optical networking.
Education
B.Tech. in Electrical Engineering from the
Indian Institute of Technology, Madras; M.S. and Ph.D. in Electrical Engineering from the University of California, Berkeley.
Key skills and experience
Our Board believes that Mr. Ramaswami’s
extensive business experience and expertise in the technology industry, gained from his executive leadership roles at other technology
companies, as well as the perspective and experience that Mr. Ramaswami brings as our President and Chief Executive Officer,
uniquely qualify him to serve on our Board. |
2022 PROXY STATEMENT 27
|
Gayle Sheppard |
|
Age: 69
Director since: 2022
Independent
Committees:
• Compensation
• Security
and Privacy |
Other public boards in the past five years:
• Envista
Holdings Corporation (2020-2021) |
Professional background
Ms. Sheppard currently serves as Corporate
Vice President and Chief Technology Officer for Microsoft Asia where she is responsible for establishing the vision, strategy and
execution programs for customer and partner co-innovation and digital transformation. Prior to her current role, Ms. Sheppard served
as the Head of Global Expansion and Digital Transformation for Microsoft Cloud and AI, where she was responsible for the vision,
strategy, and long-range P&L for growing Microsoft’s global Cloud Services and working with customers who are implementing
multiyear digital innovation and modernization strategies and as the Corporate Vice President of Azure Data at Microsoft. Earlier
in her career, she served as Vice President and General Manager of the Saffron AI/ML Division, Intel Corporation, and held various
leadership positions at Saffron Technology, Inc., Ketera Technologies, Inc., and J.D. Edwards, Inc. She has founded, created, or
contributed to start-up and Fortune 100 companies focused on Artificial Intelligence platforms, solutions in business and consumer
markets, and digitization of business in a wide variety of industries. Ms. Sheppard previously served as a member of the board
of directors of Envista Holdings Corporation, a medical technology holding company, from July 2020 until November 2021.
Education
B.S. in Business Administration from University
of South Florida.
Key skills and experience
Our Board believes that Ms. Sheppard is qualified
to serve as a member of our Board based on her extensive global business experience and deep technology expertise. |
Class I Directors Continuing in Office
Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2023
|
Steven J. Gomo |
|
Age: 70
Director since: 2015
Independent
Committees:
• Audit
(Chair)
• Nominating
and Corporate Governance |
Other public boards in the past five years:
• Enphase
Energy, Inc. (since 2011)
• Micron
Technology, Inc. (since 2018) |
Professional background
Mr. Gomo previously served as Executive
Vice President, Finance and Chief Financial Officer of NetApp, Inc., a computer storage and data management company from October
2004 until December 2011, as well as Senior Vice President, Finance and Chief Financial Officer from August 2002 to September 2004.
He has served as a member of the board of directors of Enphase Energy, Inc., a solar energy management device maker, since March
2011; a member of the board of directors of Micron Technology, Inc., a developer and manufacturer of semiconductor memory products,
since October 2018; and a member of the board of directors of Solaria Corporation, a private provider of advanced solar energy
products, since October 2019. Mr. Gomo also previously served on the board of directors of NetSuite Inc., a business management
software company, from March 2012 until it was acquired by Oracle Corporation in November 2016, and SanDisk Corporation, a flash
memory storage solutions and software company, from December 2005 until the company was acquired by Western Digital Corporation
in May 2016.
Education
B.S. in Business Administration from Oregon
State University; M.B.A. from Santa Clara University.
Key skills and experience
Our Board believes that Mr. Gomo is
qualified to serve as a member of our Board because of his substantial corporate governance, operational and financial expertise
gained from holding various executive positions at publicly-traded technology companies and from serving on the board of directors
of several public companies. |
2022 PROXY STATEMENT 28
|
Max de Groen |
|
Age: 37
Director since: 2020
Independent
Committees:
• Audit
• Compensation
(Chair) |
Other public boards in the past five years:
• None |
Professional background
Mr. de Groen joined Bain Capital in
2011 and is currently a managing director in the Technology Vertical at Bain. Prior to joining Bain Capital Private Equity, Mr. de
Groen was a consultant at The Boston Consulting Group, where he consulted in healthcare, financial services, and technology practice
areas. Mr. de Groen currently serves on the board of directors of several private companies.
Education
B.S. in Finance from the University of Minnesota;
M.B.A. from Harvard Business School.
Key skills and experience
Our Board believes that Mr. de Groen
is qualified to serve as a member of our Board because of his significant corporate finance and business expertise gained from
his experience in the venture capital and IT industries, including his time spent serving on the boards of directors of technology
companies. |
Class II Directors Continuing in Office
Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2024
|
Craig Conway |
|
Age: 68
Director since: 2017
Independent
Committees:
• Compensation
• Nominating
and Corporate Governance |
Other public boards in the past five years:
• Salesforce,
Inc. (since 2005)
• Guidewire
Software, Inc. (2010-2019) |
Professional background
Mr. Conway previously served as President
and Chief Executive Officer of PeopleSoft, Inc., an enterprise application software company, from 1999 to 2004. Mr. Conway
also served as President and Chief Executive Officer of One Touch Systems from 1996 to 1999 and TGV Software from 1993 to 1996.
Prior to that, Mr. Conway held executive management positions at a variety of leading technology companies, including Executive
Vice President at Oracle Corporation. Mr. Conway has served as a member of the board of directors of Salesforce, Inc. (formerly
known as salesforce.com, inc.), a cloud-based customer relationship management company, since October 2005. Mr. Conway previously
served as a director of Advanced Micro Devices, Inc., a semiconductor company, from September 2009 until May 2013, and Guidewire
Software, Inc., a provider of software products to insurance companies, from December 2010 until January 2019.
Education
B.S. in Computer Science and Mathematics,
the State University of New York at Brockport.
Key skills and qualifications
Our Board believes that Mr. Conway is
qualified to serve as a member of our Board based on his extensive and broad management experience, gained from his background
as the president and chief executive officer of multiple technology companies and from serving on the board of directors of several
public companies. |
2022 PROXY STATEMENT 29
|
Virginia Gambale |
|
Age: 63
Director since: 2020
Independent Chair of the Board since June 2021
Committees:
• Audit
• Nominating
and Corporate Governance (Chair) |
Other public boards in the past five years:
• FD
Technologies plc (since 2015)
• Virtu
Financial, Inc. (since 2020)
• Jamf
Holding Corp. (since 2021)
• Regis
Corporation (2018-2021)
• JetBlue
Airways Corporation (2006-2021) |
Professional background
Ms. Gambale is Managing Partner of Azimuth
Partners LLC, a technology advisory firm facilitating the growth and adoption of emerging technologies for financial services,
consumer and technology companies. Prior to founding Azimuth Partners in 2003, Ms. Gambale held senior management positions at
Merrill Lynch, Bankers Trust, Deutsche Bank and Marsh & McLennan. She was also the Head of Deutsche Bank Strategic Ventures,
and subsequently a General Partner at Deutsche Bank Capital and ABS Ventures until founding Azimuth Partners. Ms. Gambale has also
served on the boards of directors of: FD Technologies plc (formerly known as First Derivatives plc), a provider of software and
consulting services, since March 2015; Virtu Financial, Inc., a financial services company, since January 2020; Jamf Holding
Corp., a provider of Apple enterprise management, infrastructure and security platform, since May 2021; 10x Banking Technology
Services Ltd., a private financial technology firm, since March 2022; and Avellino Lab USA, Inc., a private molecular diagnostics
company, since June 2022. She also previously served on numerous international public and private boards, including Core BTS, Regis
Corporation, JetBlue Airways, Piper Jaffray, Workbrain, Synchronoss Technologies, and IQ Financial.
Education
B.S. in Mathematics and Computer Science
from the New York Institute of Technology.
Key skills and qualifications
Our Board believes Ms. Gambale is qualified
to serve as a member of our Board because of her extensive prior experience in senior leadership positions in finance and technology,
as well as her time spent serving on the boards of numerous public and private companies. |
|
Brian Stevens |
|
Age: 59
Director since: 2019
Independent
Committees:
• Compensation
• Security
and Privacy (Chair) |
Other public boards in the past five years:
• Genpact
Limited (since 2020) |
Professional background
Mr. Stevens has served as Chief Executive
Officer of Neuralmagic, Inc., a private machine learning company, since March 2021, and as its Executive Chairman from July
2019 until March 2021. Mr. Stevens has also served as a member of the board of directors of Genpact Limited, an IT services
company, since May 2020. He previously served as Chief Technology Officer from April 2017 to May 2019 and as Vice President of
Product from September 2014 to May 2019 of Google Cloud, where he was responsible for leading the technology vision for Google’s
public cloud offering. Prior to Google, from November 2001 until September 2014, Mr. Stevens served in various positions
at Red Hat, Inc., an open source solutions company, including as Chief Technology Officer and Executive Vice President of Worldwide
Engineering from September 2013 until September 2014. Mr. Stevens has also served on various boards in the past, including
the American Red Cross, IEEE, Pentaho, Data Gravity, and the Open Stack Foundation.
Education
B.S. in Computer Science from the University
of New Hampshire; M.S. in Computer Systems from Rensselaer Polytechnic Institute.
Key skills and experience
Our Board believes Mr. Stevens is qualified
to serve as a member of our Board because of his extensive business experience and expertise in our industry, gained from his substantial
leadership roles as well as his time spent serving on the boards of other technology companies. |
2022 PROXY STATEMENT 30
Director Compensation
Non-Employee Director Compensation Policy
Members of our Board who are not employees
or officers of our company (“non-employee directors”) receive compensation for their service.
The Compensation Committee
reviews the total compensation of our non-employee directors and each element of our outside director compensation policy
annually. At the direction of the Compensation Committee, Compensia, Inc. (“Compensia”), a nationally recognized
compensation consulting firm, annually analyzes the competitive position of our outside director compensation policy against
the peer group used for executive compensation purposes. For a more detailed description of the role of Compensia, the
Compensation Committee’s independent compensation consultant, please refer to the section titled “Executive
Compensation – Compensation Discussion and Analysis – Compensation-Setting Process – Role of
Compensation Consultant.” Under our amended and restated outside director
compensation policy, each non-employee director is entitled to receive (i) an annual RSU award on the date of each annual
meeting of stockholders with a total dollar value of $250,000 for the director’s service as a board member and (ii)
annual cash retainers, payable quarterly in arrears, for the director’s service as follows:
Annual RSU Award |
|
|
| |
| |
Board Member |
|
|
| |
$ | 250,000 | |
|
|
|
| |
| | |
Annual Cash Retainer |
|
|
| |
| | |
Board Member |
|
|
| |
$ | 50,000 | |
|
|
|
| |
| | |
Additional Annual Cash Retainers |
|
|
| |
| | |
Board Chair |
|
|
| |
$ | 87,500 | (1) |
Lead Independent Director |
|
|
| |
$ | 47,500 | |
|
|
|
| |
| | |
Additional Annual Cash Retainers for Committee Service | |
Chair | |
Member | |
Audit Committee | |
$ | 30,000 | |
$ | 12,500 | |
Compensation Committee | |
$ | 20,000 | |
$ | 10,000 | |
Nominating and Corporate Governance Committee | |
$ | 15,000 | |
$ | 7,500 | |
Security and Privacy Committee | |
$ | 15,000 | |
$ | 7,500 | |
(1) |
In September 2022, the additional annual cash retainer for service as Board Chair was increased to $107,500. |
Non-employee directors receive no other form
of remuneration, perquisites or benefits, but are reimbursed for their reasonable travel expenses incurred in attending board and
committee meetings.
Our 2016 Equity Incentive Plan provides that,
in any fiscal year, none of our non-employee directors may be granted cash-settled awards with a grant date fair value of more
than $750,000 (or, in connection with a director’s initial service, $1.5 million) or stock-settled awards with a grant date
fair value of more than $750,000 (or, in connection with a director’s initial service, $1.5 million).
2022 PROXY STATEMENT 31
Fiscal Year 2022 Director Compensation Table
The following table provides
information for all compensation awarded to, earned by or paid to each person who served as a non-employee director for all or
a portion of the fiscal year ended July 31, 2022 or a portion thereof. Mr. Ramaswami, our President and CEO, did not receive
compensation for his service as a director. The compensation received by Mr. Ramaswami as an employee is shown in “Executive
Compensation – Executive Compensation Tables – Fiscal Year 2022 Summary Compensation Table.”
Name |
|
Fees
Earned
or Paid in
Cash
($) |
|
Stock
Awards(1)
($) |
|
Option
Awards
($) |
|
Non-Equity
Incentive Plan
Compensation
($) |
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) |
|
All Other
Compensation
($) |
|
Total
($) |
Susan L. Bostrom(2) |
|
21,288 |
|
241,793 |
|
— |
|
— |
|
— |
|
— |
|
263,081 |
Craig Conway |
|
46,890 |
|
241,793 |
|
— |
|
— |
|
— |
|
— |
|
288,683 |
Max de Groen |
|
58,014 |
|
241,793 |
|
— |
|
— |
|
— |
|
— |
|
299,807 |
Virginia Gambale |
|
137,425 |
|
241,793 |
|
— |
|
— |
|
— |
|
— |
|
379,218 |
Steven J. Gomo |
|
56,096 |
|
241,793 |
|
— |
|
— |
|
— |
|
— |
|
297,889 |
David Humphrey |
|
42,124 |
|
241,793 |
|
— |
|
— |
|
— |
|
— |
|
283,917 |
Gayle Sheppard(3) |
|
31,288 |
|
194,883 |
|
— |
|
— |
|
— |
|
— |
|
226,171 |
Brian Stevens |
|
47,178 |
|
241,793 |
|
— |
|
— |
|
— |
|
— |
|
288,971 |
(1) |
The amounts reported
in this column represent the aggregate grant date fair value of the RSUs granted, as computed in accordance with ASC Topic
718. The assumptions used in the valuation of these awards are set forth in the notes to our consolidated financial statements
included in our Annual Report on Form 10-K for our fiscal year ended July 31, 2022 filed with the SEC on September 21, 2022.
These amounts do not necessarily reflect the actual economic value that may ultimately be realized by the director. |
(2) |
Ms. Bostrom resigned
from our Board on March 30, 2022. |
(3) |
Ms. Sheppard was appointed
to our Board on January 28, 2022 and received a prorated annual RSU grant under our amended and restated outside director
compensation policy. |
Outstanding Director Equity Awards at Fiscal Year 2022 Year-End
Table
Our non-employee directors held
the following outstanding option and RSU awards as of July 31, 2022. The table excludes Mr. Ramaswami, whose outstanding
awards are reflected in the section titled “Executive Compensation –Executive Compensation
Tables – Outstanding Equity Awards at Fiscal Year 2022 Year-End Table.”
Name |
|
# of Outstanding Options
(in shares) |
|
# of Outstanding RSUs
(in shares) |
Susan L. Bostrom(1) |
|
— |
|
— |
Craig Conway |
|
— |
|
7,365 |
Max de Groen |
|
— |
|
7,365 |
Virginia Gambale |
|
— |
|
7,365 |
Steven J. Gomo |
|
— |
|
7,365 |
David Humphrey |
|
— |
|
7,365 |
Gayle Sheppard(2) |
|
— |
|
7,484 |
Brian Stevens |
|
— |
|
7,365 |
(1) |
Ms. Bostrom resigned from our Board on March 30, 2022, and as a result, all of her remaining unvested RSUs were terminated in full. |
(2) |
Ms. Sheppard was appointed to our Board on January 28, 2022. |
2022 PROXY STATEMENT 32
Stock Ownership Guidelines
Our stock ownership guidelines provide that
each non-employee director is expected to attain a minimum share ownership position with an aggregate value equal to the value
of his or her annual equity award for service on our Board (not including any equity awards for serving as lead independent director
or a member or chair of any committees) as follows: (i) for Mr. Conway and Mr. Gomo, by our 2020 annual meeting of stockholders,
(ii) for Mr. Stevens, who joined our Board in June 2019, by the Annual Meeting, (iii) for each of Ms. Gambale and Messrs. de Groen
and Humphrey, who joined our Board in June 2020, September 2020, and September 2020, respectively, by the annual stockholders meeting
to occur after our fiscal year ending July 31, 2023, (iv) for Ms. Sheppard, by the annual stockholders meeting to occur after our
fiscal year ending July 31, 2025, and (v) for any new directors, by the fourth annual stockholders meeting after the date such
director joined our Board.
Certain Relationships and Related Party
Transactions
In addition to the executive officer and
director compensation arrangements discussed in the sections titled “Corporate Governance
- Director Compensation” and “Executive Compensation,” the
following is a description of each transaction since August 1, 2021 and each currently proposed transaction in which:
• |
we have been
or are to be a participant; |
• |
the amounts involved exceeded
or will exceed $120,000; and |
• |
any of our directors, nominees
for election as directors, executive officers or beneficial holders of more than 5% of any class of our capital stock, or
entities affiliated with them, or any immediate family members of or person sharing the household with any of these individuals,
had or will have a direct or indirect material interest. |
Equity Awards to Executive Officers and
Directors
We have granted equity awards to our named
executive officers. For a description of these stock awards, see the section titled “Executive
Compensation – Executive Compensation Tables – Outstanding Equity Awards at Fiscal Year 2022 Year-End Table.”
Policies and Procedures for Related Party
Transactions
We have a formal written policy providing
that our executive officers, directors, nominees for election as directors, beneficial owners of more than 5% of any class of our
common stock and any member of the immediate family of any of the foregoing persons, is not permitted to enter into a related party
transaction with us without the consent of the Audit Committee, subject to the exceptions described below.
In approving or rejecting any such proposal,
the Audit Committee is to consider the relevant facts and circumstances available and deemed relevant to the Audit Committee, including,
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 party’s interest in the transaction. The Audit Committee has determined
that certain transactions will not require audit committee approval, including certain employment arrangements of executive officers,
director compensation, transactions with another company at which a related party’s only relationship is as a non-executive
employee, director or beneficial owner of less than 10% of that company’s shares and the aggregate amount involved does not
exceed the greater of $200,000 or 2% of the recipient’s consolidated gross revenues in any fiscal year, transactions where
a related party’s interest arises solely from the ownership of our common stock and all holders of our common stock received
the same benefit on a pro rata basis, and transactions available to all employees generally.
We believe that we have executed all of the
transactions set forth above on terms no less favorable to us than we could have obtained from unaffiliated third parties. It is
our intention to ensure that all future transactions between us and our officers, directors and principal stockholders and their
affiliates are approved by the Audit Committee and are on terms no less favorable to us than those that we could obtain from unaffiliated
third parties.
2022 PROXY STATEMENT 33
AUDIT COMMITTEE MATTERS
Proposal 5: Ratification of Selection of
Independent Registered Public Accounting Firm
|
OUR
BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 5. |
The Audit Committee has re-appointed
Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending July 31, 2023
and has further directed that management submit this selection for ratification by our stockholders at the Annual Meeting. Although
ratification by our stockholders is not required by law, we have determined that it is good practice to request ratification of
this selection by our stockholders. In the event that Deloitte & Touche LLP is not ratified by our stockholders, the Audit Committee will review its future selection of Deloitte & Touche LLP
as our independent registered public accounting firm.
Deloitte & Touche LLP audited our financial
statements for the fiscal years ended July 31, 2020, 2021 and 2022. Representatives of Deloitte & Touche LLP are expected
to be present during the Annual Meeting, where they will be available to respond to appropriate questions and, if they desire,
to make a statement.
Our Board is submitting this selection
as a matter of good corporate governance and because we value our stockholders’ views on our independent registered public
accounting firm. Neither our amended and restated bylaws nor other governing documents or law require stockholder ratification
of the selection of our independent registered public accounting firm. If the stockholders fail to ratify this selection, our Board
will reconsider whether or not to retain that firm. Even if the selection is ratified, our Board may direct the appointment of
different independent auditors at any time during the year if they determine that such a change would be in the best interests
of our company and our stockholders. Our Board unanimously recommends a vote FOR the
approval of the ratification of our auditors.
Vote Required
An affirmative vote from holders
of a majority in voting power of the shares present at the Annual Meeting or represented by proxy and entitled to vote on the proposal
will be required to ratify the selection of Deloitte & Touche LLP. Abstentions will have the effect of a vote AGAINST
the proposal and broker non-votes will have no effect.
Principal Accountant Fees and Services
The following table provides the aggregate fees
for services provided by Deloitte & Touche LLP for the fiscal years ended July 31, 2021 and 2022.
|
Fiscal
Year Ended July 31, |
|
2021
($) |
2022
($) |
Audit fees(1) |
3,511,013 |
3,574,000 |
Audit-related fees(2) |
210,000 |
— |
Tax fees(3) |
600,018 |
548,816 |
TOTAL FEES |
4,321,031 |
4,122,816 |
(1) |
Consists of fees billed for professional services rendered in connection
with the audit of our consolidated financial statements, including audited financial statements presented in our Annual Report
on Form 10-K, review of the interim consolidated financial statements included in our quarterly reports and services normally
provided in connection with regulatory filings. |
(2) |
Consists of fees billed for assurance and related services that are reasonably related
to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit
Fees.” |
(3) |
Consists of fees billed for professional services for tax compliance, tax advice and
tax planning. These services include assistance regarding federal, state and international tax compliance. |
2022 PROXY STATEMENT 34
Pre-Approval Policies and Procedures
Consistent with the requirements of the SEC and
the Public Company Accounting Oversight Board, regarding auditor independence, the Audit Committee has responsibility for appointing,
setting compensation, retaining and overseeing the work of our independent registered public accounting firm. In recognition of
this responsibility, the Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services
rendered by our independent registered public accounting firm, Deloitte & Touche LLP. The policy generally pre-approves
specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts.
Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent
auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service.
All of the services provided by Deloitte &
Touche LLP for the fiscal years ended July 31, 2021 and 2022 described above were pre-approved by the Audit Committee. The
Audit Committee has determined that the rendering of services other than audit services by Deloitte & Touche LLP is compatible
with maintaining the principal accountant’s independence.
Report of the Audit Committee
The Audit Committee has reviewed and discussed
the audited financial statements for the fiscal year ended July 31, 2022 with the management of Nutanix. The Audit Committee
has discussed with Nutanix’s independent registered public accounting firm, Deloitte & Touche LLP, the matters required
to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC.
The Audit Committee has also received the written disclosures and the letter from its independent registered public accounting
firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the audit
committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s
independence. Based on the foregoing, the Audit Committee has recommended to our Board that the audited financial statements be
included in Nutanix’s Annual Report on Form 10-K for the fiscal year ended July 31, 2022.
The Audit Committee
Steven J. Gomo (Chair)
Max de Groen
Virginia Gambale
The material in this report is not “soliciting
material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing by Nutanix
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 such filing.
2022 PROXY STATEMENT 35
EXECUTIVE OFFICERS
The following is biographical information for
our current executive officers as of the date of this proxy statement:
Name |
|
Age |
|
Position/Office |
Rajiv Ramaswami |
|
56 |
|
President and Chief Executive Officer |
Rukmini Sivaraman |
|
41 |
|
Chief Financial Officer |
David Sangster |
|
58 |
|
Chief Operating Officer |
Tyler Wall |
|
56 |
|
Chief Legal Officer |
Our Board chooses our executive officers, who
then serve at our Board’s discretion. There are no family relationships among any of our directors or executive officers.
For biographical information regarding
Mr. Ramaswami, please refer to the section above titled “Proposal 1 – Election
of Directors.”
Rukmini Sivaraman has
served as our Chief Financial Officer since May 2022. Ms. Sivaraman previously served as our Senior Vice President, FP&A and
Strategic Finance from January 2022 to May 2022. Prior to that, she served in various roles at our company, including as Senior
Vice President of Strategic Finance, Chief People Officer and Senior Vice President of People and Business Operations. Prior
to joining us, Ms. Sivaraman served as an investment banker at Goldman Sachs from June 2009 to March 2017. Ms. Sivaraman holds
an M.B.A. from the Kellogg School of Management at Northwestern University and an M.S. in Electrical Engineering from the University
of Michigan at Ann Arbor.
David Sangster
has
served as our Chief Operating Officer since March 2019 and was our Executive Vice President, Engineering & Operations from
February 2018 to March 2019, our Executive Vice President, Support & Operations from February 2016 to February 2018, our Senior
Vice President, Operations from April 2014 to February 2016, and Vice President, Operations from December 2011 to April 2014. Prior
to joining us, Mr. Sangster served as Vice President, Manufacturing Technology at EMC Corporation, an IT storage hardware
solutions company, from July 2009 to December 2011. Mr. Sangster holds a B.S. in Mechanical Engineering from Massachusetts
Institute of Technology, an M.S. in Manufacturing Systems Engineering from Stanford University, and an M.B.A. in Operations and
Marketing from Santa Clara University.
Tyler Wall
has
served as our Chief Legal Officer since November 2017. Prior to joining us, Mr. Wall was the Senior Vice President, General
Counsel, at Red Book Connect, LLC, a restaurant industry SaaS and technology solutions company, from April 2014 to September 2017.
Prior to that, Mr. Wall was the Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary at Brocade,
a supplier of networking hardware, software, and services, from 2005 to April 2014. Mr. Wall holds a B.S. in Economics from
University of Utah, a J.D. from Santa Clara University - School of Law, and an M.B.A. from Santa Clara University – School
of Business.
2022 PROXY STATEMENT 36
EXECUTIVE COMPENSATION
Proposal 6: Advisory Vote to Approve the Compensation
of Our Named Executive Officers
|
FOR OUR BOARD RECOMMENDS A VOTE FOR THIS
PROPOSAL 6. |
Section 14A of the Securities Exchange Act of
1934 enables our stockholders to vote whether to approve, on an advisory or non-binding basis, the compensation of our named executive
officers. This vote, commonly known as a “say-on-pay” vote, gives our stockholders the opportunity to express their
views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of
compensation or any specific named executive officer, but rather the overall compensation of all our named executive officers and
the philosophy, policies and practices described in this proxy statement.
The say-on-pay vote is advisory, and therefore
not binding on us. The say-on-pay vote will, however, provide information to us regarding stockholder sentiment about our executive
compensation philosophy, policies and practices, which the Compensation Committee will be able to consider when determining executive
compensation for the remainder of the current fiscal year and beyond. Our Board and the Compensation Committee value the opinions
of our stockholders and to the extent there is any significant vote against the named executive officer compensation as disclosed
in this proxy statement, we will communicate directly with stockholders to better understand the concerns that influenced the vote,
consider these concerns, and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
We believe
that the information provided in the “Executive Compensation”
section of this proxy statement, and in particular the information discussed in “Executive
Compensation – Compensation Discussion and Analysis,” demonstrates that our executive
compensation program was designed appropriately and is working to ensure management’s interests are aligned with our stockholders’
interests to support long-term value creation. Accordingly, our Board unanimously recommends that our stockholders vote FOR
the following resolution at the Annual Meeting:
RESOLVED, that the stockholders
approve, on a non-binding advisory basis, the compensation paid to our named executive officers as disclosed in the proxy statement
for the Annual Meeting pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including in the
Compensation Discussion and Analysis, the compensation tables and the narrative discussions that accompany the compensation tables.
Vote Required
The non-binding advisory vote on
named executive officer compensation requires the affirmative vote of a majority of the voting power of the shares present at the
Annual Meeting or represented by proxy and entitled to vote on the proposal. Abstentions will have the effect of a vote AGAINST
the proposal and broker non-votes will have no effect.
Compensation Discussion and Analysis
The compensation provided to our
named executive officers for fiscal year 2022 is set forth in detail in the “Fiscal Year
2022 Summary Compensation Table” and the other tables that follow this Compensation Discussion
and Analysis. The following discussion provides an overview of our executive compensation philosophy, the overall objectives of
our executive compensation program, and each component of compensation that we provide to our named executive officers. In addition,
we explain how and why the Compensation Committee arrived at the specific compensation policies and decisions for our named executive
officers. The following are our named executive officers for fiscal year 2022:
• |
Rajiv Ramaswami, our President and Chief Executive Officer; |
• |
Rukmini Sivaraman, our Chief Financial Officer; |
• |
David M. Sangster, our Chief Operating Officer; |
• |
Tyler Wall, our Chief Legal Officer; and |
• |
Duston M. Williams, our former Chief Financial Officer. |
2022 PROXY STATEMENT 37
Executive Officer Transition
On May 1, 2022, Rukmini Sivaraman succeeded Duston
Williams as our Chief Financial Officer.
The Board has delegated to the Compensation Committee
the authority and responsibility for establishing and overseeing base salaries, administering the incentive compensation programs,
and establishing and overseeing other forms of compensation for our executive officers, general remuneration policies for the balance
of our employee population, and for overseeing and administering our equity incentive and benefit plans.
Executive Summary
Fiscal Year 2022 Financial and Performance
Highlights
$756.3 million |
$1.20 billion |
$18.5 million |
ACV Billings(1) |
Annual Recurring Revenue(1) |
Free Cash Flow(2) |
|
|
|
▲27% increase compared to FY 2021 |
▲37% increase
compared
to the end of FY 2021 |
▲$177
million increase compared
to FY 2021 |
(1) |
See Appendix A for details on
how we define ACV billings and annual recurring revenue, why we monitor these performance measures, and limitations on
their use. There is no GAAP measure that is comparable to ACV billings or annual recurring revenue, so we have not
reconciled the ACV billings or annual recurring revenue data included herein to any GAAP measure. |
(2) |
Free cash flow is a non-GAAP financial measure. See Appendix A for details on how we define free cash flow, why we monitor this measure, and limitations on its use as well as a
reconciliation of free cash flow to net cash provided by (used in) operating activities, which is the GAAP measure most
comparable to free cash flow. |
Fiscal year 2022 was an important data point in
showing the long-term benefits of our subscription business model transition, as we demonstrated strong top and bottom-line progress
against a volatile macroeconomic backdrop. ACV billings growth accelerated to 27% year-over-year in fiscal year 2022, up from 18%
year-over-year in fiscal year 2021. Annual recurring revenue as of the end of fiscal year 2022 increased to $1.20 billion, representing
a 37% increase compared to the end of fiscal year 2021. In addition, for the first time since fiscal year 2018, we achieved positive
free cash flow for fiscal year 2022, which we expect to be sustainable on an annual basis.
Beyond these financial accomplishments, we had
other important achievements, including scaling our renewals engine to successfully transact our growing base of renewals, launching
our simplified product portfolio, enhancing our leadership team, making progress with our partners and continuing to delight our
customers, as reflected by our seven-year average Net Promoter Score of 90.
