As file d with the Securities and Exchange Commission on September 8 , 2020.
R egistration No . 333- 248280
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Snowflake Inc.
(Exact name of Registrant as specified in its charter)
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Delaware
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7372
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46-0636374
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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450 Concar Drive
San Mateo, CA 94402
(844) 766-9355
(Address, including zip code, and telephone number, including
area code, of Registrant’s principal executive offices)
Frank Slootman
Chief Executive Officer
Snowflake Inc.
450 Concar Drive
San Mateo, CA 94402
(844) 766-9355
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
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Copies to:
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Mark P. Tanoury
Jon C. Avina
Seth J. Gottlieb
Alex K. Kassai
Cooley LLP
3175 Hanover Street
Palo Alto, CA 94304
(650) 843-5000
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Derk Lupinek
General Counsel
Snowflake Inc.
450 Concar Drive
San Mateo, CA 94402
(844) 766-9355
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Richard A. Kline
Sarah B. Axtell
Goodwin Procter LLP
601 Marshall Street
Redwood City, CA 94063
(650) 752-3100
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Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement is declared effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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Smaller reporting company
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☐
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Emerging growth company
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☒
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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 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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Title of each Class of
Securities to be Registered
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Amount to be Registered(1)
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Proposed Maximum Offering Price Per Share(2)
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Proposed Maximum Aggregate Offering Price(1)(2)
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Amount of Registration Fee
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Class A common stock, par value $0.0001 per share
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32,200,000
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$85.00
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$2,737,000,000
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$355,263(3)
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(1) Includes 4,200,000 shares that the underwriters have an option to purchase .
(2) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457( a ) of the Securities Act of 1933, as amended.
(3) The registrant previously paid a registration fee of $12,9 80 in connection with the initial filing of this Registration Statement.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
OSPECTUS (Subject to Completion) Issued September 8, 2020 28,000,000 Shares CLASS A COMMON STOCK This is an initial public offering of shares of Class A common stock of Snowflake Inc. Prior to this offering, there has been no public market for our Class A common stock. It is currently estimated that the initial public offering price will be between $75.00 and $85.00 per share. Our Class A common stock has been approved for listing on the New York Stock Exchange under the symbol “SNOW.” We are an “emerging growth company” as defined under the federal securities laws, and as such, we have elected to comply with certain reduced reporting requirements for this prospectus and may elect to do so in future filings. See the section titled “Risk Factors” beginning on page 13 to read about factors you should consider before buying shares of our Class A common stock. We have two classes of authorized common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting, conversion, and transfer rights. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to ten votes and is convertible at any time into one share of Class A common stock. Outstanding shares of Class B common stock will represent approximately 98.4% of the voting power of our outstanding capital stock immediately following this offering and the concurrent private placements, with our directors, executive officers, and principal stockholders representing approximately 70.1% of such voting power. Each of Salesforce Ventures LLC and Berkshire Hathaway Inc. have entered into an agreement with us pursuant to which they have each agreed to purchase $250 million of our Class A common stock in a private placement at a per share price equal to the initial public offering price. Our agreements with each of Salesforce Ventures LLC and Berkshire Hathaway Inc. are contingent upon, and are scheduled to close immediately subsequent to, the closing of this offering as well as the satisfaction of certain conditions to closing as further described in the section titled “Concurrent Private Placements.” Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Per Share Total Initial public offering price............................................................................... $ $ Underwriting discount(1).................................................................................. $ $ Proceeds, before expenses, to us.................................................................. $ $ ________________ (1) See the section titled “Underwriting” for a description of compensation payable to the underwriters. To the extent that the underwriters sell more than 28,000,000 shares of Class A common stock, the underwriters have the option to purchase up to an additional 4,200,000 shares of Class A common stock at the initial public offering price less the underwriting discount. The underwriters expect to deliver the shares of Class A common stock against payment in New York, New York on , 2020. Goldman Sachs & Co. LLC Morgan Stanley J.P. Morgan Securities LLC Allen & Company LLC Citigroup Credit Suisse Barclays Deutsche Bank Securities Mizuho Securities Truist Securities BTIG Canaccord Genuity Capital One Securities Cowen D.A. Davidson & Co. JMP Securities Oppenheimer & Co. Piper Sandler Stifel Academy Securities Loop Capital Markets Ramirez & Co., Inc. Siebert Williams Shank , 2020 The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek buy these securities in any jurisdiction where the or sale permitted.
TABLE OF CONTENTS
You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities and Exchange Commission (SEC). Neither we nor any of the underwriters have authorized anyone to provide any information or make any representations other than those contained in this prospectus or in any free writing prospectus filed with the SEC. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, shares of our Class A common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our Class A common stock. Our business, financial condition, results of operations, and prospects may have changed since such date.
For investors outside of the United States, neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about, and to observe any restrictions relating to, this offering and the distribution of this prospectus outside of the United States.
Through and including , 2020 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, all references in this prospectus to “Snowflake,” the “company,” “we,” “our,” “us,” or similar terms refer to Snowflake Inc. and its subsidiaries.
SNOWFLAKE INC.
We believe in a data connected world where organizations have seamless access to explore, share, and unlock the value of data. To realize this vision, we are pioneering the Data Cloud, an ecosystem where Snowflake customers, partners, and data providers can break down data silos and derive value from rapidly growing data sets in secure, governed, and compliant ways.
Our Cloud Data Platform is the innovative technology that powers the Data Cloud. Our platform enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data. We deliver our platform through a customer-centric, consumption-based business model, only charging customers for the resources they use.
Our platform solves the decades-old problem of data silos and data governance. Leveraging the elasticity and performance of the public cloud, our platform enables customers to unify and query data to support a wide variety of use cases. It also provides frictionless and governed data access so users can securely share data inside and outside of their organizations, generally without copying or moving the underlying data. As a result, customers can blend existing data with new data for broader context, augment data science efforts, or create new monetization streams. Delivered as a service, our platform requires near-zero maintenance, enabling customers to focus on deriving value from their data rather than managing infrastructure.
Our cloud-native architecture consists of three independently scalable layers across storage, compute, and cloud services. The storage layer ingests massive amounts and varieties of structured and semi-structured data to create a unified data record. The compute layer provides dedicated resources to enable users to simultaneously access common data sets for many use cases without latency. The cloud services layer intelligently optimizes each use case’s performance requirements with no administration. This architecture is built on three major public clouds across 22 regional deployments around the world. These deployments are interconnected to create our single Cloud Data Platform, delivering a consistent, global user experience.
Our platform supports a wide range of use cases that enable our customers’ most important business objectives, including data engineering, data lake, data warehousing, data science, data applications, and data sharing. For example, CIOs choose us to help migrate petabytes of raw data to the public cloud and transform it into analytics-ready data. CMOs choose us to create 360-degree customer views. Business leaders choose us to distill insights from their most important business metrics. Data scientists choose us to simplify data transformation to build better machine learning algorithms. Businesses choose us as the analytical engine to power their digital services. CEOs choose us as a strategic partner to accelerate their cloud strategies and deliver new revenue-generating services. From July 1, 2020 to July 31, 2020, we processed an average of 507 million daily queries across all of our customer accounts, up from an average of 254 million daily queries during the corresponding month of the prior fiscal year.
Our business benefits from powerful network effects. The Data Cloud will continue to grow as organizations move their siloed data from cloud-based repositories and on-premises data centers to the Data Cloud. The more customers adopt our platform, the more data can be exchanged with other Snowflake customers, partners, and data providers, enhancing the value of our platform for all users. We believe this network effect will help us drive our vision of the Data Cloud.
Our platform is used globally by organizations of all sizes across a broad range of industries. As of July 31, 2020, we had 3,117 customers, increasing from 1,547 customers as of July 31, 2019. As of July 31, 2020, our customers included seven of the Fortune 10 and 146 of the Fortune 500, based on the
2020 Fortune 500 list, and those customers contributed approximately 4% and 26% of our revenue for the six months ended July 31, 2020, respectively. As our customers experience the benefits of our platform, they typically expand their usage significantly, as evidenced by our net revenue retention rate, which was 158% as of July 31, 2020. The number of customers that contributed more than $1 million in trailing 12-month product revenue increased from 22 to 56 as of July 31, 2019 and 2020, respectively.
We have achieved significant growth in recent periods. For the fiscal years ended January 31, 2019 and 2020, our revenue was $96.7 million and $264.7 million, respectively, representing year-over-year growth of 174%. For the six months ended July 31, 2019 and 2020, our revenue was $104.0 million and $242.0 million, respectively, representing year-over-year growth of 133%. Our net loss was $178.0 million and $348.5 million for the fiscal years ended January 31, 2019 and 2020, respectively, and $177.2 million and $171.3 million for the six months ended July 31, 2019 and 2020, respectively.
Industry Background
Important technology and industry trends are changing the ways organizations leverage their data, including:
•Data is becoming paramount to business success. Data is at the heart of business innovation. Recognizing this trend, organizations everywhere are seeking ways to transform their businesses by capturing, analyzing, and mobilizing data.
•The explosion of data is offering richer insights. The proliferation of data provides valuable insights for organizations, including key business and performance metrics, customer attributes and behavior, and product strengths and capabilities.
•Cloud adoption is accelerating and diversifying. The public cloud is becoming the new center of gravity for data as organizations migrate from static on-premises IT architectures to global, dynamic, and multi-cloud architectures.
•Everyone is becoming a data consumer. The increasing importance of data in the digital economy is empowering every role and function within an organization to become a mainstream data consumer.
•Technology consumption is moving from fixed capacity to utility. We believe that business models are evolving from a fixed capacity, where customers often pay for unused software, to a utility model, where customers pay only for the resources they consume.
Limitations of Existing Data Technologies
Many organizations have attempted to capture the value of data using solutions built on on-premises legacy database or big data architectures. Legacy database architectures have inherent scalability and capacity constraints and were not originally designed for the adoption of cloud-based workloads. These shortcomings have resulted in data silos, governance challenges, and limited business insights. Big data architectures have attempted to solve the problem of data silos with large pools of cost-effective storage, but in doing so have often created data integrity and governance challenges. In recent years, cloud-based companies, including certain public cloud providers, have introduced solutions that are derived from legacy database and big data architectures. Despite being deployed in the public cloud, these solutions generally suffer from the same limitations due to weaknesses in the underlying architectures.
These existing solutions have some or all of the following limitations:
•Not built for today’s dynamic and diverse data requirements. Legacy database architectures typically fail to capture, manage, organize, and classify semi-structured data. Big data architectures can capture diverse data types, but the data is generally stored in inconsistent formats requiring transformation prior to use, often resulting in errors and duplicates.
