UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

November 20, 2019

 

 

A10 NETWORKS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-36343   20-1446869

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

3 West Plumeria Drive

San Jose, CA 95134

(Address of principal executive offices, including zip code)

(408) 325-8668

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.00001 par value   ATEN   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

 

 

 


Item 1.01

Entry into a Material Definitive Agreement.

On November 20, 2019, A10 Networks, Inc. (the “Company”) entered into a letter agreement (the “Letter Agreement”) with VIEX Capital Advisors, LLC (“VIEX”), VIEX Opportunities Fund, LP – Series One, VIEX Opportunities Fund, LP – Series Two, VIEX GP, LLC, VIEX Special Opportunities Fund II, LP, VIEX Special Opportunities GP II, LLC, VIEX Special Opportunities Fund III, LP, VIEX Special Opportunities GP III, LLC and Eric Singer (collectively, the “VIEX Group”), which amends and restates the letter agreement dated as of July 26, 2019, between the Company and the VIEX Group. Among other things, the Letter Agreement provides that:

 

   

Promptly following the Company’s 2019 annual meeting of stockholders (the “2019 Annual Meeting”) but no later than December 15, 2019, the Company will increase the size of its Board of Directors (the “Board”) to seven and appoint the Company’s new Chief Executive Officer to the Board to fill the resulting vacancy.

 

   

From the date of the Letter Agreement until the Company’s 2020 annual meeting of stockholders (the “2020 Annual Meeting”), the Board shall not be increased above seven directors.

 

   

The Company will hold the 2020 Annual Meeting no later than May 31, 2020.

 

   

At the 2020 Annual Meeting, the Board shall be reduced to six directors and shall not be increased above six directors for the remainder of the Restricted Period (as defined below).

 

   

Prior to the expiration of the Restricted Period, VIEX has the right to identify one independent director for appointment to the Board (the “Additional Designee”), and the Board must take appropriate action to appoint that person. If VIEX exercises this right, VIEX can elect to have the Additional Designee (i) be included in the Board’s slate for election at the 2020 Annual Meeting or (ii) replace Phillip J. Salsbury as a director on the Board.

 

   

The Company will nominate and support Mr. Singer and Tor R. Braham and any Additional Designee (collectively, the “VIEX Designees”) for election as directors at the 2019 Annual Meeting and 2020 Annual Meeting.

 

   

During the Restricted Period, if (1) any VIEX Designee cease to serve on the Board and (2) at that time the VIEX Group beneficially owns Net Long Shares (as defined in the Letter Agreement) representing in the aggregate at least two percent of the Company’s then-outstanding common stock, then VIEX will have the right to identify (and the Board will promptly appoint) another person to serve as a director in place of that VIEX Designee.

 

   

Mr. Singer will continue to serve on the Board’s strategy committee, compensation committee and nominating and corporate governance committees.

 

   

The VIEX Group will vote its shares of the Company’s common stock in a manner consistent with the recommendation of the Board, subject to certain exceptions specified in the Letter Agreement.

 

   

The VIEX Group will abide by certain customary standstill provisions lasting from the date of the Letter Agreement until 11:59 p.m., Pacific time, on the day that is 30 days prior to the deadline for the submission of stockholder nominations of directors and business proposals for the Company’s 2021 annual meeting of stockholders (such period, the “Restricted Period”). The standstill provisions provide, among other things, that the VIEX Group cannot:

 

   

solicit proxies regarding any matter to come before any annual or special meeting of stockholders of the Company, including the election of directors;

 

   

enter into a voting agreement or any “group” with stockholders of the Company, other than with other members of the VIEX Group or any of their Affiliates (as defined in the Letter Agreement);

 

   

encourage any person to submit nominees in furtherance of a contested solicitation for the election or removal of directors;

 

   

submit any proposal for consideration by stockholders of the Company at any annual or special meeting of stockholders;


   

acquire any securities of the Company or rights that would result in the VIEX Group and its Affiliates beneficially owning more than 11 percent of the then-outstanding Voting Securities (as defined in the Letter Agreement); or

 

   

other than through certain open market transactions and public offerings, sell securities of the Company to any person not a party to the Letter Agreement that, to VIEX’s knowledge, would result in such party having any beneficial or other ownership interest of more than 4.9 percent of the then-outstanding Voting Securities.

The foregoing summary of the Letter Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Letter Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On November 21, 2019, the Company issued a press release announcing the appointment of Dhrupad Trivedi as President and Chief Executive Officer of the Company, effective as of December 2, 2019. The Company has committed to appoint Mr. Trivedi to the Board within thirty days of him commencing employment with the Company. In connection with Mr. Trivedi’s appointment, Lee Chen will step down as President and Chief Executive Officer of the Company but will continue to serve as chairman of the Board. A copy of the press release related to this announcement is attached hereto as Exhibit 99.1.

Mr. Trivedi, age 52, joins the Company from Belden Incorporated (“Belden”), where he most recently was Executive Vice President running TripWire, Inc., a cybersecurity business, and Chief Technology Officer of Belden. Prior to this, Mr. Trivedi held other executive roles at Belden, including President of Belden’s Network Solutions Division; Vice President of Corporate Strategy and Development, leading the company’s M&A activities; and starting in Belden as President of Trapeze Networks, Inc. Prior to joining Belden, Mr. Trivedi held executive roles at JDS Uniphase Corporation from 1998 through 2010.

The Company entered into an offer letter with Mr. Trivedi on November 12, 2019 (the “Offer Letter”) that provides for a starting annual base salary of $500,000 and, commencing in 2020, a target annual performance-based bonus opportunity of one hundred percent (100%) of his annual salary, pursuant to the Company’s bonus program for the 2020 year established under the Company’s Executive Incentive Compensation Plan. In addition, the Offer Letter contemplates that Mr. Trivedi will be granted an award of restricted stock units covering 125,000 shares of the Company’s Common Stock under the Company’s 2014 Equity Incentive Plan, as amended (the “Plan”), which will be scheduled to vest annually over four years, subject to Mr. Trivedi’s continued service. Additionally, the Offer Letter contemplates that Mr. Trivedi will be granted an award of performance-based restricted stock units (the “PSU Award”) covering 375,000 shares of the Company’s Common Stock under the Plan, which will become eligible to vest upon the achievement of certain stock price targets as set forth below (the “Performance Milestones”), as well as continued service to the Company, with vesting of any portion for which the Performance Milestone is achieved to be scheduled to occur in equal, annual installments over a three-year period following achievement of the Performance Milestone.

 

Stock Price

Achievement

  

Amount of PSU Award

Eligible to Vest

$8.50

   125,000 shares

$9.50

   125,000 shares

$10.50

   125,000 shares

The stock price achievement will be determined based on the average, trailing, one hundred (100) day closing price of a share of the Company’s common stock (the “100-Day Stock Price”) during the period beginning on the grant date of the PSU Award and ending on the four (4) year anniversary of such grant date (the “Performance Period”).


If a change in control of the Company (“CIC”) occurs on or after the one (1) year anniversary of Mr. Trivedi’s start date with the Company and any Performance Milestone has not been met, then the amount of consideration to be received by the Company’s stockholders in the CIC will be measured against such Performance Milestone to determine whether any such Performance Milestone will be achieved in order for such portion of the award to become eligible to vest. If a CIC occurs prior to the one (1) year anniversary of Mr. Trivedi’s start date with the Company and any Performance Milestone has not been met, then 100% of the portion of the PSU Award for which the Performance Milestone has not yet been met will become eligible to vest. In addition, if a CIC occurs on or after the one (1) year anniversary of Mr. Trivedi’s start date but before the two (2) year anniversary of his start date, then 50% of the portion of the PSU Award for which the Performance Milestone has not yet been met will become eligible to vest. Any portion of the PSU Award that becomes eligible to vest in connection with a CIC will be scheduled to vest in equal, annual installments over a three-year period following the date of the CIC subject to continued service through the applicable vesting date. Any remaining portion of the PSU Award that has not become eligible to vest will be forfeited in connection with the CIC.

Upon commencing employment with the Company, Mr. Trivedi will also be entitled to become a party to a Change in Control and Severance Agreement (the “Severance Agreement”), providing for severance if his employment is terminated as follows:

 

   

Without Cause and not due to his death or Disability or his resignation for Good Reason (as those terms are defined in the Severance Agreement) other than during the period beginning on the date an agreement is entered into that would result in a Change in Control (as defined in the Severance Agreement) and provided that such Change in Control occurs, and ending on the date 12 months following such Change in Control (the “Change in Control Period”), the amount of severance would be Mr. Trivedi’s base salary rate, as in effect immediately prior to his termination of employment, for a period of twelve (12) months plus the reimbursement of COBRA premiums for continued health coverage for up to twelve (12) months.

 

   

Without Cause and not due to his death or Disability or his resignation for Good Reason during the Change in Control Period, a lump-sum payment equal to twelve (12) months of Mr. Trivedi’s annual base salary as in effect immediately prior to his termination date or, if greater, at the level in effect immediately prior to the Change in Control (as applicable). Mr. Trivedi will additionally receive a lump-sum payment equal to one hundred percent (100%) of the greater of (A) his target bonus as in effect for the fiscal year in which the Change in Control occurs, or (B) his target bonus as in effect for the fiscal year in which the termination of his employment occurs. The Company also will reimburse Mr. Trivedi for COBRA premiums for continued health coverage for a period of up to twelve (12) months. Further, one hundred percent (100%) of Mr. Trivedi’s then-outstanding and unvested equity awards that are subject to continued service-based vesting criteria, and that no longer are or never were subject to the achievement of performance-based or other similar vesting criteria, will become vested in full and, with respect to any equity awards that are subject to performance-based or other similar vesting criteria, unless provided otherwise in the award agreement or other applicable agreement between Mr. Trivedi and the Company, the vesting will accelerate as to one hundred percent (100%) of the equity award assuming performance achievement at target levels.

The severance benefits under the Severance Agreement are conditioned on his timely entering into and not revoking the Company’s then-standard separation agreement and release of claims as well as continued compliance with his obligations under his confidential information and invention assignment agreement with the Company.

