(i)
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proxy statement with respect to the Company’s annual general meeting of shareholders (the “Meeting”) to be held at 4:00 p.m. (Israel time) on June 30, 2020, at the Company’s offices at 9
Hapsagot St., Park Ofer B, Petach-Tikva, Israel, describing proposals to be voted upon at the Meeting, the procedure for voting in person or by proxy at the Meeting and various other details related to the Meeting; and
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(ii)
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a proxy card for use in connection with the Meeting.
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CYBERARK SOFTWARE LTD.
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Date: May 26, 2020
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By:
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/s/ Donna Rahav
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Name: Donna Rahav
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Title: General Counsel
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Exhibit
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Description
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(1) |
To re-elect each of Ron Gutler and Kim Perdikou and to elect François Auque, each for a term of approximately three years as a Class III director of the Company, until the Company’s annual general meeting of shareholders to be held
in 2023 and until his or her respective successor is duly elected and qualified;
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(2) |
To approve the CyberArk Software Ltd. 2020 Employee Share Purchase Plan;
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(3) |
To approve, in accordance with the requirements of the Israeli Companies Law, 5759-1999, or the Companies Law, the adoption of an equity grant plan for the years 2020-2022, for the grant of performance share units (PSUs) and
restricted share units (RSUs), to the Chairman of the Company’s board of directors, or the Board, and Chief Executive Officer, Ehud (Udi) Mokady; and
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(4) |
To approve the re-appointment of Kost Forer Gabbay & Kasierer, registered public accounting firm, a member firm of Ernst & Young Global, as the Company’s independent registered public accounting firm for the year ending
December 31, 2020 and until the Company’s 2021 annual general meeting of shareholders, and to authorize the Board to fix such accounting firm’s annual compensation.
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Sincerely,
Ehud (Udi) Mokady
Chairman of the Board of Directors and Chief Executive Officer
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(1) |
To re-elect each of Ron Gutler and Kim Perdikou and elect François Auque, for a term of approximately three years as a Class III director of the Company, until the Company’s annual general meeting of shareholders to be held in 2023
and until his or her respective successor is duly elected and qualified;
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(2) |
To approve the CyberArk Software Ltd. 2020 Employee Share Purchase Plan;
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(3) |
To approve, in accordance with the requirements of the Companies Law, the adoption of an equity grant plan for the years 2020-2022, for the grant of PSUs and RSUs, to the Chairman of the Company’s Board, and Chief Executive Officer,
Ehud (Udi) Mokady;
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(4) |
To approve the re-appointment of Kost Forer Gabbay & Kasierer, registered public accounting firm, a member firm of Ernst & Young Global, as the Company’s independent registered public accounting firm for the year ending
December 31, 2020 and until the Company’s 2021 annual general meeting of shareholders, and to authorize the Board to fix such accounting firm’s annual compensation.
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●
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By mail—If you are a shareholder of record, you can submit a proxy by completing, dating, signing and returning your proxy card
in the postage-paid envelope provided. You should sign your name exactly as it appears on the enclosed proxy card. If you are signing in a representative capacity (for example, as a guardian, executor, trustee, custodian, attorney or
officer of a corporation), please indicate your name and title or capacity. If you hold shares in “street name,” you have the right to direct your brokerage firm, bank or other similar organization on how to vote your shares, and the
brokerage firm, bank or other similar organization is required to vote your shares in accordance with your instructions. To provide instructions to your brokerage firm, bank or other similar organization by mail, please complete, date, sign
and return your voting instruction form in the postage-paid envelope provided by your brokerage firm, bank or other similar organization;
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●
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By telephone—If you are a shareholder of record, you can submit a proxy by telephone by calling the toll-free number listed on
the enclosed proxy card, entering your control number located on the enclosed proxy card and following the prompts. If you hold shares in “street name,” and if the brokerage firm, bank or other similar organization that holds your shares
offers telephone voting, you may follow the instructions shown on the enclosed voting instruction form in order to submit a proxy by telephone; or
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●
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By Internet—If you are a shareholder of record, you can submit a proxy over the Internet by logging on to the website listed on
the enclosed proxy card, entering your control number located on the enclosed proxy card and submitting a proxy by following the on-screen prompts. If you hold shares in “street name,” and if the brokerage firm, bank or other similar
nominee that holds your shares offers Internet voting, you may follow the instructions shown on the enclosed voting instruction form in order to submit your proxy over the Internet.
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providing leadership to the Board if circumstances arise in which the role of the Chairman may be, or may be perceived to be, in conflict, and responding to any reported conflicts of interest, or potential conflicts of interest,
arising for any director;
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presiding as chairman of meetings of the Board at which the Chairman of the Board is not present, including executive sessions of the independent members of the Board;
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serving as liaison between the Chairman of the Board and the independent members of the Board;
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approving meeting agendas for the Board;
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approving information sent to the Board;
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approving meeting schedules to assure that there is sufficient time for discussion of all agenda items;
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having the authority to call meetings of the independent members of the Board;
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ensuring that he or she is available for consultation and direct communication with shareholders, as appropriate;
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recommending that the Board retain consultants or advisers that report directly to the Board;
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conferring with the Chairman of the Board on important Board matters and ensuring the Board focuses on key issues and tasks facing the Company; and
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performing such other duties as the Board may from time to time delegate to assist the Board in the fulfillment of its duties.