CEO Compensation: Fiscal Year 2021 vs. Fiscal
Year 2022
In our 2021 proxy statement, we detailed several
key changes to our business and the leadership transition we undertook to enable the next phase of our growth as a company. A key
part of this shift was our transition from founder-led leadership to the identification and hire of Rajiv Ramaswami to lead Nutanix
towards more focused operational discipline and profitable growth. A critical component of Mr. Ramaswami’s sign-on compensation
was his sign-on equity award, which had a targeted value of $32 million in order to keep him whole in the value of his forfeited
long-term incentive awards from his prior employer. The majority of this sign-on award was tied to rigorous stock price performance
hurdles to trigger vesting.
The fiscal year 2022 compensation decisions made
for Mr. Ramaswami and disclosed in this proxy statement more closely reflect the Compensation Committee’s ongoing expectations
around CEO pay level. We continue to align pay with performance and the interests of our stockholders, enhancing our ongoing long-term
incentive award design with the introduction of performance-based RSUs (“PRSUs”) tied to the returns we deliver for
our stockholders relative to other companies in the Nasdaq Composite Index.
2022 PROXY STATEMENT 38
Executive Compensation Practices
We endeavor to maintain sound governance standards
consistent with our executive compensation policies and practices. The Compensation Committee evaluates our executive compensation
program on a regular basis to ensure consistency with our short-term and long-term goals, given the dynamic nature of our business
and the market in which we compete for executive talent. The following policies and practices were in effect during fiscal year
2022:
WHAT WE DO |
|
WHAT WE DON’T DO |
|
Emphasis on performance-based compensation |
|
|
No retirement or pension-type plans other than the
standard 401(k) plan offered to all employees |
|
100% independent compensation committee |
|
|
No perquisites or personal benefits, other than standard
benefits typically received by other employees |
|
Independent compensation consultant engaged by the
Compensation Committee |
|
|
No tax gross-ups for change of control payments and
benefits |
|
Annual review of executive compensation strategy and
risks, as well as compensation practices of our compensation peer group |
|
|
No short sales, hedging, or pledging of stock ownership
positions and transactions involving derivatives of our common stock |
|
Equity-based executive and director compensation to
align with the interests of our stockholders |
|
|
No strict benchmarking of compensation to a specific
percentile of our compensation peer group |
|
Multi-year vesting requirements for time-based restricted
stock unit (“RSU”) awards granted to our executive officers |
|
|
No “single-trigger” payments and benefits upon
a change of control |
|
Multi-year
vesting requirements for performance-based restricted stock unit (“PRSU”) awards granted to our executive
officers |
|
|
|
|
Our executive officers participate in broad-based company
health and welfare benefits programs as other full-time salaried employees |
|
|
|
|
Director stock ownership guidelines |
|
|
|
|
Annual say-on-pay vote |
|
|
|
Say-on-Pay Vote on Named Executive Officer
Compensation and Say-on-Pay Frequency Vote and Effect of Most Recent Say-on-Pay Vote
At the Annual Meeting, we will conduct a non-binding,
advisory vote on the compensation of our named executive officers, also known as a “say-on-pay vote,” as described
in Proposal 6 of this proxy statement. We previously determined to hold a say-on-pay vote every year consistent with our stockholders’
approval, on a non-binding, advisory basis, at our 2018 annual meeting of stockholders, to hold stockholder advisory votes on the
compensation of our named executive officers every year.
Say-on-Pay
Vote Results at 2021 Annual Meeting of Stockholders
The Compensation Committee considers the results
of the say-on-pay vote and stockholder feedback on our executive compensation program as part of its annual review of executive
compensation. At our 2021 annual meeting of stockholders, over 96% of the votes cast approved the compensation program for our
named executive officers as described in our 2021 proxy statement. Based on this strong stockholder support, the Compensation Committee
determined not to make significant changes to our existing executive compensation program and policies. Our Compensation Committee
currently intends to continue to consider the results of the annual say-on-pay vote and stockholder feedback as data points in
making executive compensation decisions.
2022 PROXY STATEMENT 39
Executive Compensation Philosophy
Our executive compensation program is designed to
attract, motivate, and retain highly qualified executive officers who drive our success and to align the interests of our executive
officers with the long-term interests of our stockholders. This section provides an overview of our executive compensation philosophy,
the overall objectives of our executive compensation program, and each component of the program. In addition, we explain how and
why the Compensation Committee arrived at the specific compensation policies and decisions involving our executive compensation
program.
Our desire is to create a premier enterprise cloud
platform software company, and our compensation philosophy is singularly focused on the achievement of that goal. Our executive
compensation program is designed to achieve this goal through four key objectives:
Attracting and Retaining Talent in a Competitive
Industry
• |
We operate in a highly competitive business environment characterized
by a rapidly changing market and frequent technological advances, and we expect competition among companies in our market
to continue to increase. |
• |
We actively compete with many other companies in seeking to attract and retain a skilled
executive management team that has successfully and rapidly scaled and managed multi-billion-dollar software businesses. |
• |
Attraction and retention are uniquely challenging in the San Francisco Bay Area and
Silicon Valley, where our headquarters are located and where there are many rapidly expanding technology companies. The competition
for highly qualified talent is particularly fierce in the software space. |
• |
We have responded to this intense competition for talent by implementing compensation
policies and practices designed to attract and motivate our executive officers to pursue our corporate objectives while promoting
their retention and incentivizing them to create long-term value for our stockholders as we grow into a premiere enterprise
cloud platform company. |
Incentivizing Growth Against Strategic Objectives
and Expanding Market Share
• |
We have structured our executive compensation program to align with
our strategy by adopting a mix of short-term and long-term incentives, which we believe will motivate our executive officers
to execute against our short-term and long-term goals. |
Aligning Executive and Stockholder Value
• |
Our executive compensation program combines short-term and long-term components, including
base salary, cash bonuses, and equity awards. |
• |
We firmly believe our executive officers should share in the ownership of our company.
Therefore, equity compensation is a significant part of our executive compensation packages, which we believe best aligns
the interests of our executives with those of our stockholders. |
Managing the Business Through an Ever-Changing
Operating Landscape
• |
In the past several years, we experienced a high level of growth
while also transitioning to a subscription-based business model. Our current business strategy is focused on driving towards
profitable growth. |
• |
To successfully execute on our strategy in this dynamic environment, we need to recruit,
incentivize, and retain talented and seasoned leaders who can execute at the highest level and deliver stockholder value. |
• |
The Compensation Committee regularly reviews and adjusts our executive compensation
program to align with the maturity, size, scale, growth, and aspirations of our business. Due to the dynamic nature of our
industry and our business, we expect to continue to adjust our approach to executive compensation to respond to our needs
and market conditions as they evolve. |
Components of our Executive Compensation Program
Our executive compensation program consists of the
following primary components:
• |
base salary; |
• |
annual incentive compensation, which is targeted as a percentage of base salary and
paid based on actual results; |
• |
long-term incentive compensation in the form of equity awards; and |
• |
severance and change of control-related payments and benefits. |
2022 PROXY STATEMENT 40
We also provide our executive officers with comprehensive
employee benefit programs, such as medical, dental, and vision insurance, a 401(k) plan, life and disability insurance, flexible
spending accounts, an employee stock purchase plan, and other plans and programs generally made available to other full-time salaried
employees.
We believe these components provide a compensation
package that attracts and retains qualified individuals, links individual performance to company performance, focuses the efforts
of our named executive officers and other executive officers on the achievement of both our short-term and long-term objectives
and aligns the interests of our executive officers with those of our stockholders. In particular, our compensation program, supported
by our corporate culture, encourages a long-term focus by our named executive officers, as well as all our other employees, by
placing a heavy emphasis on equity awards, the value of which depends on our stock price performance and our ability to execute
against our long-term objectives.
Fiscal Year 2022 Compensation Mix
The mix of target total direct compensation for Mr.
Ramaswami and our other named executive officers (other than Mr. Williams, who resigned in April 2022) for fiscal year 2022 was
as follows:
(1) |
The pay mix (i) excludes Mr. Williams’ compensation, as he
resigned as Chief Financial Officer in April 2022, (ii) reflects Ms. Sivaraman’s base salary upon her promotion to Chief
Financial Officer in May 2022, and (iii) excludes the RSU award granted to Ms. Sivaraman in connection with her promotion
to Chief Financial Officer. |
Base Salaries
We pay base salaries to our executive officers, including
our named executive officers, to compensate them for services rendered during the year and provide predictable income. Generally,
we establish the initial base salaries of our executive officers at the time we hire the individual executive officer, based on
a consideration of the executive officer’s experience, skills, knowledge, and scope of responsibilities, as well as benchmarking
against our compensation peer group. In addition, the competition in the market from which we recruit plays a role in setting salary
levels due to the difficulty in recruiting candidates with the level of talent and experience we believe are necessary for us to
execute on our business and growth plans. We do not apply specific formulas to determine changes in salaries. Instead, the salaries
of our executive officers are reviewed on an annual basis by our CEO (other than his own salary, which is reviewed and determined
by the Compensation Committee) and the Compensation Committee, based on their experience setting salary levels and in determining
compensation for our senior executives.
Fiscal Year 2022 Base Salaries
In October 2021, as part of its review of our executive
compensation program, the Compensation Committee set annual base salaries for our named executive officers (other than for Ms.
Sivaraman, who was promoted to Chief Financial Officer in May 2022), effective as of August 1, 2021. Based on market research and
an analysis prepared by its compensation consultant, Compensia, base salary levels for our named executive officers aligned with
the percentile that the Compensation Committee considered to be appropriate for the specific named executive officer, as applicable,
for a comparable executive in our compensation peer group, based on each named executive officer’s performance and contribution
to our company’s performance. Based on this review, the Compensation Committee did not change the annual base salaries for
Messrs. Ramaswami, Sangster, and Williams. During fiscal year 2022, Mr. Wall’s salary was increased to reflect his ongoing
performance and a position relative to our compensation peer group that the Compensation Committee considered appropriate. In April
2022, as part of its review of Ms. Sivaraman’s annual base salary in connection with her promotion to Chief Financial Officer,
the Compensation Committee set
2022 PROXY STATEMENT 41
Ms. Sivaraman’s annual base salary aligned with
the percentile the Compensation Committee considered to be appropriate for a comparable executive in our compensation peer group
based on market research and an analysis prepared by Compensia.
Named Executive Officer |
|
Fiscal Year 2022
Base Salary(1)
($) |
|
Change From
Fiscal Year 2021 |
Rajiv Ramaswami |
|
800,000 |
|
0% |
Rukmini Sivaraman |
|
420,000 |
|
(2) |
David Sangster |
|
475,000 |
|
0% |
Tyler Wall |
|
475,000 |
|
11.8% |
Duston M. Williams |
|
475,000 |
|
0% |
(1) |
As of July 31, 2022. |
(2) |
Ms. Sivaraman was promoted to Chief Financial Officer effective May 1, 2022, at which
time her annual base salary increased from $375,000 to $420,000. |
Target and Actual Annual Incentive Compensation
For fiscal year 2022, each of our named executive
officers participated in our Executive Incentive Compensation Plan (our “Executive Bonus Plan”). Our Executive Bonus
Plan allows the Compensation Committee to provide incentive awards to employees selected by the committee, including our named
executive officers. Under our Executive Bonus Plan, the Compensation Committee determines the performance objectives, if any, applicable
to any award or portion of an award and may choose the performance objectives from a wide range of possible metrics as set forth
in the Executive Bonus Plan. The performance objectives may differ from participant to participant and from award to award.
Each year, the Compensation Committee determines the
terms and conditions for our Executive Bonus Plan for the year. For fiscal year 2022, the Compensation Committee adopted and approved
target bonus amounts for each of our named executive officers, as well as the terms and conditions for the first half of fiscal
year 2022 (the “First Half FY2022 Executive Bonus Plan”) and the second half of fiscal year 2022 (the “Second
Half FY2022 Executive Bonus Plan”). The First Half FY2022 Executive Bonus Plan and Second Half FY2022 Executive Bonus Plan
are together herein referred to as the “Fiscal Year 2022 Executive Bonus Plan.”
Fiscal Year 2022 Target Annual Bonus Opportunities
The Compensation Committee designed the Fiscal Year
2022 Executive Bonus Plan to align with key performance measures that it believes to be appropriate indicators of our success through
our business model transitions and reflective of a subscription-based business model. In October 2021, following review of market
research and an analysis prepared by Compensia, the Compensation Committee determined the target annual bonus opportunities for
each of Messrs. Ramaswami, Sangster, Wall, and Williams as part of its annual analysis of the total cash compensation package provided
to our executive officers. Ms. Sivaraman’s target annual bonus opportunity was reviewed by the Compensation Committee in
April 2022 as part of the Compensation Committee’s analysis of the total cash compensation package to be provided to her
in connection with her promotion to Chief Financial Officer. The target annual bonus opportunities established under the Fiscal
Year 2022 Executive Bonus Plan for our named executive officers were as follows:
Named Executive Officer |
|
FY2022 Annual
Bonus Target
($) |
|
Annual
Bonus Target
(as % of Base Salary) |
|
Change
From
Fiscal Year 2021 |
Rajiv Ramaswami |
|
800,000 |
|
100% |
|
0% |
Rukmini Sivaraman |
|
242,536 |
|
(1) |
|
(1) |
David Sangster |
|
356,250 |
|
75% |
|
0% |
Tyler Wall(2) |
|
356,250 |
|
75% |
|
39.7% |
Duston M. Williams |
|
356,250 |
|
75% |
|
0% |
(1) |
Ms. Sivaraman was promoted to Chief Financial Officer in
May 2022. Her annual bonus target reflects proration based on the number of days in fiscal year 2022 during which she served
as Senior Vice President, FP&A and Strategic Finance and the number of days in fiscal year 2022 during which she served
as our Chief Financial Officer. During the time she served as Senior Vice President, FP&A and Strategic Finance, her annual
bonus as a percentage of base salary was set at 60%. During the time she served as our Chief Financial Officer, her target
annual bonus opportunity as a percentage of base salary was set at 70%. |
(2) |
Mr. Wall’s annual bonus target as a percentage of
base salary was increased from 60% to 75% for fiscal year 2022, which was approved by the Compensation Committee retroactively
for the full fiscal year in December 2021. |
2022 PROXY STATEMENT 42
Fiscal Year 2022 Executive Bonus Plan
The pre-established corporate objectives for the Fiscal
Year 2022 Executive Bonus Plan were primarily aligned with our annual operating plan. The Fiscal Year 2022 Executive Bonus Plan
provided for potential performance-based incentive payouts to our named executive officers based on three general performance components.
Each named executive officer’s potential payout was based on levels determined to be challenging and requiring substantial
skill and effort on the part of senior management and were weighted based on relative importance to the overall performance for
our company. In addition, each named executive officer’s potential payout was subject to a personal performance modifier
that allowed for an adjustment in payout based on a holistic assessment of the participating named executive officer’s individual
performance. Potential payouts under the Fiscal Year 2022 Executive Bonus Plan ranged between 0% to 200%, depending on the level
of achievement against performance objectives. Actual bonuses were paid in a lump sum following each six-month performance period.
Actual bonus amounts for each six-month performance period under the Fiscal Year 2022 Executive Bonus Plan were calculated as the
sum of the weighted payout percentage for all performance targets for the period multiplied by 50% of the target annual bonus opportunity
in effect for each named executive officer. In both the First Half FY2022 Executive Bonus Plan and the Second Half FY2022 Executive
Bonus Plan, no payout could be made under the plan unless the threshold run-rate annual contract value (“ACV”) level
was achieved for that performance period.
The Compensation Committee approved the use of these
metrics for the Fiscal Year 2022 Executive Bonus Plan for the following reasons:
Metric |
|
Definition |
|
Importance of the Metric |
Run-rate ACV |
|
For any given period, the sum of ACV for all contracts
in effect as of the end of the period assuming the contract term begins on the date a contract is booked, regardless of when
we recognize the contract revenue. “ACV” is the total annualized contract value, excluding amounts related to
professional services. The total annualized value for a contract is calculated by dividing the total value of the contract
by the contract term in years (using 5 for years contracts with no specified term). |
|
An indicator of the topline growth of our business during
our transition to a subscription-based business model. |
Non-GAAP operating expenses excluding commissions |
|
For any given period, (i) total operating expenses excluding
stock-based compensation and the related income tax impact, costs associated with our acquisitions (such as amortization of
acquired intangible assets, income tax-related impact, and other acquisition-related costs), impairment (recovery) and early
exit of operating lease-related assets, restructuring charges, the change in fair value of the derivative liability, the amortization
of the debt discount and issuance costs, interest expense related to convertible senior notes, loss on debt extinguishment,
and other non-recurring transactions and the related tax impact, minus (ii) commissions. |
|
An indicator of our ability to manage expenses in operating
our business and growth and to drive sales and marketing efficiencies. |
Employee engagement |
|
Employee engagement is measured based on employee responses
to a periodic survey administered in partnership with a third-party vendor. |
|
An indicator of employee sentiment that we believe is closely
linked to employee retention, customer satisfaction, and financial performance. |
The Compensation Committee believes these performance
metrics were objective measures of the success of our growth and business strategy during fiscal year 2022.
The following table describes the relative weighting
of each performance metric and the payout percentages used to calculate payouts under the First Half FY2022 Executive Bonus Plan
and the Second Half FY2022 Executive Bonus Plan based on achievement of the targets at and between the low end of the target range
and the high end of the target range.
2022 PROXY STATEMENT 43
Performance Metric |
|
Weighting |
|
|
Plan Targets |
|
Payout % |
Run-rate ACV
(threshold metric) |
|
|
|
|
Less than 92.5% of Target |
|
0% |
|
|
Between 92.5% and 100% of Target |
|
Between 50% and 100% |
|
|
100% of Target |
|
100% |
|
|
Between 100% and 115% of Target |
|
Between 100% and 200% |
|
|
115% or More of Target |
|
200% |
Non-GAAP operating expenses excluding commissions |
|
|
|
|
104% or More of Target |
|
0% |
|
|
Between 100% and 104% of Target |
|
Between 20% and 100% |
|
|
100% of Target |
|
100% |
|
|
Between 96% and 100% of Target |
|
Between 100% and 200% |
|
|
Less than 96% of Target |
|
200% |
Employee engagement |
|
|
|
|
Less than 75% |
|
0% |
|
|
Between 75% and 77% |
|
Between 75% and 100% |
|
|
77% |
|
100% |
|
|
Between 77% and 81% |
|
Between 100% and 200% |
|
|
81% or More |
|
200% |
Individual executive officer payouts are determined
according to the graphic below:
The specific targets for run-rate ACV and non-GAAP
operating expenses excluding commissions were derived from our internal annual operating plan, which is not publicly disclosed
for competitive reasons. Any achievement of the plan targets between the low and high end of the target range would correlate to
a lower or higher payout percentage between 0% and 200%. For the Fiscal Year 2022 Executive Bonus Plan, run-rate ACV was a threshold
metric, such that, if no payout were achieved under the run-rate ACV performance metric for any given six-month performance period,
then no payout would be made under the Executive Bonus Plan to any participating named executive officer for that period, regardless
of the level of achievement under any other performance metric. With respect to each performance metric, the target achievement
level was set at a level that the Compensation Committee believed was rigorous, would require stretch performance, and would drive
stockholder value creation. The target achievement levels were not certain to be met at the time they were determined, and the
payout curves require substantial outperformance of each performance metric to receive significantly above the 100% payout percentage
(but capped at 200%) for the metric.
2022 PROXY STATEMENT 44
First Half FY2022 Executive Bonus Plan Payouts
The achievement of each performance metric under the
First Half FY2022 Executive Bonus Plan was as follows:
Performance Metric |
|
Achievement |
|
Payout% |
|
Weighting |
|
Weighted Total |
Run-rate ACV |
|
102.2% of Target |
|
167.8% |
|
75% |
|
125.8% |
Non-GAAP operating expenses excluding commissions |
|
94.4% of Target |
|
200.0% |
|
15% |
|
30.0% |
Employee engagement |
|
73.0% |
|
0.0% |
|
10% |
|
0.0% |
|
|
TOTAL WEIGHTED ACHIEVEMENT PERCENTAGE: |
|
155.8% |
The aggregate payout amounts were calculated by multiplying
the participating named executive officer’s First Half FY2022 target annual bonus opportunity, prorated as applicable, and
the total weighted achievement across all three performance metrics, which was 155.8%. The Compensation Committee did not use the
personal performance modifier to increase or decrease the payout for any named executive officer. The aggregate payouts received
by each named executive officer under the First Half FY2022 Executive Bonus Plan were:
Named Executive Officer |
|
First Half FY2022
Bonus Target
($) |
|
First Half FY2022
Payout Amount
($) |
Rajiv Ramaswami |
|
400,000 |
|
623,200 |
Rukmini Sivaraman |
|
112,500 |
|
175,275 |
David Sangster |
|
178,125 |
|
277,519 |
Tyler Wall |
|
178,125 |
|
277,519 |
Duston M. Williams |
|
178,125 |
|
277,519 |
Second Half FY2022 Executive Bonus Plan Payouts
The achievement of each performance metric under the
Second Half FY2022 Executive Bonus Plan was as follows:
Performance Metric |
|
Achievement |
|
Payout% |
|
Weighting |
|
Weighted Total |
Run-rate ACV |
|
99.2% of Target |
|
78.9% |
|
|
|
59.2% |
Non-GAAP operating expenses excluding commissions |
|
90.3% of Target |
|
200.0% |
|
|
|
30.0% |
Employee engagement |
|
(1) |
|
0.0% |
|
|
|
0.0% |
|
|
TOTAL WEIGHTED ACHIEVEMENT PERCENTAGE: |
|
89.2% |
(1) |
We did not conduct an employee engagement survey for the second half of fiscal year
2022. |
2022 PROXY STATEMENT 45
The aggregate payout amounts were calculated by multiplying
the participating named executive officer’s Second Half FY2022 target annual bonus opportunity and the total weighted achievement
percentage for all three performance metrics, which was 89.2%. The Compensation Committee did not use the personal performance
modifier to increase or decrease the payout for any named executive officer. The aggregate payouts received by each named executive
officer under the Second Half FY2022 Executive Bonus Plan were:
Named Executive Officer |
|
Second Half
FY2022
Bonus Target
($) |
|
Second Half
FY2022
Payout Amount
($) |
Rajiv Ramaswami |
|
400,000 |
|
356,800 |
Rukmini Sivaraman |
|
130,036 |
|
115,992 |
David Sangster |
|
178,125 |
|
158,888 |
Tyler Wall |
|
178,125 |
|
158,888 |
Duston M. Williams(1) |
|
178,125 |
|
N/A |
(1) |
Mr. Williams resigned as our Chief Financial Officer during the second half of fiscal
year 2022. |
Total FY2022 Executive Bonus Plan Payout Amounts
The aggregate payouts received by each participating
named executive officer under the Fiscal Year 2022 Executive Bonus Plan were as follows:
Named
Executive Officer |
|
FY2022
Bonus Target
($) |
|
FY2022
Payout Amount
($) |
Rajiv Ramaswami |
|
800,000 |
|
980,000 |
Rukmini Sivaraman |
|
242,536 |
|
291,267 |
David Sangster |
|
356,250 |
|
436,406 |
Tyler Wall |
|
356,250 |
|
436,406 |
Duston
M. Williams |
|
356,250 |
|
277,519 |
Administration of the Executive Bonus Plan
The Compensation Committee administers our Executive
Bonus Plan and may, in its sole discretion and at any time, increase, reduce, or eliminate a participant’s actual award,
and/or increase, reduce, or eliminate the amount allocated to the bonus pool for a particular performance period. The actual award
may be below, at or above a participant’s target award, at the discretion of the Compensation Committee. The Compensation
Committee may determine the amount of any reduction on the basis of such factors as it deems relevant, and it is not required to
establish any allocation or weighting with respect to the factors it considers. Actual awards are paid in cash in a single lump
sum only after they are earned, which requires continued employment through the last day of the performance period. If a participant
terminates employment because of death or disability before the actual award is paid, the award may be paid to the participant’s
estate or to the participant, as applicable, subject to the Compensation Committee’s discretion to reduce or eliminate the
award. Payment of awards occurs as soon as administratively practicable after they are earned, but no later than the dates set
forth in our Executive Bonus Plan. The Board and the Compensation Committee have the authority to amend, alter, suspend, or terminate
our Executive Bonus Plan, provided such action does not impair the existing rights of any participant with respect to any earned
awards.
Long-Term Equity Compensation
Our corporate culture encourages our
named executive officers to focus on the company’s long-term strategy. In keeping with this culture, our executive compensation
program places a heavy emphasis on equity awards, the value of which depends on our stock price performance and other performance
metrics, to promote long-term performance. These equity awards include both time-based RSU awards and PRSU awards. Time-based RSU
awards offer our named executive officers predictable value delivery while aligning their interests with the long-term interests
of our stockholders. We believe PRSU awards directly link a significant portion of the named executive officer’s target total
direct compensation to our performance based on the returns we deliver for our stockholders relative to those of other companies
in the Nasdaq Composite Index. As discussed under “Fiscal Year 2022 Equity Awards”
below, the
2022 PROXY STATEMENT 46
Compensation Committee determined to implement PRSU
awards as a standard component of fiscal year 2022 annual equity awards granted to our executive officers, including our named
executive officers.
The Compensation Committee, in consultation
with our CEO (other than with respect to himself) and its compensation consultant, Compensia, determines the size, mix, material
terms and, in the case of PRSU awards, performance metrics of the equity awards granted to our named executive officers, taking
into account a number of factors as described in the section titled “Executive Compensation
– Compensation Discussion and Analysis – Compensation-Setting Process.”
Fiscal Year 2022 Equity Awards
In October 2021, as part of its annual review, the
Compensation Committee determined to further align pay with performance and the interests of our executive officers with the interests
of our stockholders by implementing PRSUs as a standard component of the fiscal year 2022 annual equity awards granted to our executive
officers with PRSUs comprising 50% of each award. PRSU awards are based on our total shareholder return (“TSR”) relative
to the total shareholder return of companies in the Nasdaq Composite Index over three years with interim measurements after one
year and two years. To mitigate the influence of interim fluctuations in performance during the first two measurement periods,
the achievement percentage is capped at 100% for the first two measurement periods. The Compensation Committee believes the interim
measurement periods are an appropriate design feature for the PRSU awards as a transition for the executive officers from 100%
time-based RSU awards to a mix of time-based RSUs and PRSU awards. The Compensation Committee believes relative total shareholder
return is a straightforward and objective metric for evaluating our company’s performance against the performance of other
companies and further aligns pay with performance and the interests of our executive officers with the interests of our stockholders
in creating sustainable long-term value.
The equity awards granted to our named executive officers
in October 2021 subject to our 2016 Equity Incentive Plan were as follows:
Named Executive Officer |
|
Time-Based RSU Awards
(number of units) |
|
PRSU Awards
(target number of units) |
Rajiv Ramaswami |
|
138,045 |
|
138,045 |
Rukmini Sivaraman(1) |
|
41,413 |
|
41,413 |
David Sangster |
|
48,315 |
|
48,315 |
Tyler Wall |
|
33,130 |
|
33,130 |
Duston M. Williams |
|
62,120 |
|
62,120 |
(1) |
Ms. Sivaraman received an additional RSU award in connection
with her promotion to Chief Financial Officer in May 2022. |
Each RSU represents a contingent right to receive
one share of our Class A common stock upon vesting.
2022 PROXY STATEMENT 47
The elements of each annual equity award granted
to these named executive officers for fiscal year 2022 are as follows:
Element |
|
% of Award |
|
Vesting
Terms and Conditions |
Time-Based RSU Awards |
|
|
|
•
Time-based
quarterly vesting over four years, subject to continued service to us through each vesting date. Each PRSU represents a contingent
right to receive one share of our Class A common stock upon vesting.
|
|
|
|
|
|
|
|
|
|
|
PRSU
Awards |
|
|
|
•
PRSU awards become eligible to vest based on the TSR of our company relative to the TSR of
companies in the Nasdaq Composite Index over three years with interim measurements after
one year and two years.
•
PRSU awards become eligible to vest based on performance for each period, with vesting to occur in September following the period,
subject to continued service to us through each vesting date.
•
The total number of units subject to the PRSU awards that may
become eligible to vest range from an achievement percentage of 0% to 200% of the target award, except that the achievement
percentage is capped at 100% for the first two measurement periods.
•
Only up to one-third of the target award may be earned for each of the first two measurement periods, subject to continued service
to us through each vesting date.
•
The achievement percentage of the target number of units subject to the PRSU awards that may vest are (i) 0% if the TSR of our company
ranks below the 25th percentile of the companies in the index, (ii) 100% if the TSR of our company ranks at the 50th percentile
of the companies in the index, and (iii) 200% if the TSR of our company at the 75th percentile of the companies in the index.
If the TSR of our companies ranks between these percentile thresholds, the achievement percentage of the target number of units
subject to the PRSU awards that may vest is determined using linear interpolation.
•
PRSU awards deemed earned at the end of the third measurement period based on achievement will be adjusted to deduct any PRSU awards
already vested in the first two measurement periods.
•
The award is subject to a maximum value cap that limits the total value that may become eligible to vest at the end of the third
measurement period, with the achievement percentage for the period subject to reduction so that the product of the ending price
per share at the end of the period multiplied by the achievement percentage cannot exceed $145.92 (i.e., four times the average
closing price per share of our Class A common stock from June 1, 2021 through July 31, 2021).
|
Promotional Equity Award for Ms. Sivaraman
In connection with her
promotion as our Chief Financial Officer effective May 1, 2022, the Compensation Committee granted Ms. Sivaraman an RSU award
with an aggregate value of approximately $2 million, where the total number of shares of our Class A common stock underlying the
RSU award was determined by dividing this value by the average of the daily closing prices of a share of our Class A common stock
during the 20 consecutive trading days ending on April 30, 2022. The RSUs vest in 16 equal quarterly installments, with the first
quarterly installment having vested on September 15, 2022, and each vesting subject to continued service to us through the applicable
vesting date.
2022 PROXY STATEMENT 48
FY22 PRSU Performance Results
Per the terms detailed above, the first tranche
(1/3) of the PRSU awards granted to our executive officers in fiscal year 2022 vested based on our total shareholder return relative
to the TSR of the companies in the Nasdaq Composite Index through July 31, 2022. A summary of the performance results is as follows:
Fiscal Year 2022 PRSU Performance Results – Tranche 1 of 3 |
Nutanix TSR |
|
-59.02% |
Nutanix Rank |
|
2,047 out of 2,980 |
Nutanix Percentile Rank |
|
31.32% |
Payout Percentage |
|
62.64% |
Severance and Change of Control-Related Benefits
Our named executive officers each participate
in our Executive Severance Policy and our Change of Control and Severance Policy.