The foregoing description of Mr. Trivedi’s compensation, terms and conditions of his employment and treatment of Mr. Trivedi upon certain terminations of employment is qualified in its entirety by the full texts of the Offer Letter and the Severance Agreement, which are filed as Exhibit 10.2 and Exhibit 10.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

In addition, Mr. Trivedi will enter into the Company’s standard form of indemnification agreement, a copy of which has been filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-194015) filed with the Securities and Exchange Commission on March 10, 2014.


There is no arrangement or understanding between Mr. Trivedi and any other persons pursuant to which Mr. Trivedi was elected as Chief Executive Officer or will be appointed as a director. There are no family relationships between Mr. Trivedi and any director or executive officer of the Company, and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
No.

 

Description

10.1   Letter Agreement, dated as of November  20, 2019, among A10 Networks, Inc., VIEX Opportunities Fund, LP – Series One, VIEX Opportunities Fund, LP – Series Two, VIEX GP, LLC, VIEX Special Opportunities Fund II, LP, VIEX Special Opportunities GP II, LLC, VIEX Special Opportunities Fund III, LP, VIEX Special Opportunities GP III, LLC, VIEX Capital Advisors, LLC and Eric Singer.
10.2   Offer Letter, dated November 12, 2019, by and between the Registrant and Dhrupad Trivedi
10.3   Form of CEO Change in Control and Severance Agreement
99.1   Press Release dated November 21, 2019


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

A10 NETWORKS, INC.
By:  

/s/ Tom Constantino

  Tom Constantino
  Executive Vice President and Chief Financial Officer

Date: November 21, 2019

Exhibit 10.1

A10 Networks, Inc.

3 West Plumeria Drive

San Jose, CA 95134

November 20, 2019

VIEX Capital Advisors, LLC

745 Boylston Street, 3rd Floor

Boston, MA 02116

Attn: Eric Singer

Gentlemen:

This letter (this “Agreement”) amends and restates that certain letter agreement dated as of July 26, 2019 between (a) A10 Networks, Inc. (“Company”) and (b) VIEX Capital Advisors, LLC (“VIEX”) and each of the other related Persons (as defined below) set forth on the signature pages to this Agreement (collectively with VIEX, the “VIEX Group”). The VIEX Group and each of its Affiliates (as defined below) and Associates (as defined below) are collectively referred to as the “Investors.” Company and the VIEX Group are collectively the “Parties.”

1. CEO Appointment. Promptly following the Company’s 2019 annual meeting of stockholders (the “2019 Annual Meeting”), but no later than December 15, 2019, Company’s Board of Directors (the “Board”), acting with the approval of a majority of the Board, including Eric Singer, will take all action necessary to increase the size of the Board by one and appoint Company’s new Chief Executive Officer to the Board to fill the resulting vacancy. For the avoidance of doubt, VIEX will cause Mr. Singer, in his capacity as a director of Company, to support these actions.

2. Board Size. From the date hereof until the 2020 Annual Meeting (as defined below), the Board shall not be increased above seven directors. At the 2020 Annual Meeting, the Board shall be reduced to six directors and shall not be increased above six directors for the remainder of the Restricted Period (as defined below).

3. Additional New Director. At any time during the Restricted Period, VIEX shall have the right to identify one independent director for appointment to the Board (the “Additional Designee”). The Additional Designee must (a) be qualified to serve as a member of the Board under all applicable corporate governance policies or guidelines of Company and the Board and applicable legal, regulatory and stock market requirements; and (b) meet the independence requirements with respect to Company of the listing rules of The New York Stock Exchange. At VIEX’s option, VIEX can elect to have the Additional Designee:

 

  (i)

be included in the Board’s slate for election at the 2020 Annual Meeting or

 

  (ii)

replace Phillip J. Salsbury as a director on the Board, in which case, no later than 15 days after being identified to Company, Company will take all action necessary to cause (1) the resignation of Phillip J. Salsbury from the Board; and (2) the appointment of the Additional Designee to the Board.

 


4. 2019 and 2020 Annual Meeting. Company agrees to hold its 2020 annual meeting of stockholders (the “2020 Annual Meeting”) no later than May 31, 2020. At each of Company’s 2019 Annual Meeting and the 2020 Annual Meeting, Company agrees to nominate Eric Singer and Tor R. Braham (collectively, the “Existing Designees”) and any Additional Designee (together with the Existing Designees, the “VIEX Designees”) (or any replacement(s) thereof ) for election as directors with terms expiring at Company’s next annual meeting of stockholders. Company will recommend that Company’s stockholders vote, and will solicit proxies, in favor of the election of the VIEX Designees at the 2019 Annual Meeting and 2020 Annual Meeting and otherwise support the VIEX Designees for election in a manner no less rigorous and favorable than the manner in which Company supports its other director nominees at the 2019 Annual Meeting and 2020 Annual Meeting.

5. Replacement Director. During the Restricted Period, if (a) any of the VIEX Designees cease to be a member of the Board for any reason and (b) at such time the VIEX Group beneficially owns shares (which shares are determined to be Net Long Shares (as defined below)) representing in the aggregate at least two percent of Company’s then-outstanding common stock, then VIEX will have the right to identify (and the Board will promptly appoint) another person (a “Successor Director”) to serve as a director in place of that VIEX Designee. Any Successor Director must (a) be qualified to serve as a member of the Board under all applicable corporate governance policies or guidelines of Company and the Board and applicable legal, regulatory and stock market requirements; and (b) meet the independence requirements with respect to Company of the listing rules of The New York Stock Exchange. Upon becoming a member of the Board, the Successor Director will succeed to all of the rights and privileges, and will be bound by the terms and conditions, of the VIEX Designees under this Agreement.

6. Committee Assignments. Eric Singer will continue to serve on the Board’s strategy committee (the “Strategy Committee”), compensation committee and nominating and corporate governance committee. The other members of the Strategy Committee will be Mr. Braham and Peter Chung. The size of the Strategy Committee will be fixed at three directors during the Restricted Period.

7. Compliance with Laws and Company Policies. The Investors acknowledge that Company may request the Existing Designees and any Additional Designee to agree in writing, during the term of service as a director of Company, to (a) comply with all laws, policies, procedures, processes, codes, rules, standards and guidelines applicable to members of the Board, including Company’s code of conduct, insider trading policy, Regulation FD policy, related party transactions policy and corporate governance guidelines, in each case as amended from time to time; and (b) keep confidential all confidential information of Company and not disclose to any third party (including the Investors) any discussions or matters considered in meetings of the Board and its committees (unless such discussion or matters have been previously disclosed publicly by Company).

8. No Fiduciary Restriction. Notwithstanding anything to the contrary in this Agreement, the Investors acknowledge that the Existing Designees and any Additional Designee, during such director’s service as a director of Company, will not be prohibited from acting in such director’s capacity as a director or from complying with such director’s fiduciary duties as a director of Company (including voting on any matter submitted for consideration by the Board, participating in deliberations or discussions of the Board, and making suggestions or raising any issues or recommendations to the Board).

 

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9. Director Benefits. The Existing Designees and any Additional Designee will be entitled to the same director benefits as other members of the Board, including (a) compensation for such director’s service as a director and reimbursement for such director’s expenses on the same basis as all other non-employee directors of Company; (b) equity-based compensation grants and other benefits, if any, on the same basis as all other non-employee directors of Company; and (c) the same rights of indemnification and directors’ and officers’ liability insurance coverage as the other non-employee directors of Company as such rights may exist from time to time.

10. Voting Commitment. During the Restricted Period, at each annual or special meeting of Company’s stockholders or action by written consent, the Investors will (a) cause all Voting Securities (as defined below) that are beneficially owned by them to be present for quorum purposes, if applicable; and (b) vote, or cause to be voted, all Voting Securities beneficially owned by them in a manner consistent with the recommendation of the Board. Notwithstanding the prior sentence, (i) if, as of the date of the 2019 Annual Meeting or 2020 Annual Meeting, Institutional Shareholder Services Inc. (“ISS”) and Glass Lewis & Co., LLC (“Glass Lewis”) both recommend a vote “against” or “abstain” on any proposal presented at the 2019 Annual Meeting or 2020 Annual Meeting (other than any proposal relating to the election or removal of directors), then the Investors will be permitted to vote in accordance with the ISS and Glass Lewis recommendations on that proposal; and (ii) the Investors will have the right to vote in their sole discretion with respect to any merger, acquisition, recapitalization, restructuring, disposition, distribution, spin-off, asset sale, joint venture or other business combination involving Company.