•Inability to support large data volumes. Legacy database architectures suffer from storage capacity constraints, redundant data storage, and insufficient compute resources to ingest and transform ever-increasing volumes of data. Big data architectures can often take hours or days to query larger data sets, limiting speed and relevancy of data.
•Inability to simultaneously support many use cases and users. Legacy database architectures only allow a subset of users or use cases to be effectively addressed at any given point in time. Big data architectures often lack the ability to guarantee the consistency and integrity of data when accessed and manipulated.
•Lack of optimized price-performance. Solutions built on legacy database and big data architectures are often time-consuming and costly to operate and require manual organization of data prior to use.
•Difficult to use. Solutions built on big data architectures often result in project failures due to the significant amount of effort required to configure the infrastructure. Because they require different programming languages, the implementation of these architectures regularly requires analysts to learn new skills to query data.
•Expensive to manage and maintain. Legacy database and big data architectures often require maintenance of the underlying infrastructure, upgrades and patches, and system configuration.
•Inability to support a multi-cloud, cross-region strategy. Solutions built on legacy database architectures by public cloud providers are typically only intended to run on specific infrastructures and in specific regions, limiting the flexibility to distribute and share data across public clouds and regions or select optimal functionality.
•Inability to facilitate data sharing. Solutions built on legacy database and big data architectures generally result in data copies, data security concerns, and poor governance when facilitating data sharing.
The Rise of the Data Cloud
Data silos have been an enduring challenge blocking organizations from realizing the full value of their data. To solve this problem, organizations have invested billions of dollars in disparate on-premises systems, infrastructure clouds, and application clouds. Yet, the data silo problem persists.
The Data Cloud is our vision of a world without data silos, allowing organizations to access, share, and derive better insights from their data.
Our Solution
Our Cloud Data Platform is built on a cloud-native architecture that leverages the massive scalability and performance of the public cloud. Key elements of our platform include:
•Diverse data types. Our platform integrates and optimizes both structured and semi-structured data as a common data set, without sacrificing performance or flexibility.
•Massive scalability of data volumes. Our platform leverages the scalability and performance of the public cloud to support growing data sets without sacrificing performance.
•Multiple use cases and users simultaneously. Our platform makes compute resources dynamically available to address the demand of as many users and use cases as needed.
•Optimized price-performance. Our platform uses advanced optimizations to efficiently access only the data required to deliver the desired results. It delivers speed without the need for tuning or the expense of manually organizing data prior to use.
•Easy to use. Our platform delivers instant time to value with a familiar query language and consumption-based business model, reducing hidden costs.
•Delivered as a service with no overhead. Our platform is delivered as a service, eliminating the cost, time, and resources associated with managing underlying infrastructure.
•Multi-cloud and multi-region. Our platform is available on three major public clouds across 22 regional deployments around the world. These deployments are interconnected to create our single Cloud Data Platform, delivering a consistent, global user experience.
•Seamless and secure data sharing. Our platform enables governed and secure sharing of live data within an organization and externally across customers and partners, generally without copying or moving the underlying data. When sharing data across regions and public clouds, our platform allows customers to easily replicate data and maintain a single source of truth.
Key Benefits to our Customers
Our platform eliminates data silos, empowers secure and governed access to data, and removes infrastructure complexity freeing organizations to drive holistic insights across their business and address new market opportunities. It enables customers to:
•transform into data-driven businesses;
•consolidate data into a single, analytics-ready source of truth;
•increase agility and augment insights through seamless data sharing;
•create new monetization streams and data-driven applications;
•benefit from a global multi-cloud strategy;
•reduce time spent managing infrastructure; and
•enable greater data access through enhanced data governance.
Our Opportunity
Based on our own estimates, we believe the addressable market opportunity for our Cloud Data Platform is approximately $81 billion as of January 31, 2020.
According to IDC, the markets for Analytics Data Management and Integration Platforms and Business Intelligence and Analytics Tools, which we believe we address, will have a combined value of $56 billion by the end of 2020 and $84 billion by the end of 2023.
Our data sharing opportunity has not been defined or quantified by any research institutions. However, we believe that this opportunity is substantial and largely untapped.
Our Growth Strategies
Our strategy is to advance the Data Cloud through the adoption of our platform. We intend to continue making significant investments both domestically and internationally in sales and marketing, research and development, and our partner ecosystem to drive our growth. Key elements of our strategy include:
•innovate and advance our platform;
•drive growth by acquiring new customers;
•drive increased usage within our existing customer base;
•expand our global footprint;
•expand data sharing across our global ecosystem; and
•grow and invest in our partner network.
Risk Factors
Investing in our Class A common stock involves substantial risk. The risks described in the section titled “Risk Factors” immediately following this summary may cause us to not realize the full benefits of our strengths or may cause us to be unable to successfully execute all or part of our strategy. Some of the more significant challenges include, but are not limited to, the following:
•We have a limited operating history, which makes it difficult to forecast our future results of operations.
•We may not have visibility into our financial position and results of operations.
•We have a history of operating losses and may not achieve or sustain profitability in the future.
•The markets in which we operate are highly competitive, and if we do not compete effectively, our business, financial condition, and results of operations could be harmed.
•If we fail to innovate in response to changing customer needs and new technologies and other market requirements, our business, financial condition, and results of operations could be harmed.
•If we or our third-party service providers experience a security breach or unauthorized parties otherwise obtain access to our customers’ data, our data, or our platform, our platform may be perceived as not being secure, our reputation may be harmed, demand for our platform may be reduced, and we may incur significant liabilities.
•We could suffer disruptions, outages, defects, and other performance and quality problems with our platform or with the public cloud and internet infrastructure on which it relies.
•We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors with respect to our results of operations, our stock price could decline.
•Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products and platform.
•Sales efforts to large customers involve risks that may not be present or that are present to a lesser extent with respect to sales to smaller organizations.
•The COVID-19 pandemic could have an adverse impact on our business, operations, and the markets and communities in which we, our partners, and customers operate.
•The dual class structure of our common stock will have the effect of concentrating voting control with our existing stockholders, executive officers, directors, and their affiliates, which will limit your ability to influence the outcome of important transactions and to influence corporate governance matters, such as electing directors, and to approve material mergers, acquisitions, or other business combination transactions that may not be aligned with your interests.
Corporate Information
We were incorporated in Delaware in July 2012 under the name Snowflake Computing, Inc. We changed our name to Snowflake Inc. in April 2019. Our principal executive offices are located at 450 Concar Drive, San Mateo, California 94402, and our telephone number is (844) 766-9355. Our website address is www.snowflake.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus.
The Snowflake logo, “Snowflake,” and our other registered and common law trade names, trademarks, and service marks are the property of Snowflake Inc. or our subsidiaries. Other trade names, trademarks, and service marks used in this prospectus are the property of their respective owners.
Implications of Being an Emerging Growth Company
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). We may take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm under Section 404 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and any golden parachute payments. We may take advantage of these exemptions for up to five years or until we are no longer an emerging growth company, whichever is earlier. In addition, the JOBS Act provides that an “emerging growth company” can delay adopting new or revised accounting standards until those standards apply to private companies. We have elected to use the extended transition period under the JOBS Act. Accordingly, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.
THE OFFERING
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Class A common stock offered
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28,000,000 shares
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Option to purchase additional shares of Class A common stock
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4,200,000 shares
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Class A common stock sold in the concurrent private placements and secondary transaction
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Immediately subsequent to the closing of this offering, and subject to certain conditions of closing as described in the section titled “Concurrent Private Placements,” each of Salesforce Ventures LLC and Berkshire Hathaway Inc. will purchase $250 million of our Class A common stock from us in a private placement at a price per share equal to the initial public offering price. Based on an assumed initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, each of Salesforce Ventures LLC and Berkshire Hathaway Inc. would purchase 3,125,000 shares of our Class A common stock.
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We will receive the full proceeds and will not pay any underwriting discounts or commissions with respect to the shares that are sold in the private placements. The sale of the shares in the private placements are contingent upon the completion of this offering. The sale of these shares to Salesforce Ventures LLC and Berkshire Hathaway Inc. will not be registered in this offering and will be subject to market standoff agreements with us for a period of up to 365 days after the date of this prospectus and lock-up agreements with the underwriters. See the section titled “Shares Eligible for Future Sale—Lock-Up Arrangements” for additional information regarding such restrictions. We refer to these private placements as the concurrent private placements.
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In addition, Berkshire Hathaway Inc. has agreed to purchase 4,042,043 shares of our Class A common stock from one of our stockholders in a secondary transaction at a price per share equal to the initial public offering price that will close immediately subsequent to the closing of this offering.
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Class A common stock to be outstanding after this offering, the concurrent private placements, and the secondary transaction by one of our stockholders
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38,292,043 shares
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Class B common stock to be outstanding after this offering, the concurrent private placements, and the secondary transaction by one of our stockholders
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240,486,119 shares
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Total Class A common stock and Class B common stock to be outstanding after this offering, the concurrent private placements, and the secondary transaction by one of our stockholders
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278,778,162 shares
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Use of proceeds
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We estimate that our net proceeds from the sale of our Class A common stock in this offering and the concurrent private placements will be approximately $2.7 billion (or approximately $3.0 billion if the underwriters’ option to purchase additional shares of our Class A common stock from us is exercised in full), assuming an initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses.
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The principal purposes of this offering and the concurrent private placements are to increase our capitalization and financial flexibility and create a public market for our Class A common stock. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from this offering and the concurrent private placements. However, we currently intend to use the net proceeds we receive from this offering and the concurrent private placements for general corporate purposes, including working capital, operating expenses, and capital expenditures. We may also use a portion of the net proceeds to acquire complementary businesses, products, services, or technologies. However, we do not have agreements or commitments to enter into any acquisitions at this time. See the section titled “Use of Proceeds” for additional information.
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Voting rights
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We have two classes of common stock: Class A common stock and Class B common stock. Class A common stock is entitled to one vote per share and Class B common stock is entitled to ten votes per share.
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Holders of Class A common stock and Class B common stock will generally vote together as a single class, unless otherwise required by law or our amended and restated certificate of incorporation that will be in effect in connection with the closing of this offering. Once this offering, the concurrent private placements, and the secondary transaction are completed, based on the number of shares outstanding as of July 31, 2020, the holders of our outstanding Class B common stock will own approximately 86.3% of our outstanding shares and control approximately 98.4% of the voting power of our outstanding shares, and our executive officers, directors, and stockholders holding more than 5% of our outstanding shares, together with their affiliates, will beneficially own, in the aggregate, approximately 62.1% of our outstanding shares and control approximately 70.1% of the voting power of our outstanding shares.
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The holders of our outstanding Class B common stock will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of our directors and the approval of any change in control transaction. See the sections titled “Principal Stockholders” and “Description of Capital Stock” for additional information.
