ALTERYX, INC. Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Executive Performance Awards
On
In addition, on
The Performance Awards may be earned and vested only if the Company achieves certain stock price targets over a seven-year period and the Executives continue to provide services to the Company on each achievement date as described in further detail below.
Purpose of Performance Awards
The Compensation Committee recognizes that as a leader in Analytic Process Automation, the Company is only at the beginning of its journey to unify analytics, data science and business process automation in order to accelerate digital transformation, deliver high-impact business outcomes, accelerate the democratization of data and rapidly upskill modern workforces. Accordingly, the Compensation Committee believes that the Company has a considerable opportunity to continue to deliver significant stockholder value. By further linking the Executives' compensation to the performance of the Company's stock price so that the Executives do not realize value with respect to the Performance Awards unless all the Company's stockholders benefit from substantial value creation, the Performance Awards are designed to ensure that the Executives are aligned with stockholder interests going forward. The Performance Awards are designed to incentivize significant and sustained outperformance, with vesting only occurring at stock price targets significantly above the Company's current stock price and only if the stock price is sustained at or above the target level over a trailing 60-trading day period, as described below. Moreover, the Performance Awards granted to the Executives are designed to drive the Company's strategic direction and value creation over the long-term by encouraging leadership continuity and motivating the Executives with equity that rewards them for providing sustained meaningful increases in stockholder value over a seven-year period. The seven-year performance period is significantly longer than the vesting period of equity awards previously granted to the Company's executive officers which have, since 2020, typically vested over a three-year period. The Performance Awards are one element of the Company's comprehensive executive compensation program, which the Compensation Committee has designed to achieve long-term value creation for the Company's stockholders by rewarding the Executives for achievement of performance objectives in both the short term (i.e., through the achievement of financial objectives pursuant to the Company's annual bonus plan) and long term (i.e., through performance stock units that vest upon the achievement of certain operating metrics and the Performance Awards that vest upon the achievement of stock price targets, as described below). With these goals in mind, and after a thorough analysis and review and extensive consultation with its independent compensation consultant, the Compensation Committee, comprised entirely of independent and disinterested members of the Board, granted the Performance Award to the Executives.
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Terms of Performance Awards
The Performance Awards were granted under the Company's 2017 Equity Incentive Plan (the "2017 Plan"). The Performance Awards are 100% performance-based and represent the right to earn and vest in shares of the Company's Class A common stock (the "Class A common stock") in six separate segments only if increasing stock price targets are achieved over a seven-year period and the Executive continues to provide services to the Company on each achievement date, as described in further detail below:
Stock Price Targets Table
Number of Segment Performance-based Stock
Segment Stock Price Target Units ("PSUs")
CEO: 300,000 PSUs
1 $90 CRO/CPO (each): 100,000 PSUs
CFO: 60,000 PSUs
CEO: 300,000 PSUs
2 $120 CRO/CPO (each): 100,000 PSUs
CFO: 60,000 PSUs
CEO: 250,000 PSUs
3 $150 CRO/CPO (each): 80,000 PSUs
CFO: 50,000 PSUs
CEO: 225,000 PSUs
4 $180 CRO/CPO (each): 80,000 PSUs
CFO: 50,000 PSUs
CEO: 215,000 PSUs
5 $210 CRO/CPO (each): 70,000 PSUs
CFO: 40,000 PSUs
CEO: 210,000 PSUs
6 $240 CRO/CPO (each): 70,000 PSUs
CFO: 40,000 PSUs
For the CEO, CRO, CPO and CFO, the maximum number of shares that can vest under
their respective Performance Award is 1,500,000, 500,000, 500,000 and 300,000,
respectively, with such maximum awards representing approximately 2.22%, 0.74%,
0.74% and 0.44%, respectively, of the Company's outstanding shares of Class A
common stock and Class B common stock combined as of
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For the Executives (other than the CEO, CRO, CPO and CFO), the maximum number of shares that can vest under their Performance Awards is 180,000 shares, in the aggregate, to all such persons.
For the first segment to become eligible to vest, the Company's stock price must
equal at least
If none of the six stock price targets is achieved within the seven-year period, no shares subject to the Performance Awards will vest.
The vesting of
In addition, notwithstanding any earlier achievement of a stock price target, no portion of the Performance Awards that is achieved will vest prior to the two-year anniversary of the Grant Date (the "Two-Year Anniversary Date"). These service and vesting requirements are designed to ensure continuity of leadership and to drive sustained price growth. If, prior to the Two-Year Anniversary Date, an Executive's eligible service with the Company ends as a result of a termination without "cause" or a resignation for "good reason" (each as defined in the Performance Award agreement), any previously achieved segments of the Performance Award will become vested, and the Executive will not be eligible to achieve or vest in any additional portion of the Performance Award. In addition, if an Executive's eligible service with the Company ends due to death or disability, any previously achieved segments of the Performance Award will become vested and his or her Performance Award will remain outstanding and eligible to be earned and vest based on the achievement of stock price targets for up to 12 months following the termination date due to death or disability.
In the event of a change in control of the Company, achievement of a stock price target will be measured using the change in control price per share of Class A common stock rather than the average of the Company's daily volume weighted average price over a trailing 60-trading day period, and any achievement between two stock price targets will be interpolated. Any such resulting "achieved" shares and, in the case of a change in control prior to the Two-Year Anniversary Date, any previously achieved shares, will vest on the change in control.
The Performance Awards are subject to certain clawback provisions.
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Except as described herein and as set forth in the Performance Award agreement, the Performance Awards are subject to the terms of the 2017 Plan.
The foregoing summary of the terms and conditions of the Performance Awards set
forth above does not purport to be complete and is qualified by reference to the
provisions of the 2017 Plan and form of Notice of Restricted Stock Unit Award &
Restricted Stock Unit Award Agreement previously filed with the
Restated Severance & Change in Control Agreements
On
The foregoing description of the Restated Severance & CIC Agreement is qualified
in its entirety by reference to the text of the Restated Severance & CIC
Agreement, which will be filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ending
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