Our Executive Severance Policy provides eligible
employees with protections in the event of the involuntary termination of their employment under circumstances not related to
a change of control of our company. Our Change of Control and Severance Policy provides eligible employees with protections in
the event of their involuntary termination of employment following a change of control of our company. In addition, certain of
our executive officers may have such provisions in their employment agreements.
We believe that these protections assist us
in retaining these individuals. We also believe that these protections serve our executive retention objectives by helping our
named executive officers maintain continued focus and dedication to their responsibilities to maximize stockholder value, including
any potential transaction that could involve a change of control of our company. The terms of these agreements, our Executive
Severance Policy, and our Change of Control Severance Policy were determined after the Board and the Compensation Committee reviewed
our retention goals for our named executive officers, an analysis of relevant market data prepared by the Compensation Committee’s
compensation consultant, Compensia, and with consideration for our ability to attract and retain critical executive talent.
For a summary of the material terms
and conditions of these post-employment compensation arrangements, see the section titled “Executive
Compensation – Employment Arrangements.”
Compensation-Setting Process
Role of the Compensation Committee
Pursuant to its charter, the Compensation
Committee is primarily responsible for establishing, approving, and adjusting compensation arrangements for our executive officers,
including our named executive officers, including our CEO, reviewing and approving corporate goals and objectives relevant to
these compensation arrangements, evaluating executive performance against the backdrop of our corporate goals and objectives,
and determining the long-term incentive component of our executive compensation arrangements in light of factors related to our
performance, including accomplishment of our long-term business and financial goals. For additional information about the Compensation
Committee, see the section titled “Corporate Governance – Board of Directors and Its
Committees – Compensation Committee” in this proxy statement.
Compensation decisions for our executive officers
are made by the Compensation Committee, with the input of its independent compensation consultant and our CEO and management team
(except with respect to their own compensation). The Compensation Committee periodically reviews and, as necessary, adjusts the
cash and equity compensation of our executive officers with the goal of ensuring that our executive officers are properly incentivized.
The Compensation Committee considers compensation
data from our compensation peer group as one of several factors that inform its judgment of appropriate parameters for target
compensation levels. The Compensation Committee, however, does not strictly benchmark compensation to a specific percentile of
our compensation peer group, nor does it apply a formula or assign relative weights to specific compensation elements. In addition,
while
2022 PROXY STATEMENT 49
compensation peer group data is a factor, the
Compensation Committee is forward-looking in aligning our executive compensation program with the unique growth opportunity we
believe we have, and the risks associated with pursuing the opportunity, which are not captured by reviewing peer data.
The Compensation Committee makes compensation
decisions after the consideration of many factors, including:
• |
the performance and experience of each executive officer; |
• |
the scope and strategic impact of the executive officer’s responsibilities and the
criticality of the executive officer’s role to the performance of our company and achievement of our growth strategy
and transition to a subscription-based model; |
• |
our past business performance and future expectations; |
• |
our long-term goals and strategies; |
• |
the performance of our executive team as a whole; |
• |
for each executive officer, other than our CEO, the recommendation of our CEO based on an
evaluation of his or her performance; |
• |
the difficulty and cost of replacing high-performing leaders with in-demand skills; |
• |
the tenure and past compensation levels, including existing unvested equity, of each individual
executive officer; |
• |
the relative compensation among our executive officers; and |
• |
the competitiveness of compensation relative to our compensation peer group. |
The Compensation Committee operates under a
written charter adopted by our Board. A copy of the charter is posted on the investor relations section of our website located
at http://ir.nutanix.com.
Role of Management
The Compensation Committee works with members
of our management team, including our CEO and our human resources, finance, and legal professionals (except with respect to their
own compensation). Typically, our CEO makes recommendations to the Compensation Committee, regularly attends the Compensation
Committee’s meetings, and is involved in the determination of compensation for our executive officers, except that our CEO
does not make recommendations as to his own compensation. Because of his direct role overseeing our executive officers, our CEO
makes recommendations to the Compensation Committee regarding short-term and long-term compensation for all executive officers
(other than himself) based on our results and aspirations, an individual executive officer’s actual contribution toward,
and ability to contribute to the achievement of, these results and aspirations, and performance toward individual goal achievement.
The Compensation Committee then reviews the recommendations and other data and makes decisions as to total compensation for each
executive officer, as well as each individual compensation component.
Role of Compensation Consultant
The Compensation Committee is authorized, in
its sole discretion, to retain the services of one or more compensation consultants, outside legal counsel, and such other advisors
as necessary to assist with the execution of its duties and responsibilities. For fiscal year 2022, the Compensation Committee
engaged Compensia, a national compensation consulting firm, to conduct market research and analysis on our various executive positions,
to assist the Compensation Committee in developing appropriate incentive plans for our executive officers on an annual basis,
to provide the Compensation Committee with advice and ongoing recommendations regarding material executive compensation decisions,
and to review compensation proposals of management. Compensia evaluated the following components to assist the Compensation Committee
in establishing executive compensation for fiscal year 2022:
• |
base salary; |
• |
target and actual annual incentive compensation; |
• |
target and actual total cash compensation (base salary and annual incentive compensation);
|
• |
long-term incentive compensation in the form of equity awards; and |
• |
beneficial ownership of our common stock. |
As described above in the section
titled “Corporate Governance – Director Compensation – Non-Employee Director
Compensation Policy,” Compensia also annually provides, at the direction of the Compensation
Committee, an analysis of the competitive position of our non-employee director compensation policy against the compensation peer
group used for executive compensation purposes.
2022 PROXY STATEMENT 50
Based on consideration of the factors specified
in the SEC rules and Nasdaq listing standards, the Compensation Committee does not believe that its relationship with Compensia
and the work of Compensia on behalf of the Compensation Committee and our management team has raised any conflicts of interest.
The Compensation Committee reviews these factors on an annual basis. As part of the Compensation Committee’s determination
of Compensia’s independence for fiscal year 2022, it received written confirmation from Compensia addressing these factors
and stating its belief that it remains an independent compensation consultant to the Compensation Committee.
Compensation Peer Group
The Compensation Committee reviews market data
of companies that we believe are comparable to our company. With Compensia’s assistance, the Compensation Committee developed
a peer group for use when making its fiscal year 2022 compensation decisions, which consisted of companies in information technology
industry sectors, with revenues and market capitalizations within ranges similar to that of our company and generally based in
the United States, including companies based in California. While the Compensation Committee considers compensation practices
of the peer companies, the Compensation Committee uses this information as one of many factors in its deliberations on compensation
matters, as described above, and does not set compensation levels to meet specific percentiles.
The Compensation Committee referred to compensation
data from this peer group when making fiscal year 2022 base salary, cash bonus, and equity award decisions for our executive officers,
including our named executive officers. The following is a list of the public companies that comprised our fiscal year 2022 compensation
peer group:
Arista Networks |
|
Citrix Systems |
|
Cloudera |
|
Datadog |
Dropbox |
|
Elastic |
|
F5 Networks |
|
Guidewire Software |
HubSpot |
|
MongoDB |
|
New Relic |
|
Palo Alto Networks |
PTC |
|
Pure Storage |
|
SolarWinds |
|
Splunk |
VMware |
|
Zendesk |
|
|
|
|
In June 2022, the Compensation Committee
reviewed the compensation peer group that would be used for compensation decision-making for fiscal year 2023. With Compensia’s
assistance, the Compensation Committee developed a compensation peer group for use when making its fiscal year 2023 compensation
decisions, which consisted of companies in information technology industry sectors, with revenues and market capitalizations within
ranges similar to that of our company and generally based in the United States, including companies based in California. In light
of our comparable market capitalization and revenues at the time and, in certain cases, the completed acquisition of a peer group
company, the Compensation Committee determined that Arista Networks, Cloudera (acquired by a private equity consortium in October
2021), Datadog, MongoDB, and Palo Alto Networks should be removed from the peer group and that Box, Commvault Systems, Informatica,
Teradata, and Pegasystems should be added to the peer group. The following is a list of the public companies that comprise our
fiscal year 2023 compensation peer group:
Box |
|
Citrix Systems |
|
Commvault Systems |
|
Dropbox |
Elastic |
|
F5 Networks |
|
Guidewire Software |
|
HubSpot |
Informatica |
|
New Relic |
|
Pegasystems |
|
PTC |
Pure Storage |
|
SolarWinds |
|
Splunk |
|
Teradata |
VMware |
|
Zendesk |
|
|
|
|
Employment Arrangements
We have employment agreements with our currently
employed named executive officers. Each of these arrangements provides for “at-will” employment and sets forth the
initial terms and conditions of employment of the named executive officer, including base salary, target annual bonus opportunity,
standard employee benefit plan participation, a recommendation for an initial grant of an option to purchase shares of our common
stock or other equity awards, opportunities for post-employment compensation and vesting acceleration terms. These agreements
also set forth the rights and responsibilities of each party and may protect both parties’ interests in the event of a termination
of employment by providing for certain payments and benefits under specified circumstances, including following a change of control
of our company. These offers of employment were each subject to the execution of a standard proprietary information and invention
assignment agreement and proof of identity and work eligibility in the United States.
2022 PROXY STATEMENT 51
Each of these agreements was approved on our
behalf by the Compensation Committee or the Board at the recommendation of the Compensation Committee. We believe that these arrangements
were necessary to induce these individuals to forgo other employment opportunities or leave their then-current employer for the
uncertainty of a demanding position in a new and unfamiliar organization.
In filling our executive officer positions,
the Compensation Committee was aware that, in some situations, it would be necessary to recruit candidates with the requisite
experience and skills to manage a growing business. Accordingly, it recognized that it would need to develop highly competitive
compensation packages to attract qualified candidates in a competitive labor market. At the same time, the Compensation Committee
was sensitive to the need to integrate new executive officers into the executive compensation structure that it was seeking to
develop, balancing both competitive and internal equity considerations.
On April 10, 2022, we entered into an offer
letter with Ms. Sivaraman in connection with her appointment as our Chief Financial Officer (the “Offer Letter”).
The Offer Letter has an indefinite term, and Ms. Sivaraman’s employment is “at-will.” Pursuant to the Offer
Letter, Ms. Sivaraman’s annual base salary was set at $420,000 and her target annual bonus opportunity was set at 70% of
her annual base salary, which, for fiscal year 2022, was prorated based on the number of days in the fiscal year during which
Ms. Sivaraman served as Chief Financial Officer.
For a summary of the material
terms and conditions of our employment agreements with our named executive officers, see the section titled “Executive
Compensation – Employment Arrangements” below.
Other Compensation Policies and Practices
Employee Benefits
We provide employee benefits to all eligible
employees in the United States, including our currently employed named executive officers, which the Compensation Committee believes
are reasonable and consistent with its overall compensation objective to better enable us to attract and retain employees. These
benefits include medical, dental and vision insurance, health savings accounts, a 401(k) plan, life and disability insurance,
flexible spending accounts, an employee stock purchase plan, and other plans and programs.
Stock Trading Practices; Hedging and Pledging
Policy
We maintain an Insider Trading Policy that,
among other things, prohibits our executive officers, including our named executive officers, directors, and employees from trading
during quarterly and special blackout periods. We also prohibit short sales, hedging, and similar transactions designed to decrease
the risks associated with holding our securities, as well as pledging our securities as collateral for loans and transactions
involving derivative securities relating to our common stock. Our Insider Trading Policy requires that all directors, executive
officers, and certain other key employees, including our named executive officers, pre-clear with our legal department any proposed
open market transactions.
Impact of Accounting and Tax Requirements
on Compensation
Deductibility of Executive Compensation
Generally, Section 162(m) of the Internal Revenue
Code of 1986, as amended (the “Code”), disallows a tax deduction to any publicly held corporation for any remuneration
in excess of $1 million paid in any taxable year to its chief executive officer, chief financial officer, and certain other highly
compensated executive officers. The Compensation Committee may, in its judgment, authorize compensation payments that are not
fully tax deductible when it believes that such payments are appropriate to attract and retain executive talent or meet other
business objectives. The Compensation Committee intends to continue to compensate our named executive officers in a manner consistent
with the best long-term interests of our company and our stockholders.
Taxation of “Parachute” Payments
and Deferred Compensation
We do not provide our named executive officers
with a “gross-up” or other reimbursement payment for any tax liability that they might owe as a result of the application
of Sections 280G, 4999, or 409A of the Code. Sections 280G and 4999 of the Code provide that certain officers and directors, and
service providers who hold significant equity interests, and certain highly compensated service providers may be subject to an
excise tax if they receive payments or benefits in connection with a change of control that exceeds certain prescribed limits,
and that our company, or a successor, may forfeit a deduction on the amounts subject to this additional tax. However, under our
Change of Control Severance Policy, if any payment or benefits to a policy participant, including the payments and
2022 PROXY STATEMENT 52
benefits under the policy, would constitute
a “parachute payment” within the meaning of Section 280G of the Code and would therefore be subject to an excise tax
under Section 4999 of the Code, then such payments and benefits will be either (i) reduced to the largest portion of the payments
and benefits that would result in no portion of the payments and benefits being subject to the excise tax, or (ii) not reduced,
whichever, after taking into account all applicable federal, state, and local employment and income taxes and the excise tax,
results in the participant’s receipt, on an after-tax basis, of the greater payments and benefits.
Section 409A also imposes additional significant
taxes on the individual in the event that an executive officer, director, or other service provider receives “deferred compensation”
that does not meet certain requirements of Section 409A of the Code.
Accounting for Stock-Based Compensation
We follow ASC Topic 718 for our stock-based
awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees
and directors, including stock options, RSU awards, and PRSU awards, based on the grant date “fair value” of these
awards. This calculation is performed for accounting purposes and reported in the compensation tables below. ASC Topic 718 also
requires companies to recognize the compensation cost of their stock-based compensation awards in their income statements over
the period that a named executive officer is required to render service in exchange for the award.
For PRSU awards, stock-based compensation expense
recognized may be adjusted over the performance period based on interim estimates of performance against pre-established objectives.
Compensation Risk Assessment
The Compensation Committee reviews and discusses
with management the risks arising from our compensation philosophy and practices applicable to all employees to determine whether
they encourage excessive risk-taking and to evaluate compensation policies and practices that could mitigate such risks. In addition,
the Compensation Committee has engaged Compensia to independently review our executive compensation program. Based on these reviews,
the Compensation Committee structures our executive compensation program to encourage our named executive officers to focus on
both short-term and long-term success. We do not believe that our compensation programs create risks that are reasonably likely
to have a material adverse effect on us.
Report of the Compensation Committee
The Compensation Committee has reviewed and
discussed the Compensation Discussion and Analysis with management. Based on such review and discussions, the Compensation Committee
has recommended to our Board that the Compensation Discussion and Analysis be included in this proxy statement.
Respectfully submitted by the members of the
Compensation Committee:
The Compensation Committee
Max de Groen (Chair)
Craig Conway
Gayle Sheppard (joined the Committee on March
30, 2022)
Brian Stevens
2022 PROXY STATEMENT 53
Executive
Compensation Tables
Fiscal
Year 2022 Summary Compensation Table
The following table presents all of the compensation awarded to, or earned by, our named
executive officers during the fiscal year ended July 31, 2022.
Name and Principal
Position |
|
Fiscal
Year |
|
Salary
($) |
|
Bonus
($) |
|
Option
Awards
($) |
|
Stock
Awards
($)(1) |
|
Non-Equity
Incentive Plan
Compensation
($)(2) |
|
All Other
Compensation
($) |
|
Total
($) |
Rajiv Ramaswami
President and Chief Executive Officer
|
|
2022 |
|
783,596 |
|
— |
|
— |
|
11,165,080 |
|
980,000 |
|
— |
|
12,928,676 |
|
2021 |
|
515,151 |
|
— |
|
— |
|
36,350,054 |
|
943,600 |
|
— |
|
37,808,805 |
Rukmini Sivaraman(3)
Chief Financial Officer
|
|
2022 |
|
366,329 |
|
— |
|
— |
|
5,255,793 |
|
291,267 |
|
— |
|
5,913,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David M. Sangster
Chief Operating Officer
|
|
2022 |
|
465,263 |
|
— |
|
— |
|
3,907,717 |
|
436,406 |
|
— |
|
4,809,386 |
|
2021 |
|
464,115 |
|
— |
|
— |
|
4,196,306 |
|
614,754 |
|
— |
|
5,275,175 |
|
2020 |
|
451,070 |
|
— |
|
— |
|
4,780,000 |
|
— |
|
— |
|
5,231,070 |
Tyler Wall
Chief Legal Officer
|
|
2022 |
|
465,263 |
|
— |
|
— |
|
2,679,554 |
|
436,406 |
|
— |
|
3,581,223 |
|
2021 |
|
415,260 |
|
— |
|
— |
|
2,307,970 |
|
440,034 |
|
— |
|
3,163,264 |
|
2020 |
|
403,589 |
|
— |
|
— |
|
1,434,000 |
|
— |
|
— |
|
1,837,589 |
Duston M. Williams(4)
Former Chief Financial Officer
|
|
2022 |
|
355,645 |
|
— |
|
— |
|
5,024,266 |
|
277,519 |
|
— |
|
5,657,430 |
|
2021 |
|
464,115 |
|
— |
|
— |
|
5,245,371 |
|
614,754 |
|
— |
|
6,324,240 |
|
2020 |
|
451,070 |
|
— |
|
— |
|
2,868,000 |
|
— |
|
— |
|
3,319,070 |
(1) |
The amounts reported in this column represent the aggregate grant date
fair value of equity awards, as computed in accordance with ASC Topic 718. These amounts do not necessarily reflect the actual
economic value that may ultimately be realized by the named executive officers. The grant date fair value for time-based RSUs
reported in the table is calculated in accordance with ASC Topic 718 based on the closing price per share of our Class A common
stock as reported on The Nasdaq Global Select Market on the date of grant. The grant date fair value for PRSUs reported in
the table is calculated in accordance with ASC Topic 718 using Monte Carlo simulations. A Monte Carlo simulation requires
the use of various assumptions, including the stock price volatility and risk-free interest rate as of the valuation date
corresponding to the length of time remaining in the performance period and expected dividend yield. |
(2) |
The amounts reported in this column represent the amounts earned under our Executive Bonus
Plan. |
(3) |
Ms. Sivaraman was appointed as our Chief Financial Officer on May 1, 2022. Ms. Sivaraman
was not a named executive officer for fiscal year 2021 or fiscal year 2020. Therefore, no compensation information for fiscal
year 2021 or fiscal year 2020 is presented for Ms. Sivaraman. |
(4) |
Mr. Williams resigned as our Chief Financial Officer on April 30, 2022. |
2022 PROXY STATEMENT 54
Grants
of Plan-Based Awards
The following table presents, for each of our named executive officers, information concerning
plan-based awards granted during the fiscal year ended July 31, 2022. This information supplements the information about these
awards set forth in the “Fiscal Year 2022 Summary Compensation Table” above.
|
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |
|
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
|
All Other Stock
Awards: |
|
Grant Date Fair
Value of |
Name |
|
Award
Type |
|
Grant
Date |
|
Threshold
($) |
|
Target
($) |
|
Maximum
($) |
|
Threshold
(#) |
|
Target
(#) |
|
Maximum
(#) |
|
Number
of Shares
of Stock
or Units(3)
(#) |
|
Stock
and
Option
Awards(4)
($) |
Rajiv
Ramaswami |
|
Cash
incentive |
|
— |
|
— |
|
800,000 |
|
1,600,000 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
Time-based
RSUs |
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
138,045 |
|
4,787,401 |
|
|
PRSUs |
|
10/11/2021 |
|
— |
|
— |
|
— |
|
69,022 |
|
138,045 |
|
276,090 |
|
— |
|
6,377,679 |
Rukmini
Sivaraman |
|
Cash
incentive |
|
— |
|
— |
|
242,536 |
|
485,072 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
Time-based
RSUs |
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
41,413 |
|
1,436,203 |
|
|
PRSUs |
|
10/11/2021 |
|
— |
|
— |
|
— |
|
20,706 |
|
41,413 |
|
82,826 |
|
— |
|
1,913,281 |
|
|
Time-based
RSUs |
|
5/1/2022 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
76,161 |
|
1,906,310 |
David M.
Sangster |
|
Cash
incentive |
|
— |
|
— |
|
356,250 |
|
712,500 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
Time-based
RSUs |
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
48,315 |
|
1,675,564 |
|
|
PRSUs |
|
10/11/2021 |
|
— |
|
— |
|
— |
|
24,157 |
|
48,315 |
|
96,630 |
|
— |
|
2,232,153 |
Tyler Wall |
|
Cash
incentive |
|
— |
|
— |
|
356,250 |
|
712,500 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
Time-based
RSUs |
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
33,130 |
|
1,148,948 |
|
|
PRSUs |
|
10/11/2021 |
|
— |
|
— |
|
— |
|
16,565 |
|
33,130 |
|
66,260 |
|
— |
|
1,530,606 |
Duston M.
Williams |
|
Cash
incentive |
|
— |
|
— |
|
356,250 |
|
712,500 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
Time-based
RSUs |
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
62,120 |
|
2,154,322 |
|
|
PRSUs |
|
10/11/2021 |
|
— |
|
— |
|
— |
|
31,060 |
|
62,120 |
|
124,240 |
|
— |
|
2,869,944 |
(1) |
The amounts reported in this column represent cash incentive compensation
opportunities under our Executive Bonus Plan for fiscal year 2022 at target levels for our corporate objectives. For achievement
in excess of target, overperformance could be rewarded with a payout of up to an additional 100% of each named executive officer’s
target (for a maximum payment of 200% of each named executive officer’s target). |
(2) |
The PRSUs are eligible to vest in up to three installments based on the TSR of our company relative to the TSR of companies in the NASDAQ Composite Index over three performance
periods: (i) August 1, 2021 to July 31, 2022, (ii) August 1, 2021 to July 31, 2023, and (iii) August 1, 2021 to July 31, 2024.
PRSUs that become eligible to vest based on performance for a performance period vest on September 15 following the period,
subject to continued service to us through the vesting date. The total number of PRSUs that are eligible to vest range from
an achievement percentage of 0% to 200% of the target number of PRSUs, except that the achievement percentage is capped at
100% for the first two performance periods. Up to one-third of the target number of PRSUs are eligible to vest as a result
of performance for each of the first two performance periods. The achievement percentage is (i) 0%, if our TSR ranks below
the 25th percentile of the indexed companies, (ii) 100%, if our TSR ranks at the 50th percentile of
the indexed companies, and (iii) 200%, if our TSR ranks at the 75th percentile of the indexed companies. If our
TSR ranks between these percentile thresholds, the achievement percentage is determined using linear interpolation. 100% of
the target number of PRSUs (as may be increased as a result of any achievement percentage in excess of target) will be eligible
to vest with respect to the third performance period, less any PRSUs already vested in the first two performance periods.
The PRSUs are subject to a maximum value cap that limits the total value that may become eligible to vest at the end of the
third performance period, with the achievement percentage for the period subject to reduction so that the product of the ending
price per share at the end of the period multiplied by the achievement percentage cannot exceed $145.92. |
(3) |
The RSUs granted on October 11, 2021 vest in 16 equal quarterly installments, with the first
quarterly installment having vested on December 15, 2021, subject to continued service to us through each vesting date. The
RSUs granted on May 1, 2022 vest in 16 equal quarterly installments, with the first quarterly installment having vested on
September 15, 2022, subject to continued service to us through each vesting date. |
2022 PROXY STATEMENT 55
(4) |
The amounts reported in this column represent the aggregate grant date
fair value of equity awards, as computed in accordance with ASC Topic 718. These amounts do not necessarily reflect the actual
economic value that may ultimately be realized by the named executive officers. The grant date fair value for time-based RSUs
reported in the table is calculated in accordance with ASC Topic 718 based on the closing price per share of our Class A common
stock as reported on The Nasdaq Global Select Market on the date of grant. The grant date fair value for PRSUs reported in
the table is calculated in accordance with ASC Topic 718 using Monte Carlo simulations. A Monte Carlo simulation requires
the use of various assumptions, including the stock price volatility and risk-free interest rate as of the valuation date
corresponding to the length of time remaining in the performance period and expected dividend yield. |
Outstanding
Equity Awards At Fiscal Year 2022 Year-End Table
The following table presents, for each of our named executive officers,
information concerning each outstanding equity award held by such named executive officer as of July 31, 2022. This information
supplements the information about these awards set forth in the “Fiscal Year 2022 Summary
Compensation Table” above.
|
|
|
|
Option Awards |
|
Stock Awards |
|
|
|
Name |
|
Grant
Date |
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) |
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) |
|
Option
Exercise
Price
($) |
|
Option
Expiration
Date |
|
Number
of Shares
or Units
of Stock
That
Have Not
Vested
(#) |
|
|
Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested(1)
($) |
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Yet
Vested
(#) |
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested(1)
($) |
Rajiv
Ramaswami |
|
12/9/2020 |
|
— |
|
— |
|
— |
|
— |
|
236,626 |
(2) |
|
3,580,151 |
|
— |
|
|
— |
|
|
12/9/2020 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
584,465 |
(3) |
|
8,842,955 |
|
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
112,162 |
(4) |
|
1,697,011 |
|
— |
|
|
— |
|
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
138,045 |
(5) |
|
2,088,621 |
Rukmini
Sivaraman |
|
8/27/2019 |
|
— |
|
— |
|
— |
|
— |
|
18,750 |
(6) |
|
283,688 |
|
— |
|
|
— |
|
|
10/2/2020 |
|
— |
|
— |
|
— |
|
— |
|
68,956 |
(7) |
|
1,043,304 |
|
— |
|
|
— |
|
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
33,649 |
(4) |
|
509,109 |
|
— |
|
|
— |
|
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
41,413 |
(5) |
|
626,579 |
|
|
5/1/2022 |
|
— |
|
— |
|
— |
|
— |
|
76,161 |
(8) |
|
1,152,316 |
|
— |
|
|
— |
David
Sangster |
|
9/16/2016 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
100,000 |
(9) |
|
1,513,000 |
|
|
10/23/2018 |
|
— |
|
— |
|
— |
|
— |
|
12,500 |
(10) |
|
189,125 |
|
— |
|
|
— |
|
|
8/27/2019 |
|
— |
|
— |
|
— |
|
— |
|
78,125 |
(6) |
|
1,182,031 |
|
— |
|
|
— |
|
|
10/2/2020 |
|
— |
|
— |
|
— |
|
— |
|
106,087 |
(7) |
|
1,605,096 |
|
— |
|
|
— |
|
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
39,256 |
(4) |
|
593,943 |
|
— |
|
|
— |
|
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
48,315 |
(5) |
|
731,006 |
Tyler Wall |
|
8/27/2019 |
|
— |
|
— |
|
— |
|
— |
|
23,438 |
(6) |
|
354,617 |
|
— |
|
|
— |
|
|
10/2/2020 |
|
— |
|
— |
|
— |
|
— |
|
58,348 |
(7) |
|
882,805 |
|
— |
|
|
— |
|
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
26,919 |
(4) |
|
407,284 |
|
— |
|
|
— |
|
|
10/11/2021 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
33,130 |
(5) |
|
501,257 |
Duston
M. Williams |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
(1) |
Based on the closing price per share of our Class A common stock as reported
on The Nasdaq Global Select Market on July 31, 2022, which was $15.13. |
2022 PROXY STATEMENT 56
(2) |
25% of the RSUs vested on December 15, 2021, with 1/16th of
the RSUs vesting quarterly thereafter, subject to continued service to us through each vesting date. |
(3) |
The PRSUs were subject to stock price-based milestones. The first milestone required achievement
of an average closing price per share of our Class A common stock of $32.09 for a 30 consecutive calendar day period. The
second milestone required achievement of an average closing price per share of our Class A common stock of $38.51 for a 30
consecutive calendar day period. Achievement of the first milestone resulted in 67% of the 703,117 PRSUs becoming eligible
to vest. Achievement of both milestones resulted in 133% of the 703,117 PRSUs becoming eligible to vest. Upon achievement,
25% of the eligible PRSUs vested on December 15, 2021, with 1/16th of the eligible PRSUs vesting quarterly thereafter,
subject to continued service to us through each vesting date. In October 2021, the Compensation Committee determined that
the second milestone was achieved. |
(4) |
The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having
vested on December 15, 2021, subject to continued service to us through each vesting date. |
(5) |
The PRSUs are eligible to vest in up to three installments based on the TSR of our company relative to the TSR of companies in the NASDAQ Composite Index over three performance
periods: (i) August 1, 2021 to July 31, 2022, (ii) August 1, 2021 to July 31, 2023, and (iii) August 1, 2021 to July 31, 2024.
PRSUs that become eligible to vest based on performance for a performance period vest on September 15 following the period,
subject to continued service to us through the vesting date. The total number of PRSUs that are eligible to vest range from
an achievement percentage of 0% to 200% of the target number of PRSUs, except that the achievement percentage is capped at
100% for the first two performance periods. Up to one-third of the target number of PRSUs are eligible to vest as a result
of performance for each of the first two performance periods. The achievement percentage is (i) 0%, if our TSR ranks below
the 25th percentile of the indexed companies, (ii) 100%, if our TSR ranks at the 50th percentile of
the indexed companies, and (iii) 200%, if our TSR ranks at the 75th percentile of the indexed companies. If our
TSR ranks between these percentile thresholds, the achievement percentage is determined using linear interpolation. 100% of
the target number of PRSUs (as may be increased as a result of any achievement percentage in excess of target) will be eligible
to vest with respect to the third performance period, less any PRSUs already vested in the first two performance periods.