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Risk factors
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See the section titled “Risk Factors” and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our Class A common stock.
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Proposed New York Stock Exchange trading symbol
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“SNOW”
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The number of shares of Class A common stock and Class B common stock that will be outstanding after this offering , the concurrent private placements , and the secondary transaction is based on no shares of Class A common stock and 244,528,162 shares of Class B common stock outstanding as of July 31, 2020 , and excludes:
•32,336 shares of Class B common stock issuable upon the exercise of a warrant to purchase shares of Class B common stock outstanding as of July 31, 2020, with an exercise price of $0.74 per share;
•72,228,820 shares of Class B common stock issuable upon the exercise of stock options outstanding as of July 31, 2020 under our 2012 Equity Incentive Plan (2012 Plan) with a weighted-average exercise price of $6.70 per share;
• 1 36 , 000 shares of Class B common stock issuable upon the exercise of outstanding stock options granted after July 31, 2020 through September 4, 2020 under our 2012 Plan, with a weighted-average exercise price of $ 71.91 per share;
•4,851,121 shares of Class B common stock issuable upon the vesting and settlement of restricted stock units (RSUs) outstanding as of July 31, 2020, for which the performance-based vesting condition will be satisfied in connection with this offering, but for which the service-based vesting condition was not satisfied as of July 31, 2020 and 2,110 shares of Class B common stock issuable upon the vesting and settlement of RSUs outstanding as of July 31, 2020, for which the performance-based vesting condition will be satisfied in connection with this offering and for which the service-based vesting condition was satisfied as of July 31, 2020;
• 2,84 1,823 shares of Class B common stock issuable upon the vesting and settlement of outstanding RSUs granted after July 31, 2020 through September 4, 2020 , for which the performance-based vesting condition will be satisfied in connection with this offering;
• 18,299,095 shares of Class B common stock reserved for future issuance under our 2012 Plan as of July 31, 2020 , which shares will cease to be available for issuance at the time our 2020 Equity Incentive Plan (2020 Plan) becomes effective;
• 34,100,000 shares of Class A common stock reserved for future issuance under our 2020 Plan which will become effective in connection with this offering, as well as (i) any annual automatic evergreen increases in the number of shares of Class A common stock reserved for future issuance under our 2020 Plan and (ii) upon the expiration , forfeiture , cancella tion, or reacquisit ion of any shares of Class B common stock underlying outstanding stock awards granted under our 2012 Plan, an equal number of shares of Class A common stock , such number of shares not to exceed 78,816,888 ; and
• 5,700,000 shares of Class A common stock reserved for issuance under our 2020 Employee Stock Purchase Plan (ESPP) which will become effective in connection with this offering, as well as any annual automatic evergreen increases in the number of shares of Class A common stock reserved for future issuance under our ESPP.
In addition, unless we specifically state otherwise, the information in this prospectus reflects:
•a 2-for-1 forward stock split of our Class B common stock and convertible preferred stock effected on November 28, 2018;
•the filing of our amended and restated certificate of incorporation and the effectiveness of our amended and restated bylaws, each of which will occur in connection with the closing of this offering;
• the issuan ce of an aggregate of 6,250,000 shares of our Class A common stock to Salesforce Ventures LLC and Berkshire Hathaway Inc. u pon the closing of the concurrent private placements , at an assumed initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus ;
• the conversion of 4,042,043 shares of our Class B common stock in to Class A common stock in connection with the sale of such shares at the initial publi c offering price in a secondary transaction by one of our stockholders immediately subsequent to the closing of this offering ;
•the automatic conversion of 182,271,099 outstanding shares of convertible preferred stock into an equal number of shares of Class B common stock, which will occur immediately upon the closing of this offering;
•no exercise of the underwriters’ option to purchase additional shares of Class A common stock in this offering; and
•no exercise of the outstanding stock options or warrants, or the settlement of outstanding RSUs, subsequent to July 31, 2020.
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
We have derived the summary consolidated statements of operations data for the fiscal years ended January 31, 2019 and 2020 from our audited consolidated financial statements included elsewhere in this prospectus. We have derived the summary consolidated statements of operations data for the six months ended July 31, 2019 and 2020 and the summary consolidated balance sheet data as of July 31, 2020 from our unaudited consolidated financial statements included elsewhere in this prospectus. The unaudited consolidated financial data set forth below have been prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for the fair statement of such data. You should read the consolidated financial and other data set forth below in conjunction with our consolidated financial statements and the accompanying notes and the information in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this prospectus. Our historical and interim results are not necessarily indicative of the results to be expected for the full year or any other period in the future.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
96,666
|
|
|
$
|
264,748
|
|
|
$
|
104,044
|
|
|
$
|
241,960
|
|
|
Cost of revenue(1)
|
51,753
|
|
|
116,557
|
|
|
52,546
|
|
|
93,003
|
|
|
Gross profit
|
44,913
|
|
|
148,191
|
|
|
51,498
|
|
|
148,957
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing(1)
|
125,642
|
|
|
293,577
|
|
|
137,465
|
|
|
190,540
|
|
|
Research and development(1)
|
68,681
|
|
|
105,160
|
|
|
47,782
|
|
|
69,811
|
|
|
General and administrative(1)
|
36,055
|
|
|
107,542
|
|
|
49,095
|
|
|
62,692
|
|
|
Total operating expenses
|
230,378
|
|
|
506,279
|
|
|
234,342
|
|
|
323,043
|
|
|
Operating loss
|
(185,465)
|
|
|
(358,088)
|
|
|
(182,844)
|
|
|
(174,086)
|
|
|
Interest income
|
8,759
|
|
|
11,551
|
|
|
6,761
|
|
|
4,137
|
|
|
Other expense, net
|
(502)
|
|
|
(1,005)
|
|
|
(779)
|
|
|
(1,042)
|
|
|
Loss before income taxes
|
(177,208)
|
|
|
(347,542)
|
|
|
(176,862)
|
|
|
(170,991)
|
|
|
Provision for income taxes
|
820
|
|
|
993
|
|
|
362
|
|
|
287
|
|
|
Net loss
|
$
|
(178,028)
|
|
|
$
|
(348,535)
|
|
|
$
|
(177,224)
|
|
|
$
|
(171,278)
|
|
|
Net loss per share attributable to common stockholders, basic and diluted(2)
|
$
|
(4.67)
|
|
|
$
|
(7.77)
|
|
|
$
|
(4.25)
|
|
|
$
|
(3.01)
|
|
|
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted(2)
|
38,162,228
|
|
|
44,847,442
|
|
|
41,691,615
|
|
|
56,809,625
|
|
|
Pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)(2)
|
|
|
$
|
(1.63)
|
|
|
|
|
$
|
(0.72)
|
|
|
Weighted-average shares used to compute pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)(2)
|
|
|
214,327,427
|
|
|
|
|
238,369,506
|
|
________________
(1)Includes stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
Cost of revenue
|
$
|
1,895
|
|
|
$
|
3,650
|
|
|
$
|
1,850
|
|
|
$
|
2,281
|
|
|
Sales and marketing
|
15,647
|
|
|
20,757
|
|
|
10,626
|
|
|
10,233
|
|
|
Research and development
|
28,284
|
|
|
15,743
|
|
|
6,411
|
|
|
9,818
|
|
|
General and administrative
|
6,912
|
|
|
38,249
|
|
|
15,580
|
|
|
16,317
|
|
|
Total stock-based compensation expense
|
$
|
52,738
|
|
|
$
|
78,399
|
|
|
$
|
34,467
|
|
|
$
|
38,649
|
|
Stock-based compensation expense for the fiscal year ended January 31, 2019 included $30.3 million of compensation expense related to the amount paid in excess of the estimated fair value of common stock at the date of transaction in
connection with two issuer tender offers. See Note 11 to our consolidated financial statements included elsewhere in this prospectus for further details.
(2)See Note 2 and Note 13 to our consolidated financial statements included elsewhere in this prospectus for an explanation of the calculations of our net loss per share attributable to common stockholders, basic and diluted, pro forma net loss per share attributable to common stockholders, basic and diluted, and the weighted-average shares used to compute these amounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of July 31, 2020
|
|
|
|
|
|
|
Actual
|
|
Pro Forma(1)
|
|
Pro Forma As Adjusted(2)(3)
|
|
|
(in thousands)
|
|
|
|
|
|
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
Cash, cash equivalents, and short-term and long-term investments
|
$
|
886,820
|
|
|
$
|
886,820
|
|
|
$
|
3,551,452
|
|
|
Total assets
|
1,437,241
|
|
|
1,437,241
|
|
|
4,099,042
|
|
|
Working capital(4)
|
315,789
|
|
|
315,789
|
|
|
2,980,916
|
|
|
Redeemable convertible preferred stock
|
1,415,047
|
|
|
—
|
|
|
—
|
|
|
Additional paid-in capital
|
219,046
|
|
|
1,663,208
|
|
|
4,325,500
|
|
|
Accumulated deficit
|
(871,597)
|
|
|
(900,730)
|
|
|
(900,730)
|
|
|
Total stockholders’ (deficit) equity
|
(651,399)
|
|
|
763,648
|
|
|
3,425,944
|
|
________________
(1) The pro forma column reflects (i) the automatic conversion of all outstanding shares of our redeemable convertible preferred stock as of July 31, 2020 into an aggregate of 182,271,099 shares of Class B common stock, which will occur immediately upon the closing of this offering , (ii) stock - based compensation expense of approximately $29.1 million related to RSUs subject to service-based and performance-based vesting conditions, as further described in Note 2 to our consolidated financial statements included elsewhere in this prospectus , and (iii) the filing and effectiveness of our amended and restated certificate of incorporation .
(2) The pro forma as adjusted column gives effect to (i) the pro forma adjustments set forth above and (ii) the sale and issuance of 34,250,000 shares of our Class A common stock offered by us in this offerin g and the concurrent private placements , based upon an assumed initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the underwritin g discounts and commissions and estimated offering expenses .
(3) Each $1.00 increase or decrease in the assumed initial public offering price of $80.00 per share , which is the midpoint of the price range set forth on the cover page of this prospectus, after deduc t ing the underwriting discount s and estimated offering expenses, would increase or decrease, as applicable, our cash and cash equivalents, total assets, working capital, and total stockholders’ equity by approximately $27.1 million , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same , and after deducting the underwriting discounts and commissions. Similarly, each increase or decrease of 1,000,000 shares in the number of shares offered by us would increase or decrease, as applicable, our cash and cash equivalents, total assets, working capital, and total stockholders’ equity by approximately $77.4 million , assuming that the assumed initial public offering price of $80.00 , which is the midpoint of the price range set forth on the cover page of this prospectus, remains the sam e, and after deducting the underwriting discounts and commissions.
(4)Working capital is defined as current assets less current liabilities.