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Board Member Compensation:
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Annual compensation – US$35,000
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Additional Lead Director annual compensation – US$17,500
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Additional Committee Compensation:
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Committee
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Chairperson
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Member
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Audit
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US$20,000
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US$10,000
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Compensation
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US$12,000
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US$6,000
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Nominating and Corporate Governance
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US$8,000
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US$4,000
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Strategy
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US$8,000
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US$4,000
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• |
Each of our non-executive directors, serving at the time of each annual general meeting of shareholders (provided that he or she has served at least nine months as director at such time) whose tenure does not terminate at such time,
is entitled to receive, as part of his or her annual compensation, RSUs in a value equal to $200,000, effective as of the date of each such annual meeting of shareholders.
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Each newly appointed non-executive director, upon his or her appointment or election, is entitled to an initial grant of RSUs in a value of up to $350,000.
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(a) |
“RESOLVED, that the re-election of Ron Gutler as a Class III director of the Company, for a term of approximately three years that expires at the third annual
general meeting of shareholders to be held following his re-election, and until the due election and qualification of his successor, be, and hereby is, approved in all respects.”
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(b) |
“RESOLVED, that the re-election of Kim Perdikou as a Class III director of the Company, for a term of approximately three years that expires at the third annual
general meeting of shareholders to be held following her re-election, and until the due election and qualification of her successor, be, and hereby is, approved in all respects.”
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(c) |
“RESOLVED, that the election of François Auque as a Class III director of the Company, for a term of approximately three years that expires at the third annual
general meeting of shareholders to be held following his election, and until the due election and qualification of his successor, be, and hereby is, approved in all respects.”
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hiring, motivating and retaining top-notch executive officers to lead us as we grow our business;
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supporting our long-term strategy of disciplined investing for our future growth;
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aligning the interests of our executive officers with those of our shareholders;
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designing compensation packages that pay for performance and adjust for outperformance or underperformance of our Company and individual executives; and
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providing compensation packages that are competitive, reasonable and fair relative to peers and the overall market.
|
Alteryx
|
ForeScout Technologies
|
Proofpoint
|
Tenable
|
Box
|
Guidewire
|
Q2 Holdings
|
Varonis Systems
|
Cornerstone OnDemand
|
HubSpot
|
Qualys
|
Wix.com
|
Coupa Software
|
Mimecast
|
Rapid7
|
Zscaler
|
FireEye
|
New Relic
|
RingCentral
|
|
Five9
|
Okta
|
SailPoint Technologies
|
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the CEO’s role in the execution of the Company’s operating plan for the previous fiscal year;
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the Company’s degree of achievement of its financial targets and the CEO’s degree of achievement of his personal strategic goals for the previous fiscal year, and the appropriateness of the foregoing goals as indicators of the
Company’s success and promotion of shareholder interests;
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the Company’s operating plan for the upcoming fiscal year and the nature of the financial and strategic goals necessary to be achieved in support of such plan, including an assessment of the degree of difficulty of such goals and
their expected contribution to promoting the long-term success of the Company;
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the Company’s strategic plan for the upcoming years and potential milestones necessary to be achieved in support of such plan;
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the performance of our executive team, on an individual basis and as a whole, as a result of Mr. Mokady’s leadership;
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existing compensation arrangements with Mr. Mokady, including outstanding equity compensation awarded in previous fiscal years and its vesting status; and
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if deemed necessary by the compensation committee, data from an independent analysis of compensation awarded to chief executive officers of peer companies within our industry and the manner in which peer companies strive to tie
compensation with performance.
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at least 20% of the value of each annual equity grant will be subject to a relative TSR performance criteria, with a performance period of at least three years, to which we refer as Relative TSR PSUs in this proxy statement; and
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the remainder of the PSUs awarded will be subject to achievement of any or a combination of certain of the business-related measurable criteria set forth in our Compensation Policy, with a performance period of at least one year, to
which we refer as Business PSUs in this proxy statement. Criteria stated in the Compensation Policy include, for example, the Company’s financial results, cost savings or efficiency metrics, sales and marketing objectives and
productivity indices or growth in the volume of an activity.
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Year of Grant
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Number of PSUs Granted
(on Target) |
Performance Criteria Achievement Rate
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Number of PSUs Earned
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Earning Rate
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2019
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26,900
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109%
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35,760
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133%
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2018
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36,900
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115%
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53,064
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144%
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2017
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18,000
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90%
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11,800
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66%
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RSUs will vest over a period of four years of the vesting commencement date, on a quarterly basis;
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Relative TSR PSUs that have been earned in accordance with their terms will fully vest following the earning determination date; and
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Business PSUs that have been earned in accordance with their terms will vest over a period of four years of the vesting commencement date. Upon determination of the earning rate of such PSUs, if any, the appropriate portion of such
PSUs will vest (based on the time elapsed following the vesting commencement date), and the remainder will vest on a quarterly basis until the lapse of four years of the vesting commencement date. For example, if the Business PSUs were
subject to a one-year performance period, then 25% of earned Business PSUs would vest following the Board’s determination of their earning rate, and the remaining 75% would vest quarterly over an additional three-year period.