The PRSUs are subject to a maximum value cap that limits the total value that may become eligible to vest at the end of the
third performance period, with the achievement percentage for the period subject to reduction so that the product of the ending
price per share at the end of the period multiplied by the achievement percentage cannot exceed $145.92. |
(6) |
The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having
vested on December 15, 2019, subject to continued service to us through each vesting date. |
(7) |
The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having
vested on December 15, 2020, subject to continued service to us through each vesting date. |
(8) |
The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having
vested on September 15, 2022, subject to continued service to us through each vesting date. |
(9) |
One-third of the shares subject to the awards vest on the later of January 1, 2019 or upon
the Compensation Committee’s certification that our company has achieved the performance goal, subject to continued
service to us through the vesting date. One-third of the shares subject to the awards vest on the later of January 1, 2020
or upon the Compensation Committee’s certification that our company has achieved the performance goal, subject to continued
service to us through the vesting date. One-third of the shares subject to the awards vest on the later of January 1, 2021
or upon the Compensation Committee’s certification that our company has achieved the performance goal, subject to continued
service to us through the vesting date. |
(10) |
The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having
vested on March 15, 2019, subject to continued service to us through each vesting date. |
2022
Option Exercises and Stock Vested Value
The following table presents, for each of our named executive officers, the shares of
our Class A common stock that were acquired upon the exercise of stock options and vesting of RSU and PRSU awards and the related
value realized during fiscal year 2022.
|
|
Option Awards |
|
Stock Awards |
Name |
|
Number
of Shares
Acquired on
Exercise
(#) |
|
Value
Realized on
Exercise(1)
($) |
|
Number
of Shares
Acquired on
Vesting
(#) |
|
Value
Realized on
Vesting(2)
($) |
Rajiv Ramaswami |
|
— |
|
— |
|
518,538 |
|
14,321,812 |
Rukmini Sivaraman |
|
— |
|
— |
|
57,161 |
|
1,585,174 |
David M. Sangster |
|
— |
|
— |
|
154,333 |
|
4,393,015 |
Tyler Wall |
|
— |
|
— |
|
88,393 |
|
2,810,778 |
Duston M. Williams |
|
623,750 |
|
7,303,223 |
|
113,843 |
|
3,756,210 |
(1) |
The value realized upon the exercise of stock options is calculated by
(i) subtracting the option exercise price from the closing price per share (or the sale price per share in the event of a
same day sale) of our Class A common stock on the date of exercise, multiplied by (ii) the number of shares underlying the
stock option exercised. |
(2) |
The value realized upon vesting of RSUs or PRSUs is calculated by multiplying the number
of shares vested by the closing price per share of our Class A common stock as reported on The Nasdaq Global Select Market
on the applicable vest date (or, in the event the applicable vest date occurs on a holiday or weekend, the closing price per
share of our Class A common stock as reported on The Nasdaq Global Select Market on the immediately preceding trading day). |
2022
PROXY STATEMENT 57
Employment Arrangements
Employment Arrangements
with Named Executive Officers
We have entered into employment
agreements with each of our currently employed named executive officers. Each of these arrangements was negotiated on our behalf
by the Compensation Committee or our then current CEO.
Typically, these arrangements
provide for at-will employment and set forth the initial terms and conditions of employment of each named executive officer, including
base salary, target annual bonus opportunity, standard employee benefit plan participation, a recommendation for initial equity
awards and in certain cases the circumstances, if applicable, under which post-employment compensation or vesting acceleration
terms might apply. These offers of employment were each subject to execution of a standard proprietary information and invention
agreement and proof of identity and work eligibility in the United States.
Rajiv Ramaswami
We entered into an employment
letter with Rajiv Ramaswami, our President and CEO, on December 7, 2020. The employment letter has an indefinite term and Mr.
Ramaswami’s employment is at-will. Mr. Ramaswami’s current annual base salary is $800,000, and he is currently eligible
to earn annual incentive compensation with a target equal to 100% of annual base salary based upon achievement of targets determined
by our Board or the Compensation Committee for each fiscal year.
In connection
with his hire, Mr. Ramaswami was granted 378,601 RSUs and a target number of 703,117 PRSUs under our 2016 Equity Incentive Plan.
25% of the RSUs vested on December 15, 2021, with 1/16th of the RSUs vesting quarterly thereafter, subject to continued
service to us through each vesting date. The PRSUs were subject to stock price-based milestones. The first milestone required
achievement of an average closing price per share of our Class A common stock of $32.09 for a 30 consecutive calendar day period.
The second milestone required achievement of an average closing price per share of our Class A common stock of $38.51 for a 30
consecutive calendar day period. In October 2021, the Compensation Committee determined that the second milestone was achieved,
resulting in 133% of the 703,117 PRSUs becoming eligible to vest. Upon achievement, 25% of the eligible PRSUs vested on December
15, 2021, with 1/16th of the eligible PRSUs vesting quarterly thereafter, subject to continued service to us through
each vesting date. For additional details regarding Mr. Ramaswami’s equity awards, see “Executive
Compensation – Executive Compensation Tables” above.
Mr. Ramaswami is a participant
in our Executive Severance Policy and our Change of Control Severance Policy, both of which are described below.
Rukmini Sivaraman
We entered into an employment
letter with Rukmini Sivaraman in connection with her promotion to Chief Financial Officer on April 10, 2022. The employment
letter has an indefinite term and Ms. Sivaraman’s employment is at-will. Ms. Sivaraman’s current annual base salary
is $450,000, and she is currently eligible to earn annual incentive compensation with a target equal to 70% of annual base salary
based upon achievement of targets determined by our Board or the Compensation Committee for each fiscal year.
In connection
with her promotion, Ms. Sivaraman was granted 76,161 RSUs under our 2016 Equity Incentive Plan. 1/16th of the RSUs
vested on September 15, 2022, with 1/16th of the RSUs vesting quarterly thereafter, subject to continued service to
us through each vesting date. For additional details regarding Ms. Sivaraman’s outstanding equity awards, see “Executive
Compensation – Executive Compensation Tables” above.
Ms. Sivaraman is a participant
in our Executive Severance Policy and our Change of Control Severance Policy, both of which are described below.
David M. Sangster
We entered into an employment
letter with David Sangster, our Chief Operating Officer, on October 17, 2011. The employment letter has an indefinite term
and Mr. Sangster’s employment is at-will. Mr. Sangster’s current annual base salary is $475,000, and he
is currently eligible to earn annual incentive compensation with a target equal to 75% of annual base salary based upon achievement
of targets determined by our Board or the Compensation Committee for each fiscal year.
2022 PROXY STATEMENT 58
In connection
with his hire, Mr. Sangster was granted a stock option under our 2010 Plan and option agreement to purchase 350,000 shares
of our Class A common stock. That option has since vested in full and has been exercised by Mr. Sangster. For additional
details regarding Mr. Sangster’s equity awards, see “Executive Compensation
– Executive Compensation Tables” above.
Mr. Sangster is a participant
in our Executive Severance Policy and our Change of Control Severance Policy, both of which are described below.
Tyler Wall
We entered into an employment
letter with Tyler Wall, our Chief Legal Officer, on November 20, 2017. The employment letter has an indefinite term and Mr. Wall’s
employment is at-will. Mr. Wall’s current annual base salary is $475,000, and he is currently eligible to earn annual
incentive compensation with a target equal to 75% of annual base salary based upon achievement of targets determined by our Board
or the Compensation Committee for each fiscal year.
In connection
with his hire, Mr. Wall was granted 300,000 RSUs under our 2016 Equity Incentive Plan, which have since vested in full.
For additional details regarding Mr. Wall’s equity awards, see “Executive
Compensation – Executive Compensation Tables” above.
Mr. Wall is a participant
in our Executive Severance Policy and our Change of Control Severance Policy, both of which are described below.
Severance and Change of
Control-Related Benefits
Executive Severance Policy
We have an Executive Severance
Policy, pursuant to which a designated employee is eligible to receive severance benefits in lieu of any other severance payments
and benefits, subject to the employee signing a participation agreement, in connection with the involuntary termination of their
employment under the circumstances described in our Executive Severance Policy. Generally, upon a termination of the eligible
employee either (i) by us, other than for Cause, death, or disability, or (ii) by the applicable eligible employee on
account of a Constructive Termination (such termination, “Qualified Termination”), then our Executive Severance Policy
provides for:
(1) |
a lump sum
payment equal to the participant’s annual base salary, as in effect immediately prior to the participant’s Qualified
Termination or, if the termination is due to a resignation for Constructive Termination based on a material reduction in annual
base salary, immediately prior to such reduction, multiplied by 100% for each Tier 1 eligible employee, 75% for each Tier
2 eligible employee and 50% for each Tier 3 eligible employee, and |
(2) |
payment or reimbursement,
at our sole discretion, of the cost of continued health benefits for a period of up to twelve months for each Tier 1 eligible
employee, up to nine months for each Tier 2 eligible employee and up to six months for each Tier 3 eligible employee. |
In order to receive severance
benefits under our Executive Severance Policy, a participant must timely execute and not revoke a release of claims in favor of
us.
For purposes of our Executive
Severance Policy, constructive termination (“Constructive Termination”) means the eligible employee’s termination
of his or her employment after the occurrence of one or more of the following events without the applicable eligible employee’s
express written consent:
(1) |
a
reduction in substantially all of the applicable eligible employee’s responsibilities relative to his or her responsibilities
in effect immediately prior to such reduction (provided, however, that, a change in title or reporting structure, without
more, shall not constitute a Constructive Termination), and |
(2) |
a
reduction by us in the applicable eligible employee’s rate of annual base salary by more than 25% within a single calendar
year (provided, however, that, a reduction of annual base salary that also applies to substantially all other similarly situated
employees of our company shall not constitute a Constructive Termination). |
In order for the applicable
eligible employee’s termination of his or her employment to be a Constructive Termination, the eligible employee must not
terminate employment with us without first providing us with written notice of the acts or omissions constituting the grounds
for “Constructive Termination” within 90 days of the initial existence of the grounds for “Constructive Termination”
and a cure period of 30 days following our receipt of written notice, such grounds must not have been cured during such time,
and the eligible employee must terminate his or her employment within 30 days following such cure period.
Each of our named executive
officers is eligible to participate in our Executive Severance Policy. Therefore, we have not described and quantified estimated
payments and benefits that would be provided in each covered circumstance under our Executive Severance Policy to any of our eligible
named executive officers.
2022 PROXY STATEMENT 59
Change of Control Severance
Policy
We have a Change of Control
and Severance Policy, pursuant to which a designated employee is eligible to receive severance benefits in lieu of any other severance
payments and benefits, subject to the employee signing a participation agreement, in connection with a change of control of our
company or in connection with the involuntary termination of their employment under the circumstances described in our Change
of Control Severance Policy. Each of our named executive officers is a participant in our Change of Control Severance Policy.
Generally, if a participant’s employment is terminated within three months prior to or 12 months following the consummation
of a change of control, which such period is referred to as the change of control period, either by us or a subsidiary of ours
other than for cause, death or disability or by the participant for good reason, then our Change of Control Severance Policy provides
that:
(1) |
the applicable
percentage of the then-unvested shares subject to each of the participant’s then-outstanding time-based equity awards
will immediately vest and become exercisable, with such percentage being 100% for each of our named executive officers, |
(2) |
for performance-based
equity, the equity vesting benefit will be the amount that would have vested (a) based on actual performance, if performance
has been measured or is measurable at the change of control; otherwise (b) at target level of performance, |
(3) |
a lump sum payment equal
to the participant’s annual base salary, as in effect immediately prior to the participant’s termination or, if
the termination is due to a resignation for good reason based on a material reduction in base salary, immediately prior to
such reduction, or immediately prior to the change of control, whichever is greater, multiplied by 100% for each of our named
executive officers, |
(4) |
a lump sum payment equal
to the participant’s target annual bonus as in effect for the fiscal year in which his or her termination of employment
occurs, multiplied by 100% for each of our named executive officers, and |
(5) |
payment or reimbursement
of the cost of continued health benefits for a period of up to 12 months for each of our named executive officers. |
In order to receive severance benefits under
our Change of Control Severance Policy, a participant must timely execute and not revoke a release of claims in favor of us. In
addition, our Change of Control Severance Policy provides that, if any payment or benefits to a participant, including the payments
and benefits under our Change of Control Severance Policy, would constitute a parachute payment within the meaning of Section
280G of the U.S. Internal Revenue Code of 1986, as amended, or the Code, and would therefore be subject to an excise tax under
Section 4999 of the Code, then such payments and benefits will be either (i) reduced to the largest portion of the payments
and benefits that would result in no portion of the payments and benefits being subject to the excise tax, or (ii) not reduced,
whichever, after taking into account all applicable federal, state and local employment and income taxes and the excise tax, results
in the participant’s receipt, on an after-tax basis, of the greater payments and benefits.
For purposes of each of our
Change of Control Severance Policy and our Executive Severance Policy, cause (“Cause”) means any of the following
reasons (with any references to us interpreted to include any subsidiary, parent, affiliate or successor of ours):
• |
the participant’s
repeated willful failure to perform his or her duties and responsibilities to us or the participant’s material violation
of any material written policy of ours; |
• |
the participant’s
commission of any act of fraud, embezzlement or any other willful misconduct that has caused or is reasonably expected to
result in injury to us; |
• |
the participant’s
unauthorized use or disclosure of any proprietary information or trade secrets of ours or any other party to whom the participant
owes an obligation of nondisclosure as a result of his or her relationship with us; or |
• |
the participant’s
material breach of any of his or her obligations under any written agreement or covenant with us. |
Where the facts giving rise
to Cause are capable of being remedied, we are required to provide written notice to the participant of the facts giving rise
to Cause and provide the participant with 30 calendar days with which to reasonably remedy such facts.
For purposes of our Change
of Control Severance Policy, good reason means the participant’s termination of his or her employment in accordance with
the next sentence after the occurrence of one or more of the following events without the participant’s express written
consent:
• |
a material reduction of the participant’s duties,
authorities or responsibilities relative to the participant’s duties, authorities or responsibilities in effect immediately
prior to such reduction (which, in the case of our CEO, includes ceasing to act as the CEO of the combined entity following
the change of control); |
2022 PROXY STATEMENT 60
• |
a material
reduction by us in the participant’s rate of annual base salary; provided, however, that, a reduction of annual base
salary that also applies to substantially all other similarly situated employees of ours will not constitute good reason;
|
• |
a material change in the
geographic location of the participant’s primary work facility or location; provided, that a relocation of less than
35 miles from the participant’s then present location will not be considered a material change in geographic location;
or |
• |
our failure to obtain
from any successor or transferee of ours an express written and unconditional assumption of our obligations to the participant
under our Change of Control Severance Policy. |
In order for the participant’s
termination of his or her employment to be for good reason, the participant must not terminate employment with us without first
providing us with written notice of the acts or omissions constituting the grounds for good reason within 90 days of the
initial existence of the grounds for good reason and a cure period of 30 days following the date of written notice, such
grounds must not have been cured during such time, and the participant must terminate his or her employment within 30 days
following the expiration of our 30-day cure period.
Potential Payments Upon
Termination or Change of Control
The following table sets forth
the estimated payments that would be received by each of our named executive officers who remained employed with us as of July
31, 2022 if (i) pursuant to the terms of our Executive Severance Policy, a hypothetical termination of employment by us (other
than for cause, death, or disability) or a hypothetical termination by the officer on account of a constructive termination had
occurred on July 31, 2022 and (ii) pursuant to the terms of our Change of Control and Severance Policy, a hypothetical termination
of employment by us (other than for cause, death, or disability) or a hypothetical termination by the officer for good reason
in connection with a change of control of our company had occurred on July 31, 2022. The table below reflects amounts that
would have been payable to the named executive officer assuming that, if applicable, the hypothetical termination occurred on
July 31, 2022 and, if applicable, a change of control of our company also occurred on that date. Mr. Williams resigned as
our Chief Financial Officer on April 30, 2022. Mr. Williams did not receive any severance payments or benefits in connection with
his resignation.
2022 PROXY STATEMENT 61
Name |
|
Salary
Severance(1)
($) |
|
Bonus
Severance(2)
($) |
|
Value of
Accelerated
Vesting(3)
($) |
|
Continuation
of Medical
Benefits(4)
($) |
|
Total
($) |
Rajiv Ramaswami |
|
|
|
|
|
|
|
|
|
|
Termination
by us (other than for cause, death, or disability) or termination by officer on account of constructive termination |
|
800,000 |
|
— |
|
— |
|
30,731 |
|
830,731 |
Termination
by us without cause or resignation for good reason during change of control period |
|
800,000 |
|
800,000 |
|
16,208,739 |
|
30,731 |
|
17,839,470 |
Rukmini
Sivaraman |
|
|
|
|
|
|
|
|
|
|
Termination
by us (other than for cause, death, or disability) or termination by officer on account of constructive termination |
|
420,000 |
|
— |
|
— |
|
30,731 |
|
450,731 |
Termination
by us (other than for cause, death, or disability) or termination by officer for good reason during change of control period |
|
420,000 |
|
294,000 |
|
3,614,996 |
|
30,731 |
|
4,359,727 |
David M.
Sangster |
|
|
|
|
|
|
|
|
|
|
Termination
by us (other than for cause, death, or disability) or termination by officer on account of constructive termination |
|
475,000 |
|
— |
|
— |
|
30,731 |
|
505,731 |
Termination
by us (other than for cause, death, or disability) or termination by officer for good reason during change of control period |
|
475,000 |
|
356,250 |
|
4,301,202 |
|
30,731 |
|
5,163,183 |
Tyler Wall |
|
|
|
|
|
|
|
|
|
|
Termination
by us (other than for cause, death, or disability) or termination by officer on account of constructive termination |
|
475,000 |
|
— |
|
— |
|
30,731 |
|
505,731 |
Termination
by us (other than for cause, death, or disability) or termination by officer for good reason during change of control period |
|
475,000 |
|
356,250 |
|
2,145,964 |
|
30,731 |
|
3,007,945 |
(1) |
The amounts reported in this column reflect a lump-sum
payment equal to 100% of the named executive officer’s annual base salary as of July 31, 2022 under our Executive
Severance Policy and a lump-sum payment equal to 100% of the named executive officer’s annual base salary as of
July 31, 2022 under our Change of Control and Severance Policy. |
(2) |
The amounts reported in this column reflect a lump-sum payment
equal to 100% of the named executive officer’s annual bonus target for fiscal year 2022 under our Change of Control
and Severance Policy. |
(3) |
The amounts reported in this column reflect RSU and PRSU payment
values based upon the closing price of our Class A common stock of $15.13 as reported on The Nasdaq Global Select Market
on July 31, 2022. |
(4) |
The amounts reported in this column reflect the cost of COBRA
continuation coverage based on elected level of healthcare coverage (medical, dental and vision) for twelve months under our
Executive Severance Policy and for twelve months under our Change of Control and Severance Policy. |
CEO Pay Ratio
In accordance with Item 402(u)
of Regulation S-K, promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing (i)
the ratio of the annual total compensation of our President and CEO, Rajiv Ramaswami, to (ii) the annual total compensation of
our median employee, both calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K.
For fiscal year 2022:
• |
the annual
total compensation of our President and CEO was $12,928,676; |
• |
the annual total compensation
of our median employee was $171,281; and |
• |
the ratio of the annual
total compensation of our President and CEO to the annual total compensation of our median employee was 75:1. |
We believe this ratio is a
reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act.
2022 PROXY STATEMENT 62
We selected July 31, 2022 as
the date on which to determine our employee population and the median employee. In determining this population, we included all
worldwide full-time and part-time employees other than our President and CEO. We did not include any contractors in our employee
population. As permitted by SEC rules, to identify our median employee, we elected to use total target cash compensation plus
the grant date fair market value of equity awards, if any, as our consistently applied compensation measure, which we refer to
herein as total target compensation and calculated as (i) base salary and target bonus as of July 31, 2022, and (ii) the grant
date fair market value of equity awards issued during the previous twelve months. For employees paid in a currency other than
U.S. dollars, we converted their compensation to U.S. dollars using the exchange rates used by us for various financial and accounting
purposes in effect on July 31, 2022. To identify our median employee, we then calculated the total target direct compensation
for our global employee population and excluded employees at the median who had anomalous compensation characteristics.
The SEC rules for identifying
the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to
adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their
compensation practices. Consequently, the pay ratio reported by other companies may not be comparable to the pay ratio reported
by us, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions,
estimates, and assumptions in calculating their own pay ratios.
Equity Compensation Plan Information
The following table summarizes
our equity compensation plan information as of July 31, 2022. Information is included for equity compensation plans approved by
our stockholders. We do not have any equity compensation plans not approved by our stockholders.
Plan Category |
|
(a) Number
of Securities
to be Issued
Upon Exercise
of Outstanding
Options,
Warrants and
Rights(1) |
|
(b) Weighted
Average
Exercise Price
of Outstanding
Options,
Warrants and
Rights(2) |
|
(c) Number
of Securities
Remaining
Available
for Future
Issuance Under
Equity
Compensation
Plans
(Excluding
Securities
Reflected in
Column (a))(3) |
Equity plans
approved by stockholders |
|
23,824,860 |
|
$6.43 |
|
17,520,761 |
Equity plans
not approved by stockholders |
|
— |
|
— |
|
— |
(1) |
Includes 1,689,320 outstanding stock options and
22,135,540 outstanding RSUs. |
(2) |
The weighted average exercise price is calculated based solely
on outstanding stock options and does not take into account stock underlying restricted stock units, which generally have
no exercise price. |
(3) |
Includes 15,159,164 shares reserved for future equity grants
under our 2016 Equity Incentive Plan and 2,361,597 shares reserved for future stock purchase plan awards under our ESPP. Our
2016 Equity Incentive Plan provides that the total number of shares reserved for issuance under our 2016 Equity Incentive
Plan will be automatically increased on the first day of each fiscal year beginning in fiscal year 2018, by an amount equal
to the least of (i) 18,000,000 shares, (ii) 5% of the outstanding shares of all classes of common stock as of the last
day of our immediately preceding fiscal year, or (iii) such other amount as our Board may determine. Accordingly, on
August 1, 2022, the number of shares of Class A common stock available for issuance under our 2016 Equity Incentive Plan increased
by 11,346,891 shares, pursuant to this provision. This increase is not reflected in the table above, which is as of July 31,
2022. |
2022 PROXY STATEMENT 63
ADDITIONAL PROPOSALS
Proposal 7: Approval of Amendment and Restatement
of Amended and Restated 2016 Employee Stock Purchase Plan
|
OUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 7. |
Reasons for the Amendment and Restatement
At the Annual Meeting, stockholders
are being asked to approve the amendment and restatement of the ESPP as described below, including to increase the number of shares
of our Class A common stock, or the Shares, authorized for sale under the ESPP. The amendment and restatement will be referred
to as the ESPP Amendment. The ESPP was initially adopted by our Board in 2015 and was approved by our stockholders in 2016. The
ESPP became effective in 2016 in connection with our initial public offering. A prior amendment to the ESPP was approved by our
stockholders in 2019.
The ESPP is intended to provide
an incentive to our employees who are eligible to participate by allowing them to purchase Shares at a price equal to 85% of the
lower of the fair market value of the Share on either the first or last trading day of the applicable purchase period. As a result,
the ESPP helps us align our employees’ interests with those of our stockholders and also assists us in recruiting, retaining
and motivating qualified personnel who help us achieve our business goals, ultimately creating long-term value for our stockholders.
As of the
Record Date, 1,363,314 Shares remained available for sale under the ESPP. Due to (i) the increase in our employee population,
from approximately 5,340 employees as of July 31, 2019 to approximately 6,450 employees as of July 31, 2022, and
(ii) the current rate of shares being purchased under the ESPP, we currently estimate that the remaining Share reserve would
only last us through approximately the March 20, 2023 purchase date. As a result, the ESPP Amendment would increase the
number of Shares currently available for sale under the ESPP by 12,442,247 Shares, bringing the total number of Shares that
remain available for sale under the ESPP to 13,805,561 Shares, which represents approximately 6% of our outstanding Shares as
of the close of business on the Record Date. Our company’s stockholders are being asked to approve the ESPP Amendment
so that we may continue to operate the ESPP in light of its important role in encouraging equity ownership among our
employees and assisting our company to recruit, retain and motivate qualified personnel. Other than the ESPP Amendment and
the prior amendment to the ESPP approved by our stockholders in 2019, we have not made any material amendments to the ESPP
since it became effective in 2016.
The
Compensation Committee and our Board have approved the ESPP Amendment, subject to the approval of our stockholders at the
Annual Meeting. In considering its recommendation to approve the ESPP Amendment, the Compensation Committee and our Board
analyzed the historical number of Shares purchased under the ESPP since the ESPP became effective in 2016, the motivational,
recruiting and retention value of the ESPP, as well as the projected number of Shares required to fully fund the ESPP in
future years. The number of Shares purchased under the ESPP in each of fiscal years 2020, 2021 and 2022 was 3,319,834,
3,980,477, and 2,827,004, respectively. Although the Compensation Committee and our Board considered the historical Share
purchases, the actual number of Shares that will be purchased under the ESPP in any given future year will depend on a number
of factors including, for example, the number of participants, each participant’s contribution rate, and our stock
price. Based on usage in fiscal year 2022 and projected participation numbers and contribution rates, we currently anticipate
that the increased Share reserve represented by the ESPP Amendment would allow us to fully fund the ESPP for a period of
approximately three years. However, the actual number of Shares that will be purchased under the ESPP, and time period over
which the increased Share reserve will allow us to fully fund the ESPP, will vary based on the factors noted above. We
believe that participation in our ESPP is important to our employees and key to our ongoing recruiting efforts, and therefore
the ESPP Amendment is important to our continued success. Our Board believes that it is in the best interests of our company
and our stockholders to approve the ESPP Amendment.
2022 PROXY STATEMENT 64
The ESPP Amendment also provides
that any contributions accumulated in a participant’s account not sufficient to purchase a full share on the last trading
day of the applicable purchase period will be returned to the participant in lieu of retaining such contributions in the participant’s
account for the subsequent purchase period or offering period. This amendment is being proposed as a matter of administrative convenience.
The following paragraphs provide
a summary of the principal features of the ESPP and its operation. However, this summary is not a complete description of all of
the provisions of the ESPP, and is qualified in its entirety by the specific language of the ESPP. A copy of the ESPP, as it is
proposed to be amended, is provided as Appendix C to this Proxy Statement.
General
The ESPP is intended to have
two components: (i) the first component, or the 423 Component, is intended to qualify as an employee stock purchase plan under
Section 423 of the Code; and (ii) the second component, or the Non-423 Component, under which the ESPP authorizes the grant of
an option to purchase Shares that are not intended to qualify under Section 423 of the Code, pursuant to rules, procedures or sub-plans
adopted by the ESPP’s administrator, or Administrator, that are generally designed to achieve tax, securities laws, or other
objectives for eligible employees and our company.
Purpose
The purpose of the ESPP is to
provide employees of our company and its designated subsidiaries with an opportunity to purchase Shares through accumulated contributions
as permitted under the ESPP. The ESPP serves as an important tool for us in recruiting, retaining and motivating talented employees
and aligns our employees’ interests with those of our stockholders by encouraging equity ownership among our employees.
Eligibility to Participate
In general, employees
of Nutanix and any subsidiaries or affiliates that have been designed as eligible to participate in the ESPP who are customarily
employed for at least 20 hours per week and more than five months in any calendar year by the applicable employer are eligible
to participate in the ESPP. The Administrator may change the eligibility requirements consistent with the terms of the ESPP, but
any such determination must be made before the start of the applicable offering period and, for each offering under the 423 Component,
must be made on a uniform and nondiscriminatory basis. In the case of the Non-423 Component, eligible employees may be excluded
from participation in the ESPP or an offering if the Administrator has determined that participation of such eligible employee
is not advisable or practicable. As of the Record Date, approximately 6,350
employees are expected to be eligible to participate in the ESPP in the offering period
that is scheduled to start on the first trading day on or after March 20, 2023.
However, an employee is not
eligible to participate in the ESPP if, immediately after the grant of an option, he or she would own capital stock of our company
or its parent or subsidiary and/or hold outstanding options to purchase such stock equal to 5% or more of the total combined voting
power or value of all classes of our company’s capital stock or the stock of any parent or subsidiary of our company (including
stock attributed to the applicable employee under Section 424(d) of the Code). In addition, an eligible employee’s right
to buy Shares under the ESPP may not accrue at a rate exceeding USD $25,000 worth of Shares (determined based on the fair market
value of such Shares at the beginning of the applicable offering period) per calendar year for each calendar year in which the
offering period is in effect.
Enrollment
Eligible employees may voluntarily
elect to participate in the ESPP by (i) submitting to our company’s stock administration office (or its designee), on or
before a date determined by the Administrator prior to an applicable enrollment date, a properly completed subscription agreement
authorizing contributions in the form provided by the Administrator for such purpose, or (ii) following an electronic or other
enrollment procedure determined by the Administrator. Each eligible employee who joins the ESPP is granted an option to purchase
Shares on each enrollment date while participating in the ESPP and is automatically re-enrolled for additional rolling six-month
purchase periods; provided, however, that an employee may cancel his or her enrollment at any time (subject to the terms of the
ESPP). Eligible employees who participate in the ESPP are referred to collectively as Participants and individually as a Participant.
2022 PROXY STATEMENT 65
Contributions
Eligible employees may voluntarily
elect to contribute in the ESPP through contributions (in the form of payroll deductions or otherwise, to the extent permitted
by the Administrator) in an amount not exceeding 15% of the applicable eligible employee’s eligible compensation. For this
purpose, eligible compensation generally includes the applicable eligible employee’s regular and recurring straight time
gross earnings, commissions, bonus and other incentive compensation, and payments for overtime. The Administrator may establish
a different definition of compensation on a uniform and nondiscriminatory basis in its discretion, and may decrease the size of
contributions to 0% at any time during an offering period to the extent necessary to comply with Section 423(b)(8) of the Code
and other applicable terms of and limitations under the ESPP.
Purchase of Shares
Currently, Shares are offered
under the ESPP through a series of consecutive offering periods approximately 12 months in duration that are scheduled to start
on the first trading day on or after March 20 and September 20 of each year and terminate on the first trading day on or after
March 20 and September 20, approximately 12 months later. Each offering period generally contains two consecutive six-month purchase
periods. On the last trading day of each purchase period, our company uses each Participant’s payroll deductions or contributions
to purchase Shares for the Participant.
The Administrator also has discretion
to set a limit on the number of Shares that may be purchased during any six-month purchase period (currently 1,000 Shares, unless
otherwise determined by the Administrator). Further, under certain circumstances whereby the number of Shares to be purchased in
a purchase period exceeds the number of Shares available for purchase under the ESPP, the Administrator may make adjustments that
result in the purchase of a lesser number of Shares. The Administrator also may decrease the size of contributions to 0% at any
time during an offering period to the extent necessary to comply with Section 423(b)(8) of the Code and other applicable terms
of and limitations under the ESPP. Until Shares have been purchased and delivered to a Participant (as evidenced by the appropriate
entry in our company’s books or a duly authorized transfer agent of our company), the Participant will have no voting, dividend,
or other stockholder rights with respect to the Shares.
Purchase Price
Eligible employees are allowed
to purchase Shares under the ESPP at a price equal to the lesser of (i) 85% of the fair market value of our Shares on the
first trading day of the applicable offering period, or the Enrollment Date, or (ii) 85% of the fair market value of our Shares
on the Exercise Date. To the extent permitted by applicable laws, if the fair market value of Shares on any Exercise Date in an
offering period is lower than the fair market value of the Shares on the Enrollment Date of such offering period, then all Participants
in such offering period will be automatically withdrawn from such offering period immediately after the exercise of their option
on such Exercise Date and automatically re-enrolled in the immediately following offering period as of the first day thereof.