Key Business Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Product revenue(1) (in millions)
|
$
|
95.7
|
|
|
$
|
252.2
|
|
|
$
|
100.6
|
|
|
$
|
227.0
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
(unaudited)
|
|
|
|
(unaudited)
|
|
|
|
Remaining performance obligations(1) (in millions)
|
$
|
128.0
|
|
|
$
|
426.3
|
|
|
$
|
221.1
|
|
|
$
|
688.2
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
Total customers(1)
|
948
|
|
|
2,392
|
|
|
1,547
|
|
|
3,117
|
|
|
Net revenue retention rate(1)
|
180
|
%
|
|
169
|
%
|
|
223
|
%
|
|
158
|
%
|
|
Customers with trailing 12-month product revenue greater than $1 million(1)
|
14
|
|
|
41
|
|
|
22
|
|
|
56
|
|
________________
(1)See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metrics” included elsewhere in this prospectus for our definitions of these metrics.
RISK FACTORS
Investing in our Class A common stock involves a high degree of risk. You should consider and read carefully all of the risks and uncertainties described below, as well as other information included in this prospectus, including our consolidated financial statements and related notes appearing elsewhere in this prospectus, before making an investment decision. The risks described below are not the only ones we face. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition, or results of operations. In such case, the trading price of our Class A common stock could decline, and you may lose some or all of your original investment.
Risks Related to Our Business and Industry
We have a limited operating history, which makes it difficult to forecast our future results of operations.
We were founded in 2012 and first offered our platform for sale in 2014. Our revenue was $96.7 million and $264.7 million for the fiscal years ended January 31, 2019 and 2020, respectively, and $104.0 million and $242.0 million for the six months ended July 31, 2019 and 2020, respectively. However, you should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance. As a result of our limited operating history, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth. Our historical revenue growth should not be considered indicative of our future performance.
Further, in future periods, our revenue growth could slow or our revenue could decline for a number of reasons, including slowing demand for our platform, increased competition, changes to technology, a decrease in the growth of our overall market, or our failure, for any reason, to continue to take advantage of growth opportunities. We have also encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as the risks and uncertainties described below. If our assumptions regarding these risks and uncertainties and our future revenue growth are incorrect or change, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, and our business could suffer.
We may not have visibility into our financial position and results of operations.
Customers consume our platform by using compute, storage, and data transfer resources. Unlike a subscription-based business model, in which revenue is recognized ratably over the term of the subscription, we generally recognize revenue on consumption. Because our customers have flexibility in the timing of their consumption, we do not have the visibility into the timing of revenue recognition that a typical subscription-based software company has. There is a risk that customers will consume our platform more slowly than we expect, and our actual results may differ from our forecasts. Further, investors and securities analysts may not understand how our consumption-based business model differs from a subscription-based business model, and our business model may be compared to subscription-based business models. If our quarterly results of operations fall below the expectations of investors and securities analysts who follow our stock, the price of our Class A common stock could decline substantially, and we could face costly lawsuits, including securities class actions.
We have a history of operating losses and may not achieve or sustain profitability in the future.
We have experienced net losses in each period since inception. We generated net losses of $178.0 million and $348.5 million for the fiscal years ended January 31, 2019 and 2020, respectively, and $177.2 million and $171.3 million for the six months ended July 31, 2019 and 2020, respectively. As of January 31, 2020 and July 31, 2020, we had an accumulated deficit of $700.3 million and $871.6 million, respectively. We expect our costs and expenses to increase in future periods. In particular, we intend to continue to invest significant resources to further develop our platform and expand our sales, marketing, and professional services teams. In addition, our platform currently operates on public cloud infrastructure provided by Amazon Web Services (AWS), Microsoft Azure (Azure), and Google Cloud Platform (GCP), and our costs and gross margins are significantly influenced by the prices we are able to negotiate with these public cloud providers, which in certain cases are also our competitors. We will also incur increased general and administrative expenses associated with our growth, including costs related to internal
systems and operating as a public company. Our efforts to grow our business may be costlier than we expect, or our revenue growth rate may be slower than we expect, and we may not be able to increase our revenue enough to offset the increase in operating expenses resulting from these investments. If we are unable to achieve and sustain profitability, or if we are unable to achieve the revenue growth that we expect from these investments, the value of our business and Class A common stock may significantly decrease.
The markets in which we operate are highly competitive, and if we do not compete effectively, our business, financial condition, and results of operations could be harmed.
The markets in which we operate are rapidly evolving and highly competitive. As these markets continue to mature and new technologies and competitors enter such markets, we expect competition to intensify. Our current competitors include:
•large, well-established, public cloud providers that generally compete in all of our markets, including AWS, Azure, and GCP;
•less-established public and private cloud companies with products that compete in some of our markets;
•other established vendors of legacy database solutions or big data offerings; and
•new or emerging entrants seeking to develop competing technologies.
We compete based on various factors, including price, performance, breadth of use cases, multi-cloud availability, brand recognition and reputation, customer support, and differentiated capabilities, including ease of implementation and data migration, ease of administration and use, scalability and reliability, data governance, security, and compatibility with existing standards. Many of our competitors have substantially greater brand recognition, customer relationships, and financial, technical, and other resources than we do, and may be able to respond more effectively than us to new or changing opportunities, technologies, standards, customer requirements, and buying practices.
We currently only offer our platform on the public clouds provided by AWS, Azure, and GCP, which are also some of our primary competitors. Currently, a substantial majority of our business is run on the AWS public cloud. There is risk that one or more of these public cloud providers could use their respective control of their public clouds to embed innovations or privileged interoperating capabilities in competing products, bundle competing products, provide us unfavorable pricing, leverage its public cloud customer relationships to exclude us from opportunities, and treat us and our customers differently with respect to terms and conditions or regulatory requirements than it would treat its similarly situated customers. Further, they have the resources to acquire or partner with existing and emerging providers of competing technology and thereby accelerate adoption of those competing technologies. All of the foregoing could make it difficult or impossible for us to provide products and services that compete favorably with those of the public cloud providers.
For all of these reasons, competition may negatively impact our ability to maintain and grow consumption of our platform or put downward pressure on our prices and gross margins, any of which could materially harm our reputation, business, results of operations, and financial condition.
If we fail to innovate in response to changing customer needs and new technologies and other market requirements, our business, financial condition, and results of operations could be harmed.
We compete in markets that evolve rapidly. We believe that the pace of innovation will continue to accelerate as customers increasingly base their purchases of cloud data platforms on a broad range of factors, including performance and scale, markets addressed, types of data processed, ease of data ingestion, user experience, and data governance and regulatory compliance. We introduced data warehousing on our platform in 2014 as our core use case. In recent years, customers have begun using our platform for additional use cases, including data pipelines, data lakes, data application development, and data sharing and exchange. Our future success depends on our ability to continue to innovate and increase customer adoption of our platform in these and other areas. Further, the value of our platform to customers is increased to the extent they are able to use it for all of their data. We need to continue to invest in technologies, services, and partnerships that increase the types of data processed on our platform and the ease with which customers can ingest data into our platform. We must also continue to
enhance our data sharing and data exchange capabilities so customers can share their data with internal business units, customers, and other third parties. In addition, our platform requires third-party public cloud infrastructure to operate. Currently, we use public cloud offerings provided by AWS, Azure, and GCP. We will need to continue to innovate to optimize our offerings for these and other public clouds that our customers require, particularly as we expand internationally. Further, the markets in which we compete are subject to evolving industry standards and regulations, resulting in increasing data governance and compliance requirements for us and our customers. To the extent we expand further into the public sector and highly regulated industries, our platform may need to address additional requirements specific to those industries.
If we are unable to enhance our platform to keep pace with these rapidly evolving customer requirements, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, more conveniently, or more securely than our platform, our business, financial condition, and results of operations could be adversely affected.
If we or our third-party service providers experience a security breach or unauthorized parties otherwise obtain access to our customers’ data, our data, or our platform, our platform may be perceived as not being secure, our reputation may be harmed, demand for our platform may be reduced, and we may incur significant liabilities.
Our platform processes, stores, and transmits our customers’ proprietary and sensitive data, including personal information, protected health information, and financial data. Our platform is built to be available on the infrastructure of third-party public cloud providers such as AWS, Azure, and GCP. We also use third-party service providers and sub-processors to help us deliver services to our customers and their end-users. These vendors may store or process personal information, protected health information, or other confidential information of our employees, our partners, our customers, or our customers’ end-users. We collect such information from individuals located both in the United States and abroad and may store or process such information outside the country in which it was collected. While we, our third-party cloud providers, and our third-party processors have implemented security measures designed to protect against security breaches, these measures could fail or may be insufficient, resulting in the unauthorized disclosure, modification, misuse, destruction, or loss of our or our customers’ data or other sensitive information. Any security breach of our platform, our operational systems, physical facilities, or the systems of our third-party processors, or the perception that one has occurred, could result in litigation, indemnity obligations, regulatory enforcement actions, investigations, fines, penalties, mitigation and remediation costs, disputes, reputational harm, diversion of management’s attention, and other liabilities and damage to our business. Even though we do not control the security measures of third parties, we may be responsible for any breach of such measures or suffer reputational harm even where we do not have recourse to the third party that caused the breach. In addition, any failure by our vendors to comply with applicable law or regulations could result in proceedings against us by governmental entities or others.
Cyber-attacks, denial-of-service attacks, ransomware attacks, business email compromises, computer malware, viruses, and social engineering (including phishing) are prevalent in our industry and our customers’ industries. In addition, we may experience attacks, unavailable systems, unauthorized access or disclosure due to employee theft or misuse, denial-of-service attacks, sophisticated nation-state and nation-state supported actors, and advanced persistent threat intrusions. The techniques used to sabotage or to obtain unauthorized access to our platform, systems, networks, or physical facilities in which data is stored or through which data is transmitted change frequently, and we may be unable to implement adequate preventative measures or stop security breaches while they are occurring. We have previously been, and may in the future become, the target of cyber-attacks by third parties seeking unauthorized access to our or our customers’ data or to disrupt our operations or ability to provide our services.
We have contractual and legal obligations to notify relevant stakeholders of security breaches. Most jurisdictions have enacted laws requiring companies to notify individuals, regulatory authorities, and others of security breaches involving certain types of data. In addition, our agreements with certain customers and partners may require us to notify them in the event of a security breach. Such mandatory disclosures are costly, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our security measures, and require us to expend significant capital and other resources to respond to or alleviate problems caused by the actual or perceived security breach.
A security breach may cause us to breach customer contracts. Our agreements with certain customers may require us to use industry-standard or reasonable measures to safeguard sensitive personal information or confidential information. A security breach could lead to claims by our customers, their end-users, or other relevant stakeholders that we have failed to comply with such legal or contractual obligations. As a result, we could be subject to legal action or our customers could end their relationships with us. There can be no assurance that any limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages.