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unusual or non-recurring events, such as acquisitions;
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changes in our accounting principles or tax laws; and
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events related to currency fluctuations.
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Mr. Mokady has acted as the driving force in the design and execution of the Company’s long-term strategy, both organically and through calculated and fruitful acquisitions, resulting in the Company’s successful efforts to broaden
its products and services, diversify its business and licensing model and enter into new markets.
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Under his oversight, the Company has achieved sustainable, multi-year revenue growth across geographies, securing customers in over 100 countries. Our 2019 revenues reached a record $433.9 million, and our five-year CAGR between 2014
and 2019 was 33%.
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Non-GAAP Operating income in 2019 reached a record $123.4 million and our five-year CAGR between 2014 and 2019 was 41%. Our non-GAAP net income reached a record $107.9 million in 2019 and our five-year CAGR between 2014 and 2019 was
47% (see Appendix C for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure).
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In 2019, our net cash provided by operating activities reached a record $141.7 million and our five-year CAGR between 2014 and 2019 was 44%.
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Between the Company’s initial public offering in 2014 and 2019, our customer base has rapidly expanded, nearly tripling from 1,800 customers in 2014 to approximately 5,300 customers in 2019. Such growth was not only in numbers but
also in quality and across all verticals, evidenced by having our products secure over 50% of the Fortune 500 and more than 35% of the Global 2000. Customer satisfaction rates are high, demonstrated by maintenance renewal rates of over
90% and sales expansion among more than a third of our customers each year.
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Under Mr. Mokady’s leadership, in November 2019, the Company successfully completed the issuance of $575 million aggregate principal amount of 0.00% Convertible Senior Notes due 2024. We ended 2019 with a robust balance sheet,
including more than $1.1 billion in cash, cash equivalents, short-term deposits and marketable securities.
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Our robust balance sheet allowed us to continue making ongoing investments in our business, leading to our competitive differentiation. The Company has made significant investments in its cloud solutions, which are increasing its
recurring revenue and creating future growth drivers for our business. Based on our continued innovation, we are the market leader in privileged access management and are repeatedly recognized by leading industry analysts as such.
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Under Mr. Mokady’s leadership, CyberArk is committed to fostering a culture of diversity, inclusion and continuous improvement, which has been key in hiring and retaining talented employees who promote the Company’s success. In 2019,
the Company began implementing its Environmental, Social and Governance program, an important driver of long-term returns.
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Between 2014 and 2019, our headcount increased from approximately 317 employees to 1,380 employees in 38 countries.
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The unvested portion of all of Mr. Mokady’s outstanding equity awards constitutes approximately 0.39% of our total outstanding ordinary shares, which percentage would continue to diminish if this Proposal 3 is not approved at the
Meeting; and
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Mr. Mokady holds options to purchase 253,395 of our ordinary shares, with a weighted average exercise price of $66.10 per share. Only a small portion of such stock options are still subject to vesting, as approximately 83% of the
stock options previously awarded to him have already vested and are currently exercisable.
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Year of Vesting
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RSUs
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Earned PSUs
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Stock Options
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2020
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17,025
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12,578
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14,913
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2021
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25,613
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22,944
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18,575
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2022
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12,919
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12,256
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8,225
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2023
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2,406
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2,235
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1,507
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Mr. Mokady’s positive performance assessment as described above;
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Mr. Mokady’s relatively low total cash compensation and the Company’s methodology to balance the same by providing above median equity awards, as described above; and
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the fact that a significantly larger portion of the awards will be subject to performance criteria compared to previous years, and that the Company is introducing a relative TSR performance criteria with a longer performance period
for the first time.
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RSUs
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Business PSUs
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Relative TSR PSUs
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Percentage
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50%
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30%
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20%
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Amount
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27,700
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16,600
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11,100
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Percentile
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Achievement Rate
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Threshold
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25th
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50%
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Target
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50th
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100%
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Overachievement
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75th
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200%
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RSUs will vest on a quarterly basis over a period of four years as of the vesting commencement date and become fully vested on February 15, 2024. RSUs which would have vested on May 15, 2020 (1,732 RSUs) will become vested on the
Meeting date.
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Subject to the achievement of the relevant performance criteria, 25% of the Business PSUs will vest on February 15, 2021, with the remainder vesting on a quarterly basis thereafter, and becoming fully vested on February 15, 2024.
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Subject to the achievement of the relevant performance criteria, Relative TSR PSUs would fully vest on February 15, 2023.