11. Standstill. During the Restricted Period, none of the Investors will, and VIEX will cause the principals, directors, general partners, officers, employees, agents and representatives of each Investor not to, in any way, directly or indirectly (in each case, except as expressly permitted by this Agreement):

(a) with respect to Company or the Voting Securities, (i) make, participate in or encourage any “solicitation” (as such term is used in the proxy rules of Securities and Exchange Commission (the “SEC”)) of proxies or consents with respect to the election or removal of directors or any other matter or proposal; (ii) become a “participant” (as such term is used in the proxy rules of the SEC) in any such solicitation of proxies or consents; (iii) seek to advise, encourage or influence any Person with respect to the voting or disposition of any Voting Securities; or (iv) initiate, encourage or participate, directly or indirectly, in any “vote no,” “withhold” or similar campaign;

(b) initiate, propose or otherwise “solicit” (as such term is used in the proxy rules of the SEC) Company’s stockholders for the approval of any shareholder proposal, whether made pursuant to Rule 14a-4 or Rule 14a-8 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise, or cause or encourage any Person to initiate or submit any such shareholder proposal;

 

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(c) with respect to Company or the Voting Securities, (i) communicate with Company’s stockholders or others pursuant to Rule 14a-1(l)(2)(iv) pursuant to the Exchange Act; (ii) participate in, or take any action pursuant to, or encourage any Person to take any action pursuant to, any type of “proxy access”; or (iii) conduct any nonbinding referendum or hold a “stockholder forum”;

(d) (i) seek, alone or in concert with others, election or appointment to, or representation on, the Board; (ii) nominate or propose the nomination of, or recommend the nomination of, or encourage any Person to nominate or propose the nomination of or recommend the nomination of, any candidate to the Board; or (iii) seek, alone or in concert with others, or encourage any Person to seek, the removal of any member of the Board;

(e) (i) call or seek to call a special meeting of stockholders, or encourage any Person to call a special meeting of stockholders; (ii) act or seek to act by written consent of stockholders; or (iii) make a request for any stockholder list or other similar Company records;

(f) other than solely with other Investors and their Affiliates with respect to Voting Securities now or subsequently owned by them, (i) form, join (whether or not in writing), encourage, influence, advise or participate in a partnership, limited partnership, syndicate or other group, including a “group” as defined pursuant to Section 13(d) of the Exchange Act, with respect to any Voting Securities (other than any group comprised solely of Investors and their Affiliates); (ii) deposit any Voting Securities into a voting trust, arrangement or agreement; or (iii) subject any Voting Securities to any voting trust, arrangement or agreement;

(g) (i) make any offer or proposal (with or without conditions) with respect to any merger, acquisition, recapitalization, restructuring, disposition or other business combination involving any Investor and Company; (ii) solicit a third party to, on an unsolicited basis, make an offer or proposal (with or without conditions) with respect to any merger, acquisition, recapitalization, restructuring, disposition or other business combination involving Company, or publicly encourage, initiate or support any third party in making such an offer or proposal; or (iii) publicly comment on any proposal regarding any merger, acquisition, recapitalization, restructuring, disposition or other business combination with respect to Company by a third party prior to such proposal becoming public;

(h) other than through non-public communications with Company that would not reasonably be expected to trigger public disclosure obligations for any Party, make or disclose any statement regarding any intent, purpose, plan or proposal with respect to the Board, Company or its management, policies, affairs or assets, or the Voting Securities or this Agreement, that is inconsistent with the provisions of this Agreement, including any intent, purpose, plan or proposal that is conditioned on, or would require, the waiver, amendment, nullification or invalidation of any provision of this Agreement, or take any action that could require Company to make any public disclosure relating to any such intent, purpose, plan, proposal or condition;

(i) institute, solicit, assist or join, as a party, any litigation, arbitration or other proceedings against or involving Company or any of its current or former directors or officers (including derivative actions) based upon facts publicly known as of the date of this Agreement, other than (i) litigation by the Investors enforce the provisions of this Agreement; (ii) counterclaims with respect to any proceeding initiated by, or on behalf of, Company or any of its Affiliates against the Investors; and (iii) the exercise of statutory appraisal rights;

 

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(j) take any action in support of, or, other than through non-public communications, make any proposal or request that constitutes: (i) controlling, changing or influencing Company’s management, business or corporate structure; (ii) seeking to have Company waive or make amendments or modifications to its certificate of incorporation or bylaws; (iii) causing a class of securities of Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange; or (iv) causing a class of securities of Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;

(k) sell, offer or agree to sell to any third party, through swap or hedging transactions, derivative agreements or otherwise, any voting rights decoupled from the underlying Voting Securities held by the Investors;

(l) acquire, offer, agree or propose to acquire, whether by purchase, tender or exchange offer, through the acquisition of control of another Person, by joining a partnership, limited partnership, syndicate or other group, including a “group” as defined pursuant to Section 13(d) of the Exchange Act, through swap or hedging transactions, or otherwise, any securities of Company or any rights decoupled from the underlying securities of Company that would result in the Investors in the aggregate beneficially owning more than 11 percent of the then-outstanding Voting Securities; or

(m) other than through open market broker sale transactions where the identity of the purchaser is not known and in underwritten widely dispersed public offerings, sell, offer or agree to sell, through swap or hedging transactions or otherwise, the securities of Company to any Person not a Party (a “Third Party”) that, to VIEX’s knowledge (after due inquiry in connection with a private, non-open market transaction, it being understood that such knowledge will be deemed to exist with respect to any publicly available information, including information in documents filed with the SEC), would result in such Third Party, together with its Affiliates and Associates, owning, controlling or otherwise having any beneficial or other ownership interest of more than 4.9 percent of the then-outstanding Voting Securities or that would increase the beneficial or other ownership interest of any Third Party who, together with its Affiliates and Associates, has a beneficial or other ownership interest of more than 4.9 percent of the then-outstanding Voting Securities.

12. Permitted Actions. Notwithstanding paragraph 11, nothing in this Agreement will prohibit or restrict the Investors from: (a) communicating privately with the Board or any officer or director of Company regarding any matter, so long as such communications are not intended to, and would not reasonably be expected to, require any public disclosure of such communications, subject in any case to any confidentiality obligations to Company of any such director or officer; (b) taking any action necessary to comply with any law, rule or regulation or any action required by any governmental or regulatory authority or stock exchange that has, or may have, jurisdiction over the Investors or any of their respective Affiliates or Associates, but only if a breach by the Investors of this Agreement is not the cause of the applicable requirement; or (c) privately communicating to any of their investors or potential investors factual information regarding Company, but only if such

 

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communications are subject to reasonable confidentiality obligations and are not otherwise reasonably expected to be publicly disclosed. For the avoidance of doubt, subject to applicable law, the Investors will not be prohibited from communicating privately with stockholders of Company and others in a manner that does not otherwise violate paragraph 11.

13. Non-Disparagement. Subject to applicable law, each of the Parties covenants and agrees that, during the Restricted Period, it and its respective Affiliates, Associates, subsidiaries, officers, key employees, general partners and directors will not in any way publicly disparage, call into disrepute or otherwise defame or slander the other Party or such other Party’s Affiliates, Associates, subsidiaries, successors, assigns, officers (including any current or former officer of such other Party or its subsidiaries), directors (including any current or former director of such other Party or its subsidiaries), employees, stockholders, agents, attorneys or representatives, or any of their businesses, products or services, in any manner that would reasonably be expected to damage the business or reputation of such other Party or its businesses, products or services, subsidiaries, Affiliates, successors, assigns, officers (or former officers), directors (or former directors), employees, stockholders, agents, attorneys or representatives. This paragraph 13 will not apply to any statement made in connection with any action to enforce this Agreement.

14. No Compensation Arrangements. The Investors will not, directly or indirectly, compensate or agree to compensate the Existing Designees or any Additional Designee for his service as a director of Company with any cash, securities (including any rights or options convertible into or exercisable for or exchangeable into securities or any profit-sharing agreement or arrangement) or other form of compensation directly or indirectly related to Company or its securities.

15. Compliance with this Agreement. VIEX will cause the other Investors to comply with the terms of this Agreement and will be responsible for any breach of the terms of this Agreement by any Investor, in each case even if such Investor is not a party to this Agreement.

16. Expense Reimbursement. Within five business days of the receipt of appropriate documentation, Company will reimburse the Investors for their reasonable and documented out-of-pocket fees and expenses (including legal expenses) incurred by the Investors in connection with the negotiation and execution of this Agreement.

17. Public Disclosure.

(a) Press Release. No later than 5:00 p.m., Pacific time, on November 21, 2019, Company will issue a press release in the form attached as Exhibit A (the “Press Release”). Neither Company nor the Investors will make any public statements with respect to the matters covered by this Agreement (including in the Schedule 13D or in any other filing with the SEC, any other regulatory or governmental agency, any stock exchange or in any materials that would reasonably be expected to be filed with the SEC) that are inconsistent with, or otherwise contrary to, the statements in the Press Release.

 

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(b) Form 8-K. Company will promptly prepare and file (but not before the issuance of the Press Release) with the SEC a Current Report on Form 8-K (the “Form 8-K”) reporting the entry into this Agreement. All disclosure in the Form 8-K will be consistent with this Agreement. Company will provide VIEX and its counsel with a reasonable opportunity to review and comment on the Form 8-K prior to filing, and will consider in good faith any changes proposed by VIEX or its counsel.

(c) Amended Schedule 13D. The VIEX Group will promptly prepare and file (but not before the issuance of the Press Release) with the SEC an amendment to its Schedule 13D (the “Amended Schedule 13D”) with respect to Company reporting the entry into this Agreement. All disclosure in the Amended Schedule 13D will be consistent with this Agreement. The VIEX Group will provide Company and its counsel with reasonable opportunity to review and comment on the Amended Schedule 13D prior to filing, and will consider in good faith any changes proposed by Company or its counsel.

18. Definitions. As used in this Agreement, the term (a) “Person” will be interpreted broadly to include, among others, any individual, general or limited partnership, corporation, limited liability or unlimited liability company, joint venture, estate, trust, group, association or other entity of any kind or structure; (b) “Affiliate” has the meaning set forth in Rule 12b-2 promulgated under the Exchange Act and will include Persons who become Affiliates of any Person after the date of this Agreement; (c) “Associate” has the meaning set forth in Rule 12b-2 promulgated under the Exchange Act and will include Persons who become Associates of any Person after the date of this Agreement, but will exclude any Person not controlled by or under common control with the related Person; (d) “beneficially own,” “beneficially owned” and “beneficial ownership” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act; (e) “business day” means any day other than a Saturday, Sunday or a day on which the Federal Reserve Bank of San Francisco is closed; (f) “Net Long Shares” will be limited to the number of shares of Company’s common stock beneficially owned by any Person that constitute such Person’s net long position as defined in Rule 14e-4 under the Exchange Act (except that for purposes of such definition, the date that the tender offer is first announced will instead be the date for determining or documenting such Person’s Net Long Shares and the reference to the highest tender price will refer to the market price on such date) and, to the extent not covered by such definition, reduced by any shares as to which such Person does not have the right to vote or direct the vote as of the date for determining or documenting or as to which such Person has entered into a derivative or other agreement, arrangement or understanding that hedges or transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of such shares, it being understood that whether shares constitute Net Long Shares will be decided by the Board in its reasonable determination; (g) “Restricted Period” means the period from the date of this Agreement until 11:59 p.m., Pacific time, on the day that is 30 days prior to the deadline for the submission of stockholder nominations of directors and business proposals for Company’s 2021 annual meeting of stockholders as set forth in Company’s bylaws as in effect on the date of this Agreement; and (h) “Voting Securities” means the shares of Company’s common stock and any other securities of Company entitled to vote in the election of directors, or securities convertible into, or exercisable or exchangeable for, such shares or other securities, whether or not subject to the passage of time or other contingencies.

