months. In addition, in the event of a qualifying termination of employment within 3 months prior to or 12 months after a change in control, our named executive officers outstanding equity
awards will accelerate as described in Equity Acceleration below. These severance payments and benefits are contingent on the named executive officers execution of a release of claims and, if requested, resignation from our board
of directors.
Equity Acceleration
Unless we provide otherwise when an equity award is granted, vesting of the equity awards granted to our named executive officers will accelerate in full
in the event the employment of the officer is terminated without cause or he or she resigns for good reason, in either case within 3 months prior to, or 12 months after, a change in control. In the case of the performance option granted to
Mr. Bernshteyn in fiscal 2019, this acceleration will only apply to the extent the option remains outstanding following a change in control. In addition, Mr. Bernshteyn was granted an option to purchase 545,000 shares of our common stock
in February 2016 that will accelerate with respect to 50% of the then-unvested shares if his employment is terminated by us without cause or he resigns for good reason at any time.
CEO Performance Option
All or a portion of the performance option granted to Mr. Bernshteyn in fiscal 2019 will be cancelled in connection with a change in control if the
closing price of our common stock on the trading day prior to the change in control (the CIC price) is less than the stock price target applicable to the option of $171.75 per share. If the CIC price is less than $110.11, which
represents the midpoint between the exercise price applicable to the option and the stock price target, the option will be cancelled. If the CIC price is in between $110.11 and $171.75, the number of option shares cancelled will be determined by
linear interpolation. Any portion of the option that remains outstanding will vest pursuant to the service-based vesting schedule applicable to the option.
For purposes of the severance and acceleration payments and benefits described above, the terms cause, change in control and
good reason have the following meanings:
Cause means an officers unauthorized use or disclosure of our confidential
information or trade secrets which causes material harm, material breach of any agreement with us, material failure to comply with our written policies or rules, conviction of a felony, gross negligence or willful misconduct, continuing failure to
perform assigned duties or failure to cooperate in good faith with a governmental or internal investigation.
Good Reason means a
substantial adverse change in the officers responsibilities, authority, powers, functions or duties, a material reduction in the officers base salary, a substantial reduction in benefits other than certain across-the-board reductions, or a requirement that the officer relocate more than 50 miles.
Change in control means a sale of all or substantially all our assets, consummation of a merger of the company with or into another entity
if our capital stock represents less than 50% of the voting power of the surviving entity or its parent, or, in the case of Messrs. Bernshteyn and Ford, any person acquires ownership of more than 50% of our voting stock, or certain changes in the
composition of our board of directors.
In addition, pursuant to our equity plans, an outstanding award held by an active service provider will
accelerate in full if it is not continued, assumed or substituted with an equivalent award in connection with a change in control.
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