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2018
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2019
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(in thousands)
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Audit Fees
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$
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559
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$
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852
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Audit-Related Fees
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240
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75
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Tax Fees
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227
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332
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All Other Fees
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-
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115
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Total
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$
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1,026
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$
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1,374
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By order of the Board of Directors:
Donna Rahav
General Counsel
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1. |
PURPOSE
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2. |
DEFINITIONS AND CONSTRUCTION
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3. |
SHARES SUBJECT TO THE PLAN
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3.1 |
Number of Shares. As of the Effective Date, the maximum aggregated number of Shares that may be issued pursuant to rights granted under the Plan (the “Pool”), shall be the sum of (a)
500,000 Shares, plus (b) on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2026, the number of Shares available for issuance under the Plan shall be increased by that number
of Shares equal to the lesser of (1) an amount determined by the Board , if so determined prior to January 1 of the calendar year in which the increase will occur, (2) 1% of the total number of Shares outstanding on the December 31 of the
immediately preceding calendar year, and (3) 1,000,000 Shares; in all event subject to Section 7. The Committee may postpone the Effective Date or decrease the amount of shares pursuant to section 3.1(a). If any right granted under the
Plan shall for any reason terminate without having been exercised, the Shares not purchased under such right shall again become available for issuance under the Plan.
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3.2
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Shares Distributed. Any Shares distributed pursuant to the Plan may consist, in whole or in part, of authorized and unissued
Shares, treasury shares or Shares purchased on the open market.
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4. |
ELIGIBILITY AND PARTICIPATION
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4.1
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Eligibility. Unless otherwise determined by the Committee, any Eligible Employee who shall be employed by the Company or a
Designated Subsidiary for at least 90 days prior to a given Enrollment Date for a Purchase Period shall be eligible to participate in the Plan during such Purchase Period, subject to the requirements of this Section 4 and the limitations
imposed by Section 423(b) of the Code, as applicable.
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4.2
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Enrollment in Plan.
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4.2.1 |
Except as otherwise determined by the Committee, an Eligible Employee may become a Participant in the Plan for a Purchase Period by delivering a subscription agreement to the Company by such time prior to the Enrollment Date for such
Purchase Period designated by the Committee and in such form as the Company provides.
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4.2.2 |
Each subscription agreement shall designate a whole percentage of such Eligible Employee’s Compensation to be withheld by the Company or the Designated Subsidiary employing such Eligible Employee on each Payday during the Offering
Period as payroll deductions under the Plan. The percentage of Compensation designated by an Eligible Employee may not be less than 1% and may not be more than 15%, unless otherwise determined by the Committee. The payroll deductions made
for each Participant shall be credited to an account for such Participant under the Plan and shall be deposited with the general funds of the Company, without any interest thereon.
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4.2.3 |
Except as otherwise determined by the Committee, a Participant shall be allowed to decrease (but not increase) his or her payroll deduction elections one time during each Purchase Period subject to the limits of this
Section 4.2, or may suspend his or her payroll deductions, at any time during a Purchase Period. Any such change or suspension of payroll deductions shall be effective with the first full payroll period following five business days after
the Company’s receipt of the new subscription agreement. In the event a Participant suspends his or her payroll deductions, such Participant’s cumulative payroll deductions prior to the suspension shall remain in his or her account and
shall be applied to the purchase of Shares on the next occurring Purchase Date and shall not be paid to such Participant unless he or she withdraws from participation in the Plan pursuant to Section 6.
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4.2.4 |
Except as otherwise determined by the Committee, a Participant may participate in the Plan only by means of payroll deduction and may not make contributions by lump sum payment for any Purchase Period. In locations where local law
limits or prohibits payroll deduction, the Committee may provide that an Eligible Employee may elect to participate through contributions to the Participant’s account under the Plan in a form acceptable to the Committee in lieu of or in
addition to payroll deductions, subject to limitations of Section 423 of the Code, as applicable.
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4.3
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Payroll Deductions. Except otherwise determined by the Committee, payroll deductions for a Participant shall commence on the
first Payday following the Enrollment Date and shall end on the last Payday in the Offering Period to which the Participant’s authorization is applicable, unless sooner terminated by the Participant as provided in Section 6 or suspended
by the Participant or the Committee as provided in Section 4.2 and Section 4.6, respectively.
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4.4
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Effect of Enrollment. A Participant’s completion of a subscription agreement will enroll such Participant in the Plan for
each subsequent Purchase Period on the terms contained therein until the Participant either submits a new subscription agreement, withdraws from participation under the Plan as provided in Section 6 or otherwise becomes ineligible to
participate in the Plan.
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4.5
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Limitation on Purchase of Shares. An Eligible Employee may be granted rights under the Plan only if such rights, together
with any other rights granted to such Eligible Employee under “employee stock purchase plans” of the Company, any Parent or any Subsidiary, as specified by Section 423(b)(8) of the Code, do not permit such employee’s rights to purchase
shares of the Company or any Parent or Subsidiary to accrue at a rate that exceeds $25,000 of the fair market value of such shares (determined as of the first day of the Purchase Period during which such rights are granted) for each
calendar year in which such rights are outstanding at any time and up to the Maximum number of shares for each Offering Period. This limitation shall be applied in accordance with Section 423(b)(8) of the Code.
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4.6
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Suspension of Payroll Deductions. Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 4.5, as applicable or the other limitations set forth in this Plan, a Participant’s payroll deductions may be suspended by the Committee at any time during an Offering Period. The balance of the amount credited to the
account of each Participant that has not been applied to the purchase of Shares by reason of Section 423(b)(8) of the Code or the other limitations set forth in this Plan shall be paid to such Participant in one lump sum in cash as soon
as reasonably practicable after the Purchase Date.
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4.7
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Israeli and other Non-U.S. Employees.