 

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19. Interpretations. The words “include,” “includes” and “including” will be deemed to be followed by the words “without limitation.” The word “or” is not exclusive. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement, instrument, law, rule or statute defined or referred to in this Agreement means, unless otherwise indicated, such agreement, instrument, law, rule or statute as from time to time amended, modified or supplemented. The measure of a period of one month or year for purposes of this Agreement will be the day of the following month or year corresponding to the starting date. If no corresponding date exists, then the end date of such period being measured will be the next actual day of the following month or year (for example, one month following February 18 is March 18 and one month following March 31 is May 1).

20. Representations of the VIEX Group. Each member of the VIEX Group, severally and not jointly, represents that (a) its authorized signatory set forth on the signature page to this Agreement has the power and authority to execute this Agreement and any other documents or agreements to be entered into in connection with this Agreement and to bind such member; (b) this Agreement has been duly authorized, executed and delivered by it and is a valid and binding obligation of such member, enforceable against it in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles; (c) this Agreement does not and will not violate any law, any order of any court or other agency of government, its organizational documents or any provision of any agreement or other instrument to which such member or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such agreement or other instrument, or result in the creation or imposition of, or give rise to, any material lien, charge, restriction, claim, encumbrance or adverse penalty of any nature whatsoever; and (d) as of the date of this Agreement, it has not, directly or indirectly, compensated or agreed to compensate the Existing Designees for their service as directors of Company with any cash, securities (including any rights or options convertible into or exercisable for or exchangeable into securities or any profit sharing agreement or arrangement) or other form of compensation directly or indirectly related to Company or its securities. The VIEX Group represents and warrants that as of the date of this Agreement, it is the beneficial owner of an aggregate of 7,883,675 shares of Company’s common stock.

21. Representations of Company. Company represents that this Agreement (a) has been duly authorized, executed and delivered by it and is a valid and binding obligation of Company, enforceable against Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles; (b) does not require the approval of the stockholders of Company; and (c) does not and will not violate any law, any order of any court or other agency of government, Company’s certificate of incorporation or bylaws, each as amended from time to time, or any provision of any agreement or other instrument to which Company or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such agreement or other instrument, or result in the creation or imposition of, or give rise to, any material lien, charge, restriction, claim, encumbrance or adverse penalty of any nature whatsoever.

 

-8-


22. Specific Performance. Each Party acknowledges and agrees that money damages would not be a sufficient remedy for any breach (or threatened breach) of this Agreement by it and that, in the event of any breach or threatened breach of this Agreement, (a) the Party seeking specific performance will be entitled to injunctive and other equitable relief, without proof of actual damages; (b) the Party against whom specific performance is sought will not plead in defense that there would be an adequate remedy at law; and (c) the Party against whom specific performance is sought agrees to waive any applicable right or requirement that a bond be posted. Such remedies will not be the exclusive remedies for a breach of this Agreement, but will be in addition to all other remedies available at law or in equity.

23. Entire Agreement; Binding Nature; Assignment; Waiver. This Agreement constitutes the only agreement between the Parties with respect to the subject matter of this Agreement and it supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written (including the letter agreements between the Parties dated July 26, 2019 and March 13, 2018). This Agreement binds, and will inure to the benefit of, the Parties and their respective successors and permitted assigns. No Party may assign or otherwise transfer either this Agreement or any of its rights, interests, or obligations under this Agreement without the prior written approval of the other Party. Any purported transfer requiring consent without such consent is void. No amendment, modification, supplement or waiver of any provision of this Agreement will be effective unless it is in writing and signed by the affected Party, and then only in the specific instance and for the specific purpose stated in such writing. Any waiver by any Party of a breach of any provision of this Agreement will not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a Party to insist upon strict adherence to any term of this Agreement on one or more occasions will not be considered a waiver or deprive that Party of the right to insist upon strict adherence to that term or any other term of this Agreement in the future.

24. Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, then the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement that is held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable, and this Agreement will otherwise be construed so as to effectuate the original intention of the Parties reflected in this Agreement. The Parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the purposes of such invalid or unenforceable provision.

25. Governing Law; Forum. This Agreement is governed by and will be construed in accordance with the laws of the State of Delaware. Each of the Parties (a) irrevocably and unconditionally consents to the exclusive personal jurisdiction and venue of the Court of Chancery of the State of Delaware and any appellate court thereof (unless the federal courts have exclusive jurisdiction over the matter, in which case the United States District Court for the District of Delaware and any appellate court thereof will have exclusive personal jurisdiction); (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (c) agrees that it will not bring any action relating to this Agreement or otherwise in any court other than the such courts; and (d) waives any claim of improper venue or any claim that those courts are an inconvenient forum. The Parties agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in paragraph 28 or in such other manner as may be permitted by applicable law, will be valid and sufficient service thereof.

 

-9-


26. Waiver of Jury Trial. EACH OF THE PARTIES, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY OF THEM. No Party will seek to consolidate, by counterclaim or otherwise, any action in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived.

27. Third Party Beneficiaries. This Agreement is solely for the benefit of the Parties and is not enforceable by any other Person.

28. Notices. All notices, consents, requests, instructions, approvals and other communications provided for in, and all legal process in regard to, this Agreement will be in writing and will be deemed validly given, made or served (i) upon receipt, when delivered personally; (ii) upon confirmation of receipt, when sent by email (but only if such confirmation is not automatically generated); or (iii) one business day after deposit with a nationally recognized overnight delivery service. The addresses for such communications are as follows. At any time, any Party may, by notice given in accordance with this paragraph 28 to the other Parties, provide updated information for notices pursuant to this Agreement.

 

  (a)

If to Company:

A10 Networks, Inc.

3 West Plumeria Drive

San Jose, CA 95134

Attn: General Counsel

Email: RCochran@a10networks.com

with a copy (which will not constitute notice) to:

Wilson Sonsini Goodrich & Rosati

Professional Corporation

650 Page Mill Road

Palo Alto, CA 94304

Attn:     Herbert P. Fockler

    Mark B. Baudler

    David J. Berger

    Douglas K. Schnell

Fax:      (650) 493-6811

Email:   hfockler@wsgr.com, mbaudler@wsgr.com, dberger@wsgr.com,

    dschnell@wsgr.com

 

-10-


  (b)

If to the VIEX Group:

VIEX Capital Advisors, LLC

745 Boylston Street, 3rd Floor

Boston, MA 02116

Attn: Eric Singer

Email: singer@viexcapital.com

with a copy (which will not constitute notice) to:

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, NY 10019

Attn:   Steve Wolosky

    Elizabeth Gonzalez-Sussman

Fax:     (212) 451-2222

Email:  swolosky@olshanlaw.com, egonzalez@olshanlaw.com

29. Representation by Counsel. Each of the Parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed this Agreement with the advice of such counsel. Each Party and its counsel cooperated and participated in the drafting and preparation of this Agreement, and any and all drafts of this Agreement exchanged among the Parties will be deemed the work product of all of the Parties and may not be construed against any Party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application and is expressly waived by each of the Parties, and any controversy over interpretations of this Agreement will be decided without regard to events of drafting or preparation.

30. Counterparts. This Agreement and any amendments to this Agreement may be executed in one or more textually-identical counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart. Any such counterpart, to the extent delivered by fax or .pdf, .tif, .gif, .jpg or similar attachment to electronic mail (any such delivery, an “Electronic Delivery”), will be treated in all manner and respects as an original executed counterpart and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No Party may raise the use of an Electronic Delivery to deliver a signature, or the fact that any signature or agreement or instrument was transmitted or communicated through the use of an Electronic Delivery, as a defense to the formation of a contract, and each Party forever waives any such defense, except to the extent such defense relates to lack of authenticity.

31. Headings. The headings set forth in this Agreement are for convenience of reference purposes only and will not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision of this Agreement.

[Signature page follows.]

 

 

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Very truly yours,
A10 NETWORKS, INC.
By:  

/s/ Robert Cochran

  Name: Robert Cochran
  Title:   EVP Legal & Corporate Collaboration

 

ACCEPTED AND AGREED
as of the date written above:
VIEX OPPORTUNITIES FUND, LP – SERIES ONE
By:   VIEX GP, LLC
  General Partner
By:  

/s/ Eric Singer

  Name: Eric Singer
  Title: Managing Member
VIEX OPPORTUNITIES FUND, LP – SERIES TWO
By:   VIEX GP, LLC
  General Partner
By:  

/s/ Eric Singer

  Name: Eric Singer
  Title: Managing Member
VIEX GP, LLC
By:  

/s/ Eric Singer

  Name: Eric Singer
  Title: Managing Member

[Signature Page to Letter Agreement]


VIEX SPECIAL OPPORTUNITIES FUND II, LP
By:   VIEX Special Opportunities GP II, LLC
  General Partner
By:  

/s/ Eric Singer

  Name:   Eric Singer
  Title:   Managing Member
VIEX SPECIAL OPPORTUNITIES GP II, LLC
By:  

/s/ Eric Singer

  Name:   Eric Singer
  Title:   Managing Member
VIEX SPECIAL OPPORTUNITIES FUND III, LP
By:   VIEX Special Opportunities GP III, LLC
  General Partner
By:  

/s/ Eric Singer

  Name:   Eric Singer
  Title:   Managing Member
VIEX SPECIAL OPPORTUNITIES GP III, LLC
By:  

/s/ Eric Singer

  Name:   Eric Singer
  Title:   Managing Member
VIEX CAPITAL ADVISORS, LLC
By:  

/s/ Eric Singer

  Name:   Eric Singer
  Title:   Managing Member

[Signature Page to Letter Agreement]


ERIC SINGER

/s/ Eric Singer

[Signature Page to Letter Agreement]

Exhibit 10.2

 

 

LOGO

November 10, 2019

Mr. Dhrupad Trivedi

Dear Dhrupad,

I am pleased to confirm the offer for you to join A10 Networks, Inc. (the “Company”), in the position of Chief Executive Officer (CEO) at our Corporate Headquarters located in San Jose, CA. This is a full-time, regular position, reporting to the Board of Directors of the Company (the “Board”). The terms of our offer and the benefits currently provided by the Company are as follows:

Within 30 days from your first date of employment with the Company (“Start Date”), the Company will appoint you to the Board. Upon the termination of your employment with the Company for any reason, unless otherwise requested by the Board, you will be deemed to have resigned from the Board (and all other positions held at the Company or any affiliate) without any further required action by you and you agree to execute any documents necessary to reflect this resignation. During the term of your employment, you shall devote your full business efforts and time to the Company.