Currently, any contributions
accumulated in a participant’s account not sufficient to purchase a full share on an Exercise Date are retained in the participant’s
account for the subsequent purchase period or offering period. If stockholders approve the ESPP Amendment, then such contributions
will instead be returned to the participant.
Number of Shares of Common Stock Available for
Sale under the ESPP
Currently, (i)
a maximum of 11,529,531 Shares
have been approved for sale pursuant to the ESPP, and (ii) 1,363,314 Shares
remain available for sale under the ESPP. If stockholders approve the ESPP Amendment, then (i) the maximum number of Shares available
for sale under the ESPP will be increased to 13,805,561 Shares,
and (ii) 13,805,561 Shares will be immediately available
for sale under the ESPP. If stockholders do not approve the ESPP Amendment, no Shares will be added to the total number of Shares
reserved for sale under the ESPP, and the ESPP will continue under its existing terms.
Evergreen Provision
The ESPP does not provide for
an automatic annual increase in the number of Shares reserved for issuance under the ESPP.
Administration
Our Board, or a committee
thereof designated by our Board that complies with applicable laws, may administer the ESPP. Currently, the Compensation
Committee serves as the Administrator of the ESPP at the discretion of our Board and subject to the terms of the ESPP.
Subject to the terms of the ESPP, the Administrator has full and exclusive discretionary authority to interpret and apply the
terms of the ESPP, to establish rules, procedures, sub-plans, and
2022 PROXY STATEMENT 66
appendices to the subscription
agreement necessary for administration of the ESPP, to determine eligibility, to designate separate offerings under the ESPP, to
designate subsidiaries and affiliates of our company as participating in the 423 Component or the Non-423 Component, and to adjudicate
all disputed claims filed under the ESPP. Every finding, decision and determination made by the Administrator will, to the full
extent permitted by law, be final and binding upon all parties. The Administrator also may adopt rules and procedures regarding:
the definition of compensation, eligibility, handling of contributions, making of contributions to the ESPP, establishment of bank
or trust accounts to hold contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination
of beneficiary designation requirements, withholding procedures, and handling of stock certificates that vary with applicable local
requirements.
Termination of Participation
Participation in the ESPP generally
terminates when a Participant’s employment with our company or its subsidiaries ceases for any reason, the Participant withdraws
from the ESPP, or our company terminates or amends the ESPP such that the Participant no longer is eligible to participate. A Participant
may withdraw his or her participation in the ESPP at any time in accordance with procedures, and prior to the deadline, specified
by our company’s stock administration office. Upon withdrawal from the ESPP, generally the Participant will receive all amounts
credited to his or her account, without interest (unless otherwise required by applicable law), and his or her payroll withholdings
or contributions under the ESPP will cease.
Non-transferability
Neither contributions credited
to a Participant’s account nor any rights or interests under the ESPP may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution) by the applicable Participant. Any such attempt
at assignment, transfer, pledge or other disposition will be without effect, except that our company may treat such act as an election
to withdraw funds from an offering period in accordance with the terms of the ESPP.
Certain Transactions
In the event of any dividend
or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares
or other securities of our company, or other change in our company’s corporate structure affecting the Shares occurs, the
Administrator, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available
under the ESPP, will, in such manner as it may deem equitable, adjust the number and class of Shares that may be delivered under
the ESPP, the purchase price per Share and the number of Shares covered by each option under the ESPP that has not yet been exercised,
and the numerical limits under the ESPP. In the event of the proposed dissolution or liquidation of our company, any offering period
then in progress will be shortened by setting a new Exercise Date, and will terminate immediately prior to the consummation of
such proposed dissolution or liquidation, unless provided otherwise by the Administrator. In the event of a merger or change of
control of our company, each outstanding option will be assumed or an equivalent option substituted by the successor corporation
or a parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute
for the option, the offering period with respect to which such option relates will be shortened by setting a new Exercise Date
on which such offering period shall end.
Amendment and Termination
The Administrator, in its sole
discretion, may amend, suspend or terminate the ESPP, or any part thereof, at any time and for any reason. The ESPP will continue
in effect unless terminated by the Administrator in accordance with its terms. If the Administrator determines that the ongoing
operation of the ESPP may result in unfavorable financial accounting consequences, the Administrator may modify, amend or terminate
the ESPP to reduce or eliminate such accounting consequence. If the ESPP is terminated, the Administrator, in its discretion, may
elect to terminate all outstanding offering periods either immediately or after completion of the purchase of Shares on the next
Exercise Date (which may be adjusted to occur sooner than originally scheduled), or may elect to permit offering periods to expire
in accordance with their terms. If options are terminated prior to expiration, then all amounts then credited to Participants’
accounts that have not been used to purchase Shares will be returned the Participants, without interest (unless otherwise required
by applicable law), as soon as administratively practicable.
2022 PROXY STATEMENT 67
Number of Shares Purchased by Certain Individuals
and Groups
Participation in the ESPP is
voluntary and dependent on each eligible employee’s election to participate and his or her determination as to the level
of contributions of eligible compensation. Further, the number of Shares that may be purchased under the ESPP is determined, in
part, by the price of our Shares on the Enrollment Date and the Exercise Date.
Accordingly, the actual number
of Shares that may be purchased by any individual is not determinable. For illustrative purposes only, the following table sets
forth (i) the number of Shares that were purchased during fiscal year 2022 under the ESPP, and (ii) the weighted average per Share
purchase price paid for such Shares, for each of our Named Executive Officers, all current executive officers as a group, and all
other employees who participated in the ESPP as a group. Our executive officers have an interest in the approval of the ESPP Amendment
by our stockholders because they are eligible to participate in the ESPP. Non-employee members of our Board are not eligible to
participate in the ESPP.
Name
of Individual or Identity of Group and Position |
Number of Shares
Purchased
(#) |
|
Weighted Average
Purchase Price Per
Share
($) |
Rajiv
Ramaswami
President and Chief Executive Officer |
1,906 |
|
22.29 |
Rukmini
Sivaraman
Chief Financial Officer |
— |
|
— |
David
Sangster
Chief Operating Officer |
— |
|
— |
Tyler
Wall
Chief Legal Officer |
1,350 |
|
22.29 |
Duston
M. Williams
Former Chief Financial Officer |
1,350 |
|
22.29 |
All
current executive officers as a group(1) |
3,256 |
|
22.29 |
All
current directors who are not executive officers as a group(2) |
— |
|
— |
All other employees
(including all current officers who are not
executive officers) as a group |
2,822,398 |
|
22.15 |
(1) |
Mr. Williams resigned effective April 30, 2022 and therefore is not included in the group of current executive officers. |
(2) |
Non-employee directors are not eligible to participate in the ESPP. |
U.S. Federal Income Tax Consequences
The following brief summary
of the effect of U.S. federal income taxation upon the Participant and our company with respect to the Shares purchased under the
ESPP is based on management’s understanding of current U.S. federal income tax laws, does not purport to be complete, and
does not discuss the tax consequences of a Participant’s death or the income tax laws of any state or foreign country in
which the Participant may reside.
The 423 Component of the ESPP
is intended to qualify as an employee stock purchase plan within the meaning of Section 423 of the Code. Under an employee stock
purchase plan that so qualifies, no taxable income will be recognized by a Participant, and no deductions will be allowable to
our company, upon either the grant or the exercise of the purchase rights. Taxable income will not be recognized until there is
a sale or other disposition of the Shares acquired under the ESPP or in the event of the Participant’s death while still
owning the purchased Shares.
If the Participant sells or
otherwise disposes of the purchased Shares within two (2) years after the start date of the offering period in which the Shares
were acquired or within one (1) year after the actual purchase date of those Shares, then the Participant generally will recognize
ordinary income in the year of sale or disposition equal to the amount by which the fair market value of the Shares on the purchase
date exceeded the purchase price paid for those Shares, and our company will be entitled to an income tax deduction, for the taxable
year in which such disposition occurs equal in amount to such excess. The amount of this ordinary income will be added to the Participant’s
basis in the Shares, and any resulting gain or loss recognized upon the sale or disposition will be a capital gain or loss. If
the Shares have been held for more than one (1) year since the date of purchase, the gain or loss will be long-term.
2022 PROXY STATEMENT 68
If the Participant sells or
disposes of the purchased Shares more than two (2) years after the start date of the offering period in which the Shares were acquired
and more than one (1) year after the actual purchase date of those Shares, then the Participant generally will recognize ordinary
income in the year of sale or disposition equal to the lesser of (i) the amount by which the fair market value of the Shares on
the sale or disposition date exceeded the purchase price paid for those Shares, or (ii) 15% of the fair market value of the Shares
on the start date of that offering period. Any additional gain upon the disposition will be taxed as a long-term capital gain.
Alternatively, if the fair market value of the Shares on the date of the sale or disposition is less than the purchase price, there
will be no ordinary income and any loss recognized will be a long-term capital loss. Our company will not be entitled to an income
tax deduction with respect to such disposition.
Registration of Shares
If the ESPP Amendment is approved
by our stockholders, our Board intends to cause the additional Shares that will become available for sale as a result of the ESPP
Amendment to be registered on a Form S-8 Registration Statement to be filed with the SEC at our company’s expense prior to
the sale of any such Shares.
Summary and Recommendation of our Board
Our Board believes
that it is in the best interests of our company and our stockholders to continue to provide eligible employees with the opportunity
to purchase Shares through the ESPP, which plays an important role in encouraging equity ownership among our employees and assisting
our company to recruit, retain and motivate talented employees. We strongly believe that the ESPP is essential for us to compete
for talent in the labor markets in which we operate. Accordingly, our Board unanimously recommends a vote FOR
the approval of the ESPP Amendment.
Vote Required
Approval of Proposal
7 requires FOR votes from the holders
of a majority of the voting power of the shares present at the Annual Meeting or represented by proxy thereat and entitled to vote
on the proposal. Abstentions are considered votes present and entitled to vote on this proposal, and thus will have the same effect
as a vote AGAINST the proposal. Broker
non-votes will have no effect on the outcome of this proposal.
If our stockholders do not approve
the ESPP Amendment, our ESPP will remain in effect without the ESPP Amendment, but our goals of recruiting, retaining and motivating
talented employees will be more difficult to meet. We believe that the approval of the ESPP Amendment is important to our continued
success.
2022 PROXY STATEMENT 69
STOCK OWNERSHIP INFORMATION
Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth,
as of the close of business on October 11, 2022, certain information with respect to the beneficial ownership of our common stock:
(i) by each person known by us to be the beneficial owner of more than five percent of the outstanding shares of Class A
common stock; (ii) by each of our directors; (iii) by each of our named executive officers; and (iv) by all of our
current executive officers and directors as a group.
The percentage of
shares beneficially owned shown in the table is based on 230,085,836 shares
of Class A common stock as of the close of business on October 11, 2022. In computing the number of shares of capital stock
beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares of our capital
stock with respect to which the individual has the right to acquire beneficial ownership within 60 days of October 11, 2022
through the exercise of any stock option or other right. However, we did not deem such shares of our capital stock outstanding
for the purpose of computing the percentage ownership of any other person.
Beneficial ownership is determined
in accordance with SEC rules and generally includes any shares over which a person exercises sole or shared voting or investment
power. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with
respect to all shares shown beneficially owned by them, subject to applicable community property laws. The information contained
in the following table is not necessarily indicative of beneficial ownership for any other purpose, and the inclusion of any shares
in the table does not constitute an admission of beneficial ownership of those shares. Except as otherwise noted below, the address
for persons listed in the table is c/o Nutanix, Inc., 1740 Technology Drive, Suite 150, San Jose, California 95110.
The information provided in the table below is based on our records, information filed with the SEC and information provided to
us, except where otherwise noted.
Name of Beneficial Owner |
Shares Beneficially
Owned |
% |
5% Stockholders: |
|
|
Entities affiliated with Fidelity(1) |
33,628,974 |
14.6 |
Entities affiliated with the Vanguard Group(2) |
25,459,958 |
11.1 |
Entities affiliated with Generation Investment Management LLP(3) |
21,163,311 |
9.2 |
Named Executive Officers and Directors: |
|
|
Rajiv Ramaswami |
267,576 |
* |
Rukmini Sivaraman |
95,237 |
* |
David Sangster |
199,763 |
* |
Tyler Wall |
129,296 |
* |
Duston M. Williams |
314,104 |
* |
Craig Conway(4) |
49,681 |
* |
Max de Groen(5) |
22,330 |
* |
Virginia Gambale(6) |
36,620 |
* |
Steven J. Gomo(7) |
120,060 |
* |
David Humphrey(8) |
22,330 |
* |
Gayle Sheppard(9) |
7,484 |
* |
Brian Stevens(10) |
34,565 |
* |
All current directors and executive officers
as a group (11 persons)(11) |
984,942 |
* |
2022 PROXY STATEMENT 70
(1) |
Consists of: (i) 72,872 shares
of Class A common stock directly held by investment companies advised by Fidelity Management & Research Company
LLC, an indirect wholly-owned subsidiary of FMR LLC; and (ii) 33,556,102 shares of Class A common stock held of record by FMR
LLC and its affiliates. Abigail P. Johnson is a Director, the Chairman and the Chief Executive Officer of FMR LLC. Members of
the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting
common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B
shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be
voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting
common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed,
under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P.
Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies
registered under the Investment Company Act advised by Fidelity Management & Research Company (“FMR
Co”), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. FMR
Co carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees.
The address for FMR LLC is 245 Summer Street, Boston, Massachusetts 02210. Based on a Schedule 13G/A filed on February 9,
2022 and a Form 13F-HR filed on August 12, 2022 by FMR LLC. |
(2) |
Consists of 25,459,958 shares of Class A
common stock beneficially owned by The Vanguard Group and its affiliates. Based on a Schedule 13G/A filed on January 10, 2022
and a Form 13F-HR filed on August 12, 2022 by The Vanguard Group and its affiliates. The address for The Vanguard Group is
100 Vanguard Blvd., Malvern, PA 19355. |
(3) |
Consists of 21,163,311 shares of Class A common stock beneficially
owned by Generation Investment Management LLP. Based on a Schedule 13G/A filed on February 14, 2022 and a Form 13F-HR filed
on August 12, 2022, by Generation Investment Management LLP. The address for Generation Investment Management LLP is 20 Air
Street, 7th floor, London, United Kingdom W1B 5AN. |
(4) |
Consists of (i) 42,316 shares of Class A common stock held of
record by Mr. Conway and (ii) 7,365 shares of Class A common stock issuable upon vesting of RSUs within 60 days of October
11, 2022. |
(5) |
Consists of (i) 14,965 shares of Class A common stock held of
record by Mr. de Groen and (ii) 7,365 shares of Class A common stock issuable upon vesting of RSUs within 60 days of October
11, 2022. |
(6) |
Consists of (i) 23,755 shares of Class A common stock held of
record by Ms. Gambale, (ii) 5,500 shares of Class A common stock held of record by Virginia Gambale TTEE Virginia Gambale
REV Trust DTD 5/22/2003 for which Ms. Gambale serves as trustee, and (iii) 7,365 shares of Class A common stock issuable upon
vesting of RSUs within 60 days of October 11, 2022. |
(7) |
Consists of (i) 112,695 shares of Class A common stock held of
record by Mr. Gomo and (ii) 7,365 shares of Class A common stock issuable upon vesting of RSUs within 60 days of October 11,
2022. |
(8) |
Consists of (i) 14,965 shares of Class A common stock held of
record by Mr. Humphrey and (ii) 7,365 shares of Class A common stock issuable upon vesting of RSUs within 60 days of October
11, 2022. |
(9) |
Consists of 7,484 shares of Class A common stock issuable upon
vesting of RSUs within 60 days of October 11, 2022. |
(10) |
Consists of (i) 27,200 shares of Class A common stock held of
record by Mr. Stevens and (ii) 7,365 shares of Class A common stock issuable upon vesting of RSUs within 60 days of October
11, 2022. |
(11) |
Consists of (i) 933,268 shares of Class A common stock beneficially
owned by our current directors and executive officers as a group, and (ii) 51,674 shares of Class A common stock issuable
upon vesting of RSUs within 60 days of October 11, 2022. |
2022 PROXY STATEMENT 71
OTHER MATTERS
Our Board knows of no other matters
that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting,
the persons named in the associated proxy intend to vote on such matters in accordance with their best judgment.
We filed our Annual Report on
Form 10-K for the fiscal year ended July 31, 2022 with the SEC on September 21, 2022. It is available free of charge at the
SEC’s website at www.sec.gov. Stockholders can also access this proxy statement and our Annual Report at http://ir.nutanix.com,
or a copy of our Annual Report is available without charge upon written request to our Secretary at 1740 Technology Drive,
Suite 150, San Jose, California 95110.
2022 PROXY STATEMENT 72
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
Why did I receive a notice regarding the availability
of proxy materials on the Internet?
We have elected to provide access
to our proxy materials over the Internet. Accordingly, we have sent you a Notice of Internet Availability of Proxy Materials containing
instructions on how to access our proxy materials because our Board is soliciting your proxy to vote at the Annual Meeting. All
stockholders will have the ability to access the proxy materials on the website referred to in the Notice or to request a printed
set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may
be found in the Notice.
We mailed the Notice on or about
October 24 , 2022 to all stockholders of record entitled to vote at the Annual Meeting.
How do I attend and participate in the Annual
Meeting online?
We will be hosting
the Annual Meeting via live webcast only. Any stockholder can attend the Annual Meeting, live online at www.virtualshareholdermeeting.com/NTNX2022.
The webcast will start at 9:00 a.m., Pacific Time. Stockholders may vote and submit questions while attending the meeting online.
The webcast will open 15 minutes before the start of the meeting. In order to enter the meeting, you will need the control number.
The control number will be included in the Notice or on your proxy card if you are a stockholder of record of shares of common
stock, or included with your voting instructions received from your broker, bank or other agent if you hold your shares of common
stock in a “street name.” Instructions on how to attend and participate online are available at www.virtualshareholdermeeting.com/NTNX2022.
Who can vote at the Annual Meeting?
Only stockholders
of record at the close of business on October 11, 2022, the record date for the Annual Meeting, will be entitled to vote at the
Annual Meeting. As of the close of business on the record date, there were 230,085,836 shares
of Class A common stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your
Name
If, as of the close of business
on the record date, your shares of Class A common stock were registered directly in your name with our transfer agent, Computershare
Trust Company, N.A., then you are a stockholder of record. As a stockholder of record, you may vote online during the meeting or
vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name
of a Broker or Bank
If, as of the close of business
on the record date, your shares of Class A common stock were held, not in your name, but rather in an account at a brokerage firm,
bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and the
Notice will be forwarded to you by that organization. The organization holding your account is considered to be the stockholder
of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other
agent regarding how to vote the shares in your account. You are also invited to attend the virtual Annual Meeting. Since you are
not the stockholder of record, you may vote your shares online during the Annual Meeting only by following the instructions from
your broker, bank or other agent.
2022 PROXY STATEMENT 73
What matters am I voting on?
There are seven matters scheduled for a vote:
• |
the approval of amendments to our Amended and Restated Certificate
of Incorporation to declassify our Board; |
• |
the approval of amendments to our Amended and Restated Certificate
of Incorporation to remove supermajority voting requirements; |
• |
the approval of amendments to our Amended and Restated Certificate
of Incorporation to eliminate inoperative provisions and update certain other miscellaneous provisions; |
• |
the election of three Class III directors to hold office until
the annual meeting of stockholders to take place after the end of fiscal year ending July 31, 2025; |
• |
the ratification of the selection of Deloitte & Touche
LLP as our independent registered public accounting firm for the fiscal year ending July 31, 2023; |
• |
the approval, on a non-binding advisory basis, of the compensation
of our named executive officers; and |
• |
the approval of amendments to our Amended and Restated 2016 Employee
Stock Purchase Plan. |
How do I vote?
The procedures for voting are as follows:
Stockholder of Record: Shares Registered in Your
Name
If you are a stockholder of record,
you may vote online during the Annual Meeting, vote by proxy through the Internet, vote by proxy over the telephone, or vote by
proxy using a proxy card that you may request. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy
to ensure your vote is counted. Even if you have submitted a proxy before the Annual Meeting, you may still attend online and vote
during the meeting. In such case, your previously submitted proxy will be disregarded.
• |
To vote online during the Annual Meeting, follow the provided
instructions to join the meeting at www.virtualshareholdermeeting.com/NTNX2022,
starting at 9:00 a.m., Pacific Time, on December 9, 2022. |
• |
To vote online before the Annual Meeting, go to www.proxyvote.com.
|
• |
To vote by toll-free telephone, call 1-800-690-6903 if you are
a stockholder of record or 1-800-454-8683 if you are a “beneficial” stockholder (be sure to have your Notice or
proxy card in hand when you call). |
• |
To vote by mail, simply complete, sign and date the proxy card
or voting instruction card, and return it promptly in the envelope provided. |
If we receive your vote by Internet
or phone or your signed proxy card up until 11:59 p.m., Eastern Time, the day before the Annual Meeting, we will vote your shares
as you direct.
To vote, you will need the control
number. The control number will be included in the Notice, or on your proxy card if you are a stockholder of record of shares of
Class A common stock, or included with your voting instructions received from your broker, bank or other agent if you hold your
shares of Class A common stock in “street name.”
Beneficial Owner: Shares Registered in the Name
of Broker or Bank
If you are a beneficial owner
of shares registered in the name of your broker, bank or other agent, you should have received a notice containing voting instructions
from that organization rather than from us. Simply follow the voting instructions in such notice to ensure that your vote is counted.
To vote online during the meeting, you must follow the instructions from your broker, bank or other agent.
Internet proxy voting is provided
to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote
instructions. Please be aware that you must bear any costs associated with your Internet access.
2022 PROXY STATEMENT 74
Can I change my vote?
Yes. Subject to the voting deadlines
above, if you are a stockholder of record, you may revoke your proxy at any time before the close of voting using one of the following
methods:
• |
You may submit another properly completed proxy card with a later
date. |
• |
You may grant a subsequent proxy by telephone or through the
Internet. |
• |
You may send a written notice that you are revoking your proxy
to our Secretary at 1740 Technology Drive, Suite 150, San Jose, California 95110. |
• |
You may attend and vote online during the Annual Meeting. Simply
attending the Annual Meeting will not, by itself, revoke your proxy. |
If your shares are held by your
broker or bank as a nominee or agent, you should follow the instructions provided by such party.
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your
Name
If you are a stockholder of record
and do not vote during the Annual Meeting, or through the Internet, by telephone or by completing your proxy card before the Annual
Meeting, your shares will not be voted.
Beneficial Owner: Shares Registered in the Name
of a Broker or Bank
Broker non-votes occur when (i) a
broker or other nominee holds shares for a beneficial owner, (ii) the beneficial owner has not given the respective broker
specific voting instructions, (iii) the matter is non-routine in nature, and (iv) there is at least one routine proposal
presented at the applicable meeting of stockholders (such as Proposal 5 at this Annual Meeting). Under applicable rules, a broker
or other nominee has discretionary voting power only with respect to proposals that are considered “routine,” but not
with respect to “non-routine” proposals. Broker non-votes are considered present for purposes of determining the presence
of a quorum so long as the shares represented by a broker or other nominee who holds shares for a beneficial owner, where the beneficial
owner has not given the respective broker or other nominee specific voting instructions, can be voted for, against or in abstention
for at least one proposal presented at the Annual Meeting. Since there is one routine proposal presented at the Annual Meeting
(Proposal 5) on which brokers and other nominees have such discretionary voting power, broker non-votes will be counted for quorum
purposes at the Annual Meeting. Broker non-votes will not be counted for purposes of determining the number of votes cast or considered
entitled to vote, as applicable, on a proposal. Therefore, a broker non-vote will make a quorum more readily attainable but will
not otherwise affect the outcome of the vote on Proposals 4, 5, 6 and 7. In the case of Proposals 1, 2 and 3 broker non-votes are
also counted as votes against the proposal.
Abstentions represent
a stockholder’s affirmative choice to decline to vote on a proposal, and occur when shares present at the meeting are marked
ABSTAIN. Abstentions are counted for purposes of
determining whether a quorum is present but will not otherwise affect the outcome of the vote on Proposal 4. In the case of Proposals
1, 2, 3, 5, 6 and 7, abstentions are also counted as votes AGAINST the
proposal.
Proposals 1, 2, 3, 4, 6
and 7 are non-routine matters, so your broker or nominee may not vote your shares on Proposals 1, 2, 3, 4, 6 or 7 without
your instructions. Proposal 5, the ratification of Deloitte & Touche LLP as our independent registered public accounting
firm for the fiscal year ending July 31, 2023, is a routine matter so your broker or nominee may vote your shares on Proposal 5
even in the absence of your instruction. Please instruct your bank, broker or other agent to ensure that your vote will be counted.
What if I return a proxy card or otherwise vote
but do not make specific choices?
If you return a
signed and dated proxy card or otherwise vote but do not make specific choices, your shares will be voted FOR
the amendment and restatement of our Amended and Restated Certificate of Incorporation
to declassify the board of directors and provide for the annual election of directors, FOR
the amendment and restatement of our Amended and Restated Certificate of Incorporation
to eliminate supermajority voting requirements, FOR the
amendment and restatement of our Amended and Restated Certificate of Incorporation to eliminate inoperative provisions and update
certain other miscellaneous provisions, FOR the
election of all three nominees as Class III directors, FOR the
ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal
year ending July 31, 2023, FOR the approval
of the compensation of our named executive officers,
2022 PROXY STATEMENT 75
and FOR
the amendment and restatement of our Amended and Restated 2016 Employee Stock Purchase
Plan. If any other matter is properly presented at the Annual Meeting, your proxyholder (one of the individuals named on your proxy
card) will vote your shares using the proxyholder’s best judgment.
How many votes do I have?
Each holder of Class A common
stock will have the right to one vote per share of Class A common stock. Stockholders are not permitted to cumulate votes
with respect to the election of directors.
How many votes are needed to approve each proposal
and how are the votes counted?
Proposal 1: The
approval of the amendment and restatement of our Amended and Restated Certificate of Incorporation to declassify the board of directors
and provide for the annual election of directors must receive FOR votes
from the holders of at least 66⅔% of the voting power of the outstanding shares entitled to vote on the proposal. You may vote
FOR, AGAINST,
or ABSTAIN with respect to this proposal. Abstentions
and broker non-votes are considered votes present and entitled to vote on this proposal, and thus will have the same effect as
votes AGAINST this proposal. Approval of Proposal
1 is also conditioned on the approval of Proposals 2 and 3. If either Proposal 2 or 3 is not approved, our Board will not implement
Proposal 1, even if it is approved by the requisite vote of our stockholders.
Proposal 2: The
approval of the amendment and restatement of our Amended and Restated Certificate of Incorporation to eliminate supermajority voting
requirements must receive FOR votes from the holders
of at least 66⅔% of the voting power of the outstanding shares entitled to vote on the proposal. You may vote FOR, AGAINST,
or ABSTAIN with respect to this proposal. Abstentions
and broker non-votes are considered votes present and entitled to vote on this proposal, and thus will have the same effect as
votes AGAINST this proposal. Approval of Proposal
2 is also conditioned on the approval of Proposals 1 and 3. If either Proposal 1 or 3 is not approved, our Board will not implement
Proposal 2, even if it is approved by the requisite vote of our stockholders.
Proposal 3: The
approval of the amendment and restatement of our Amended and Restated Certificate of Incorporation to eliminate inoperative provisions
and update certain other miscellaneous provisions must receive FOR votes
from the holders of at least 66⅔% of the voting power of the outstanding shares entitled to vote on the proposal. You may vote
FOR, AGAINST,
or ABSTAIN with respect to this proposal. Abstentions
and broker non-votes are considered votes present and entitled to vote on this proposal, and thus will have the same effect as
votes AGAINST this proposal. Approval of Proposal
3 is also conditioned on the approval of Proposals 1 and 2. If either Proposal 1 or 3 is not approved, our Board will not implement
Proposal 3, even if it is approved by the requisite vote of our stockholders.
Proposal 4: Directors
are elected by a majority of the votes cast, meaning that the number of shares voted FOR
a director’s election exceeds the number of votes cast AGAINST
such director’s election. You may vote FOR,
AGAINST, or ABSTAIN
on each of the nominees for election as director. Abstentions will not be counted for purposes
of determining the number of votes cast with respect to the election of a director, and thus will have no effect on the outcome
of the vote. Broker non-votes will have no effect on the outcome of the vote.
Proposal 5: The
ratification of the selection of our independent registered public accounting firm for the fiscal year ending July 31, 2023,
must receive FOR votes from the holders of a majority
in voting power of the shares present at the Annual Meeting or represented by proxy thereat and entitled to vote on the proposal.
You may vote FOR, AGAINST,
or ABSTAIN with respect to this proposal. Abstentions
are considered votes present and entitled to vote on this proposal, and thus will have the same effect as a vote AGAINST
the proposal. Broker non-votes will have no effect as a vote on the outcome of this proposal.
Proposal 6: The
approval, on an advisory basis, of the compensation of our named executive officers must receive FOR
votes from the holders of a majority of the voting power of the shares present at the Annual
Meeting or represented by proxy thereat and entitled to vote on the proposal. You may vote FOR, AGAINST,
or ABSTAIN with respect to this proposal. Abstentions
are considered votes present and entitled to vote on this proposal, and thus will have the same effect as votes AGAINST
this proposal. Broker non-votes will have no effect on the outcome of this proposal. Although
the advisory vote is non-binding, our Board values stockholders’ opinions. The Compensation Committee will review
the results of the vote and, consistent with our record of stockholder responsiveness, consider stockholders’ concerns and
take into account the outcome of the vote when considering future decisions concerning our executive compensation program.
Proposal 7: The
approval of the amendment and restatement of our Amended and Restated 2016 Employee Stock Purchase Plan, including to increase
the maximum number of shares of our Class A common stock authorized for sale thereunder by 12,442,247 shares, must receive FOR votes
from the holders of a majority of the voting power of the shares
2022 PROXY STATEMENT 76
present at the Annual
Meeting or represented by proxy thereat and entitled to vote on the proposal. You may vote FOR, AGAINST,
or ABSTAIN with respect to this proposal. Abstentions
are considered votes present and entitled to vote on this proposal, and thus will have the same effect as votes AGAINST
this proposal. Broker non-votes will have no effect on the outcome of this proposal.
Who counts the votes?