Litigation resulting from security breaches may adversely affect our business. Unauthorized access to our platform, systems, networks, or physical facilities could result in litigation with our customers, our customers’ end-users, or other relevant stakeholders. These proceedings could force us to spend money in defense or settlement, divert management’s time and attention, increase our costs of doing business, or adversely affect our reputation. We could be required to fundamentally change our business activities and practices or modify our platform capabilities in response to such litigation, which could have an adverse effect on our business. If a security breach were to occur, and the confidentiality, integrity or availability of our data or the data of our partners, our customers or our customers’ end-users was disrupted, we could incur significant liability, or our platform, systems, or networks may be perceived as less desirable, which could negatively affect our business and damage our reputation.
If we fail to detect or remediate a security breach in a timely manner, or a breach otherwise affects a large amount of data of one or more customers, or if we suffer a cyber-attack that impacts our ability to operate our platform, we may suffer material damage to our reputation, business, financial condition, and results of operations. Further, our insurance coverage may not be adequate for data security, indemnification obligations, or other liabilities. In addition, we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim. Our risks are likely to increase as we continue to expand our platform, grow our customer base, and process, store, and transmit increasingly large amounts of proprietary and sensitive data.
We could suffer disruptions, outages, defects, and other performance and quality problems with our platform or with the public cloud and internet infrastructure on which it relies.
Our business depends on our platform to be available without disruption. We have experienced, and may in the future experience, disruptions, outages, defects, and other performance and quality problems with our platform. We have also experienced, and may in the future experience, disruptions, outages, defects, and other performance and quality problems with the public cloud and internet infrastructure on which our platform relies. These problems can be caused by a variety of factors, including introductions of new functionality, vulnerabilities and defects in proprietary and open source software, human error or misconduct, capacity constraints, design limitations, or denial of service attacks or other security-related incidents.
Further, if our contractual and other business relationships with our public cloud providers are terminated, suspended, or suffer a material change to which we are unable to adapt, such as the elimination of services or features on which we depend, we could be unable to provide our platform and could experience significant delays and incur additional expense in transitioning customers to a different public cloud provider.
Any disruptions, outages, defects, and other performance and quality problems with our platform or with the public cloud and internet infrastructure on which it relies, or any material change in our contractual and other business relationships with our public cloud providers, could result in reduced use of our platform, increased expenses, including service credit obligations, and harm to our brand and reputation, any of which could have a material adverse effect on our business, financial condition, and results of operations.
We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors with respect to our results of operations, our stock price could decline.
Our results of operations have fluctuated in the past and are expected to fluctuate in the future due to a variety of factors, many of which are outside of our control. As a result, our past results may not be
indicative of our future performance. In addition to the other risks described herein, factors that may affect our results of operations include the following:
•fluctuations in demand for or pricing of our platform;
•fluctuations in usage of our platform;
•our ability to attract new customers;
•our ability to retain existing customers;
•customer expansion rates;
•timing, amount, and cost of our investments to expand the capacity of our public cloud providers;
•seasonality;
•investments in new features and functionality;
•fluctuations in customer consumption resulting from our introduction of new features or capabilities to our systems that may impact customer consumption;
•the timing of our customers’ purchases;
•the speed with which customers are able to migrate data onto our platform after purchasing capacity;
•fluctuations or delays in purchasing decisions in anticipation of new products or enhancements by us or our competitors;
•changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions;
•our ability to control costs, including our operating expenses;
•the amount and timing of payment for operating expenses, particularly research and development and sales and marketing expenses, including commissions;
•the amount and timing of non-cash expenses, including stock-based compensation, goodwill impairments, and other non-cash charges;
•the amount and timing of costs associated with recruiting, training, and integrating new employees and retaining and motivating existing employees;
•the effects of acquisitions and their integration;
•general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate;
•health epidemics or pandemics, such as the coronavirus outbreak (COVID-19);
•the impact of new accounting pronouncements;
•changes in regulatory or legal environments that may cause us to incur, among other things, expenses associated with compliance;
•the overall tax rate for our business, which may be affected by the mix of income we earn in the United States and in jurisdictions with comparatively lower tax rates, the effects of stock-based compensation, and the effects of changes in our business;
•the impact of changes in tax laws or judicial or regulatory interpretations of tax laws, which are recorded in the period such laws are enacted or interpretations are issued and may significantly affect the effective tax rate of that period;
•fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies;
•fluctuations in the market values of our portfolio investments and in interest rates;
•changes in the competitive dynamics of our market, including consolidation among competitors or customers; and
•significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our platform.
Any of these and other factors, or the cumulative effect of some of these factors, may cause our results of operations to vary significantly. If our quarterly results of operations fall below the expectations of investors and securities analysts who follow our stock, the price of our Class A common stock could decline substantially, and we could face costly lawsuits, including securities class actions.
Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products and platform.
We must expand our sales and marketing organization to increase our sales to new and existing customers. For the fiscal years ended January 31, 2019 and 2020, Capital One Services, LLC (an affiliate of Capital One Securities, Inc, one of the underwriters in this offering) accounted for approximately 17% and 11% of our revenue, respectively, and while we expect our revenue from this customer to account for less than 10% of our revenue during the fiscal year ending January 31, 2021, a significant decrease in revenue from this customer could harm our business and results of operations. We plan to continue expanding our direct sales force, both domestically and internationally, particularly our direct enterprise sales organization focused on sales to the world’s largest organizations. We also plan to dedicate significant resources to sales and marketing programs that are focused on these large organizations. Once a new customer begins using our platform, our sales team will need to continue to focus on expanding consumption with that customer. All of these efforts will require us to invest significant financial and other resources, including in industries and sales channels in which we have limited experience to date. Our business and results of operations will be harmed if our sales and marketing efforts generate increases in revenue that are smaller than anticipated. We may not achieve anticipated revenue growth from expanding our sales force if we are unable to hire, develop, integrate, and retain talented and effective sales personnel, if our new and existing sales personnel are unable to achieve desired productivity levels in a reasonable period of time, or if our sales and marketing programs are not effective.
Sales efforts to large customers involve risks that may not be present or that are present to a lesser extent with respect to sales to smaller organizations.
Sales to large customers involve risks that may not be present or that are present to a lesser extent with sales to smaller organizations, such as longer sales cycles, more complex customer requirements, substantial upfront sales costs, and less predictability in completing some of our sales. For example, large customers may require considerable time to evaluate and test our platform prior to making a purchase decision and placing an order. A number of factors influence the length and variability of our sales cycle, including the need to educate potential customers about the uses and benefits of our platform, the discretionary nature of purchasing and budget cycles, and the competitive nature of evaluation and purchasing approval processes. As a result, the length of our sales cycle, from identification of the opportunity to deal closure, may vary significantly from customer to customer, with sales to large enterprises typically taking longer to complete. Moreover, large customers often begin to deploy our products on a limited basis but nevertheless demand implementation services and negotiate pricing discounts, which increase our upfront investment in the sales effort with no guarantee that sales to these customers will justify our substantial upfront investment. If we fail to effectively manage these risks associated with sales cycles and sales to large customers, our business, financial condition, and results of operations may be affected.
The COVID-19 pandemic could have an adverse impact on our business, operations, and the markets and communities in which we, our partners, and customers operate.
The potential impact and duration of the COVID-19 pandemic on the global economy and our business are difficult to assess or predict. Potential impacts include:
•Our customer prospects and our existing customers may experience slowdowns in their businesses, which in turn may result in reduced demand for our platform, lengthening of sales cycles, loss of customers, and difficulties in collections.
•Our employees are working from home significantly more frequently than they have historically, which may result in decreased employee productivity and morale with increased unwanted employee attrition.
•We continue to incur fixed costs, particularly for real estate, and are deriving reduced or no benefit from those costs.
•We may continue to experience disruptions to our growth planning, such as for facilities and international expansion.
•We anticipate incurring costs in returning to work from our facilities around the world, including changes to the workplace, such as space planning, food service, and amenities.
•Our operating lease right-of-use assets may be impaired due to potential loss of sublease income.
•We may be subject to legal liability for safe workplace claims.
•Our critical vendors could go out of business.
•Our in-person marketing events, including customer user conferences, have been canceled and we may continue to experience prolonged delays in our ability to reschedule or conduct in-person marketing events and other sales and marketing activities.
•Our marketing, sales, professional services, and support organizations are accustomed to extensive face-to-face customer and partner interactions, and conducting business virtually is unproven.
Any of the foregoing could adversely affect our business, financial condition, and results of operations.
Complying with evolving privacy and other data related laws and requirements may be expensive and force us to make adverse changes to our business, and failure to comply with such laws and requirements could result in substantial harm to our business.
Laws and regulations governing data privacy and protection, the use of the Internet as a commercial medium, the use of data in artificial intelligence and machine learning, and data sovereignty requirements are rapidly evolving, extensive, complex, and include inconsistencies and uncertainties. Examples of recent and anticipated developments that have or could impact our business include the following:
•The General Data Protection Regulation (GDPR) took effect in May 2018 and established requirements applicable to the handling of personal information of residents of the European Union (EU).
•The EU has proposed the Regulation on Privacy and Electronic Communications (ePrivacy Regulation), which, if adopted, would impose new obligations on the use of personal information in the context of electronic communications, particularly with respect to online tracking technologies and direct marketing.
•In January 2020, Britain formally left the EU. The United Kingdom’s withdrawal from the EU is commonly referred to as “Brexit.”
•We are following developments in 2020 regarding the frameworks that address the transfer of personal information outside of the EU, including the Privacy Shield framework and the standard contractual clauses.
•In January 2020, the California Consumer Privacy Act (CCPA) took effect, providing California residents increased privacy rights and protections, including the ability to opt out of sales of their personal information. The CCPA may increase our compliance costs and exposure to liability. Other U.S. states are considering adopting similar laws.
•Both U.S. and non-U.S. governments are considering regulating artificial intelligence and machine learning.
•The certifications we maintain and standards we comply with, including the U.S. Federal Risk and Authorization Management Program, PCI-DSS, ISO/IEC 27001, among others, are becoming more stringent.