Salary. Your starting base salary will be at a rate of $500,000 per year subject to annual review, less applicable taxes and other withholdings in accordance with the Company’s normal payroll schedule.

Incentive. Commencing in 2020, you will be eligible to receive an annual performance-based bonus target of one hundred percent (100%) of your annual salary, pursuant to the Company’s bonus program for the 2020 year established under the Company’s Executive Incentive Compensation Plan. Your participation in the Company’s bonus program for 2020 will be subject to all of the terms and conditions of the Company’s Executive Incentive Compensation Plan, including without limitation that unless determined otherwise by such Plan’s administrator, you must remain an employee through the date of payment of the bonus in order to receive such payment. Your target bonus shall be subject to annual review by the Board or its Compensation Committee, as applicable, commencing with the Company’s bonus program for the 2021 year.

Restricted Stock Unit Grant. Subject to the approval of the Board (or its Compensation Committee, as applicable) after your Start Date, you will be granted an award of restricted stock units (the “RSU Award”) to cover 125,000 shares of the Company’s Common Stock under the Company’s 2014 Equity Incentive Plan, as amended (the “Plan”), and an award agreement under the Plan. Each restricted stock unit granted represents the right to receive one share of the Company’s Common Stock upon vesting. Twenty-five percent (25%) of the recommended RSU Award shall be scheduled to vest on each yearly anniversary of your vest base date (assuming your continued employment with the Company on each vesting date) such that the entire RSU Award shall vest over four (4) years (for administrative reasons, the vest base date will be the 5th day of the month following the Start Date). The RSU Award will be subject to any accelerated vesting provisions and other applicable terms set forth in your Change in Control and Severance Agreement (the “Acceleration Provisions”).

Performance Stock Unit Grant. In addition, subject to approval of the Board of Directors (or its Compensation Committee, as applicable), after your Start Date, you will be granted an award of performance-based restricted stock units (the “PSU Awards”) to cover an aggregate of 375,000 shares of the Company’s Common Stock under the Plan and award agreement under the Plan. Each PSU granted represents the right to receive one share of the Company’s Common Stock subject to achievement of certain performance milestones (the “Performance Milestones”), as well as continued service to the Company through specified dates. Upon achievement of any one of the three Performance Milestones described below, one-third (1/3rd) of the PSU Award will become eligible to vest (each, an “Eligible Portion”). The following Performance Milestones will apply to the PSU Award:

 

   

$8.50 Performance Milestone: 125,000 shares of the Company’s common stock subject to the PSU Award will become eligible to vest upon the achievement of $8.50 or greater with respect to the average, trailing, one hundred (100) day closing price of a share of the Company’s common stock (the “100-Day Stock Price”) during the period beginning on the grant date of the PSU Award and ending on the four (4) year anniversary of such grant date (the “Performance Period”).

 

  A10 Networks, Inc.   3 West Plumeria Drive   T: 408. 325. 8668
  www.a10networks.com   San Jose, CA 95134   F: 408. 325. 8666


LOGO

 

   

$9.50 Performance Milestone: 125,000 shares of the Company’s common stock subject to the PSU Award will become eligible to vest upon the achievement of $9.50 or greater with respect to the 100-Day Stock Price during the Performance Period.

 

   

$10.50 Performance Milestone: 125,000 shares of the Company’s common stock subject to the PSU Award will become eligible to vest upon the achievement of $10.50 or greater with respect to the 100-Day Stock Price during the Performance Period.

The Board (or its Compensation Committee, as applicable) periodically, as well as at completion of the Performance Period, will determine whether any of the Performance Milestones have been achieved during the Performance Period. Any Eligible Portion will be scheduled to vest as to one-third (1/3rd) of the Eligible Portion on each of the one (1), two (2), and three (3) year anniversaries of the date of achievement of the corresponding Performance Milestone, subject to your continuing to provide services to the Company through the applicable vesting date and subject to the Acceleration Provisions and the following provisions relating to a CIC. If there is a CIC during the Performance Period, then the following treatment will apply to the PSU Award:

 

a.

CIC Performance Measurement.

i.    Measurement Based on Deal Price. If a CIC occurs on or after the one (1) year anniversary of your Start Date and any Performance Milestone has not yet been met, then the Deal Price (as defined below) will be measured against such Performance Milestone shortly before the completion of the CIC to determine whether any such Performance Milestone will be achieved. Any such Performance Milestone that is deemed achieved based on the Deal Price will be considered an Eligible Portion as of immediately prior to the completion of the CIC.

ii.    Additional Conversions to an Eligible Portion. If a CIC occurs before the one (1) year anniversary of your Start Date, then as of immediately prior to the completion of the CIC, one hundred percent (100%) of the portion of the PSU Award for which the Performance Milestone has not yet been met will become an Eligible Portion. If a CIC occurs on or after the one (1) year anniversary of your Start Date but before the two (2) year anniversary of your Start Date, then fifty (50%) of the portion of the PSU Award that has not become an Eligible Portion (after application of section a.i. above) will be considered an Eligible Portion as of immediately prior to the completion of the CIC.

iii.    Deal Price. For purposes of this PSU Award, “Deal Price” means the amount (or value, as applicable, and as determined by the Board or its Compensation Committee, as applicable, in its sole discretion) of the consideration to be received by the Company’s stockholders (and/or the Company, if applicable, for example in the case of a CIC due to the sale of a substantial portion of the Company’s assets) in the CIC.

iv.    CIC Vesting Schedule. Any portion of the PSU Award that becomes an Eligible Portion in connection with the CIC under sections a.i. and a.ii. above will be scheduled to vest as to one-third (1/3rd) of such Eligible Portion on each of the one (1), two (2), and three (3) year anniversaries of the date of the CIC, subject to your continuing to provide services to the Company through the applicable vesting date and subject to the Acceleration Provisions.

 

  A10 Networks, Inc.   3 West Plumeria Drive   T: 408. 325. 8668
  www.a10networks.com   San Jose, CA 95134   F: 408. 325. 8666


LOGO

 

b.    Forfeiture. If as of immediately prior to the CIC, any portion of the PSU Award has not become an Eligible Portion or otherwise become vested, then such portion will be forfeited as of immediately prior to the CIC. Such forfeited portion will not be eligible for vesting acceleration under the Acceleration Provisions, including without limitation under the circumstances described in the last paragraph of Section 3(b) of your Change in Control and Severance Agreement (the “Pre-CIC Termination”). In addition, in a Pre-CIC Termination, if the Performance Period ends before the CIC, any portion of the PSU Award that has not become an Eligible Portion based on performance during the Performance Period will be forfeited and will not be eligible for vesting acceleration under the Acceleration Provisions.

All of the terms and conditions of the PSU Award will be subject to approval by the Board or its Compensation Committee and will be set forth in the award agreement governing the PSU Award, subject to the terms of the Plan.

Annual Grants. On an annual basis beginning in the first grant cycle which occurs after the one (1) year anniversary of the Start Date (i.e., at the Q1 2021 Board meeting), you will be eligible to receive annual equity award grants based on assessment by the Compensation Committee of the Board of relevant market comparables and such other factors as it may deem relevant, in its sole discretion, with the present expectation that such grants based on performance would have a value between $2.0M and $2.5M.

Acceleration of Vesting; Severance; Indemnification. Effective upon your Start Date, you will be entitled to become a party to the Change in Control and Severance Agreement (which provides for certain severance and acceleration of equity vesting rights) and Indemnification Agreement (which provides for certain rights of indemnification, among other things), each in the forms included with this offer letter.

Employee Stock Purchase Plan. You will be eligible to participate in the Company’s 2014 Employee Stock Purchase Plan, as amended (the “ESPP”), in accordance with the terms thereof, whereby you will have the opportunity (but not the obligation) to enroll in the ESPP and purchase shares of the Company’s common stock at a discount from the market price. Currently, there are two opportunities each year to enroll in the ESPP approximately each May and November. You will receive a notice about these opportunities from the stock administration office of the Company following your Start Date.

Employee Benefits. You will be entitled to receive the Company’s employee benefits made available to other employees at your level to the full extent of your eligibility. The effective date of medical, dental and vision insurance will be the Start Date. The Company reserves the right to terminate, change or otherwise modify, in its sole discretion at any time and for any reason, the preceding benefits and terms of employment.