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4.8
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Leave of Absence. During leaves of absence approved by the Company meeting the requirements of Treasury Regulation Section
1.421-1(h)(2) under the Code, a Participant may continue participation in the Plan, including by making cash payments to the Company on his or her normal Payday equal to the Participant’s authorized payroll deduction.
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5. |
GRANT AND EXERCISE OF RIGHTS
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5.1
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Grant of Rights. Subject to the limits in Section 4.5, on the Enrollment Date of each Purchase Period, each Eligible
Employee participating in such Purchase Period shall have the right to buy, on each Purchase Date (at the applicable Purchase Price), such number of whole Shares as is determined by dividing (a) such Participant’s payroll deductions
accumulated prior to such Purchase Date and retained in the Participant’s account as of the Purchase Date, by (b) the applicable Purchase Price (rounded down to the nearest Share). The right shall expire on the last day of the Purchase
Period.
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5.2 |
Purchase Price. The Purchase Price per Share offered to each Eligible Employee in a given Purchase Period. Unless otherwise determined by the Committee, the Purchase Price will be no less than 85% of the Fair Market Value of a
Share on the Enrollment Date or on the Purchase Date, whichever is lower; provided, further, that the Purchase Price may be adjusted by the Committee pursuant to Section 9 and shall not be less than the par value of a
Share.
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5.3
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Exercise of Rights. On each Purchase Date, each Participant’s accumulated payroll deductions and any other additional
payments approved by the Committee will be applied to the purchase of whole Shares, up to the Maximum Number of Shares permitted for each Offering Period, pursuant to the terms of the Plan. No fractional Shares shall be issued upon the
exercise of rights granted under the Plan, unless otherwise approved by the Committee. Any cash in lieu of fractional Shares remaining after the purchase of whole Shares upon exercise of a purchase right will be credited to a
Participant’s account and carried forward and applied toward the purchase of whole Shares for the next following Purchase Period. Shares issued pursuant to the Plan may be evidenced in such manner as the Committee may determine and may be
issued in certificated form or issued pursuant to book-entry procedures.
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5.4
|
Pro Rata Allocation of Shares. If the Committee determines that, on a given Purchase Date, the number of Shares with respect
to which rights are to be exercised may exceed (a) the number of Shares that were available for issuance under the Plan on the Enrollment Date of the applicable Offering Period, or (b) the Pool available for issuance under the Plan on
such Purchase Date, the Committee shall make, as applicable, such adjustment or pro rata allocation of the Shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable.
The balance of the amount credited to the account of each Participant that has not been applied to the purchase of Shares shall be paid to such Participant in one lump sum in cash as soon as reasonably practicable after the Purchase Date
or such earlier date as determined by the Committee.
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5.5
|
Withholding. Any tax consequences arising from participation in the Plan, the issuance, sale or disposition of Shares or
from any other event or act (including, without limitation, by the Company, and/or any Designated Subsidiary or any Participant) hereunder shall be borne solely by the relevant Participant. Without derogating from the generality of the
foregoing, at the time a Participant’s rights under the Plan are exercised, in whole or in part, or at the time some or all of the Shares issued under the Plan is disposed of, the Participant must make adequate provision for the Company’s
federal, state, or other tax withholding obligations, if any, that arise upon the exercise of the right or the disposition of the Shares. At any time, the Company may, but shall not be obligated to, withhold from the Participant’s
compensation or Shares received pursuant to the Plan the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits
attributable to sale or early disposition of Shares by the Participant.
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|
5.6 |
Conditions to Issuance of Shares. The Company shall not be required to issue or deliver any certificate or certificates for, or make any book entries evidencing, Shares purchased upon the exercise of rights under the Plan
prior to fulfillment of all of the following conditions: (a) the admission of such Shares to listing on all stock exchanges, if any, on which the Shares are then listed; (b) the completion of any registration or other qualification of
such Shares under any state or federal law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, that the Committee shall, in its absolute discretion, deem necessary or
advisable; (c) the obtaining of any approval or other clearance from any state or federal governmental agency that the Committee shall, in its absolute discretion, determine to be necessary or advisable; (d) the payment to the Company
of all amounts that it is required to withhold under federal, state or local law upon exercise of the rights, if any; and (e) the lapse of such reasonable period of time following the exercise of the rights as the Committee may from
time to time establish for reasons of administrative convenience.
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6. |
WITHDRAWAL; CESSATION OF ELIGIBILITY
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6.1
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Withdrawal. A Participant may withdraw all of the payroll deductions credited to his or her account and not yet used to
exercise his or her rights under the Plan at any time by giving written notice to the Company in a form acceptable to the Company no later than one week prior to the end of the Purchase Period. All of the Participant’s payroll deductions
credited to his or her account during a Purchase Period shall be paid to such Participant as soon as reasonably practicable after receipt of notice of withdrawal and such Participant’s rights for the Purchase Period shall be automatically
terminated, and no further payroll deductions for the purchase of Shares shall be made for such Purchase Period.