We have engaged Broadridge Financial
Solutions as our independent agent to tabulate stockholder votes. If you are a stockholder of record, and you choose to vote over
the Internet (either prior to or during the Annual Meeting) or by telephone, Broadridge Financial Solutions will access and tabulate
your vote electronically, and if you choose to sign and mail your proxy card, your executed proxy card is returned directly to
Broadridge Financial Solutions for tabulation. As noted above, if you hold your shares through a broker, your broker (or its agent
for tabulating votes of shares held in street name, as applicable) returns one proxy card to Broadridge Financial Solutions on
behalf of all its clients.
Who is paying for this proxy solicitation?
We will pay for
the cost of soliciting proxies to be voted at the Annual Meeting. We intend to retain Alliance Advisors, LLC for various services related to the solicitation of proxies, which we anticipate will cost
approximately $14,500, plus reimbursement of expenses.
In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other
means of communication. Directors and employees will not be paid additional compensation for soliciting proxies. We may reimburse
brokers, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
When are stockholder proposals due for next year’s
annual meeting?
Requirements for Stockholder Proposals to be Considered
for Inclusion in our Proxy Materials
Stockholder proposals
submitted pursuant to Rule 14a-8 under the Exchange Act and intended to be presented at the 2023 annual meeting of stockholders
must be received by us no later than June 26 , 2023 in
order to be considered for inclusion in our proxy materials for that meeting.
Requirements for Stockholder Proposals to be Brought
Before an Annual Meeting
Our amended and restated bylaws contain advance notice provisions that provide that, for stockholder director
nominations or other proposals to be considered at an annual meeting of stockholders, the stockholder must give timely
notice thereof in writing to our Secretary at Nutanix, Inc., 1740 Technology Drive, Suite 150, San Jose, California
95110. To be timely for our 2023 annual meeting of stockholders, a stockholder’s notice must be delivered to or mailed
and received by our Secretary at Nutanix, Inc., 1740 Technology Drive, Suite 150, San Jose, California 95110 not later
than the close of business on September 9, 2023 nor earlier than the close of business on August 10, 2023. A
stockholder’s notice to the Secretary must set forth the information required by our amended and restated bylaws, which
bylaws include the information required by Rule 14a-19 of the Exchange Act.
What is the quorum requirement?
A quorum of stockholders is necessary
to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the aggregate voting power of
the shares of Class A common stock issued, outstanding and entitled to vote are present in person at the meeting or represented
by proxy.
Your shares will be counted towards
the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you
vote during the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no
quorum, either the chairperson of the Annual Meeting or the stockholders entitled to vote at the Annual Meeting that are present
in person or represented by proxy may adjourn the meeting to another date.
2022 PROXY STATEMENT 77
How can I find out the results of the voting at
the Annual Meeting?
We expect that preliminary voting
results will be announced during or shortly following the Annual Meeting. In addition, final voting results will be published in
a current report on Form 8-K that we expect to file with the SEC within four business days after the Annual Meeting.
What does it mean if I receive more than one Notice?
If you receive more than one
Notice, your shares may be registered in more than one name or in different accounts. Please follow the instructions on the Notices
to ensure that all your shares are voted.
What does it mean if multiple members of my household
are stockholders but we only received one Notice or full set of proxy materials in the mail?
The SEC has adopted rules that
permit companies and intermediaries, such as brokers, to satisfy the delivery requirements for notices and proxy materials with
respect to two or more stockholders sharing the same address by delivering a single Notice or set of proxy materials addressed
to those stockholders. In accordance with a prior notice sent to certain brokers, banks, dealers or other agents, we are sending
only one Notice or full set of proxy materials to those addresses with multiple stockholders unless we received contrary instructions
from any stockholder at that address. This practice, known as “householding,” allows us to satisfy the requirements
for delivering Notices or proxy materials with respect to two or more stockholders sharing the same address by delivering a single
copy of these documents. Householding helps to reduce our printing and postage costs, reduces the amount of mail you receive and
helps to preserve the environment. If you currently receive multiple copies of the Notice or proxy materials at your address and
would like to request “householding” of your communications, please contact your broker. Once you have elected “householding”
of your communications, “householding” will continue until you are notified otherwise or until you revoke your consent.
To receive a separate copy, or,
if a stockholder is receiving multiple copies, to request that we only send a single copy of the Notice and, if applicable, our
proxy materials, such stockholder may contact us at the following address:
Nutanix, Inc.
Attention: Investor Relations
1740 Technology Drive, Suite 150
San Jose, California 95110
2022 PROXY STATEMENT 78
APPENDIX A – KEY PERFORMANCE MEASURES AND
NON-GAAP FINANCIAL MEASURES
This proxy statement includes the following key
performance and non-GAAP financial measures:
• |
ACV
billings — We calculate ACV billings
as the sum of the ACV for all contracts billed during the period. ACV is defined as the total annualized value of a contract,
excluding amounts related to professional services and hardware. We calculate the total annualized value for a contract by
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. |
• |
Annual recurring revenue
(“ARR”) — We calculate ARR 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, we assume that the contract
term begins on the date a contract is booked, unless the terms of such contract prevent us from fulfilling our obligations
until a later period, and irrespective of the periods in which we would recognize revenue for such contract. |
• |
Free cash flow —
We calculate free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment,
which measures our ability to generate cash from our business operations after our capital expenditures. |
ACV billings is a performance
measure that we believe provides useful information to our management and investors as they allow us to better track the topline
growth of our business during our transition to a subscription-based business model because they take into account variability
in term lengths. ARR is a performance measure that we believe provides useful information to our management and investors as it
allows us to better track the topline growth of our subscription business because it takes into account variability in term lengths.
Free cash flow is a performance measure that we believe provides useful information to our management and investors about the
amount of cash generated by the business after necessary capital expenditures, and we define free cash flow as net cash provided
by (used in) operating activities less purchases of property and equipment. We use these key performance and non-GAAP financial
measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. However, these
key performance and non-GAAP financial measures have limitations as analytical tools and you should not consider them in isolation
or as substitutes for analysis of our results as reported under GAAP. There is no GAAP measure that is comparable to ACV billings
or ARR, so we have not reconciled the ACV billings or ARR data included in this proxy statement to any GAAP measure. The GAAP
measure that is most comparable to free cash flow is net cash flow provided (used in) provided by operating activities. Set forth
below is a reconciliation of free cash flow to net cash flow provided (used in) provided by operating activities. In addition,
other companies, including companies in our industry, may calculate key performance measures and non-GAAP financial measures and
differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our key performance
measures and non-GAAP financial measures as tools for comparison. We urge you not to rely on any single financial measure to evaluate
our business.
| |
Fiscal Year Ended July 31, |
| |
2021 | | |
2022 | |
| |
($) | | |
($) | |
| |
(in thousands) |
Net cash (used in) provided by operating activities | |
| (99,810 | ) | |
| 67,543 | |
Purchases of property and equipment | |
| (58,647 | ) | |
| (49,058 | ) |
FREE CASH FLOW (NON-GAAP) | |
| (158,457 | ) | |
| 18,485 | |
2022 PROXY STATEMENT A-1
APPENDIX B - PROPOSED AMENDED & RESTATED
CERTIFICATE OF INCORPORATION
AMENDED AND RESTATED
CERTIFICATE
OF INCORPORATION OF
NUTANIX, INC.
Nutanix,
Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), certifies
that:
A. |
The name of the Corporation is Nutanix,
Inc. |
|
|
B. |
The Corporation’s original Certificate of Incorporation
was filed with the Secretary of State of the State of Delaware on September 22, 2009. |
|
|
BC. |
This Amended and Restated Certificate of
Incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the
State of Delaware by the Board of Directors of the Corporation and the
affirmative vote of the stockholders of the Corporation, and restates, integrates and further amends the
provisions of the Corporation’s Certificate of Incorporation. |
|
|
C. |
This Amended
and Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of the Corporation
in accordance with Section 228 of the General Corporation Law of Delaware. |
|
|
D. |
The text of the Corporation’s Amended
and Restated Certificate of Incorporation is amended and restated in its entirety to read as set forth in EXHIBIT A attached hereto. |
2022 PROXY STATEMENT B-1
IN
WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation, which amends
and restates and integrates and also
further amends the Corporation’s existing
amended and restated certificate of incorporation, and which has been duly adopted
by this corporation’sCorporation’s Board
of Directors and stockholders in accordance with the applicable provisions of Sections 228, 242
and 245 of the Delaware General
Corporation Law of the State of
Delaware, has been executed by its duly authorized officer as of the date set
forth below.
NUTANIX, INC.
|
|
|
By: |
|
|
Name: Dheeraj Pandey |
|
Title: Chief Executive Officer and Chairman |
|
Date: October 5, 2016 |
|
|
|
|
|
2022 PROXY STATEMENT B-2
Exhibit A
Article I
The name of the
Corporation is Nutanix, Inc. (the “Corporation”).
Article II
The
purpose of this Corporation is to engage in any lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the “DGCL”).
Article III
The
address of the Corporation’s registered office in the State of Delaware is 2711
Centerville Road, Suite 400, in the City of251 Little Falls Drive, Wilmington,
County of New Castle, Zip Code 19808. The name of the registered agent at such address is Corporation Service Company.
Article IV
4.1 Authorized
Capital Stock. The total number of shares of all classes of capital stock that the Corporation is authorized to issue is 1,400,000,0001,200,000,000 shares,
consisting of 1,000,000,000 shares of Class A Common Stock, par value $0.000025 per share (the “Class A Common
Stock”), 200,000,000 shares of Class B Common Stock, par value
$0.000025 per share (the “Class B Common Stock”) and
200,000,000 shares of Preferred Stock, par value $0.000025 per share (the “Preferred Stock”).
4.2 Increase
or Decrease in Authorized Capital Stock. The number of authorized shares of Class A Common
Stock, Class B Common Stock or Preferred Stock may be increased or decreased
(but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the
voting power of all the outstandingthen-outstanding shares
of capital stock of the Corporation entitled to vote thereon,
irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto),
voting together as a single class, without a separate vote of the holders of the
class or classes the number of authorized shares of which are being increased or decreased, unless a vote by any holders of
one or more series of Preferred Stock is required by the express terms of any series of Preferred Stock as provided for or
fixed pursuant to the provisions of Section 4.4 of this ARTICLE IV (or any certificate of designation with respect
thereto).
4.3 Rights
ofClass A Common Stock and Class B Common Stock.
(a) Voting Rights.
1.(a) General
Right to Vote Together; Exception. Except as otherwise expressly provided herein or
required by applicable law, the holders of shares of Class A Common Stock shall be entitled to one (1) vote for each such
share held by them and the holders of shares of Class B Common Stock shall be
entitled to ten (10) votes for each such share held by them as
of the applicable record date on each matter properly submitted to the
stockholders on which the holders of shares of Class A Common Stock and Class B
Common Stock are entitled to vote.
(a)(b) Except as
otherwise required by law or this certificate of incorporation (this “Certificate of Incorporation”
which term, as used herein, shall mean the certificate of incorporation of the Corporation, as amended from time to time,
including the terms of any certificates of designation of any series of Preferred Stock), and subject to the rights of the
holders of Preferred Stock, at any annual or special meeting of the stockholders, the holders of shares of Class A Common
Stock and Class B Common Stock shall have the right to vote for the election of directors and on all other matters properly
submitted to a vote of the stockholders; provided, however, that, except as
otherwise required by law or provided by the terms of this Amended
and Restated Certificate of Incorporation, including Section 4.2 hereof,
holders of Class A Common Stock and Class B Common Stock shall
not be entitled to vote on any amendment to this Amended
and Restated Certificate of Incorporation (including
any certificate of designation filed with respect to any series of Preferred Stock) that
relates solely to the terms, number of shares, powers, designations, preferences, or relative, participating,
optional or other special rights (including, without limitation, voting rights), or to qualifications, limitations or
restrictions thereon, of one or more outstanding series of Preferred Stock if the holders of such affected series are
entitled, either separately or together as
a class with the holders of one or more other such series, to vote thereon
pursuant to this Amended
and Restated Certificate of Incorporation (including, without limitation, by any certificatescertificate of
designation relating to any series of Preferred Stock) or pursuant to the DGCL.
2022 PROXY STATEMENT B-3
(b) Identical Rights. Except as otherwise expressly provided herein or required by applicable law, shares
of Class A Common Stock and Class B Common Stock shall have the same rights and privileges and rank equally, share ratably and
be identical in all respects as to all matters, including, without limitation:
1. Dividends and Distributions. Subject to the rights of the holders of shares of Preferred Stock, the holders of shares of Class A Common Stock and the holders
of shares of Class B Common Stock shall be entitled to receive such dividends and other distributions (payable in cash, property
or capital stock of the Corporation) when, as and if declared thereon by the Board of Directors from time to time out of any assets
or funds of the Corporation legally available therefor and shall share equally, identically and ratably, on a per share basis,
in such dividends and distributions, unless different treatment of the shares of each such class is approved by the affirmative
vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately
as a class; provided, however, that in the event a distribution is paid in the form of Class A Common Stock or Class B
Common Stock (or rights to acquire such stock), then holders of Class A Common Stock shall receive Class A Common Stock (or rights
to acquire such stock, as the case may be) and holders of Class B Common Stock shall receive Class B Common Stock (or rights to
acquire such stock, as the case may be).
2. Subdivision or Combination. If the Corporation in any manner subdivides or combines the outstanding shares
of Class A Common Stock or Class B Common Stock, the outstanding shares of the other such class will be subdivided or combined
in the same proportion and manner, unless different treatment of the shares of each such class is approved by the affirmative
vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately
as a class.
3. Treatment in Change of Control Transaction. In the event of a Change of Control Transaction, after payment
or provision for payment of the debts and other liabilities of the Corporation, and subject to the rights of the holders of Preferred
Stock in respect thereof, the holders of shares of Class A Common Stock and the holders of shares of Class B Common Stock shall
be entitled to receive all the remaining assets of the Corporation available for distribution to its stockholders, equally, identically
and ratably in proportion to the number of shares of Class A Common Stock and Class B Common Stock held by them, unless different
treatment of the shares of each such class is approved by the affirmative vote of the holders of a majority of the outstanding
shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.
(c) Voluntary and Automatic Conversion of Class B Common Stock.
1. Voluntary Conversion. Each share of Class B Common Stock shall be convertible into one (1) share of Class
A Common Stock at the option of the holder thereof at any time upon written notice to the transfer agent of the Corporation.
2. Automatic Conversion for All Class B Common Stock. Each share of Class B Common Stock shall automatically,
without any further action, convert into one (1) share of Class A Common Stock upon the earliest to occur of:
(A) the date specified by the affirmative vote of the holders of at least sixty-seven percent (67%) of the outstanding shares of Class
B Common Stock, voting as a single class; and
(B) 5:00 p.m. in New York City, New York on the first Trading Day falling on or after the seventeen year anniversary of October 5,
2016.
3. Automatic Conversion for Individual Holder’s Class B Common Stock.
(A) Each share of Class B Common Stock shall automatically, without any further action, convert into one (1) share of Class A Common
Stock a Transfer of such share. Such conversion shall be deemed to have been made at the time that the Transfer of such shares
occurred. No such automatic conversion shall occur in the case of a Transfer by a Class B Stockholder to any of the persons or
entities listed in clauses (1) through (5) below (each, a “Permitted Transferee”) and from any such Permitted
Transferee back to such Class B Stockholder and/or any other Permitted Transferee established by or for such Class B Stockholder:
(1) a bona fide trust (X) where each trustee is either (a) the holder, (b) the Immediate Family of such holder, (c) a professional
in the business of providing trustee services, including private professional fiduciaries, trust companies and bank trust departments,
or (d) solely in the case of any such trust established by a natural person grantor prior to October 5, 2016, any other bona fide
trustee, and (Y) solely for the benefit of (i) such holder or (ii) the Immediate Family of such holder;
(2) such holder’s Immediate Family; provided, that such Transfer does not involve any payment of cash, securities, property
or other consideration to the holder;
2022 PROXY STATEMENT B-4
(3) an Individual Retirement Account, as defined in Section 408(a) of the Internal Revenue Code, or a pension, profit sharing, stock
bonus or other type of plan or trust of which such Class B Stockholder is a participant or beneficiary and which satisfies the
requirements for qualification under Section 401 of the Internal Revenue Code; provided that in each case such Class B Stockholder
has sole dispositive power and exclusive Voting Control with respect to the shares of Class B Common Stock held in such account,
plan or trust, and provided, further, that in the event the Class B Stockholder no longer has sole dispositive power and exclusive
Voting Control with respect to the shares of Class B Common Stock held by such account, plan or trust, each share of Class B Common
Stock then held by such account, plan or trust shall automatically convert into one (1) fully paid and nonassessable share of
Class A Common Stock;
(4) a corporation in which such Class B Stockholder directly, or indirectly through one or more Permitted Transferees, owns shares
with sufficient Voting Control in the corporation, or otherwise has legally enforceable rights, such that the Class B Stockholder
retains sole dispositive power and exclusive Voting Control with respect to the shares of Class B Common Stock held by such corporation;
provided that in the event the Class B Stockholder no longer owns sufficient shares or no longer has sufficient legally enforceable
rights to ensure the Class B Stockholder retains sole dispositive power and exclusive Voting Control with respect to the shares
of Class B Common Stock held by such corporation, each share of Class B Common Stock then held by such corporation shall automatically
convert into one (1) fully paid and nonassessable share of Class A Common Stock; or
(5) a limited liability company in which such Class B Stockholder directly, or indirectly through one or more Permitted Transferees,
owns membership interests with sufficient Voting Control in the limited liability company, or otherwise has legally enforceable
rights, such that the Class B Stockholder retains sole dispositive power and exclusive Voting Control with respect to the shares
of Class B Common Stock held by such limited liability company; provided that in the event the Class B Stockholder no longer owns
sufficient membership interests or no longer has sufficient legally enforceable rights to ensure the Class B Stockholder retains
sole dispositive power and exclusive Voting Control with respect to the shares of Class B Common Stock held by such limited liability
company, each share of Class B Common Stock then held by such limited liability company shall automatically convert into one (1)
fully paid and nonassessable share of Class A Common Stock.
(B) Each share of Class B Common Stock held by a Class B Stockholder or its Affiliates shall automatically convert into one (1) share
of Class A Common Stock immediately upon the closing of a Transfer after which the Class B Stockholder, including its Affiliates,
would hold less than twenty percent (20%) of the shares of Class B Common Stock that were held by such Class B Stockholder and
its Affiliates as of October 5, 2016 (as adjusted for stock splits, stock dividends, reclassification and the like).
(d) Conversion Upon Death. Each share of Class B Common Stock held of record by a Class B Stockholder who
is a natural person, or by such Class B Stockholder’s Permitted Transferees, shall automatically, without any further action,
convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the death of such Class B Stockholder.
(e) Procedures. The Corporation may, from time to time, establish such policies and procedures relating to
the conversion of the Class B Common Stock into Class A Common Stock and the general administration of this dual class stock structure,
including the issuance of stock certificates with respect thereto, as it may deem necessary or advisable, and may from time to
time request that holders of shares of Class B Common Stock furnish certifications, affidavits or other proof to the Corporation
as it deems necessary to verify the ownership of Class B Common Stock and to confirm that a conversion to Class A Common Stock
has not occurred. A determination by the Secretary or Assistant Secretary of the Corporation or the Board or a duly authorized
committee thereof that a Transfer results in a conversion to Class A Common Stock shall be conclusive and binding.
(f) Immediate Effect. In the event of a conversion of shares of Class B Common Stock to shares of Class A
Common Stock pursuant to Section 4.3(c)(3), such conversion shall be deemed to have been made at the time that the Transfer of
shares occurred. Upon any conversion of Class B Common Stock into Class A Common Stock, all rights of the shares of Class B Common
Stock as Class B Common Stock shall cease and the person or persons in whose name or names the certificate or certificates representing
the shares of Class A Common Stock are to be issued shall be treated for all purposes as having become the record holder or holders
of such shares of Class A Common Stock. Shares of Class B Common Stock that are converted into shares of Class A Common Stock
as provided in Section 4.3(c) of this ARTICLE IV shall be retired and may not be reissued.
(g) Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of Class B Common
Stock, such number of its shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of
all outstanding shares of Class B Common Stock into shares of Class A Common Stock.
2022 PROXY STATEMENT B-5
(h) No Further Issuances. Except for the issuance of Class B Common Stock issuable upon exercise of options,
warrants or similar rights to acquire Class B Common Stock outstanding at October 5, 2016, or a dividend payable in accordance
with ARTICLE IV, Section 4.3(b), the Corporation shall not at any time after October 5, 2016, issue any additional shares of Class
B Common Stock, unless such issuance is approved by the affirmative vote of the holders of a majority of the outstanding shares
of Class B Common Stock.
4.4 Preferred Stock.
(a) The Preferred Stock may be issued from time to time in one or more series pursuant to a resolution
or resolutions providing for such issue duly adopted by the Board of Directors of the Corporation
(the “Board of Directors”) (authority to do so being hereby expressly
vested in the Board of Directors). The Board of Directors is further authorized, subject to any limitations prescribed by law, to fix by resolution or resolutions and to set forth in
one or more certificates of designation filed pursuant to the DGCL the powers, designations, preferences and relative, participationparticipating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, of any wholly unissued
series of Preferred Stock, including, without limitation, authority to fix by resolution or resolutions the dividend rights, dividend
rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), redemption price or
prices, and liquidation preferences of any such series, and the number of shares constituting any such series and the designation
thereof, or any of the foregoing.
(b) The
Board of Directors is further authorized to increase (but not above the total number of authorized shares of the class) or
decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series, subject
to the powers, preferences and rights, and the qualifications, limitations and restrictions thereof stated in thethis
Amended and Restated Certificate of Incorporation or the resolution of the Board
of Directors originally fixing the number of shares of such series. If Except
as may be otherwise specified by the terms of any series of Preferred Stock, if the
number of shares of any series is so decreased, then the Corporation
shall take all such steps as are necessary to cause the shares constituting such
decrease shallto resume
the status which they had prior to the adoption of the resolution originally fixing the number of shares of such
series.
ARTICLE V
The
following terms, where capitalized in this Certificate of Incorporation, shall have the meanings ascribed to them in this ARTICLE
V:
“Affiliates”
means (i) with respect to any holder, any other holder who, directly or indirectly, controls, is controlled by or is under common
control with such holder, including, without limitation, any general partner, managing member, officer or director of such holder,
or any venture capital fund now or hereafter existing which is controlled by one or more general partners or managing members
of, or shares the same management company with, such holder and (ii) a trust created for the benefit of the holder or a holder’s
Immediate Family.
“Change
of Control Share Issuance” means the issuance by the Corporation, in a transaction or series of related transactions,
of voting securities representing more than two percent (2%) of the total voting power (assuming, solely for purposes of this
definition, the Class A Common Stock and Class B Common Stock each have one (1) vote per share) of the Corporation before such
issuance to any person or persons acting as a group as contemplated in Rule 13d-5(b) under the Exchange Act (or any successor
provision) that immediately prior to such transaction or series of related transactions held fifty percent (50%) or less of the
total voting power of the Corporation (assuming the Class A Common Stock and Class B Common Stock each have one (1) vote per share),
such that, immediately following such transaction or series of related transactions, such person or group of persons would hold
more than fifty percent (50%) of the total voting power of the Corporation (assuming, solely for purposes of this definition,
the Class A Common Stock and Class B Common Stock each have one (1) vote per share).
“Change
of Control Transaction” means (i) the closing of any sale, transfer or other disposition of all or substantially all
of the assets of the Corporation, (ii) the consummation of a merger, reorganization, consolidation or share transfer which results
in the voting securities of the Corporation outstanding immediately prior to the transaction (or the voting securities issued
with respect to voting securities of the Corporation outstanding immediately prior to the transaction) representing less than
a majority of the combined voting power of the voting securities of the Corporation or the surviving or acquiring entity, as applicable,
immediately after the transaction, (iii) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction
or a series of related transactions, to a person or group of affiliated persons of securities of the Corporation if, after closing,
the transferee person or group would hold 50% or more of the voting power of the outstanding capital stock of the Corporation
(or the surviving or acquiring entity), (iv) any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation,
or (v) any Change of Control Share Issuance.
2022 PROXY STATEMENT B-6
“Class
B Stockholder” means (i) the registered holder of a share of Class B Common Stock as of October 5, 2016, (ii) the Permitted
Transferee until the shares of Class B Common Stock held by such Permitted Transferee are converted as provided herein and (iii)
the initial registered holder of any shares of Class B Common Stock that are issued by the Corporation after October 5, 2016.
“Exchange
Act” means the United States Securities Exchange Act of 1934, as amended.
“Immediate
Family” means any child, stepchild, grandchild or other descendant, any parent, stepparent, grandparent or other ancestor,
any spouse, sibling, niece, nephew, uncle, aunt, mother-in-law, father-in-law, son-in-law, daughter-in-law, or brother-in-law
or sister-in-law, including adoptive relationships.
“Securities
Exchange” means, at any time, the registered national securities exchange on which the Corporation’s equity securities
are then principally listed or traded, which shall be either the New York Stock Exchange or NASDAQ Global Select Market (or similar
national quotation system of the NASDAQ Stock Market) (“NASDAQ”) or any successor exchange of either the New
York Stock Exchange or NASDAQ.
“Trading
Day” means any day on which the Securities Exchange is open for trading.
“Transfer”
of a share of Class B Common Stock shall mean any sale, offer to sell, assignment, transfer, conveyance, hypothecation, gift,
pledge, mortgage or other transfer or disposition of such share or any legal or beneficial right or interest in such share, whether
or not for value and whether voluntary or involuntary or by operation of law. A “Transfer” shall also include,
without limitation and for the avoidance of doubt, (i) a Transfer of a share of Class B Common Stock to a broker or other nominee
(regardless of whether or not there is a corresponding change in beneficial ownership), (ii) the Transfer of, or entry
into a binding agreement with respect to, Voting Control over a share of Class B Common Stock by proxy or otherwise, (iii) the
Transfer of a share of Class B Common Stock by a stockholder that is an entity to the beneficial or record owners of equity of
such entity (unless otherwise explicitly permitted hereunder) or (iv) any Transfer in connection with a divorce proceeding, domestic
relations order or similar legal requirement; provided, however, that the following shall not be considered a “Transfer”:
(a) the grant of a proxy to officers or directors of the Corporation at the request of the Board of Directors of the Corporation
in connection with actions to be taken at an annual or special meeting of stockholders or by written consent, or the grant of
a revocable proxy or consent given to any other person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the General Rules and Regulations promulgated under the Exchange Act; (b)
the pledge of shares of Class B Common Stock by a Class B Stockholder that creates a mere security interest in such shares pursuant
to a bona fide loan or indebtedness transaction so long as the Class B Stockholder continues to exercise Voting Control over such
pledged shares; provided, however, that a foreclosure on such shares of Class B Common Stock or other similar action by
the pledge shall constitute a “Transfer”; or (c) the fact that, as of October 5, 2016, or at any time after
October 5, 2016, the spouse of any holder of Class B Common Stock possesses or obtains an interest in such holder’s shares
of Class B Common Stock arising solely by reason of the application of the community property laws of any jurisdiction (excluding
in connection with a divorce proceeding, domestic relations order or similar legal requirement, all of which shall constitute
“Transfers”), so long as no other event or circumstance shall exist or have occurred that constitutes a “Transfer”
of such shares of Class B Common Stock.
“Voting
Control” with respect to a share of Class B Common Stock means the exclusive power (whether directly or indirectly)
to vote or direct the voting of such share of Class B Common Stock by proxy, voting agreement, or otherwise.
ARTICLE VI
6.15.1 General Powers. The business and affairs of
the Corporation shall be managed by or under the direction of the Board of Directors.
6.25.2 Number of Directors; Election; Term.
(a)
Subject to the rights of holders of any series of Preferred Stock with respect to the election
of directors, the number of directors that constitutes the entire Board of Directors of the Corporation shall be fixed solely
by resolution of thea majority
of the Whole Board. For purposes of this Amended and Restated Certificate
of Incorporation, the term “Whole Board” will mean the total number of authorized directorsdirectorships whether or not there exist any vacancies or other
unfilled seats in previously authorized directorships.
(b)
Subject to the rights of holders of any series of Preferred Stock with respect to the election
of directors, effective upon the closing date (the “Effective Date”)
of the initial sale of shares of Class A Common Stock in the Corporation’s initial public offering pursuant to an effective
registration statement filed under the Securities Act of 1933, as amended, the directors
of the Corporation shall beare divided
into three classes as nearly equal in size as is practicable, hereby, designated Class I, Class II and Class III. The
initial assignment of members of the Board of Directors
2022 PROXY STATEMENT B-7
to
each such class shall be made by the Board of Directors. The term of office of the initial Class I directors shall expire at the
first regularly-scheduled annual meeting of the stockholders following the Effective Date, the term of office of the initial Class
II directors shall expire at the second annual meeting of the stockholders following the Effective Date and the term of office
of the initial Class III directors shall expire at the third annual meeting of the stockholders following the Effective Date. At each annual meeting of stockholders,
commencing with the first regularly-scheduled annual meeting of stockholders following the Effective Date,
each of the successors elected to replace the directors of a Class whose term shall have expired at such annual meeting shall
be elected to hold office until the third annual meeting next succeeding his or hersuch
person’s election and until his or hersuch
person’s respective successor shall have been duly elected and qualified. Subject
to the rights of holders of any series of Preferred Stock with respect to the election of directors, if the number of directors
that constitutes the Board of Directors is changed, any newly created directorships or decrease in directorships shall be so apportioned
by the Board of Directors among the classes as to make all classes as nearly equal in number as is practicable, provided that
no decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
(c) Notwithstanding the prior paragraph, (1) at the Corporation’s annual meeting of stockholders held in 2023 (the “2023
Annual Meeting”), the successors of the Class I directors whose terms expire at the 2023 Annual Meeting shall each be
elected for a term expiring at the Corporation’s next annual meeting of stockholders; (2) at the corporation’s
annual meeting of stockholders held in 2024 (the “2024 Annual Meeting”), the successors of the directors whose
terms expire at the 2024 Annual Meeting (including, for the avoidance of doubt, the Class II directors and the successors of the
directors elected at the 2023 Annual Meeting) shall each be elected for a term expiring at the Corporation’s next annual
meeting of stockholders; and (3) at the Corporation’s annual meeting of stockholders held in 2025 (the “2025 Annual
Meeting”) and at all annual meetings thereafter, all directors shall be elected for terms expiring at the next annual
meeting of stockholders. Commencing with the 2025 Annual Meeting, the classification of the Board of Directors of the corporation
shall cease.
(c)(d) Notwithstanding the foregoing provisions of this Section 6.25.2, and subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, each director
shall serve until his or hersuch person’s successor is duly elected and qualified or until his
or hersuch person’s earlier death,
resignation, or removal.