Confidentiality. As an employee of the Company, you will have access to certain confidential information of the Company and you may, during the course of your employment, develop certain information or inventions that will be the property of the Company. To protect the interests of the Company, you will need to sign the Company’s standard “Confidential Information and Invention Assignment Agreement” as a condition of your employment. We wish to impress upon you that we do not want you to, and we hereby direct you not to, bring with you any confidential or proprietary material of any former employer or to violate any other obligations you may have to any former employer. During the period that you render services to the Company, you agree to not engage in any employment, business or activity that is in any way competitive with the business or proposed business of the Company. You will disclose to the Company in writing any other gainful employment, business or activity that you are currently associated with or participate in that competes with the Company. You will not assist any other person or organization in competing with the Company or in preparing to engage in competition with the business or proposed business of the Company. In accepting this offer, you expressly represent and agree that (1) You have not and will not bring to the Company or use for the benefit of the Company any unauthorized third-party intellectual property, including but not limited to what they consider to be trade secrets (“Former Employer Confidential Information”), (2) You have not and will not disclose to the Company any proprietary or otherwise confidential information of a prior employer’s business, (3) You will not communicate to anyone at the Company any information that you acquired or learned during your employment that might in any respect be considered Former Employer Confidential Information, (3) prior to accepting this position at the Company you have not provided to anyone at A10 any written Former Employer Confidential Information that in any way could be considered to be Former Employer Confidential Information, and (4) prior to your accepting this position at the Company, you have not conveyed anything orally to anyone at A10 that might in any way be considered Former Employer Confidential Information.

 

  A10 Networks, Inc.   3 West Plumeria Drive   T: 408. 325. 8668
  www.a10networks.com   San Jose, CA 95134   F: 408. 325. 8666


LOGO

 

Ethical Conduct. You will abide by the Company’s Code of Business Conduct and Ethics, the Company’s Employee Handbook and other applicable policies pertaining to intellectual property and other matters.

No Breach of Obligations to Prior Employers. You represent that your signing of this offer letter, agreement(s) concerning equity rights granted to you, if any, under the Plan (as defined above) and the Company’s Confidential Information And Invention Assignment Agreement and your commencement of employment with the Company will not violate any agreement currently in place between yourself and current or past employers.

Authorization to Work. Please note that because of employer regulations adopted in the Immigration Reform and Control Act of 1986, within three (3) business days of starting your new position you will need to present documentation demonstrating that you have authorization to work in the United States. If you have questions about this requirement, which applies to U.S. citizens and non-U.S. citizens alike, you may contact our Human Resources Department.

At-Will Employment. While we look forward to a long and profitable relationship, should you decide to accept our offer, you will be an at-will employee of the Company, which means the employment relationship can be terminated by either of us for any reason, at any time, with or without prior notice and with or without cause. Any statements or representations to the contrary (and, indeed, any statements contradicting any provision in this offer letter) should be regarded by you as ineffective. Further, your participation in any equity award or benefit program is not to be regarded as assuring you of continuing employment for any particular period of time. Any modification or change in your at-will employment status may only occur by way of a written employment agreement signed by you and the Chairman of the Board.

Background Check. The Company will undertake a background investigation and reference check in accordance with applicable law. This investigation and reference check may include a consumer report, as defined by the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. 1681a, and/or an investigative consumer report, as defined by FCRA, 15 U.S.C. 1681a, and California Civil Code 1786.2(c). This investigation also may include a consumer credit report, as defined by California Civil Code 1785.3(c), which is being requested because this position is managerial, you will have access to confidential or proprietary information of the type described in California Labor Code § 1024.5(a)(7), and other bases listed in California Labor Code § 1024.5. This offer is contingent upon a clearance of such a background investigation and/or reference check, and upon your written authorization to obtain a consumer report, consumer credit report and/or investigative consumer report. This offer can be rescinded based upon data received in the verification.

Contingent Offer. Your employment will be subject to your execution of the Company’s Confidential Information and Invention Assignment Agreement relating to non-disclosure of confidential information and assignment of inventions to the Company. A copy is included with this offer letter. We also require successful completion of any outstanding reference and background checks and presentation of documentation giving you the right to work in the United States as noted above.

Entire Agreement. This offer, once accepted, constitutes the entire agreement between you and the Company with respect to the subject matter hereof and supersedes all prior offers, negotiations and agreements, if any, whether written or oral, relating to such subject matter. You acknowledge that neither the Company nor its agents have made any promise, representation or warranty whatsoever, either express or implied, written or oral, which is not contained in this offer letter for the purpose of inducing you to execute the offer letter, and you acknowledge that you have executed this offer letter in reliance only upon such promises, representations and warranties as are contained herein.

Acceptance. This offer will remain open through November 15, 2019. If you decide to accept our offer, and I hope you will, please sign the enclosed copy of this offer letter in the space indicated and return it to me. Your signature will acknowledge that you have read and understood and agreed to the terms and conditions of this offer letter and the attached documents, if any.

 

  A10 Networks, Inc.   3 West Plumeria Drive   T: 408. 325. 8668
  www.a10networks.com   San Jose, CA 95134   F: 408. 325. 8666


LOGO

 

Dhrupad, we are very excited to enhance our Executive Team with your experience, capabilities and leadership. We look forward to the opportunity to welcome you to the Company.

 

Sincerely,
/s/ Lee Chen
Lee Chen
Chairman of the Board of Directors
A10 Networks, Inc.

I have read and understood this offer letter and hereby acknowledge, accept and agree to the terms as set forth above and further acknowledge that no other commitments were made to me as part of my employment offer except as specifically set forth herein.

 

/s/ Dhrupad Trivedi

Dhrupad Trivedi
Date: November 12, 2019
Start Date: December 2, 2019

 

  A10 Networks, Inc.   3 West Plumeria Drive   T: 408. 325. 8668
  www.a10networks.com   San Jose, CA 95134   F: 408. 325. 8666

Exhibit 10.3

A10 NETWORKS, INC.

FORM OF CHANGE IN CONTROL AND SEVERANCE AGREEMENT

This Change in Control and Severance Agreement (the “Agreement”) is made and entered into by and between Dhrupad Trivedi (“Executive”) and A10 Networks, Inc., a Delaware corporation (the “Company”), effective as of                     , 2019 (the “Effective Date”).

RECITALS

A.    The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company believes that it is in the best interests of the Company and its shareholders to provide Executive with an incentive for Executive’s employment and to motivate Executive to maximize the value of the Company for the benefit of its shareholders.

B.    The Committee believes that it is imperative to provide Executive with certain severance benefits upon Executive’s termination of employment under certain circumstances to help maintain Executive’s focus on his duties and responsibilities to the Company and to minimize the need of Executive to consider alternative employment opportunities. These benefits will provide Executive with enhanced financial security, incentive and encouragement to remain with the Company.

C.    Certain capitalized terms used in the Agreement are defined in Section 6 below.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

1.    Term of Agreement. This Agreement will automatically terminate upon the date that all of the obligations of the parties hereto with respect to this Agreement have been satisfied.

2.    At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and will continue to be at-will, as defined under applicable law. As an at-will employee, either the Company or Executive may terminate the employment relationship at any time, with or without Cause. Upon any termination of employment, the Company will pay Executive all accrued but unpaid vacation, expense reimbursements, wages and other benefits due to Executive under any Company-provided plans, policies and arrangements (“Accrued Compensation”).

3.    Severance Benefits.

(a)    Termination Without Cause or Resignation for Good Reason Other Than During the Change in Control Period. If the Company terminates Executive’s employment with the Company without Cause and other than due to death or Disability, or Executive resigns from his or her employment for Good Reason, and, in each case, such termination does not occur during the Change in Control Period, then subject to Section 4 and in addition to Accrued Compensation, Executive will receive the following:

(i)    Continuing Severance Payments. Executive will be paid continuing payments of severance pay at a rate equal to Executive’s base salary rate, as in effect immediately prior to Executive’s termination of employment, for a period of twelve (12) months.


(ii)    Continuation Coverage. If Executive elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) within the time period prescribed pursuant to COBRA for Executive and Executive’s eligible dependents, then the Company will reimburse Executive for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Executive’s termination) until the earlier of (A) a period of twelve (12) months from the date of termination or (B) the date upon which Executive and/or Executive’s eligible dependents become covered under similar plans. Notwithstanding the foregoing, if the Company determines in its sole discretion that it cannot provide the COBRA reimbursement benefits without potentially violating, or being subject to an excise tax under, applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu thereof, the Company will provide to Executive a taxable monthly payment, payable on the last day of a given month (except as provided by the following sentence), in an amount equal to the monthly COBRA premium that Executive would be required to pay to continue Executive’s group health coverage in effect on the termination of employment date (which amount will be based on the premium for the first month of COBRA coverage), which payments will be made regardless of whether Executive elects COBRA continuation coverage and will commence on the first month following Executive’s termination of employment and will end on the earlier of (x) the date upon which Executive obtains other employment or (y) the date the Company has paid an amount equal to twelve (12) payments. For the avoidance of doubt, any taxable payments in lieu of COBRA reimbursements may be used for any purpose, including, but not limited to continuation coverage under COBRA, and will be subject to all applicable tax withholdings.

(b)    Termination Without Cause or Resignation for Good Reason During the Change in Control Period. If the Company terminates Executive’s employment with the Company without Cause and other than due to death or Disability, or if Executive resigns from his or her employment for Good Reason, and, in each case, such termination occurs during the Change in Control Period, then subject to Section 4 and the completion of the Change in Control, and in addition to Accrued Compensation, Executive will receive the following:

(i)    Severance Payment. Executive will receive a lump-sum payment equal to twelve (12) months of Executive’s annual base salary as in effect immediately prior to Executive’s termination date or, if greater, at the level in effect immediately prior to the Change in Control (as applicable).

(ii)    Bonus Payment. Executive will receive a lump-sum payment equal to one hundred percent (100%) of the greater of (A) Executive’s target bonus as in effect for the Company’s fiscal year in which the Change in Control occurs (as applicable), or (B) Executive’s target bonus as in effect for the Company’s (or surviving company’s, as applicable) fiscal year in which Executive’s termination of employment occurs.