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6.2
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Future Participation. A Participant’s withdrawal from a Purchase Period shall not have any effect upon his or her
eligibility to participate in any similar plan that may hereafter be adopted by the Company or a Designated Subsidiary or in subsequent Purchase Periods that commence after the termination of the Purchase Period from which the Participant
withdraws. If a Participant withdraws from a Purchase Period, payroll deductions shall not resume at the beginning of the next Purchase Period unless the Participant timely delivers to the Company a new subscription agreement.
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6.3
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Cessation of Eligibility. Upon a Participant’s ceasing to be an Eligible Employee for any reason, including following
employment Termination, he or she shall be deemed to have elected to withdraw from the Plan pursuant to this Section 6 and the payroll deductions credited to such Participant’s account during the Purchase Period shall be paid to such
Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 11.4, as soon as reasonably practicable, and such Participant’s rights for the Purchase Period shall be automatically terminated. The
Committee may establish the applicable rules to govern transfers of employment between entities.
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7. |
ADJUSTMENTS UPON CHANGES IN SHARES
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7.1
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Changes in Capitalization. Subject to Section 7.3, in the event that the Committee determines that an adjustment is
appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any outstanding purchase rights under the Plan, following any
dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), change in control, reorganization, merger, amalgamation, consolidation, combination, repurchase, redemption, recapitalization,
liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Shares or other securities of the Company, issuance of warrants or other rights to
purchase Shares or other securities of the Company, or other similar corporate transaction or event, the Committee may make equitable adjustments, if any, to reflect such change with respect to (a) the aggregate number and type of Shares
(or other securities or property) that may be issued under the Plan (including, the Pool and the Maximum Number of Shares that may be purchased); (b) the class(es) and number of Shares and price per Share subject to outstanding rights;
and (c) the Purchase Price with respect to any outstanding rights.
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7.2
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Other Adjustments. Subject to Section 7.3, in the event of any transaction or event described in Section 7.1 or any unusual
or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any affiliate, or of changes in Applicable Law or accounting principles, the Committee, in its
discretion, and on such terms and conditions as it deems appropriate, is hereby authorized to take any one or more of the following actions whenever the Committee determines that such action is appropriate in order to prevent the dilution
or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any right under the Plan, to facilitate such transactions or events or to give effect to such changes in laws,
regulations or principles:
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7.2.1 |
To provide for either (i) termination of any outstanding right in exchange for an amount of cash, if any, equal to the amount that would have been obtained upon the exercise of such right had such right been currently exercisable or
(ii) the replacement of such outstanding right with other rights or property selected by the Committee in its sole discretion;
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7.2.2 |
To provide that the outstanding rights under the Plan shall be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar rights covering the shares of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;
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7.2.3 |
To make adjustments in the number and type of Shares (or other securities or property) subject to outstanding rights under the Plan and/or in the terms and conditions of outstanding rights and rights that may be granted in the future;
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7.2.4 |
To provide that Participants’ accumulated payroll deductions may be used to purchase Shares prior to the next occurring Purchase Date on such date as the Committee determines in its sole discretion and the Participants’ rights under
the ongoing Offering Period(s) shall be terminated; and
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7.2.5 |
To provide that all outstanding rights shall terminate without being exercised.
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7.3
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No Adjustment Under Certain Circumstances. Unless determined otherwise by the Committee, no adjustment or action described
in this Section 7 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to fail to satisfy the requirements of Section 423 of the Code, if applicable.
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7.4
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No Other Rights. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision
or consolidation of shares of any class, the payment of any dividend, any increase or decrease in the number of shares of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except
as expressly provided in the Plan or pursuant to action of the Administrator under the Plan, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number of Shares subject to outstanding rights under the Plan or the Purchase Price with respect to any outstanding rights.
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8. |
AMENDMENT, MODIFICATION AND TERMINATION
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8.1
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Amendment, Modification and Termination. The Committee may amend, suspend or terminate the Plan at any time and from time to
time; provided, however, that approval of the Company’s shareholders shall be required to amend the Plan to: (a) increase the aggregate number, or change the type, of shares that
may be sold pursuant to rights under the Plan under Section 3.1 (other than an adjustment as provided by Section 7) or (b) change the corporations or classes of corporations whose employees may be granted rights under the Plan.
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8.2
|
Certain Changes to Plan. Without shareholder consent and without regard to whether any Participant rights may be considered
to have been adversely affected (and taking into account Section 423 of the Code, if applicable), the Committee shall be entitled to change the Offering Periods, Purchase Periods, limit the frequency and/or number of changes in the amount
withheld from Compensation during a Purchase Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a Participant in
order to adjust for delays or mistakes in the Company’s processing of withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase
of Shares for each Participant properly correspond with amounts withheld from the Participant’s Compensation, and establish such other limitations or procedures as the Committee determines in its sole discretion to be advisable that are
consistent with the Plan.
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8.3
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Actions In the Event of Unfavorable Financial Accounting Consequences. In the event the Committee determines that the
ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Committee may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:
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8.3.1 |
altering the Purchase Price for any Purchase Period including a Purchase Period underway at the time of the change in Purchase Price;
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8.3.2 |
shortening any Purchase Period so that it ends on a new Purchase Date, including an Purchase Period underway at the time of the Committee action; and
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8.3.3 |
allocating Shares.