These and other similar legal and regulatory developments could contribute to legal and economic uncertainty, affect how we design, market, sell, and operate our platform, how our customers process and share data, how we process and use data, and how we transfer personal data from one jurisdiction to another, which could negatively impact demand for our platform. We may incur substantial costs to comply with such laws and regulations, to meet the demands of our customers relating to their own compliance with applicable laws and regulations, and to establish and maintain internal policies, self-certifications, and third-party certifications supporting our compliance programs. Our customers may delegate their GDPR compliance or other privacy law obligations to us via contract, and we may otherwise be required to expend resources to assist our customers with such compliance obligations. In addition, any actual or perceived non-compliance with applicable laws, regulations, policies, and certifications could result in proceedings, investigations, or claims against us by regulatory authorities, customers, or others, leading to reputational harm, significant fines, litigation costs, and damages. For example, if regulators assert that we have failed to comply with the GDPR, we may be subject to fines of up to EUR 20 million or 4% of our worldwide annual revenue, whichever is greater, as well as potential data processing restrictions for a violation of certain GDPR requirements. All of these impacts could have a material adverse effect on our business, financial condition, and results of operations.
We publish privacy policies and other documentation regarding our collection, processing, use, and disclosure of personal information, credit card information, or other confidential information. Although we endeavor to comply with our published policies, certifications, and documentation, we may at times fail to do so or may be perceived to have failed to do so. Moreover, despite our efforts, we may not be successful in achieving compliance if our employees or vendors fail to comply with our published policies, certifications, and documentation. Such failures can subject us to potential international, local, state, and federal action if they are found to be deceptive, unfair, or misrepresentative of our actual practices.
If we are unable to successfully manage the growth of our professional services business and improve our profit margin from these services, our operating results will be harmed.
Our professional services business, which performs implementation services for our customers, has grown as our product revenue has grown. We believe our investment in professional services facilitates the adoption of our platform, especially with large enterprises. As a result, our sales efforts have focused on helping our customers realize the value of our platform rather than on the profitability of our professional services business. In the future, we intend to price our professional services based on the anticipated cost of those services and, as a result, expect to improve the gross profit percentage of our professional services business. If we are unable to manage the growth of our professional services business and improve our profit margin from these services, our operating results, including our profit margins, will be harmed.
Our current management team is new, and if we lose key members of our management team or are unable to attract and retain executives and employees we need to support our operations and growth, our business and future growth prospects may be harmed.
Many of our executive officers and other members of our management team have been with us for a short period of time, including Frank Slootman, our Chairman and Chief Executive Officer, who joined us in April 2019, and Michael P. Scarpelli, our Chief Financial Officer, who joined us in August 2019. Our
success depends largely upon the continued services of these and other executive officers, as well as our other key employees in the areas of research and development and sales and marketing.
From time to time, there may be changes in our executive management team or other key employees resulting from the hiring or departure of these personnel. Our executive officers and other key employees are employed on an at-will basis, which means that these personnel could terminate their employment with us at any time. The loss of one or more of our executive officers, or the failure by our executive team to effectively work with our employees and lead our company, could harm our business.
In addition, to execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense, especially for engineers experienced in designing and developing cloud-based data platform products, experienced sales professionals, and expert customer support personnel. We also are dependent on the continued service of our existing software engineers because of the sophistication of our platform. While the market for such talented personnel is particularly competitive in the San Francisco Bay Area, where our headquarters is located, it is also competitive in other markets where we maintain operations.
If we are unable to attract such personnel in cities where we are located, we may need to hire in other locations, which may add to the complexity and costs of our business operations. From time to time, we have experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached their legal obligations, resulting in a diversion of our time and resources. In addition, prospective and existing employees often consider the value of the equity awards they receive in connection with their employment. If the perceived value of our equity awards declines, experiences significant volatility, or increases such that prospective employees believe there is limited upside to the value of our equity awards, it may adversely affect our ability to recruit and retain key employees. We also believe our culture has been a key contributor to our success to date and that the critical nature of the platform that we provide promotes a sense of greater purpose and fulfillment in our employees. Any failure to preserve our culture could negatively affect our ability to retain and recruit personnel. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects would be harmed.
The estimates of market opportunity and forecasts of market growth included in this prospectus may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.
Market opportunity estimates and growth forecasts included in this prospectus, including those we have generated ourselves, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of addressable users or companies covered by our market opportunity estimates will purchase our platform or generate any particular level of revenue for us. Any expansion in our markets depends on a number of factors, including the cost, performance, and perceived value associated with our platform and the products of our competitors. Even if the markets in which we compete achieve the forecasted growth, our business could fail to grow at similar rates, if at all.
If the availability of our platform does not meet our service-level commitments to our customers, our current and future revenue may be negatively impacted.
We typically commit to our customers that our platform will maintain a minimum service-level of availability. If we are unable to meet these commitments, we may be obligated to provide customers with additional capacity, which could significantly affect our revenue. We rely on public cloud providers, such as AWS, Azure, and GCP, and any availability interruption in the public cloud could result in us not meeting our service-level commitments to our customers. In some cases, we may not have a contractual right with our public cloud providers that compensates us for any losses due to availability interruptions in the public cloud. Further, any failure to meet our service-level commitments could damage our reputation and adoption of our platform, and we could face loss of revenue from reduced future consumption of our platform. Any service-level failures could adversely affect our business, financial condition, and results of operations.
We agree to indemnify customers and other third parties, which exposes us to substantial potential liability.
Our contracts with customers, investors, and other third parties may include indemnification provisions under which we agree to defend and indemnify them against claims and losses arising from alleged infringement, misappropriation, or other violation of intellectual property rights, data protection violations, breaches of representations and warranties, damage to property or persons, or other liabilities arising from our products or such contracts. Although we attempt to limit our indemnity obligations, an event triggering our indemnity obligations could give rise to multiple claims involving multiple customers or other third parties. We may be liable for up to the full amount of the indemnified claims, which could result in substantial liability or material disruption to our business or could negatively impact our relationships with customers or other third parties, reduce demand for our products, and adversely affect our business, financial condition, and results of operations.
Acquisitions, strategic investments, partnerships, or alliances could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our business, financial condition, and results of operations.
We have in the past and may in the future seek to acquire or invest in businesses, joint ventures, and platform technologies that we believe could complement or expand our platform, enhance our technology, or otherwise offer growth opportunities. Further, our anticipated proceeds from this offering increase the likelihood that we will devote resources to exploring larger and more complex acquisitions and investments than we have previously attempted. Any such acquisitions or investments may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable opportunities, whether or not the transactions are completed, and may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products, personnel, or operations of any acquired companies, particularly if the key personnel of an acquired company choose not to work for us, their software is not easily adapted to work with our platform, or we have difficulty retaining the customers of any acquired business due to changes in ownership, management, or otherwise. Any such transactions that we are able to complete may not result in the synergies or other benefits we expect to achieve, which could result in substantial impairment charges. These transactions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our results of operations.
Seasonality may cause fluctuations in our remaining performance obligations.
Historically, we have received a higher volume of orders from new and existing customers in the fourth fiscal quarter of each year. We believe that this results from the procurement, budgeting, and deployment cycles of many of our customers, particularly our large enterprise customers. This seasonality has an impact on our remaining performance obligations (RPO). We expect this seasonality to become more pronounced as we continue to target large enterprise customers.
We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition, and results of operations.
We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended (the FCPA), U.S. domestic bribery laws, the UK Bribery Act 2010, and other anti-corruption and anti-money laundering laws in the countries in which we conduct business. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees, and their third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. As we increase our international sales and business and sales to the public sector, we may engage with business partners and third-party intermediaries to market our products and to obtain necessary permits, licenses, and other regulatory approvals. In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.
While we have policies and procedures to address compliance with such laws, there is a risk that our employees and agents will take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. As we expand internationally, our risks under these laws may increase.
Detecting, investigating, and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources, and attention from senior management. In addition, noncompliance with anti-corruption, anti-bribery, or anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, other civil or criminal penalties or injunctions, suspension or debarment from contracting with certain persons, reputational harm, adverse media coverage, and other collateral consequences. If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal proceeding, our business, financial condition, and results of operations could be harmed.
We do business with federal, state, and local governments and agencies, and heavily regulated U.S. and foreign organizations; as a result, we face risks related to the procurement process, budget decisions driven by statutory and regulatory determinations, termination of contracts, and compliance with government contracting requirements.
We provide our platform to the U.S. government, state and local governments, and heavily regulated organizations directly and through our partners. We have made, and may continue to make, significant investments to support future sales opportunities in the federal, state, and local government sectors. This includes obtaining the following additional cloud security certifications: HHS CMS Acceptable Risk Safeguards (ARS) 3.1 and the U.S. Department of Defense Impact Level 2 in the Security Requirements Guide for cloud computing by the Defense Information Systems Agency. However, government certification requirements may change, or we may be unable to achieve or sustain one or more government certifications, including those mentioned above. As a result, our ability to sell into the government sector could be restricted until we obtain such certifications.
A substantial majority of our sales to date to government entities have been made indirectly through our distribution and reseller partners. Doing business with government entities presents a variety of risks. The procurement process for governments and their agencies is highly competitive, time-consuming, and may, in certain circumstances, be subject to political influence. We incur significant up-front time and expense, which subjects us to additional compliance risks and costs, without any assurance that we (or a third-party distributor or reseller) will win a contract. Beyond this, demand for our platform may be adversely impacted by public sector budgetary cycles, and funding availability that in any given fiscal cycle may be reduced or delayed, including in connection with an extended federal government shutdown. Further, if we are or our partners are successful in receiving a bid award, that award could be challenged by one or more competitive bidders. Bid protests may result in an increase in expenses related to obtaining contract awards or an unfavorable modification or loss of an award. In the event a bid protest is unsuccessful, the resulting delay in the startup and funding of the work under these contracts may cause our actual results to differ materially and adversely from those anticipated. As a result of these lengthy and uncertain sales cycles, it is difficult for us to predict the timing of entering into customer agreements with government entities.
In addition, public sector customers may have contractual, statutory, or regulatory rights to terminate current contracts with us or our third-party distributors or resellers for convenience or due to a default, though such risk may be assumed by such third-party distributors or resellers. If a contract is terminated for convenience, we may only be able to collect fees for platform consumption prior to termination and settlement expenses. If a contract is terminated due to a default, we may be liable for excess costs incurred by the customer for procuring alternative products or services or be precluded from doing further business with government entities. Further, entities providing services to governments are required to comply with a variety of complex laws, regulations, and contractual provisions relating to the formation, administration, or performance of government contracts that give public sector customers substantial rights and remedies, many of which are not typically found in commercial contracts. These may include rights with respect to price protection, the accuracy of information provided to the government, contractor compliance with supplier diversity policies, and other terms that are particular to government contracts, such as termination rights. These rules may apply to us or third-party resellers or distributors whose practices we may not control. Such parties’ non-compliance could result in repercussions with respect to contractual and customer satisfaction issues.
In addition, federal, state, and local governments routinely investigate and audit contractors for compliance with these requirements. If, as a result of an audit, it is determined that we have failed to comply with these requirements, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, costs associated with the triggering of price reduction clauses, fines, and suspensions or debarment from future government business, and we may suffer reputational harm.