(iii)    Continuation Coverage. If Executive elects continuation coverage pursuant to COBRA within the time period prescribed pursuant to COBRA for Executive and Executive’s eligible dependents, then the Company will reimburse Executive for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Executive’s termination) until the earlier of (A) a period of twelve (12) months from the date of termination or (B) the date upon which Executive and/or Executive’s eligible dependents become covered under similar plans. Notwithstanding the foregoing, if the Company determines in its sole discretion that it cannot provide the COBRA reimbursement benefits without potentially violating, or being subject to an excise tax under, applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu thereof, the Company will provide to Executive a taxable monthly payment, payable on the last day of a given month (except as provided by the following sentence), in an amount equal to the monthly COBRA premium that Executive would be required to pay to continue Executive’s group health coverage in effect on the termination of employment date (which amount will be based on the premium for the first month of COBRA

 

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coverage), which payments will be made regardless of whether Executive elects COBRA continuation coverage and will commence on the first month following Executive’s termination of employment and will end on the earlier of (x) the date upon which Executive obtains other employment or (y) the date the Company has paid an amount equal to twelve (12) payments. For the avoidance of doubt, any taxable payments in lieu of COBRA reimbursements may be used for any purpose, including, but not limited to, continuation coverage under COBRA, and will be subject to all applicable tax withholdings.

(iv)    Accelerated Vesting of Equity Awards. One hundred percent (100%) of Executive’s then-outstanding and unvested Equity Awards (or portions thereof, as applicable) that are subject to continued service-based vesting criteria, and that no longer are or never were subject to the achievement of performance-based or other similar vesting criteria, will become vested in full. With respect to any then-outstanding and unvested Equity Award (or portion thereof, as applicable) that is subject to the achievement of any performance-based or other similar vesting criteria, unless provided otherwise in Executive’s Equity Award agreement or other written agreement between the Company and Executive governing the terms of the Equity Award, the Equity Award (or applicable portion thereof) will vest as to one hundred percent (100%) of the amount of the Equity Award (or applicable portion thereof) assuming the relevant performance criteria had been achieved at target levels for the relevant performance period(s).

In the event that Executive’s employment with the Company terminates in accordance with this Section 3(b) and such termination occurs prior to a Change in Control, then unless provided otherwise in the Equity Award agreement or other written agreement between the Company and Executive governing the terms of the Equity Award, (A) the Equity Award will remain outstanding until immediately prior to the Change in Control (provided that in no event will an Equity Award remain outstanding after the expiration of the Equity Award’s maximum term to expiration) notwithstanding that Executive’s status as a service provider to the Company has terminated, (B) any vesting acceleration under this subsection (iv) will be applied to Executive’s Equity Awards outstanding as of immediately prior to the Change in Control, and (C) any options and stock appreciation rights will remain outstanding and exercisable in accordance with, and for the post-termination exercisability period set forth in, the applicable Equity Award agreement as if Executive’s status as a service provider of the Company had ceased as of the Change in Control (provided that in no event will an Equity Award remain outstanding after the expiration of the Equity Award’s maximum term to expiration and, for the avoidance of doubt, subject to any earlier termination in accordance with the terms and conditions of the Company’s plan, including if applicable, its termination in connection with the Change in Control).

(c)    Voluntary Resignation; Termination for Cause; Termination of Employment Other than During Change in Control Period. If Executive’s employment with the Company terminates (i) voluntarily by Executive (other than for Good Reason) or (ii) for Cause by the Company, then Executive will not be entitled to receive severance or other benefits except for the Accrued Compensation and those severance or other benefits (if any) as may then be established under the Company’s then-existing written severance and benefits plans and practices or pursuant to other written agreements with the Company.

(d)    Disability; Death. If the Company terminates Executive’s employment as a result of Executive’s Disability, or Executive’s employment terminates due to Executive’s death, Executive will not be entitled to receive any other severance or other benefits, except for the Accrued Compensation and those severance or other benefits (if any) as may then be established under the Company’s then-existing written severance and benefits plans and practices or pursuant to other written agreements with the Company.

(e)    Exclusive Remedy. In the event of a termination of Executive’s employment as set forth in Section 3(a) or 3(b) of this Agreement, the provisions of Section 3 are intended to be and are exclusive and in lieu of and supersede any other rights or remedies to which Executive or the Company

 

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otherwise may be entitled, whether at law, tort or contract, in equity, or under this Agreement (other than the payment of accrued but unpaid wages, as required by law, and any unreimbursed reimbursable expenses). Executive will be entitled to no benefits, compensation or other payments or rights upon a termination of employment other than those benefits expressly set forth in Section 3 of this Agreement.

4.    Conditions to Receipt of Severance.

(a)    Release of Claims Agreement. The receipt of any severance payments or benefits (other than any Accrued Compensation) pursuant to this Agreement (the “Severance Benefits”) is subject to Executive signing and not revoking the Company’s then-standard separation agreement and release of claims (the “Release”), which must become effective and irrevocable no later than the sixtieth (60th) day following Executive’s termination of employment (the “Release Deadline Date”). If the Release does not become effective and irrevocable by the Release Deadline Date, Executive will forfeit any right to the Severance Benefits. In no event will Severance Benefits be paid or provided, or in the case of installments, commence, until the Release actually becomes effective and irrevocable.

(b)    Payment Timing Following Release.

(i)    General Payment Timing. If the Release becomes effective and irrevocable by the Release Deadline Date, then subject to Section 4(d) below, Severance Benefits under this Agreement will be paid, or in the case of installments, will commence, on the first regularly scheduled payroll date that occurs after the Release Deadline Date (the “Severance Start Date”), but in no event later than March 15th of the calendar year following the calendar year in which Executive’s employment termination occurs, and any Severance Benefits otherwise payable to Executive during the period immediately following Executive’s termination of employment with the Company through the Severance Start Date will be paid in a lump sum to Executive on the Severance Start Date, with any remaining payments to be made as provided in this Agreement.

(ii)    Overlapping Termination. For purposes of clarity, subject to Section 4(d) below, if (A) prior to a Change in Control, Executive incurs a termination of employment that qualifies Executive for Severance Benefits under Section 3(a), (B) the Release becomes effective and irrevocable by the Release Deadline Date, and (C) subsequent to Executive’s employment termination, a Change in Control occurs that qualifies Executive for Severance Benefits under Section 3(b) (the “Overlapping Termination”), then (1) any Severance Benefits under Section 3(a) will cease upon the Change in Control, and (2) Executive will be entitled to the Severance Benefits under Section 3(b) as follows: (I) a lump sum salary severance payment in the amount calculated and as described in Section 3(b)(i), but less any amount previously paid to Executive under Section 3(a)(i), (II) a lump sum bonus severance payment in the amount set forth and as described in Section 3(b)(ii), (III) the continued COBRA reimbursements for the number of months set forth and as described in Section 3(b)(iii), but less the number of months previously paid to Executive under Section 3(a)(ii) (or, if applicable, a taxable, lump sum cash payment of the amount calculated and as described in Section 3(b)(iii), less any taxable, lump sum cash payment previously paid under Section 3(a)(ii)), and (IV) the vesting acceleration as set forth under Section 3(b)(iv). Further, in the event of an Overlapping Termination, the additional Severance Benefits payable under Section 3(b) as specified in the immediately preceding sentence will be paid, or in the case of installments, will commence, on the later of the Change in Control or the Severance Start Date (such later date, the “Later Start Date”), and any Severance Benefits otherwise payable to Executive during the period immediately following Executive’s termination of employment with the Company through the Later Start Date will be paid in a lump sum to Executive on the Later Start Date.

 

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(c)    Confidential Information and Invention Assignment Agreements. Executive’s receipt of any payments or benefits under Section 3 (other than any Accrued Compensation) will be subject to Executive continuing to comply with the terms of the any confidential information and invention assignment agreement executed by Executive in favor of the Company and the provisions of this Agreement.

(d)    Section 409A.

(i)    Notwithstanding anything to the contrary in this Agreement, no severance pay or benefits to be paid or provided to Executive, if any, pursuant to this Agreement that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A of the Code, and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Payments”) will be paid or otherwise provided until Executive has a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to Executive, if any, pursuant to this Agreement that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until Executive has a “separation from service” within the meaning of Section 409A.

(ii)    It is intended that none of the severance payments under this Agreement will constitute Deferred Payments but rather will be exempt from Section 409A as a payment that would fall within the “short-term deferral period” as described in Section 4(d)(iv) below or resulting from an involuntary separation from service as described in Section 4(d)(v) below. In no event will Executive have discretion to determine the taxable year of payment of any Deferred Payment.

(iii)    Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s separation from service (other than due to death), then the Deferred Payments, if any, that are payable within the first six (6) months following Executive’s separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, in the event of Executive’s death following Executive’s separation from service, but before the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this Agreement is intended to constitute a separate payment under Section 1.409A-2(b)(2) of the Treasury Regulations.

(iv)    Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.

(v)    Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit (as defined below) will not constitute Deferred Payments for purposes of clause (i) above.

(vi)    The foregoing provisions are intended to comply with or be exempt from the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply or be exempt. For purposes of this Agreement, to the extent required to be exempt from or comply with Section 409A, references to Executive’s “termination of employment” or similar phrases will be references to Executive’s “separation from service” within the meaning of

 

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Section 409A. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition before actual payment to Executive under Section 409A. In no event will the Company reimburse Executive for any taxes that may be imposed on Executive as result of Section 409A.

5.    Limitation on Payments. In the event that the payments and benefits provided for in this Agreement or other payments and benefits payable or provided to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 5, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s payments and benefits under this Agreement or other payments or benefits (the “280G Amounts”) will be either:

(i)    delivered in full, or

(ii)    delivered as to such lesser extent which would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Executive on an after-tax basis, of the greatest amount of 280G Amounts, notwithstanding that all or some portion of the 280G Amounts may be taxable under Section 4999 of the Code.

(a)    Reduction Order. In the event that a reduction of 280G Amounts is being made in accordance with this Section 5, the reduction will occur, with respect to the 280G Amounts considered parachute payments within the meaning of Section 280G of the Code, in the following order:

(i)    reduction of cash payments in reverse chronological order (that is, the cash payment owed on the latest date following the occurrence of the event triggering the excise tax will be the first cash payment to be reduced);

(ii)    cancellation of equity awards that were granted “contingent on a change in ownership or control” within the meaning of Code Section 280G in the reverse order of date of grant of the awards (that is, the most recently granted equity awards will be cancelled first);

(iii)    reduction of the accelerated vesting of equity awards in the reverse order of date of grant of the awards (that is, the vesting of the most recently granted equity awards will be cancelled first); and

(iv)    reduction of employee benefits in reverse chronological order (that is, the benefit owed on the latest date following the occurrence of the event triggering the excise tax will be the first benefit to be reduced).