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8.4
|
Payments Upon Termination of Plan. Upon termination of the Plan, the balance in each Participant’s Plan account shall be
refunded as soon as practicable after such termination, without any interest thereon, or the Purchase Period may be shortened so that the purchase of Shares occurs prior to the termination of the Plan.
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9. |
TERM OF PLAN
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10. |
ADMINISTRATION
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10.1
|
Administrator. Unless otherwise determined by the Board, the Plan shall be administered by the Committee (or
another committee or a subcommittee of the Board to which the Board delegates administration of the Plan). The Board may at any time vest in the Board any authority or duties for administration of the Plan. The Committee may delegate
administrative tasks under the Plan to the services of an Agent or Employees to assist in the administration of the Plan, including establishing and maintaining an individual securities account under the Plan for each Participant.
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10.2
|
Authority of Committee. The Committee shall have the power, subject to, and within the limitations of, the express provisions
of the Plan:
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|
10.2.1 |
To determine when and how rights to purchase Shares shall be granted and the provisions of each offering of such rights (which need not be identical).
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10.2.2 |
To designate from time to time which Subsidiaries of the Company shall be Designated Subsidiaries, which designation may be made without the approval of the shareholders of the Company.
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10.2.3 |
To impose a mandatory holding period pursuant to which Employees may not dispose of or transfer Shares purchased under the Plan for a period of time determined by the Committee in its discretion.
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10.2.4 |
To construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Committee, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.
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10.2.5 |
To amend, suspend or terminate the Plan as provided in Section 8.
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|
10.2.6 |
Generally, to exercise such powers and to perform such acts as the Committee deems necessary or expedient to promote the best interests of the Company and its Subsidiaries and to carry out the intent that the Plan be treated as an
“employee stock purchase plan” within the meaning of Section 423 of the Code.
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|
10.2.7 |
The Committee may adopt appendices or sub-plans applicable to the Company or particular Designated Subsidiaries or locations, which appendices or sub-plans may be designed to be outside the scope of Section 423 of the Code. The rules
of such sub-plans may take precedence over other provisions of this Plan, with the exception of Section 3.1 hereof, but unless otherwise superseded by the terms of such appendix or sub-plan, the provisions of this Plan shall govern the
operation of such appendix or sub-plan.
|
10.3
|
Decisions Binding. The Committee’s interpretation of the Plan, any rights granted pursuant to the Plan, any subscription agreement and all
decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.
|
11. |
MISCELLANEOUS
|
|
11.1 |
Restriction upon Assignment. A right granted under the Plan shall not be transferable other than by will or the
applicable laws of descent and distribution, and is exercisable during the Participant’s lifetime only by the Participant. Except as provided in Section 11.4 hereof, a right under the Plan may not be exercised to any extent except by the
Participant. The Company shall not recognize and shall be under no duty to recognize any assignment or alienation of the Participant’s interest in the Plan, the Participant’s rights under the Plan or any rights thereunder.
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11.2
|
Rights as a Shareholder. With respect to Shares subject to a right granted under the Plan, a Participant shall not be deemed to be a
shareholder of the Company, and the Participant shall not have any of the rights or privileges of a shareholder, until such Shares have been issued to the Participant or his or her nominee following exercise of the Participant’s rights
under the Plan. No adjustments shall be made for dividends (ordinary or extraordinary, whether in cash securities, or other property) or distribution or other rights for which the record date occurs prior to the date of such issuance,
except as otherwise expressly provided herein or as determined by the Administrator.
|
11.3
|
Interest. No interest shall accrue on the payroll deductions or contributions of a Participant under the Plan.
|
11.4
|
Designation of Beneficiary.
|
|
11.4.1 |
A Participant may, in the manner determined by the Committee, file a written designation of a beneficiary who is to receive any Shares and/or cash, if any, from the Participant’s account under the Plan in the event of such
Participant’s death subsequent to a Purchase Date on which the Participant’s rights are exercised but prior to delivery to such Participant of such Shares and cash. In addition, a Participant may file a written designation of a
beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the Participant’s rights under the Plan. If the Participant is married and resides in a
community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary shall not be effective without the prior written consent of the Participant’s spouse.
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|
11.4.2 |
Such designation of beneficiary may be changed by the Participant at any time by written notice to the Company. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is
living at the time of such Participant’s death, the Company shall deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the
knowledge of the Company), the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
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11.5
|
Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
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11.6
|
Equal Rights and Privileges. Subject to Section 4.7, all Eligible Employees will have equal rights and privileges under the Plan, so that
it qualifies as an “employee stock purchase plan” within the meaning of Section 423 of the Code. Subject to Section 4.7, any provision that is inconsistent with Section 423 of the Code will, without further act or amendment by the Company,
the Board or the Committee, be reformed to comply with the equal rights and privileges requirement of Section 423 of the Code, as applicable.
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11.7
|
Use of Funds. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such payroll deductions.
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|
11.8 |
Reports. Statements of account shall be given to Participants at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of Shares purchased and the remaining cash
balance, if any.
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11.9
|
No Employment Rights. Nothing in the Plan shall be construed to give any person (including any Eligible Employee or
Participant) the right to remain in the employ of the Company or any of its affiliates or affect the right of the Company or any of its affiliates to terminate the employment of any person (including any Eligible Employee or Participant) at
any time, with or without cause.