(d)(e) Elections of directors need not be by written ballot unless the Bylaws of the Corporation
shall so provide.
6.35.3 Removal. Subject to the rights of holders of
any series of Preferred Stock with respect to the election of directors, upon October
5, 2016, aany director or
the entire board of directors may be removed from office by the stockholders of the Corporation
only for cause and only by the affirmative vote of the holders of at least 66⅔% in
voting power of the outstanding shares of stock of the Corporation entitled to vote thereonin
the manner provided in Section 141(k) of the DGCL.
6.45.4 Vacancies and Newly Created Directorships.
Effective upon the conversion of all Class B Common Stock pursuant to Section 4.3(c)
of ARTICLE IV and subject Subject to the
rights of holders of any series of Preferred Stock with respect to the election of directors, and except as otherwise provided
in by resolution of a majority of the DGCLWhole
Board, vacancies occurring on the Board of Directors for any reason and newly created
directorships resulting from an increase in the authorized number of directors elected
by all of the stockholders having the right to vote as a single class may be filled only
by the affirmative vote of a majority of the remaining
members of the Board of Directorsdirectors then in office,
although less than a quorum, or by a sole remaining director, at any meeting of the
Board of Directors, and not by stockholders. Prior to such conversion, vacancies and newly created directorships may be filled
by the remaining directors (though less than a quorum) or by theand not by stockholders.
A person so elected to fill a vacancy or newly created directorship shall hold office untilfor the next electionremaining
term of the class, if any, for
which such director shall have been assigned by the Board of Directorselected and until his or hersuch
person’s successor shall behave
been duly elected and qualified, or until such
director’s earlier death, resignation or removal.
ARTICLE
VIIARTICLE VI
In
furtherance and not in limitation of the powers conferred by statute, the Board of Directors of the Corporation is expressly
authorized to adopt, alter, amend
or repeal the Bylaws of the Corporation by the affirmative vote of a majority of the Whole Board. The
Corporation’s Bylaws may also be adopted, amended, altered or repealed by the stockholders of the
Corporation. Notwithstanding the
above and any other provision of this Amended
and Restated Certificate of Incorporation or
any provision of law that might otherwise permit a lesser vote or no vote, but
in addition to any affirmative vote of the holders of any series of Preferred Stock required by law, by this Amended
and Restated Certificate of Incorporation or by any Preferred Stock certificate of
designation, the Bylaws may also beof
the Corporation may not be adopted, amended, altered or repealed and
new Bylaws may be adopted by the affirmative
2022 PROXY STATEMENT B-8
vote
of the holders of at least 66⅔% in voting power of the outstanding stockby the
stockholders of the Corporation entitled to
vote thereonexcept in accordance with the provisions of the Bylaws relating to
amendments to the Bylaws.
ARTICLE
VIIIARTICLE VII
8.17.1 No Action by Written Consent of Stockholders. Effective
upon the conversion of all Class B Common Stock pursuant to Section 4.3(c) of ARTICLE IV and exceptExcept as otherwise expressly provided by the terms of any series of Preferred Stock permitting
the holders of such series of Preferred Stock to act by written consent, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting
of the stockholders and may not be effected by writtenany consent in writing by such stockholders in lieu
of a meeting. Prior to such conversion, any action required or permitted to be taken
by stockholders of the Corporation that could be effected at a duly called annual or special meeting of the stockholders may be
effected by written consent in lieu of such meeting.
8.27.2 Special Meetings. Except as otherwise required
by statute or expressly provided by the terms of any series of Preferred Stock permitting
the holders of such series of Preferred Stock to call a special meeting of the holders of such series, special meetings of stockholders
of the Corporation may be called only by the affirmative vote of a majority of the Whole Board, the chairperson of the Board of
Directors, the lead independent director, the chief executive officer or the president (in the absence of a chief executive officer),
and the ability of the stockholders to call a special meeting is hereby specifically denied. Only
such business shall be considered at a special meeting of stockholders as shall have been stated in the notice for such meeting.
The Board of Directors, by the affirmative vote of a majority of the Whole Board, may
cancel, postpone or reschedule any previously scheduled special meeting of stockholders
at any time, before or after the notice for such meeting has been sent to the stockholders.
8.37.3 No Cumulative Voting. No stockholder will be
permitted to cumulate votes at any election of directors.
8.47.4 Advance Notice. Advance notice of stockholder
nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders
of the Corporation shall be given in the manner and to the extent provided
in the Bylaws of the Corporation.
ARTICLE
IXARTICLE VIII
9.18.1 Limitation of Personal Liability. To the fullest
extent permitted by the DGCL, as it
presentlythe same exists or as may hereafter be amended from time to time, a director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the
DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
9.28.2 Indemnification.
TheSubject
to any provisions in the Bylaws of the Corporation related
to indemnification, the Corporation shall indemnify, to the fullest extent permitted by
applicable law, any director or officer of the Corporation who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”)
by reason of the fact that he or shesuch
person is or was a director, officer, employee or agent of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any
such Proceeding. The Corporation shall be required to indemnify a person in connection with a Proceeding (or part thereof) initiated
by such person only if the Proceeding (or part thereof) was authorized by the Board of
Directors.
The
Corporation shall have the power to indemnify, to the fullest extent
permitted by the DGCL, as it presently exists or may hereafter be amended from time
to timeapplicable law, any employee or
agent of the Corporation who was or is a party or is threatened to be made a party to any Proceeding by reason of the fact that
he or shesuch person is
or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with any such Proceeding.
2022 PROXY STATEMENT B-9
Any
repeal or amendment of this ARTICLE IX by changes in law, or the adoption of any other provision of this Certificate of Incorporation
inconsistent with this ARTICLE IX will, unless otherwise required by law, be prospective only (except to the extent such amendment
or change in law permits the Corporation to further limit or eliminate the liability of directors) and shall not adversely affect
any right or protection of a director or officer of the Corporation existing at the time of such repeal or amendment or adoption
of such inconsistent provision with respect to acts or omissions occurring prior to such repeal or amendment or adoption of such
inconsistent provision.
Neither
any amendment, elimination nor repeal of any Section of this ARTICLE VIII, nor the adoption of any provision of this Amended and
Restated Certificate of Incorporation or the Bylaws of the Corporation inconsistent with this ARTICLE VIII, shall eliminate or
reduce the effect of this ARTICLE VIII in respect of any matter occurring, or any Proceeding accruing or arising or that, but
for this ARTICLE VIII, would accrue or arise, prior to such amendment, elimination, repeal or adoption of an inconsistent provision.
ARTICLE
XARTICLE IX
If
any provision or provisions of this Amended and Restated Certificate
of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever:
(i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of
this Amended and Restated Certificate of Incorporation
(including, without limitation, each portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal
or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby and (ii) to the fullest extent possible, the provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each such portion of any
paragraph of this Amended and Restated Certificate
of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit
the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith
service or for the benefit of the Corporation to the fullest extent permitted by law.
The
Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation
(including any rights, preferences or other designations of Preferred Stock), in the manner now or hereafter prescribed by this
Certificate of Incorporation and the DGCL; and all rights, preferences and privileges herein conferred upon stockholders by and
pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved
in this ARTICLE X. Notwithstanding any other provision of this Certificate of Incorporation, and in addition to any other vote
that may be required by law or the terms of any series of Preferred Stock, the affirmative vote of the holders of at least 66⅔%
of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote thereon, voting together
as a single class, shall be required to amend, alter or repeal, or adopt any provision as part of this Certificate of Incorporation
inconsistent with the purpose and intent of, Section 4.3 of ARTICLE IV, ARTICLE VI, ARTICLE VII, ARTICLE VIII or this ARTICLE
X (including, without limitation, any such Article as renumbered as a result of any amendment, alteration, change, repeal or adoption
of any other Article).
Except
as provided in Article VIII above, the Corporation reserves the right to amend or repeal any provision contained in this Amended
and Restated Certificate of Incorporation in the manner prescribed by the laws of the State of Delaware and all rights conferred
upon stockholders are granted subject to this reservation. Any amendment to this Amended and Restated Certificate that requires
stockholder approval pursuant to the DGCL shall require the affirmative vote of the holders of at least a majority of the voting
power of the outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together
as a single class.
2022 PROXY STATEMENT B-10
APPENDIX C - PROPOSED AMENDED & RESTATED
2016 EMPLOYEE STOCK PURCHASE PLAN
NUTANIX, INC.
AMENDED & RESTATED 2016
EMPLOYEE STOCK PURCHASE PLAN
(As Amended and Restated on , )
1. |
Purpose.
The purpose of the Plan is to provide employees of the Company and its Designated
Companies with an opportunity to purchase Common Stock through accumulated Contributions. The Company intends for the Plan
to have two components: a Code Section 423 Component (“423 Component”) and a non-Code Section 423 Component
(“Non-423 Component”). The Company’s intention is to have the 423 Component of the Plan qualify as
an “employee stock purchase plan” under Section 423 of the Code. The provisions of the 423 Component, accordingly,
will be construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the
requirements of Section 423 of the Code. In addition, this Plan authorizes the grant of an option to purchase shares of Common
Stock under the Non-423 Component that does not qualify as an “employee stock purchase plan” under Section 423
of the Code; such an option will be granted pursuant to rules, procedures or sub-plans adopted by the Administrator designed
to achieve tax, securities laws or other objectives for Eligible Employees and the Company. Except as otherwise provided herein,
the Non-423 Component will operate and be administered in the same manner as the 423 Component. |
|
|
|
(a) |
“Administrator”
means the Board or any Committee designated by the Board to administer the Plan pursuant
to Section 14. |
|
(b) |
“Affiliate”
means any entity, other than a Subsidiary, in which the Company has an equity or other
ownership interest. |
|
(c) |
“Applicable
Laws” means the requirements relating to
the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code,
any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign
country or jurisdiction where options are, or will be, granted under the Plan. |
|
(d) |
“Board”
means the Board of Directors of the Company. |
|
(e) |
“Change
in Control” means the occurrence of any
of the following events: |
|
(i) |
A change
in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”),
acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty
percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection,
the acquisition of additional stock by any one Person, who is considered to own more than fifty percent (50%) of the total
voting power of the stock of the Company will not be considered a Change in Control. |
|
|
Further, if the stockholders of the Company immediately
before such change in ownership continue to retain immediately after the change in ownership, in substantially the same proportions
as their ownership of shares of the Company’s voting stock immediately prior to the change in ownership, direct or indirect
beneficial ownership of fifty percent (50%) or more of the total voting power of the stock of the Company or of the ultimate
parent entity of the Company, such event shall not be considered a Change |
2022 PROXY STATEMENT C-1
|
|
in Control under this subsection (i).
For this purpose, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of
the voting securities of one or more corporations or other business entities which own the Company, as the case may be, either
directly or through one or more subsidiary corporations or other business entities; or |
|
(ii) |
A change in the effective
control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12)
month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to
the date of the appointment or election. For purposes of this subsection (ii), if any Person is considered to be in effective
control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change
in Control; or |
|
(iii) |
A change in the ownership
of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired
during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from
the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market
value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for
purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of
the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately
after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the
asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of
the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly
or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company,
or (4) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly,
by a Person described in this subsection (iii)(B)(3). For purposes of this subsection (iii), gross fair market value means
the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities
associated with such assets. |
|
|
For purposes of this definition, persons will be considered
to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition
of stock, or similar business transaction with the Company. |
|
|
Notwithstanding the foregoing, a transaction will
not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code
Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal
Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time. |
|
|
Further and for the avoidance of doubt, a transaction
will not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation,
or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons
who held the Company’s securities immediately before such transaction. |
|
(f) |
“Code”
means the U.S. Internal Revenue Code of 1986, as amended. Reference to a specific section
of the Code or U.S. Treasury Regulation thereunder will include such section or regulation, any valid regulation or other
official applicable guidance promulgated under such section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation. |
|
(g) |
“Committee”
means a committee of the Board appointed in accordance with Section 14 hereof. |
|
(h) |
“Common
Stock” means the Class A common stock of the Company. |
|
(i) |
“Company”
means Nutanix, Inc., a Delaware corporation, or any successor thereto. |
|
(j) |
“Compensation”
means an Eligible Employee’s base straight time gross earnings, commissions, bonus
and other incentive compensation, and payments for overtime. The Administrator, in its discretion, may, on a uniform and nondiscriminatory
basis, establish a different definition of Compensation for a subsequent Offering Period. |
|
(k) |
“Contributions”
means the payroll deductions and other additional payments that the Company may permit
to be made by a Participant to fund the exercise of options granted pursuant to the Plan. |
|
(l) |
“Designated
Company” means any Subsidiary or Affiliate
that has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan.
For purposes of the 423 Component, only the Company and its Subsidiaries may be Designated Companies, provided, however that
at any given time, a Subsidiary that is a Designated Company under the 423 Component shall not be a Designated Company under
the Non-423 Component. |
2022 PROXY STATEMENT C-2
|
(m) |
“Director”
means a member of the Board. |
|
(n) |
“Eligible
Employee” means any individual who is a
common law employee providing services to the Company or a Designated Company and is customarily employed for at least 20
hours per week and more than 5 months in any calendar year by the Employer, or any lesser number of hours per week and/or
number of months in any calendar year established by the Administrator (if required under applicable local law) for purposes
of any separate Offering or for Eligible Employees participating in the Non-423 Component. For purposes of the Plan, the employment
relationship will be treated as continuing intact while the individual is on sick leave or other leave of absence that the
Employer approves or is legally protected under Applicable Laws. Where the period of leave exceeds 3 months and the individual’s
right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have
terminated 3 months and 1 day following the commencement of such leave. The Administrator, in its discretion, from time to
time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date in an Offering, determine (for
each Offering under the 423 Component, on a uniform and nondiscriminatory basis or as otherwise permitted by Treasury Regulation
Section 1.423-2) that the definition of Eligible Employee will or will not include an individual if he or she: (i) has not
completed at least 2 years of service since his or her last hire date (or such lesser period of time as may be determined
by the Administrator or the Company’s stock administration in its discretion), (ii) customarily works not more than
20 hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (iii) customarily
works not more than 5 months per calendar year (or such lesser period of time as may be determined by the Administrator in
its discretion), (iv) is a highly compensated employee within the meaning of Section 414(q) of the Code, or (v) is a highly
compensated employee within the meaning of Section 414(q) of the Code with compensation above a certain level or is an officer
or subject to the disclosure requirements of Section 16(a) of the Exchange Act, provided the exclusion is applied with respect
to each Offering under the 423 Component in an identical manner to all highly compensated individuals of the Employer whose
Employees are participating in that Offering under the 423 Component. Each exclusion shall be applied with respect to an Offering
in a manner complying with U.S. Treasury Regulation Section 1.423-2(e)(2)(ii). Such exclusions may be applied with respect
to an Offering under the Non- 423 Component without regard to the limitations of Treasury Regulation Section 1.423-2. |
|
(o) |
“Employer”
means the employer of the applicable Eligible Employee(s). |
|
(p) |
“Enrollment
Date” means the first Trading Day of each
Offering Period. |
|
(q) |
“Exchange
Act” means the U.S. Securities Exchange
Act of 1934, as amended, including the rules and regulations promulgated thereunder. |
|
(r) |
“Exercise
Date” means the first Trading Day on or
after March 20 and September 20 of each Purchase Period. Notwithstanding the foregoing, the first Exercise Date under the
Plan will be September 20, 2016. |
|
(s) |
“Fair
Market Value” means, as of any date and
unless the Administrator determines otherwise, the value of Common Stock determined as follows: |
|
(i) |
If the Common
Stock is listed on any established stock exchange or a national market system, including without limitation the New York Stock
Exchange, NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market of The NASDAQ Stock Market, its
Fair Market Value will be the closing sales price (or the closing bid, if no sales were reported) for such stock as quoted
on such exchange or system on the date of determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; |
|
(ii) |
If the Common Stock is
regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value will be the
mean between the high bid and low asked prices for the Common Stock on the date of determination (or if no bids and asks were
reported on that date, as applicable, on the last Trading Day such bids and asks were reported), as reported in The Wall Street
Journal or such other source as the Administrator deems reliable; |
|
(iii) |
In the absence of an
established market for the Common Stock, the Fair Market Value thereof will be determined in good faith by the Administrator;
or |
|
(iv) |
For purposes of the Enrollment
Date of the first Offering Period under the Plan, the Fair Market Value will be the initial price to the public as set forth
in the final prospectus included within the registration statement on Form S-1 filed with the Securities and Exchange Commission
for the initial public offering of the Common Stock (the “Registration Statement”). |
|
(t) |
“Fiscal
Year” means the fiscal year of the Company. |
2022 PROXY STATEMENT C-3
|
(u) |
“New
Exercise Date” means a new Exercise Date
if the Administrator shortens any Offering Period then in progress. |
|
(v) |
“Offering”
means an offer under the Plan of an option that may be exercised during an Offering Period
as further described in Section 4. For purposes of the Plan, the Administrator may designate separate Offerings under the
Plan (the terms of which need not be identical) in which Eligible Employees of one or more Employers will participate, even
if the dates of the applicable Offering Periods of each such Offering are identical and the provisions of the Plan will separately
apply to each Offering. To the extent permitted by U.S. Treasury Regulation Section 1.423-2(a)(1), the terms of each Offering
need not be identical provided that the terms of the Plan and an Offering together satisfy U.S. Treasury Regulation Section
1.423-2(a)(2) and (a)(3). |
|
(w) |
“Offering
Periods” means the periods of approximately
12 months during which an option granted pursuant to the Plan may be exercised, (i) commencing on the first Trading Day on
or after March 20 and September 20 of each year and terminating on the first Trading Day on or after March 20 and September
20, approximately 12 months later; provided, however, that the first Offering Period under the Plan will commence with the
first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company’s Registration
Statement effective and will end on a date determined by the Administrator, and provided, further, that the second Offering
Period under the Plan will commence on a date determined by the Administrator. The duration and timing of Offering Periods
may be changed pursuant to Sections 4 and 19. |
|
(x) |
“Parent”
means a “parent corporation,” whether now or hereafter existing, as defined
in Section 424(e) of the Code in relation to the Company. |
|
(y) |
“Participant”
means an Eligible Employee that participates in the Plan. |
|
(z) |
“Plan”
means this Nutanix, Inc. Amended & Restated 2016 Employee Stock Purchase Plan. |
|
(aa) |
“Purchase
Period” means the approximately 6-month
period commencing after one Exercise Date and ending with the next Exercise Date, except that the first Purchase Period of
any Offering Period will commence on the Enrollment Date and end with the next Exercise Date. |
|
(bb) |
“Purchase
Price” means an amount equal to 85% of the Fair Market Value of a share of Common
Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided however, that the Purchase Price may be
determined for subsequent Offering Periods by the Administrator subject to compliance with Section 423 of the Code (or any
successor rule or provision or any other Applicable Law, regulation or stock exchange rule) or pursuant to Section 19. |
|
(cc) |
“Subsidiary”
means a “subsidiary corporation,” whether now or hereafter existing, as defined
in Section 424(f) of the Code in relation to the Company. |
|
(dd) |
“Trading
Day” means a day on which the national stock
exchange upon which the Common Stock is listed is open for trading. |
|
(ee) |
“U.S.
Treasury Regulations” means the Treasury
regulations of the Code. Reference to a specific Treasury Regulation or Section of the Code shall include such Treasury Regulation
or Section, any valid regulation promulgated under such Section, and any comparable provision of any future legislation or
regulation amending, supplementing or superseding such Section or regulation. |
|
(a) |
First
Offering Period. Any individual who is an Eligible
Employee immediately prior to the first Offering Period will be automatically enrolled in the first Offering Period. |
|
(b) |
Subsequent Offering
Periods. Any Eligible Employee on a given Enrollment
Date subsequent to the first Offering Period will be eligible to participate in the Plan, subject to the requirements of Section
5. |
|
(c) |
Non-U.S. Employees.
Eligible Employees who are citizens or residents of a non-U.S. jurisdiction (without regard
to whether they also are citizens or residents of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A)
of the Code)) may be excluded from participation in the Plan or an Offering if the participation of such Eligible Employees
is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would
cause the Plan or an Offering to violate Section 423 of the Code. In the case of the Non-423 Component, an Eligible Employee
may be excluded from participation in the Plan or an Offering if the Administrator has determined that participation of such
Eligible Employee is not advisable or practicable. |
2022 PROXY STATEMENT C-4
|
(d) |
Limitations.
Any provisions of the Plan to the contrary notwithstanding, no Eligible Employee will
be granted an option under the Plan (i) to the extent that, immediately after the grant, such Eligible Employee (or any other
person whose stock would be attributed to such Eligible Employee pursuant to Section 424(d) of the Code) would own capital
stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such stock possessing
5% or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Parent
or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase
plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate,
which exceeds $25,000 worth of stock (determined at the Fair Market Value of the stock at the time such option is granted)
for each calendar year in which such option is outstanding at any time, as determined in accordance with Section 423 of the
Code and the regulations thereunder. |
|
|
|
4. |
Offering
Periods. The Plan will be implemented
by overlapping Offering Periods with a new Offering Period commencing on the first Trading Day on or after March 20 and September
20 each year, or on such other date as the Administrator will determine; provided, however, that the first Offering Period
under the Plan will commence with the first Trading Day on or after the date upon which the Company’s Registration Statement
is declared effective by the Securities and Exchange Commission and end on a date determined by the Administrator, and provided,
further, that the second Offering Period under the Plan will commence on a date determined by the Administrator. The Administrator
will have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to
future Offerings without stockholder approval if such change is announced prior to the scheduled beginning of the first Offering
Period to be affected thereafter; provided, however, that no Offering Period may last more than 27 months. |
|
|
5. |
Participation. |
|
|
|
(a) |
First
Offering Period. An Eligible Employee will be
entitled to continue to participate in the first Offering Period pursuant to Section 3(a) only if such individual submits
a subscription agreement authorizing Contributions in a form determined by the Administrator (which may be similar to the
form attached hereto as Exhibit A) to the Company’s designated plan administrator (i) no earlier than the effective
date of the Form S-8 registration statement with respect to the issuance of Common Stock under this Plan and (ii) no later
than 10 business days following the effective date of such S-8 registration statement or such other period of time as the
Administrator may determine (the “Enrollment Window”). An Eligible Employee’s failure to submit the
subscription agreement during the Enrollment Window will result in the automatic termination of such individual’s participation
in the first Offering Period. |
|
(b) |
Subsequent Offering
Periods. An Eligible Employee may participate
in the Plan pursuant to Section 3(b) by (i) submitting to the Company’s stock administration office (or its designee),
on or before a date determined by the Administrator prior to an applicable Enrollment Date, a properly completed subscription
agreement authorizing Contributions in the form provided by the Administrator for such purpose, or (ii) following an electronic
or other enrollment procedure determined by the Administrator. |
|
(a) |
At the time
a Participant enrolls in the Plan pursuant to Section 5, he or she will elect to have Contributions (in the form of payroll
deductions or otherwise, to the extent permitted by the Administrator) made on each pay day during the Offering Period in
an amount not exceeding 15% of the Compensation, which he or she receives on each pay day during the Offering Period; provided,
however, that should a pay day occur on an Exercise Date, a Participant will have any payroll deductions made on such day
applied to his or her account under the subsequent Purchase Period or Offering Period. The Administrator, in its sole discretion,
may permit all Participants in a specified Offering to contribute amounts to the Plan through payment by cash, check or other
means set forth in the subscription agreement prior to each Exercise Date of each Purchase Period. A Participant’s subscription
agreement will remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof. |
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(b) |
In the event Contributions
are made in the form of payroll deductions, such payroll deductions for a Participant will commence on the first pay day following
the Enrollment Date and will end on the last pay day prior to the Exercise Date of such Offering Period to which such authorization
is applicable, unless sooner terminated by the Participant as provided in Section 10 hereof; provided, however, that for the
first Offering Period, payroll deductions will commence on the first pay day on or following the end of the Enrollment Window. |
|
(c) |
All Contributions made
for a Participant will be credited to his or her account under the Plan and Contributions will be made in whole percentages
only. A Participant may not make any additional payments into such account. |
|
(d) |
A Participant may discontinue
his or her participation in the Plan as provided in Section 10. A Participant’s ability to change the rate of his or
her Contributions may be set forth in policies approved by the Company’s stock administration from time to time. If
a change in Contribution rate is permitted, a Participant may change the rate by (i) properly completing and submitting to
the Company’s stock administration office (or its designee), |
2022 PROXY STATEMENT C-5
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|
on or before
a date determined by the Administrator prior to an applicable Exercise Date, a new subscription agreement authorizing the
change in Contribution rate in the form provided by the Administrator for such purpose, or (ii) following an electronic or
other procedure prescribed by the Administrator. If a Participant has not followed such procedures to change the rate of Contributions,
the rate of his or her Contributions will continue at the originally elected rate throughout the Offering Period and future
Offering Periods (unless terminated as provided in Section 10). The Administrator and the Company’s stock administration
may, in its sole discretion, limit the nature and/or number of Contribution rate changes that may be made by Participants
during any Offering Period, and may establish such other conditions or limitations as it deems appropriate for Plan administration.
Any change in payroll deduction rate made pursuant to this Section 6(d) will be effective in accordance with policies approved
by the Company’s stock administration from time to time. |
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(e) |
Notwithstanding the foregoing,
to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(d), a Participant’s Contributions
may be decreased to 0% at any time during a Purchase Period. Subject to Section 423(b)(8) of the Code and Section 3(d) hereof,
Contributions will recommence at the rate originally elected by the Participant effective as of the beginning of the first
Purchase Period scheduled to end in the following calendar year, unless terminated by the Participant as provided in Section
10. |
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(f) |
Notwithstanding any provisions
to the contrary in the Plan, the Administrator may allow Eligible Employees to participate in the Plan via cash contributions
instead of payroll deductions (i) if payroll deductions are not permitted under Applicable Laws, (ii) if the Administrator
determines that cash contributions are permissible for Participants participating in the Section 423 Component, or (iii) for
Participants participating in the Non-423 Component. |
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(g) |
At the time the option is exercised, in whole or in
part, or at the time some or all of the Common Stock issued under the Plan is disposed of (or any other time that a taxable
event related to the Plan occurs), the Participant must make adequate provision for the Company’s or Employer’s
federal, state, local or any other tax liability payable to any authority including taxes imposed by jurisdictions outside
of the U.S., national insurance, social security or other tax withholding obligations, if any, which arise upon the exercise
of the option or the disposition of the Common Stock (or any other time that a taxable event related to the Plan occurs).
At any time, the Company or the Employer may, but will not be obligated to, withhold from the Participant’s compensation
the amount necessary for the Company or the Employer to meet applicable withholding obligations, including any withholding
required to make available to the Company or the Employer any tax deductions or benefits attributable to sale or early disposition
of Common Stock by the Eligible Employee. In addition, the Company or the Employer may, but will not be obligated to, withhold
from the proceeds of the sale of Common Stock or any other method of withholding the Company or the Employer deems appropriate
to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f). |
7. |
Grant
of Option. On the Enrollment Date of
each Offering Period, each Eligible Employee participating in such Offering Period will be granted an option to purchase on
each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of Common Stock
determined by dividing such Eligible Employee’s Contributions accumulated prior to such Exercise Date and retained in
the Eligible Employee’s account as of the Exercise Date by the applicable Purchase Price; provided that in no event
will an Eligible Employee be permitted to purchase during each Purchase Period more than 1,000 shares of Common Stock (subject
to any adjustment pursuant to Section 18) and provided further that such purchase will be subject to the limitations set forth
in Sections 3(d) and 13. The Eligible Employee may accept the grant of such option (i) with respect to the first Offering
Period by submitting a properly completed subscription agreement in accordance with the requirements of Section 5 on or before
the last day of the Enrollment Window, and (ii) with respect to any subsequent Offering Period under the Plan, by electing
to participate in the Plan in accordance with the requirements of Section 5. The Administrator may, for future Offering Periods,
increase or decrease, in its absolute discretion, the maximum number of shares of Common Stock that an Eligible Employee may
purchase during each Purchase Period of an Offering Period. Exercise of the option will occur as provided in Section 8, unless
the Participant has withdrawn pursuant to Section 10. The option will expire on the last day of the Offering Period. |
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8. |
Exercise of Option. |
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(a) |
Unless a
Participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of shares of Common Stock
will be exercised automatically on the Exercise Date, and the maximum number of full shares subject to the option will be
purchased for such Participant at the applicable Purchase Price with the accumulated Contributions from his or her account.
No fractional shares of Common Stock will be purchased; any Contributions accumulated in a Participant’s account which
are not sufficient to purchase a full share will be retained in the Participant’s
account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the Participant as provided
in Section 10 returned to the Participant.
Any other funds left over in a Participant’s account after the Exercise Date will be returned to the Participant. During
a Participant’s lifetime, a Participant’s option to purchase shares hereunder is exercisable only by him or her. |
2022 PROXY STATEMENT C-6
|
(b) |
If the Administrator
determines that, on a given Exercise Date, the number of shares of Common Stock with respect to which options are to be exercised
may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Enrollment Date of
the applicable Offering Period, or (ii) the number of shares of Common Stock available for sale under the Plan on such Exercise
Date, the Administrator may in its sole discretion (x) provide that the Company will make a pro rata allocation of the shares
of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as
will be practicable and as it will determine in its sole discretion to be equitable among all Participants exercising options
to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect or (y) provide that the Company
will make a pro rata allocation of the shares available for purchase on such Enrollment Date or Exercise Date, as applicable,
in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods then in effect
pursuant to Section 19. The Company may make a pro rata allocation of the shares available on the Enrollment Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares for issuance under
the Plan by the Company’s stockholders subsequent to such Enrollment Date. |
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9. |
Delivery.
As soon as reasonably practicable after each Exercise Date on which a purchase of
shares of Common Stock occurs, the Company will arrange the delivery to each Participant of the shares purchased upon exercise
of his or her option in a form determined by the Administrator (in its sole discretion) and pursuant to rules established
by the Administrator. The Company may permit or require that shares be deposited directly with a broker designated by the
Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer.
The Company may require that shares be retained with such broker or agent for a designated period of time and/or may establish
other procedures to permit tracking of disqualifying dispositions of such shares. No Participant will have any voting, dividend,
or other stockholder rights with respect to shares of Common Stock subject to any option granted under the Plan until such
shares have been purchased and delivered to the Participant as provided in this Section 9. |
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10. |
Withdrawal. |
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|
|
(a) |
A Participant
may withdraw all but not less than all the Contributions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by (i) submitting to the Company’s stock administration office (or its designee)
a written notice of withdrawal in the form determined by the Administrator for such purpose (which may be similar to the form
attached hereto as Exhibit B), or (ii) following an electronic or other withdrawal procedure determined by the Administrator.