In no event will Executive have any discretion with respect to the ordering of payments.

(b)    Unless the Company and Executive otherwise agree in writing, any determination required under this Section 5 will be made in writing by a nationally recognized accounting or valuation firm (the “Firm”) selected by the Company, whose determination will be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section 5, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive will furnish to the Firm such information and documents as the

 

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Firm may reasonably request in order to make a determination under this Section. The Company will bear all costs and make all payments for the Firm’s services relating to any calculations contemplated by this Section 5.

6.    Definition of Terms. The following terms referred to in this Agreement will have the following meanings:

(a)    Cause. “Cause” will mean:

(i)    Executive’s repeated failure to perform his or her duties and responsibilities to the Company, or abide, in all material respects, with the policies of the Company after written notice from the Board or an officer of the Company describing in reasonable detail Executive’s failure to perform such duties or responsibilities or abide by such policies;

(ii)    Executive’s engagement in illegal conduct that was or is injurious in any material respect to the Company;

(iii)    Executive’s material violation or material breach of his or her Employment, Confidential Information and Invention Assignment with the Company that is not cured within twenty (20) days of written notice thereof or is incapable of cure; or

(iv)    Executive’s conviction of, or entry of a plea of guilty or nolo contendere to, a felony (other than motor vehicle offenses the effect of which do not materially impair Executive’s performance of his employment duties) or any crime involving fraud, embezzlement or other offense which involves moral turpitude, and/or committing any act of embezzlement, dishonesty or fraud against, or the misappropriation of material property belonging to, the Company.

The foregoing definition does not in any way limit the Company’s ability to terminate Executive’s employment relationship at any time as provided in Section 2 above, and the term “Company” will be interpreted to include any subsidiary, parent, affiliate or successor thereto, if applicable.

(b)    Change in Control.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 within the meaning of Section 13(d) of the Exchange Act (“Person”), acquires ownership of the stock of the Company that, together with the stock already held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; 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; 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

 

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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 an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company. 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 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. 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 Section 409A.

(c)    Change in Control Period. “Change in Control Period” will mean, subject to the completion of the Change in Control, the period beginning on the date on which an agreement to enter into such Change in Control has been signed and executed by the relevant parties, and ending on the date twelve (12) months following such Change in Control.

(d)    Code. “Code” will mean the Internal Revenue Code of 1986, as amended.

(e)    Disability. “Disability” will mean Executive’s inability to perform the essential functions of his or her job due to a Permanent and Total Disability as defined under Section 22(e)(3) of the Code.

(f)    Equity Awards. “Equity Awards” will mean Executive’s outstanding stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units and any other Company equity compensation awards.

(g)    Good Reason. “Good Reason” will mean Executive’s voluntary termination of employment with the Company within ninety (90) days following the expiration of any Company cure period (discussed below) following one or more of the following occurring without Executive’s prior written consent:

(i)    a material reduction by the Company in Executive’s gross base salary, as in effect immediately prior to such reduction other than in connection with a similar reduction for all similarly-situated employees of the Company;

(ii)    a material reduction by the Company in Executive’s authority, duties, or responsibilities; or

(iii)    relocation of Executive’s principal place of work to a location that is more than fifty (50) miles from Executive’s current principal work site for the Company;

Executive may not resign for Good Reason without first providing the Company with written notice within sixty (60) days of the initial existence of the condition that Executive believes constitutes Good Reason specifically identifying the acts or omissions constituting the grounds for Good Reason and a reasonable cure period of not less than thirty (30) days following the date of such notice, during which such grounds must not have been cured.

 

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For purposes of the “Good Reason” definition, the term “Company” will be interpreted to include any subsidiary, parent, affiliate or successor thereto, if applicable.

(h)    Section 409A Limit. “Section 409A Limit” will mean two (2) times the lesser of: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during Executive’s taxable year preceding Executive’s taxable year of Executive’s termination of employment as determined under, and with such adjustments as are set forth in, Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

 

  7.

Successors.

(a)    The Companys Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets will assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” will include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 7(a) or which becomes bound by the terms of this Agreement by operation of law.

(b)    Executive’s Successors. The terms of this Agreement and all rights of Executive hereunder will inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

  8.

Notice.

(a)    General. Notices and all other communications contemplated by this Agreement will be in writing and will be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. Mailed notices to Executive will be addressed to Executive at the home address which Executive most recently communicated to the Company in writing. In the case of the Company, mailed notices will be addressed to its corporate headquarters, and all notices will be directed to the attention of its Secretary.

(b)    Notice of Termination. Any termination by the Company for Cause or by Executive for Good Reason will be communicated by a notice of termination to the other party hereto given in accordance with Section 8(a) of this Agreement. Such notice will indicate the specific termination provision in this Agreement relied upon, will set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and will specify the termination date (which will be not more than thirty (30) days after the giving of such notice).

9.    Resignation. Upon the termination of Executive’s employment for any reason, Executive will be deemed to have resigned from all officer and/or director positions held at the Company and its affiliates voluntarily, without any further required action by Executive, as of the end of Executive’s employment and Executive, at the Board’s request, will execute any documents reasonably necessary to reflect Executive’s resignation.

 

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  10.

Miscellaneous Provisions.

(a)    No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any such payment be reduced by any earnings that Executive may receive from any other source.

(b)    Waiver. No provision of this Agreement will be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c)    Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

(d)    Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto and supersedes in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties, including but not limited to the Offer Letter entered into between you and the Company dated                     , 2019, and any accelerated vesting and post-termination exercisability provisions set forth in your equity award agreements (to the extent modified by this Agreement), in each case with respect to the subject matter hereof. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto and which specifically mention this Agreement.

(e)    Choice of Law. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of California (with the exception of its conflict of laws provisions). Any claims or legal actions by one party against the other arising out of the relationship between the parties contemplated herein (whether or not arising under this Agreement) will be commenced or maintained in any state or federal court located in Santa Clara County, California, and Executive and the Company hereby submit to the jurisdiction and venue of any such court.

(f)    Severability. The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision hereof, which will remain in full force and effect.

(g)    Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income, employment and other taxes.

(h)    Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first set forth above.

 

COMPANY       A10 NETWORKS, INC.
      By:  

 

      Title:  

 

EXECUTIVE       Dhrupad Trivedi
     

 

      (Signature)
      Date:  

 

 

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Exhibit 99.1

A10 Networks Announces Dhrupad Trivedi as New CEO

Founder Lee Chen Will Assist in Smooth Transition of Leadership

Strategy Committee of the Board of Directors Continues to Review Strategic Alternatives Directed at Maximizing Shareholder Value

SAN JOSE, Calif. – November 21, 2019 — A10 Networks (NYSE: ATEN), a leading provider of intelligent and automated cybersecurity solutions, today announced that Dhrupad Trivedi has agreed to join the company as its new President and Chief Executive Officer, effective December 2, 2019. Lee Chen, who founded A10 Networks in 2004 and has served as CEO since inception, will continue to be actively involved with the company to ensure a smooth leadership transition, and will continue as chairman of the A10 Networks Board of Directors.

Dr. Trivedi joins A10 Networks from Belden, where he most recently was Executive Vice President running Tripwire, a cybersecurity software business and CTO of Belden. Prior to this, he held other executive roles at Belden, including President of Belden’s Network Solutions Division; Vice President of Corporate Strategy and Development, leading the company’s M&A activities; and starting in Belden as President of Trapeze Networks. Prior to joining Belden, Trivedi held executive roles at JDS Uniphase Corporation from 1998 through 2010.

“I am honored and excited to join A10 Networks as CEO to help the company pursue its mission of organic growth by delivering leading technology for our customers in terms of reliability, security and availability. I also look forward to partnering with the Strategy Committee of the Board of Directors to maximize shareholder value,” said Trivedi. “Lee and the A10 team have established a strong reputation as the high performance leader in multiple growing markets, which will provide strong secular tailwinds for many years to come. I am excited to join the company at a pivotal time and lead it through this key inflection point to the next phase of growth. I look forward to working with our customers, employees, partners and investors.”

“I am privileged to serve marquee customers across the globe in a wide variety of industries and tremendously proud of the innovative solutions we offer. I am honored to have worked with our outstanding team at A10. I especially appreciate their commitment to customer success first and foremost in everything they do,” said Chen. “I am also deeply confident that under Dhrupad’s leadership the A10 Networks team will continue to help our customers prosper.”

The company has committed to appoint Trivedi to its board of directors within 30 days of his joining the Company. The company’s letter agreement with VIEX Capital Advisors and its affiliates, in which the company had agreed to fix the size of the Board at six, has been amended to permit increasing the board to seven members until the company’s 2020 annual meeting of shareholders. Pursuant to the amended agreement, the company has also agreed to renominate directors Eric Singer and Tor R. Braham for election at the 2020 annual meeting, and VIEX Capital Advisors’ right to identify, and A10 Networks agreement to appoint within 15 days thereafter, an additional director to the Board, with Phillip J. Salsbury agreeing to resign from the Board in such event, has been extended for an additional year.


The Company further announced that the Strategy Committee of the Board of Directors continues to evaluate steps to maximize shareholder value.

About A10 Networks

A10 Networks (NYSE: ATEN) provides Reliable Security Always, with a range of high-performance application networking solutions that help organizations ensure that their data center applications and networks remain highly available, accelerated and secure. Founded in 2004, A10 Networks is based in San Jose, Calif., and serves customers globally with offices worldwide. For more information, visit: www.a10networks.com and @A10Networks.

The A10 logo and A10 Networks are trademarks or registered trademarks of A10 Networks, Inc. in the United States and other countries. All other trademarks are the property of their respective owners.

Investor Contact:

Chris Mammone

The Blueshirt Group

investors@a10networks.com

Media and Analyst Contact

A10 Networks

Karin Gilles

kgilles@a10networks.com

 

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