Further, we are increasingly doing business in heavily regulated industries, such as the financial services and health care industries. Current and prospective customers, such as those in these industries, may be required to comply with more stringent regulations in connection with subscribing to and implementing our services or particular regulations regarding third-party vendors that may be interpreted differently by different customers. In addition, regulatory agencies may impose requirements toward third-party vendors generally, or our company in particular, that we may not be able to, or may not choose to, meet. In addition, customers in these heavily regulated areas often have a right to conduct audits of our systems, products, and practices. In the event that one or more customers determine that some aspect of our business does not meet regulatory requirements, we may be limited in our ability to continue or expand our business.
Our customers also include a number of non-U.S. governments, to which similar procurement, budgetary, contract, and audit risks of U.S. government contracting also apply, particularly in certain emerging markets where our customer base is less established. In addition, compliance with complex regulations and contracting provisions in a variety of jurisdictions can be expensive and consume significant management resources. In certain jurisdictions, our ability to win business may be constrained by political and other factors unrelated to our competitive position in the market. Each of these difficulties could materially adversely affect our business and results of operations.
Our intellectual property rights may not protect our business or provide us with a competitive advantage.
To be successful, we must protect our technology and brand in the United States and other jurisdictions through trademarks, trade secrets, patents, copyrights, service marks, invention assignments, contractual restrictions, and other intellectual property rights and confidentiality procedures. Despite our efforts to implement these protections, they may not protect our business or provide us with a competitive advantage for a variety of reasons, including:
•the failure by us to obtain patents and other intellectual property rights for important innovations or maintain appropriate confidentiality and other protective measures to establish and maintain our trade secrets;
•uncertainty in, and evolution of, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights;
•potential invalidation of our intellectual property rights through administrative processes or litigation;
•any inability by us to detect infringement or other misappropriation of our intellectual property rights by third parties; and
•other practical, resource, or business limitations on our ability to enforce our rights.
Further, the laws of certain foreign countries, particularly certain developing countries, do not provide the same level of protection of corporate proprietary information and assets, such as intellectual property, trademarks, trade secrets, know-how, and records, as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property or proprietary rights abroad. Additionally, we may also be exposed to material risks of theft or unauthorized reverse engineering of our proprietary information and other intellectual property, including technical data, data sets, or other sensitive information. Our efforts to enforce our intellectual property rights in such foreign countries may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop, which could have a material adverse effect on our business, financial condition, and results of operations. Moreover, if we are unable to prevent the disclosure of our trade secrets to third
parties, or if our competitors independently develop any of our trade secrets, we may not be able to establish or maintain a competitive advantage in our market, which could seriously harm our business.
Litigation may be necessary to enforce our intellectual property or proprietary rights, protect our trade secrets, or determine the validity and scope of proprietary rights claimed by others. Any litigation, whether or not resolved in our favor, could result in significant expense to us, divert the efforts of our technical and management personnel, and result in counterclaims with respect to infringement of intellectual property rights by us. If we are unable to prevent third parties from infringing upon or misappropriating our intellectual property or are required to incur substantial expenses defending our intellectual property rights, our business, financial condition, and results of operations may be materially adversely affected.
We may become subject to intellectual property disputes, which are costly and may subject us to significant liability and increased costs of doing business.
We compete in markets where there are a large number of patents, copyrights, trademarks, trade secrets, and other intellectual and proprietary rights, as well as disputes regarding infringement of these rights. For example, on July 24, 2020, Yeti Data, Inc. (Yeti Data) filed a lawsuit against us in the U.S. District Court for the Central District of California alleging trademark infringement and other ancillary claims. Yeti Data is seeking a permanent injunction against infringement, damages, and attorneys’ fees. While we intend to defend this lawsuit vigorously and believe that we have valid defenses to these claims, there can be no assurance that a favorable outcome will be obtained.
In addition, many of the holders of patents, copyrights, trademarks, trade secrets, and other intellectual and proprietary rights have extensive intellectual property portfolios and greater resources than we do to enforce their rights. As compared to our large competitors, our patent portfolio is relatively undeveloped and may not provide a material deterrent to such assertions or provide us with a strong basis to counterclaim or negotiate settlements. Further, to the extent assertions are made against us by entities that hold patents but are not operating companies, our patent portfolio may not provide deterrence because such entities are not concerned with counterclaims.
Any intellectual property litigation to which we become a party may require us to do one or more of the following:
•cease selling, licensing, or using products or features that incorporate the intellectual property rights that we allegedly infringe, misappropriate, or violate;
•make substantial payments for legal fees, settlement payments, or other costs or damages, including indemnification of third parties;
•obtain a license or enter into a royalty agreement, either of which may not be available on reasonable terms or at all, in order to obtain the right to sell or use the relevant intellectual property; or
•redesign the allegedly infringing products to avoid infringement, misappropriation, or violation, which could be costly, time-consuming, or impossible.
Intellectual property litigation is typically complex, time consuming, and expensive to resolve and would divert the time and attention of our management and technical personnel. It may also result in adverse publicity, which could harm our reputation and ability to attract or retain customers. As we grow, we may experience a heightened risk of allegations of intellectual property infringement. An adverse result in any litigation claims against us could have a material adverse effect on our business, financial condition, and results of operations.
Any future litigation against us could be costly and time-consuming to defend.
We may become subject to legal proceedings and claims that arise in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes or employment claims made by our current or former employees. Litigation might result in substantial costs and may divert management’s attention and resources, which might seriously harm our business, financial condition, and results of operations. Insurance might not cover such claims, might not provide sufficient payments to cover all the costs to resolve one or more such claims, and might not continue to be available on terms acceptable to us (including premium increases or the imposition of large deductible
or co-insurance requirements). A claim brought against us that is uninsured or underinsured could result in unanticipated costs, potentially harming our business, financial position, and results of operations. In addition, we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.
If we use open source software inconsistent with our policies and procedures or the license terms applicable to such software, we could be subject to legal expenses, damages, or costly remediation or disruption to our business.
We use open source software in our platform. While we have policies and procedures in place governing the use of open source software, there is a risk that we incorporate open source software with onerous licensing terms, including the obligation to make our source code available for others to use or modify without compensation to us. If we receive an allegation that we have violated an open source license, we may incur significant legal expenses, be subject to damages, be required to redesign our product to remove the open source software, or be required to comply with onerous license restrictions, all of which could have a material impact on our business. Even in the absence of a claim, if we discover the use of open source software inconsistent with our policies, we could expend significant time and resources to replace the open source software or obtain a commercial license, if available. All of these risks are heightened by the fact that the ownership of open source software can be uncertain, leading to litigation, and many of the licenses applicable to open source software have not been interpreted by courts, and these licenses could be construed to impose unanticipated conditions or restrictions on our ability to commercialize our products. Any use of open source software inconsistent with our policies or licensing terms could harm our business and financial position.
We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.
Our platform is subject to U.S. export controls, including the U.S. Export Administration Regulations, and we incorporate encryption technology into our platform. This encryption technology may be exported outside of the United States only with the required export authorizations, including by license, a license exception, or other appropriate government authorizations, including the filing of an encryption classification request or self-classification report.
Obtaining the necessary export license or other authorization for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities. Furthermore, our activities are subject to U.S. economic sanctions laws and regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control that prohibit the sale or supply of most products and services to embargoed jurisdictions or sanctioned parties. Violations of U.S. sanctions or export control regulations can result in significant fines or penalties and possible incarceration for responsible employees and managers.
If our channel partners fail to obtain appropriate import, export, or re-export licenses or permits, we may also be adversely affected through reputational harm, as well as other negative consequences, including government investigations and penalties.
Also, various countries, in addition to the United States, regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to distribute our platform in those countries. Changes in our platform or future changes in export and import regulations may create delays in the introduction of our platform in international markets, prevent our customers with international operations from using our platform globally or, in some cases, prevent the export or import of our platform to certain countries, governments, or persons altogether. From time to time, various governmental agencies have proposed additional regulation of encryption technology. Any change in export or import regulations, economic sanctions, or related legislation, increased export and import controls, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform by, or in our decreased ability to export or sell our platform to, existing or potential customers with international operations. Any decreased use of our platform or limitation on our ability to export or sell our platform would adversely affect our business, financial condition, and results of operations.
Unfavorable conditions in our industry or the global economy, or reductions in cloud spending, could limit our ability to grow our business and negatively affect our results of operations.
Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our customers and potential customers. Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, international trade relations, pandemic (such as the COVID-19 pandemic), political turmoil, natural catastrophes, warfare, and terrorist attacks on the United States, Europe, the Asia Pacific region, Japan, or elsewhere, could cause a decrease in business investments, including spending on cloud technologies, and negatively affect the growth of our business. Competitors, many of whom are larger and have greater financial resources than we do, may respond to challenging market conditions by lowering prices in an attempt to attract our customers. We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within any particular industry.
Our current operations are international in scope, and we plan further geographic expansion, creating a variety of operational challenges.
A component of our growth strategy involves the further expansion of our operations and customer base internationally. Customer accounts outside the United States generated 12% of our revenue for the fiscal year ended January 31, 2020. We are continuing to adapt to and develop strategies to address international markets, but there is no guarantee that such efforts will have the desired effect. For example, we anticipate that we will need to establish relationships with new partners in order to expand into certain countries, and if we fail to identify, establish, and maintain such relationships, we may be unable to execute on our expansion plans. We expect that our international activities will continue to grow for the foreseeable future as we continue to pursue opportunities in existing and new international markets, which will require significant dedication of management attention and financial resources.
Our current and future international business and operations involve a variety of risks, including:
•slower than anticipated public cloud adoption by international businesses;
•changes in a specific country’s or region’s political, economic, or legal and regulatory environment, including Brexit, pandemics, tariffs, trade wars, or long-term environmental risks;
•the need to adapt and localize our platform for specific countries;
•greater difficulty collecting accounts receivable and longer payment cycles;
•unexpected changes in trade relations, regulations, or laws;
•new, evolving, and more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe;
•differing and potentially more onerous labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations;
•challenges inherent in efficiently managing, and the increased costs associated with, an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs that are specific to each jurisdiction;
•difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems;
•increased travel, real estate, infrastructure, and legal compliance costs associated with international operations;
•currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we chose to do so in the future;
•limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries;
•laws and business practices favoring local competitors or general market preferences for local vendors;
•limited or insufficient intellectual property protection or difficulties obtaining, maintaining, protecting, or enforcing our intellectual property rights, including our trademarks and patents;
•political instability or terrorist activities;
•COVID-19 or any other pandemics or epidemics that could result in decreased economic activity in certain markets, decreased use of our products and services, or in our decreased ability to import, export, or sell our products and services to existing or new customers in international markets;
•exposure to liabilities under anti-corruption and anti-money laundering laws, including the FCPA, U.S. bribery laws, the UK Bribery Act, and similar laws and regulations in other jurisdictions;
•burdens of complying with laws and regulations related to taxation; and
•regulations, adverse tax burdens, and foreign exchange controls that could make it difficult to repatriate earnings and cash.