The Company’s stock administration may set forth a deadline of when a withdrawal must occur to be effective prior to
a given Exercise Date in accordance with policies it may approve from time to time. All of the Participant’s Contributions
credited to his or her account will be paid to such Participant promptly after receipt of notice of withdrawal and such Participant’s
option for the Offering Period will be automatically terminated, and no further Contributions for the purchase of shares will
be made for such Offering Period. If a Participant withdraws from an Offering Period, Contributions will not resume at the
beginning of the succeeding Offering Period, unless the Participant re-enrolls in the Plan in accordance with the provisions
of Section 5. |
|
(b) |
A Participant’s
withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in any similar plan
that may hereafter be adopted by the Company or in succeeding Offering Periods that commence after the termination of the
Offering Period from which the Participant withdraws. |
11. |
Termination
of Employment. Upon a Participant’s
ceasing to be an Eligible Employee, for any reason, he or she will be deemed to have elected to withdraw from the Plan and
the Contributions credited to such Participant’s account during the Offering Period but not yet used to purchase shares
of Common Stock under the Plan will be returned to such Participant, or, in the case of his or her death, to the person or
persons entitled thereto, and such Participant’s option will be automatically terminated. Unless determined otherwise
by the Administrator in a manner that, with respect to an Offering under the 423 Component, is permitted by, and compliant
with, Section 423 of the Code, a Participant whose employment transfers between entities through a termination with an immediate
rehire (with no break in service) by the Company or a Designated Company shall not be treated as terminated under the Plan;
however, no Participant shall be deemed to switch from an Offering under the Non-423 Component to an Offering under the 423
Component or vice versa unless (and then only to the extent) such switch would not cause the 423 Component or any Option thereunder
to fail to comply with Section 423 of the Code. |
|
|
12. |
Interest.
No interest will accrue on the Contributions of a participant in the Plan, except
as may be required by Applicable Law, as determined by the Company, and if so required by the laws of a particular jurisdiction,
shall, with respect to Offerings under the 423 Component, apply to all Participants in the relevant Offering, except to the
extent otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f). |
2022 PROXY STATEMENT C-7
|
(a) |
Subject to
adjustment upon changes in capitalization of the Company as provided in Section 18 hereof, the maximum number of shares of
Common Stock that will be made available for sale under the Plan will be 11,529,531 13,805,561 shares of Common Stock. |
|
(b) |
Until the shares of Common
Stock are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent
of the Company), a Participant will have only the rights of an unsecured creditor with respect to such shares, and no right
to vote or receive dividends or any other rights as a stockholder will exist with respect to such shares. |
|
(c) |
Shares of Common Stock
to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant
and his or her spouse. |
14. |
Administration.
The Plan will be administered by the Board or a Committee appointed by the Board,
which Committee will be constituted to comply with Applicable Laws. The Administrator will have full and exclusive discretionary
authority to construe, interpret and apply the terms of the Plan, to designate separate Offerings under the Plan, to designate
Subsidiaries and Affiliates as participating in the 423 Component or Non-423 Component, to determine eligibility, to adjudicate
all disputed claims filed under the Plan and to establish such procedures that it deems necessary for the administration of
the Plan (including, without limitation, to adopt such procedures, sub-plans and appendices to the subscription agreement
as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed
outside the U.S., the terms of which sub-plans and appendices may take precedence over other provisions of this Plan, with
the exception of Section 13(a) hereof, but unless otherwise superseded by the terms of such sub-plan or appendix, the provisions
of this Plan shall govern the operation of such sub-plan or appendix). Unless otherwise determined by the Administrator, the
Employees eligible to participate in each sub-plan will participate in a separate Offering or in the Non-423 Component, unless
such designation would cause the 423 Component to violate the requirements of Section 423 of the Code. Without limiting the
generality of the foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding eligibility
to participate, the definition of Compensation, handling of Contributions, making of Contributions to the Plan (including,
without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold Contributions,
payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation
requirements, withholding procedures and handling of stock certificates that vary with applicable local requirements. The
Administrator also is authorized to determine that, to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f),
the terms of an option granted under the Plan or an Offering to citizens or residents of a non-U.S. jurisdiction will be less
favorable than the terms of options granted under the Plan or the same Offering to employees resident solely in the U.S. Every
finding, decision and determination made by the Administrator will, to the full extent permitted by law, be final and binding
upon all parties. |
15. |
Transferability.
Neither Contributions credited to a Participant’s account nor any rights with
regard to the exercise of an option or to receive shares of Common Stock under the Plan may be assigned, transferred, pledged
or otherwise disposed of in any way (other than by will, the laws of descent and distribution) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition will be without effect, except that the Company may treat such
act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof. |
16. |
Use of Funds.
The Company may use all Contributions received or held by it under the Plan for any
corporate purpose, and the Company will not be obligated to segregate such Contributions except under Offerings or for Participants
in the Non-423 Component for which Applicable Laws require that Contributions to the Plan by Participants be segregated from
the Company’s general corporate funds and/or deposited with an independent third party. Until shares of Common Stock
are issued, Participants will have only the rights of an unsecured creditor with respect to such shares. |
17. |
Reports.
Individual accounts will be maintained for each Participant in the Plan. Statements
of account will be given to participating Eligible Employees at least annually, which statements will set forth the amounts
of Contributions, the Purchase Price, the number of shares of Common Stock purchased and the remaining cash balance, if any. |
18. |
Adjustments, Dissolution, Liquidation,
Merger or Change in Control. |
|
(a) |
Adjustments.
In the event that any dividend or other distribution (whether in the form of cash, Common
Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of Common Stock or other securities of the Company, or other change
in the corporate structure of the Company affecting the Common Stock occurs, the Administrator, in order to prevent dilution
or enlargement of the benefits or potential benefits intended to be made available under the Plan, will, in such manner as
it may deem equitable, adjust the number and class of Common Stock that may be delivered under the Plan, the Purchase Price
per share and the number of shares of Common Stock covered by each option under the Plan that has not yet been exercised,
and the numerical limits of Sections 7 and 13. |
2022 PROXY STATEMENT C-8
|
(b) |
Dissolution
or Liquidation. In the event of the proposed dissolution or liquidation of the Company,
any Offering Period then in progress will be shortened by setting a New Exercise Date, and will terminate immediately prior
to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise
Date will be before the date of the Company’s proposed dissolution or liquidation. The Administrator will notify each
Participant in writing or electronically, prior to the New Exercise Date, that the Exercise Date for the Participant’s
option has been changed to the New Exercise Date and that the Participant’s option will be exercised automatically on
the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section
10 hereof. |
|
(c) |
Merger or Change in
Control. In the event of a merger or Change in Control, each outstanding option will
be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.
In the event that the successor corporation refuses to assume or substitute for the option, the Offering Period with respect
to which such option relates will be shortened by setting a New Exercise Date on which such Offering Period shall end. The
New Exercise Date will occur before the date of the Company’s proposed merger or Change in Control. The Administrator
will notify each Participant in writing or electronically prior to the New Exercise Date, that the Exercise Date for the Participant’s
option has been changed to the New Exercise Date and that the Participant’s option will be exercised automatically on
the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section
10 hereof. |
19. |
Amendment or Termination. |
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|
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(a) |
The Administrator,
in its sole discretion, may amend, suspend, or terminate the Plan, or any part thereof, at any time and for any reason. If
the Plan is terminated, the Administrator, in its discretion, may elect to terminate all outstanding Offering Periods either
immediately or upon completion of the purchase of shares of Common Stock on the next Exercise Date (which may be sooner than
originally scheduled, if determined by the Administrator in its discretion), or may elect to permit Offering Periods to expire
in accordance with their terms (and subject to any adjustment pursuant to Section 18). If the Offering Periods are terminated
prior to expiration, all amounts then credited to Participants’ accounts that have not been used to purchase shares
of Common Stock will be returned to the Participants (without interest thereon, except as otherwise required under Applicable
Laws, as further set forth in Section 12 hereof) as soon as administratively practicable. |
|
(b) |
Without stockholder consent
and without limiting Section 19(a), the Administrator will be entitled to change the Offering Periods or Purchase Periods,
designate separate Offerings, limit the frequency and/or number of changes in the amount withheld during an Offering Period,
establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit Contributions in
excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing
of properly completed Contribution elections, establish reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with
Contribution amounts, and establish such other limitations or procedures as the Administrator determines in its sole discretion
advisable that are consistent with the Plan. |
|
(c) |
In the event the Administrator
determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator
may, in its discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or eliminate
such accounting consequence including, but not limited to: |
|
(i) |
amending
the Plan to conform with the safe harbor definition under the Financial Accounting Standards Board Accounting Standards Codification
Topic 718 (or any successor thereto), including with respect to an Offering Period underway at the time; |
|
(ii) |
altering the Purchase
Price for any Offering Period or Purchase Period including an Offering Period or Purchase Period underway at the time of the
change in Purchase Price; |
|
(iii) |
shortening any Offering
Period or Purchase Period by setting a New Exercise Date, including an Offering Period or Purchase Period underway at the
time of the Administrator action; |
|
(iv) |
reducing the maximum
percentage of Compensation a Participant may elect to set aside as Contributions; and |
|
(v) |
reducing the maximum
number of Shares a Participant may purchase during any Offering Period or Purchase Period. |
|
|
Such modifications or
amendments will not require stockholder approval or the consent of any Participants. |
2022 PROXY STATEMENT C-9
20. |
Notices.
All notices or other communications by a Participant to the Company under or in connection
with the Plan will be deemed to have been duly given when received in the form and manner specified by the Company at the
location, or by the person, designated by the Company for the receipt thereof. |
21. |
Conditions Upon
Issuance of Shares. Shares of Common
Stock will not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such
shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign, including, without limitation,
the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and will be further subject to the approval of counsel for
the Company with respect to such compliance. |
|
As a condition to the
exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute
such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned
applicable provisions of law. |
22. |
Code Section 409A.
The Plan is intended to be exempt from the application of Code Section 409A, and,
to the extent not exempt, is intended to comply with Code Section 409A and any ambiguities herein will be interpreted to so
be exempt from, or comply with, Code Section 409A. In furtherance of the foregoing and notwithstanding any provision in the
Plan to the contrary, if the Administrator determines that an option granted under the Plan may be subject to Code Section
409A or that any provision in the Plan would cause an option under the Plan to be subject to Code Section 409A, the Administrator
may amend the terms of the Plan and/or of an outstanding option granted under the Plan, or take such other action the Administrator
determines is necessary or appropriate, in each case, without the Participant’s consent, to exempt any outstanding option
or future option that may be granted under the Plan from or to allow any such options to comply with Code Section 409A, but
only to the extent any such amendments or action by the Administrator would not violate Code Section 409A. Notwithstanding
the foregoing, the Company shall have no liability to a Participant or any other party if the option to purchase Common Stock
under the Plan that is intended to be exempt from or compliant with Code Section 409A is not so exempt or compliant or for
any action taken by the Administrator with respect thereto. The Company makes no representation that the option to purchase
Common Stock under the Plan is compliant with Code Section 409A. |
23. |
Term of Plan.
The Plan will become effective upon the earlier to occur of its adoption by the Board
or its approval by the stockholders of the Company. It will continue in effect for a term of 20 years, unless sooner terminated
under Section 19. |
24. |
Stockholder Approval.
The Plan will be subject to approval by the stockholders of the Company within 12
months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the
degree required under Applicable Laws. |
25. |
Governing Law.
The Plan shall be governed by, and construed in accordance with, the laws of the State
of California (except its choice-of-law provisions). |
26. |
No Right to Employment.
Participation in the Plan by a Participant shall not be construed as giving a Participant
the right to be retained as an employee of the Company or a Subsidiary or Affiliate, as applicable. Furthermore, the Company
or a Subsidiary or Affiliate may dismiss a Participant from employment at any time, free from any liability or any claim under
the Plan. |
27. |
Severability.
If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or
unenforceable for any reason in any jurisdiction or as to any Participant, such invalidity, illegality or unenforceability
shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as to such jurisdiction or
Participant as if the invalid, illegal or unenforceable provision had not been included. |
28. |
Compliance with
Applicable Laws. The terms of this Plan are intended to comply with all Applicable
Laws and will be construed accordingly. |
29. |
Automatic Transfer
to Low Price Offering Period. To the extent permitted by Applicable Laws, if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period is lower than the Fair Market Value of the
Common Stock on the Enrollment Date of such Offering Period, then all participants in such Offering Period will be automatically
withdrawn from such Offering Period immediately after the exercise of their option on such Exercise Date and automatically
re-enrolled in the immediately following Offering Period as of the first day thereof. |
[Remainder of page left intentionally blank]
2022 PROXY STATEMENT C-10
Exhibit A
Amended & Restated 2016
Employee Stock Purchase Plan
Subscription Agreement
Original Application |
Offering Date: |
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Change in Payroll Deduction Rate
1. |
I hereby
elect to participate in the Nutanix, Inc. Amended & Restated 2016
Employee Stock Purchase Plan (the “Plan”) and subscribe to purchase shares of the Company’s Common
Stock in accordance with this Subscription Agreement and the Plan. Capitalized terms used but not otherwise defined herein
shall have the meanings assigned to them in the Plan. |
2. |
I hereby authorize payroll
deductions from each paycheck in the amount of % of my Compensation on each payday (from 1 to 15%)during the Offering Period
in accordance with the Plan. (Please note that no fractional percentages are permitted.) |
3. |
I understand that said
payroll deductions will be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined
in accordance with the Plan. I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions
will be used to automatically exercise my option and purchase Common Stock under the Plan. |
4. |
I understand that the
Company may elect to terminate, suspend or modify the terms of the Plan at any time. I agree to be bound by such termination,
suspension or modification regardless of whether notice is given to me of such event, subject in any case to my right to timely
withdraw from the Plan in accordance with the Plan withdrawal procedures then in effect. |
5. |
I have received a copy
of the complete Plan and its accompanying prospectus. I understand that my participation in the Plan is in all respects subject
to the terms of the Plan. |
6. |
I understand that if
I am a U.S. taxpayer participating in an offering under the Section 423 Component of the Plan and I dispose of any shares
received by me pursuant to the Plan within two (2) years of the Offering Date (the first Trading Day of the Offering Period
during which I purchased such shares) or one (1) year of the Exercise Date, I will be treated for U.S. federal income tax
purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the fair market
value of the shares at the time such shares were purchased by me over the price that I paid for the shares. I hereby agree
to notify the Company in writing within thirty (30) days after the date of any disposition of my shares and I will make adequate
provision for U.S. federal, state, foreign or other tax withholding obligations, if any, which arise upon the disposition
of the Common Stock. The Company may, but will not be obligated to, withhold from my compensation the amount necessary
to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax
deductions or benefits attributable to sale or early disposition of Common Stock by me. If I dispose of such shares at any
time after the expiration of the two (2)-year and one (1)-year holding periods, I understand that I will be treated for U.S.
federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed
as ordinary income only to the extent of an amount equal to the lesser of (a) the excess of the fair market value of the shares
at the time of such disposition over the purchase price which I paid for the shares, or (b) 15% of the fair market value of
the shares on the first day of the Offering Period. The remainder of the gain, if any, recognized on such disposition will
be taxed as capital gain. |
7. |
I acknowledge that, regardless
of any action taken by the Company or, if different, my employer (the “Employer”) with respect to any or
all income tax, social security, payroll tax, fringe benefit, or other tax-related items related to my participation in the
Plan and legally applicable to me (“Tax-Related Items”), the ultimate liability for all Tax-Related Items
is and remains my responsibility and may exceed the amount actually withheld by the Company or the Employer. Furthermore,
I acknowledge that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of
any Tax-Related Items in connection with any aspect of the options under the Plan, including the grant of such options, the
purchase and sale of shares of Common Stock acquired under the Plan and/or the receipt of any dividends on such shares, and
(ii) do not commit to and are under no obligation to structure the terms of the grant of options or any aspect of my participation
in the Plan to reduce or eliminate my liability for Tax-Related Items or achieve any particular tax result. Further, if I
am or become subject to Tax-Related Items in more than one jurisdiction, I acknowledge that the Company and/or the Employer
(or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. |
2022 PROXY STATEMENT C-11
8. |
Prior to
the purchase of shares of Common Stock under the Plan or any other relevant taxable or tax withholding event, as applicable,
I agree to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In
this regard, I authorize the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any
withholding obligations with regard to all Tax-Related Items by one or a combination of the following: (1) withholding from
my wages or Compensation paid to me by the Company and/ or the Employer; or (2) withholding from proceeds of the sale of the
shares of Common Stock purchased under the Plan either through a voluntary sale or through a mandatory sale arranged by the
Company (on my behalf pursuant to this authorization). Depending on the withholding method, the Company may withhold or account
for Tax-Related Items by considering applicable maximum rates, in which case I will receive a cash refund of any over-withheld
amount not remitted to tax authorities on my behalf and will have no entitlement to the Common Stock equivalent. Finally,
I agree to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required
to withhold as a result of my participation in the Plan that cannot be satisfied by the means previously described. The Company
may refuse to purchase shares of Common Stock under the Plan on my behalf and/or refuse to issue or deliver the shares or
the proceeds of the sale of shares if I fail to comply with my obligations in connection with the Tax-Related Items. |
9. |
The Company may, in its
sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.
I hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line
or electronic system established and maintained by the Company or another third party designated by the Company. |
10. |
The Subscription Agreement
is governed by the internal substantive laws but not the choice of law rules of California. For purposes of any action, lawsuit
or other proceedings brought to enforce the Subscription Agreement, relating to it, or arising from it, the parties hereby
submit to and consent to the sole and exclusive jurisdiction of the state courts of Santa Clara County, California, or the
United States District Court for the Northern District of California, and no other courts, where this grant is made and/or
to be performed. |
11. |
Notwithstanding any provision
of this Subscription Agreement, I understand that if I am working or resident in a country other than the United States, my
participation in the Plan also shall be subject to the Additional Terms and Conditions for Non-U.S. Participants set forth
in Appendix A attached hereto and any special terms and conditions for my country set forth in Appendix B attached hereto.
Further, I understand that if I relocate to one of the countries included in Appendix B, the special terms and conditions
for such country will apply to me to the extent the Company determines that the application of such terms and conditions is
necessary or advisable for legal or administrative reasons. Appendix A and Appendix B constitute part of this Subscription
Agreement. |
12. |
The provisions of the
Subscription Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable,
in whole or in part, the remaining provisions nevertheless shall be binding and enforceable. |
13. |
I acknowledge that a
waiver by the Company of breach of any provision of the Subscription Agreement shall not operate or be construed as a waiver
of any other provision of the Subscription Agreement, or of any subsequent breach by me or any other participant. |
14. |
The Company is not providing
any tax, legal or financial advice, nor is the Company making any recommendations regarding my participation in the Plan,
or my acquisition or sale of the underlying shares of Common Stock. I am hereby advised to consult with my own personal tax,
legal and financial advisors regarding my participation in the Plan before taking any action related to the Plan. |
15. |
I hereby agree to be
bound by the terms of the Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate
in the Plan. |
Employee’s ID Number: |
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Employee’s Address: |
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I UNDERSTAND THAT MY PARTICIPATION
UNDER THE TERMS OF THIS SUBSCRIPTION AGREEMENT WILL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED
BY ME OR IF I CEASE TO BE AN ELIGIBLE EMPLOYEE.
Dated: |
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Signature of Employee |
2022 PROXY STATEMENT C-12
Appendix A
Amended & Restated 2016 Employee Stock Purchase Plan
Additional Terms and Conditions
for Non-U.S. Participants
Capitalized
terms used but not otherwise defined herein shall have the meaning given to such terms in the Nutanix, Inc. Amended & Restated 2016 Employee Stock Purchase Plan.
1. |
Conversion
of Payroll Deductions. I understand that if my
payroll deductions or Contributions under the Plan are made in any currency other than U.S. dollars, such payroll deductions
or Contributions will be converted to U.S. dollars on or prior to the Exercise Date using a prevailing exchange rate in effect
at the time such conversion is performed, as determined by the Administrator. I understand and agree that neither the Employer
nor the Company (nor any Parent, Subsidiary or Affiliate of the Company) will be liable for any foreign exchange rate fluctuation
between my local currency and the U.S. dollar that may affect the amount of my Contributions, the value of the options granted
to me under the Plan or the value of any amounts due to me under the Plan, including the amount of proceeds due to me upon
the sale of any shares of Common Stock acquired under the Plan. |
2. |
Nature of Grant.
By electing to participate in the Plan, I acknowledge, understand and agree that: |
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(a) |
the Plan
is established voluntarily by the Company and it is discretionary in nature; |
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(b) |
all decisions with respect
to future grants of options under the Plan, if any, will be at the sole discretion of the Company; |
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(c) |
the grant of options
under the Plan shall not create a right to employment or be interpreted as forming an employment contract with the Company,
the Employer, or any other Parent, Subsidiary or Affiliate, and shall not interfere with the ability of the Company or the
Employer, as applicable, to terminate my employment (if any); |
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(d) |
I am voluntarily participating
in the Plan; |
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(e) |
the options granted under
the Plan and the shares of Common Stock underlying such options, and the income and value of same, are not intended to replace
any pension rights or compensation; |
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(f) |
the options granted under
the Plan and the shares of Common Stock underlying such options, and the income and value of same, are not part of my normal
or expected compensation for any purpose, including, but not limited to, calculating any severance, resignation, termination,
redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; |
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(g) |
unless otherwise agreed
with the Company, the options granted under the Plan and the shares of Common Stock underlying such options, and the income
and value of same, are not granted as consideration for, or in connection with, the service I may provide as a director of
a Subsidiary or Affiliate; |
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(h) |
the future value of the
shares of Common Stock underlying the options granted under the Plan is unknown, indeterminable and cannot be predicted with
certainty; |
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(i) |
the shares of Common
Stock that I acquire under the Plan may increase or decrease in value, even below the Purchase Price; |
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(j) |
no claim or entitlement
to compensation or damages shall arise from the forfeiture options granted to me under the Plan as a result of the termination
of my status as an Eligible Employee (for any reason whatsoever, and whether or not later found to be invalid or in breach
of employment laws in the jurisdiction where I am employed or the terms of my employment agreement, if any) and, in consideration
of the grant of options under the Plan to which I otherwise am not entitled, I irrevocably agree never to institute a claim
against the Company, the Employer, or any other Parent, Subsidiary or Affiliate, waive my ability, if any, to bring such claim,
and release the Company, the Employer, and any other Parent, Subsidiary or Affiliate from any such claim that may arise; if,
notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, I shall be deemed irrevocably
to have agreed not to pursue such claim and I agree to execute any and all documents necessary to request dismissal or withdrawal
of such claim; |
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(k) |
in the event of the termination
of my status as an Eligible Employee (for any reason whatsoever, whether or not later found to be invalid or in breach of
employment laws in the jurisdiction where I am employed or the terms of my employment agreement, if any), my right to participate
in the Plan and any options granted to me under the Plan, if any, will terminate effective as of the date that I no longer
am actively employed by the Company or one of its Parents, Subsidiaries or Affiliates and, in any event, will not be extended
by any notice period mandated under the employment laws in the jurisdiction in which I am employed or the terms of my employment
agreement, if any (e.g., active employment would not include a period of “garden leave” or similar period
pursuant to the employment laws in the jurisdiction in which I am employed or the terms |
2022 PROXY STATEMENT C-13
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of my employment
agreement, if any); the Company shall have the exclusive discretion to determine when I no longer am actively employed for
purposes of my participation in the Plan (including whether I still may be considered to be actively employed while on a leave
of absence); and |
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(l) |
the grant of the option
to purchase shares of Common Stock under the Plan and the benefits evidenced by the Subscription Agreement do not create any
entitlement not otherwise specifically provided for in the Plan, or provided by the Company in its discretion, to have such
rights or benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection
with a sale of substantially all of the Company’s assets or a merger of the Company in which the Company is not the
surviving corporation. |
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(a) |
I hereby
explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of my personal data
as described in the Subscription Agreement and any other Plan materials (“Data”) by and among, as applicable,
the Employer, the Company and its Parents, Subsidiaries and Affiliates for the exclusive purpose of implementing, administering
and managing my participation in the Plan. I understand that Data may include certain personal information about me, including,
but not limited to, my name, home address and telephone number, date of birth, social insurance number or other identification
number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of all options
granted under the Plan or any other entitlement to shares of Common Stock awarded, canceled, exercised, vested, unvested or
outstanding in my favor. |
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(b) |
I understand that
Data will be transferred to such stock plan service provider as may be designated by the Company from time to time (the “Designated
Broker”), which is assisting the Company with the implementation, administration and management of the Plan. I understand
that the recipients of Data may be located in the United States or elsewhere, and that a recipient’s country of operation
(e.g., the United States) may have different data privacy laws and protections than my country. I understand that I may request
a list with the names and addresses of any potential recipients of Data by contacting my local human resources representative. |
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(c) |
I authorize the Company,
the Designated Broker and any other possible recipients which may assist the Company (presently or in the future) with implementing,
administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the
sole purpose of implementing, administering and managing my participation in the Plan. I understand that Data will be held
only as long as is necessary to implement, administer and manage my participation in the Plan. I understand that I may, at
any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments
to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing my local human resources
representative. Further, I understand that I am providing the consents herein on a purely voluntary basis. If I do not consent,
or if I later seek to revoke my consent, my employment status or career with the Company or the Employer will not be adversely
affected; the only consequence of refusing or withdrawing my consent is that the Company would not be able to grant me options
under the Plan or other equity awards, or administer or maintain such awards. Therefore, I understand that refusing or withdrawing
my consent may affect my ability to participate in the Plan. For more information on the consequences of my refusal to consent
or withdrawal of consent, I understand that I may contact my local human resources representative. |
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(d) |
Finally, upon request
of the Company or the Employer, I agree to provide an executed data privacy consent form to the Company and/or the Employer
(or any other agreements or consents that may be required by the Company and/or the Employer) that the Company and/or the
Employer may deem necessary to obtain from me for the purpose of administering my participation in the Plan in compliance
with the data privacy laws in my country, either now or in the future. I understand and agree that I will not be able to participate
in the Plan if I fail to provide any such consent or agreement requested by the Company and/or the Employer. |
4. |
Compliance
with Law. Notwithstanding any other provision of the Plan or the Subscription Agreement,
unless there is an available exemption from any registration, qualification or other legal requirement applicable to the shares
of Common Stock, the Company shall not be required to deliver any shares issuable upon purchase of shares under the Plan prior
to the completion of any registration or qualification of the shares under any local, state, federal or foreign securities
or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”)
or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state,
federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion,
deem necessary or advisable. I understand that the Company is under no obligation to register or qualify the shares of Common
Stock with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority
for the issuance or sale of the shares. Further, I agree that the Company shall have unilateral authority to amend the Plan
and the |
2022 PROXY STATEMENT C-14
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Subscription
Agreement without my consent to the extent necessary to comply with securities or other laws applicable to issuance of shares. |
5. |
Language.
If I have received the Subscription Agreement or any other document related to the Plan
translated into a language other than English and if the meaning of the translated version is different than the English version,
the English version will control. |
6. |
Insider Trading.
By participating in the Plan, I agree to comply with the Company’s policy on insider
trading (to the extent that it is applicable to me). Further, I acknowledge that my country of residence also may have
laws or regulations governing insider trading and that such laws or regulations may impose additional restrictions on my ability
to participate in the Plan (e.g., acquiring or selling shares of Common Stock) and that I am solely responsible for
complying with such laws or regulations. |
7. |
Imposition of Other
Requirements. The Company reserves the right to impose other requirements on my participation
in the Plan, on any shares of Common Stock purchased under the Plan, to the extent the Company determines it is necessary
or advisable for legal or administrative reasons, and to require me to sign any additional agreements or undertakings that
may be necessary to accomplish the foregoing. |
[Remainder of page left intentionally blank]
2022 PROXY STATEMENT C-15
Appendix B
Amended & Restated 2016 Employee Stock Purchase Plan
Country-Specific Provisions For Non-U.S. Participants
Capitalized
terms used but not otherwise defined herein shall have the meaning given to such terms in the Nutanix, Inc. Amended & Restated 2016 Employee Stock Purchase Plan
Terms and Conditions
I understand that this Appendix B includes additional terms and conditions that govern the options to purchase shares of Common Stock granted to me under the
Plan if I work or reside in one of the countries listed below. If I am a citizen or resident of a country other than the
one in which I currently am working (or if I am considered as such for local law purposes), or if I transfer employment or
residence to another country after enrolling in the Plan, I acknowledge and agree that the Company, in its discretion, will
determine the extent to which the terms and conditions herein will be applicable to me.
Notifications
This Appendix B also includes information regarding securities laws, exchange controls and certain other issues of which I should be aware with respect
to my participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the
respective countries as of [DATE]. Such laws are often complex and change frequently. As a result, the Company recommends that
I do not rely on the information in this Appendix B as the only source of information relating to the consequences of my
participation in the Plan because the information included herein may be out of date at the time that I acquire shares of Common
Stock under the Plan or subsequently sell such shares.
In addition, the information
contained herein is general in nature and may not apply to my particular situation and the Company is not in a position to assure
me of any particular result. Accordingly, I am advised to seek appropriate professional advice as to how the relevant laws in
my country may apply to my individual situation.
Finally, if I am a citizen
or resident of a country other than the one in which I currently am working or residing (or if I am considered as such for local
law purposes), or if I transfer employment or residence to another country after options have been granted to me under the Plan,
the information contained herein may not be applicable to me in the same manner.
[Remainder of page left intentionally blank]
2022 PROXY STATEMENT C-16
[NON-US DESIGNATED COMPANIES
AND RELATED TERMS AND CONDITIONS TO COME IF THE ADMINISTRATOR APPROVES SUCH ENTITES AS DESIGNATED COMPANIES UNDER THE ESPP]
2022 PROXY STATEMENT C-17
Exhibit B
Amended & Restated 2016 Employee Stock Purchase Plan
Notice of Withdrawal
The undersigned
participant in the Offering Period of the Nutanix, Inc. Amended & Restated 2016 Employee Stock Purchase Plan that began on , (the “Offering Date”) hereby notifies the Company that he or she
hereby withdraws from the Offering Period. He or she hereby directs the Company to pay to the undersigned as promptly as practicable
all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and
agrees that his or her option for such Offering Period will be automatically terminated. The undersigned understands further that
no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned will
be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement.
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2022 PROXY STATEMENT C-18
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