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11.10
|
Notice of Disposition of Shares. Each Participant shall give prompt notice to the Company of any disposition or other
transfer of any Shares purchased upon exercise of a right under the Plan, subject to Section 423 of the Code if such disposition or transfer is made: (a) within two years from the Enrollment Date of the Offering Period in which the Shares
were purchased or (b) within one year after the Purchase Date on which such Shares were purchased. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by the Participant in such disposition or other transfer.
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11.11
|
Governing Law. The Plan and any agreements hereunder shall be administered, interpreted and enforced in accordance with the
laws of the State of Israel, disregarding any state’s choice of law principles requiring the application of a jurisdiction’s laws other than the State of Israel. Certain definitions, which refer to the laws of such jurisdiction, shall be
construed in accordance with other such laws. The competent courts located in Tel-Aviv-Jaffa, Israel shall have exclusive jurisdiction over any dispute arising out of or in connection with this Plan and any award granted hereunder.
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11.12
|
Electronic Forms. To the extent permitted by Applicable Law and in the discretion of the Committee, an Eligible Employee may
submit any form or notice as set forth herein by means of an electronic form approved by the Committee. Before the commencement of an Offering Period, the Committee shall prescribe the time limits within which any such electronic form shall
be submitted to the Committee with respect to such Offering Period in order to be a valid election.
|
1. |
Purpose
|
2. |
Definitions
|
3. |
Determination and Grant of LTI Award
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4. |
Terms and Conditions of Awards Issued in Connection with the LTI Award
|
5. |
Accelerated Earning, Vesting and Settlement of PSUs
|
6. |
Administration
|
7. |
Miscellaneous
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2014
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2019
|
|||||||
(in thousands)
|
||||||||
Reconciliation of Operating Income to Non-GAAP Operating Income:
|
||||||||
Operating income
|
$
|
20,454
|
$
|
62,284
|
||||
Share-based compensation
|
1,573
|
55,517
|
||||||
Amortization of intangible assets – Cost of revenues
|
-
|
5,029
|
||||||
Amortization of intangible assets – Sales and marketing
|
-
|
576
|
||||||
Non-GAAP operating income
|
$
|
22,027
|
$
|
123,406
|
2014
|
2019
|
|||||||
(in thousands)
|
||||||||
Reconciliation of Net Income to Non-GAAP Net Income:
|
||||||||
Net income
|
$
|
9,954
|
$
|
63,064
|
||||
Share-based compensation
|
1,573
|
55,517
|
||||||
Warrant adjustment
|
4,309
|
-
|
||||||
Amortization of intangible assets – Cost of revenues
|
-
|
5,029
|
||||||
Amortization of intangible assets – Sales and marketing
|
-
|
576
|
||||||
Amortization of debt discount and issuance costs
|
-
|
1,966
|
||||||
Taxes on income related to non-GAAP adjustments
|
-
|
(18,251
|
)
|
|||||
Non-GAAP net income
|
$
|
15,836
|
$
|
107,901
|
Address Changes/Comments:
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
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CYBERARK SOFTWARE LTD.
C/O PROXY SERVICES
P.O. BOX 9142
FARMINGDALE, NY 11735
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VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand
when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
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ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or
the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
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VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the
instructions.
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VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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KEEP THIS PORTION FOR YOUR RECORDS
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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DETACH AND RETURN THIS PORTION ONLY
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CYBERARK SOFTWARE LTD.
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||||
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH
PROPOSAL LISTED BELOW.
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|||||
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1.
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To re-elect each of Ron Gutler and Kim Perdikou, and to elect François Auque, each for a term of approximately three years as a Class III director of the Company, until the Company’s annual
general meeting of shareholders to be held in 2023 and until his or her respective successor is duly elected and qualified.
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For | Against | Abstain | ||||
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1a. | Ron Gutler |
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☐
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☐
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☐
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1b. | Kim Perdikou |
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☐
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☐
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☐
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1c. | François Auque |
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☐
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☐
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☐
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2.
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To approve the CyberArk Software Ltd. 2020 Employee Share Purchase Plan.
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☐
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☐
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☐
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||||
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3.
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To approve, in accordance with the requirements of the Companies Law, the adoption of an equity grant plan for the years 2020-2022, for the grant of performance share units (PSUs) and
restricted share units (RSUs), to the Company’s Chairman of the Board and Chief Executive Officer, Ehud (Udi) Mokady.
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☐
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☐
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☐
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||||
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4.
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To approve the re-appointment of Kost Forer Gabbay & Kasierer, registered public accounting firm, a member firm of Ernst & Young Global, as the Company’s independent registered
public accounting firm for the year ending December 31, 2020 and until the Company’s 2021 annual general meeting of shareholders, and to authorize the Board to fix such accounting firm’s annual compensation.
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☐
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☐
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☐
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For address changes and/or comments, please check this box and write them on the back where indicated.
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☐ |
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Please indicate if you plan to attend this meeting.
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☐ | ☐ |
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Yes |
No
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Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title
as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer.
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Signature [PLEASE SIGN WITHIN BOX]
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Date |
Signature (Joint Owners)
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Date | |||
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