If we invest substantial time and resources to further expand our international operations and are unable to do so successfully and in a timely manner, our business and results of operations will suffer.
We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all.
We have funded our operations since inception primarily through equity financings and payments received from our customers. We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments to support our business, which may require us to engage in equity or debt financings to secure additional funds. Additional financing may not be available on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, operating results, and financial condition. If we incur debt, the debt holders would have rights senior to holders of common stock to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. Furthermore, if we issue additional equity securities, stockholders will experience dilution, and the new equity securities could have rights senior to those of our common stock. Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities. As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our common stock and diluting their interests.
We are exposed to fluctuations in currency exchange rates and interest rates, which could negatively affect our results of operations and our ability to invest and hold our cash.
Our sales are denominated in U.S. dollars, and therefore, our revenue is not subject to foreign currency risk. However, a strengthening of the U.S. dollar could increase the real cost of our platform to our customers outside of the United States, which could adversely affect our results of operations. In addition, an increasing portion of our operating expenses is incurred outside the United States. These operating expenses are denominated in foreign currencies and are subject to fluctuations due to changes in foreign currency exchange rates. In the future, we expect to have sales denominated in currencies other than the U.S. dollar, which will subject our revenue to foreign currency risk. If we are not able to successfully hedge against the risks associated with currency fluctuations, our results of operations could be adversely affected. In addition, we are exposed to fluctuations in interest rates, which may result in a negative interest rate environment, in which interest rates drop below zero. In such a zero interest rate environment, any cash that we may hold with financial institutions, including cash proceeds received from this offering, will yield a storage charge instead of earning interest income, and encourages us to spend
our cash or make high-risk investments, all of which could adversely affect our financial position, results of operations, and cash flows.
Our international operations may subject us to greater than anticipated tax liabilities.
We are expanding our international operations to better support our growth into international markets. Our corporate structure and associated transfer pricing policies contemplate future growth in international markets, and consider the functions, risks, and assets of the various entities involved in intercompany transactions. The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of various jurisdictions, including the United States, to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions pursuant to our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions. If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency.
Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows.
The tax regimes we are subject to or operate under, including income and non-income taxes, are unsettled and may be subject to significant change. Changes in tax laws, regulations, or rulings, or changes in interpretations of existing laws and regulations, could materially affect our financial position and results of operations. For example, the 2017 Tax Cuts and Jobs Act (Tax Act) made broad and complex changes to the U.S. tax code, including changes to U.S. federal tax rates, additional limitations on the deductibility of interest, both positive and negative changes to the utilization of future net operating loss (NOL) carryforwards, allowing for the expensing of certain capital expenditures, and putting into effect the migration from a “worldwide” system of taxation to a territorial system. The issuance of additional regulatory or accounting guidance related to the Tax Act could materially affect our tax obligations and effective tax rate in the period issued. In addition, many countries in Europe, as well as a number of other countries and organizations, have recently proposed or recommended changes to existing tax laws or have enacted new laws that could significantly increase our tax obligations in the countries where we do business or require us to change the manner in which we operate our business.
The Organization for Economic Cooperation and Development has been working on a Base Erosion and Profit Shifting Project, and issued a report in 2015, an interim report in 2018, and is expected to continue to issue guidelines and proposals that may change various aspects of the existing framework under which our tax obligations are determined in many of the countries in which we do business. Similarly, the European Commission and several countries have issued proposals that would change various aspects of the current tax framework under which we are taxed. These proposals include changes to the existing framework to calculate income tax, as well as proposals to change or impose new types of non-income taxes, including taxes based on a percentage of revenue. For example, several countries have proposed or enacted taxes applicable to digital services, which could apply to our business.
Due to the large and expanding scale of our international business activities, these types of changes to the taxation of our activities could increase our worldwide effective tax rate, increase the amount of taxes imposed on our business, and harm our financial position. Such changes may also apply retroactively to our historical operations and result in taxes greater than the amounts estimated and recorded in our financial statements.
Our ability to use our net operating loss carryforwards may be limited.
We have incurred substantial losses during our history, do not expect to become profitable in the near future, and may never achieve profitability. Unused U.S. federal NOLs for taxable years beginning before January 1, 2018, may be carried forward to offset future taxable income, if any, until such unused NOLs expire. Under legislation enacted in 2017, informally titled the Tax Act, as modified by legislation enacted on March 27, 2020, entitled the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), U.S. federal NOLs incurred in taxable years beginning after December 31, 2017, can be carried forward
indefinitely, but the deductibility of such U.S. federal NOLs in taxable years beginning after December 31, 2020 is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the Tax Act or the CARES Act.
As of January 31, 2020, we had U.S. federal and state net operating loss carryforwards of $632.4 million and $385.8 million, respectively. Of the $632.4 million U.S. federal net operating loss carryforwards, $64.0 million may be carried forward indefinitely with no limitation when utilized, and $487.6 million may be carried forward indefinitely with utilization limited to 80% of taxable income. The remaining $80.8 million will begin to expire in 2031. The state net operating loss carryforwards begin to expire in 2029.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the Code), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards to offset its post-change income or taxes may be limited. We have completed a Section 382 study and have determined that none of the operating losses will expire solely due to Section 382 limitations. However, we may experience ownership changes as a result of our initial public offering or in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control. This could limit the amount of NOLs that we can utilize annually to offset future taxable income or tax liabilities. Subsequent ownership changes and changes to the U.S. tax rules in respect of the utilization of NOLs may further affect the limitation in future years. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.
Changes in our effective tax rate or tax liability may have an adverse effect on our results of operations.
We are subject to income taxes in the United States and various foreign jurisdictions. The determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment by management, and there are many transactions where the ultimate tax determination is uncertain. We believe that our provision for income taxes is reasonable, but the ultimate tax outcome may differ from the amounts recorded in our consolidated financial statements and may materially affect our financial results in the period or periods in which such outcome is determined.
Our effective tax rate could increase due to several factors, including:
•changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;
•changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Tax Act and the CARES Act;
•changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business;
•the outcome of current and future tax audits, examinations, or administrative appeals; and
•the effects of acquisitions.
Any of these developments could adversely affect our results of operations.
Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
U.S. generally accepted accounting principles (GAAP) are subject to interpretation by the Financial Accounting Standards Board (FASB), the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported results of operations and could affect the reporting of transactions already completed before the announcement of a change.
If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes appearing elsewhere in this prospectus. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant estimates and judgments involve those related to revenue recognition, internal-use software development costs, deferred commissions, valuation of our stock-based compensation awards, including the determination of fair value of our common stock, accounting for income taxes, the carrying value of operating lease right-of-use assets, and useful lives of long-lived assets, among others. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our Class A common stock.
Our business could be disrupted by catastrophic occurrences and similar events.
Our platform and the public cloud infrastructure on which our platform relies are vulnerable to damage or interruption from catastrophic occurrences, such as earthquakes, floods, fires, power loss, telecommunication failures, terrorist attacks, criminal acts, sabotage, other intentional acts of vandalism and misconduct, geopolitical events, disease, such as the COVID-19 pandemic, and similar events. Our United States corporate offices and certain of the public cloud data centers in which we operate are located in the San Francisco Bay Area and Pacific Northwest, regions known for seismic activity. Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problems at our facilities or the facilities of our public cloud providers could result in disruptions, outages, and other performance and quality problems. If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster and to execute successfully on those plans in the event of a disaster or emergency, our business would be seriously harmed.
Risks Related to Ownership of Our Class A Common Stock
Our stock price may be volatile, and the value of our Class A common stock may decline.
The market price of our Class A common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including:
•actual or anticipated fluctuations in our financial condition or results of operations;
•variance in our financial performance from expectations of securities analysts;
•changes in the pricing of our platform;
•changes in our projected operating and financial results;
•changes in laws or regulations applicable to our platform;
•announcements by us or our competitors of significant business developments, acquisitions, or new offerings;
•significant data breaches, disruptions to, or other incidents involving our platform;
•our involvement in litigation;
•future sales of our Class A common stock by us or our stockholders, as well as the anticipation of lock-up releases;
•changes in senior management or key personnel;
•the trading volume of our Class A common stock;
•changes in the anticipated future size and growth rate of our market; and
•general economic and market conditions.
Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, such as recessions, interest rate changes, or international currency fluctuations, may also negatively impact the market price of our Class A common stock. In addition, technology stocks have historically experienced high levels of volatility. In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial expenses and divert our management’s attention.
The dual class structure of our common stock will have the effect of concentrating voting control with our existing stockholders, executive officers, directors, and their affiliates, which will limit your ability to influence the outcome of important transactions and to influence corporate governance matters, such as electing directors, and to approve material mergers, acquisitions, or other business combination transactions that may not be aligned with your interests.
Our Class B common stock has ten votes per share, whereas our Class A common stock, which is the stock we are offering in this offering, has one vote per share. Our existing stockholders, all of which hold shares of Class B common stock, will collectively own shares representing approximately 98.4% of the voting power of our outstanding capital stock immediately following the closing of this offering , the concurrent private placements, and the secondary transaction by one of our stockholders , based on the number of shares outstanding as of J uly 31, 2020, and without giving effect to any purchases that these holders may make in this offering . Our directors and executive officers and their affiliates will collectively beneficially own, in the aggregate, shares representing approximately 27.9 % of the voting power of our outstanding capital stock immediately following the closing of this offering , the concurrent private placements, and the secondary transaction by one of our stockholders , based on the number of shares outstanding as of July 31, 2020 , and without giving effect to any purchases that these holders may make in this offering. As a result, the holders of our Class B common stock will be able to exercise considerable influence over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or our assets, even if their stock holdings represent less than 50% of the outstanding shares of our capital stock. This concentration of ownership will limit the ability of other stockholders to influence corporate matters and may cause us to make strategic decisions that could involve risks to you or that may not be aligned with your interests. This control may adversely affect the market price of our Class A common stock.
Further, future transfers by holders of our Class B common stock will generally result in those shares converting into shares of our Class A common stock, subject to limited exceptions, such as certain transfers effected for tax or estate planning purposes. The conversion of shares of our Class B common stock into shares of our Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term.
We cannot predict the impact our dual class structure may have on the market price of our Class A common stock.
We cannot predict whether our dual class structure, combined with the concentrated control of our stockholders who held our capital stock prior to the completion of our offering, including our executive officers, employees, and directors and their affiliates, will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple class share structures in certain of their indices. In July 2017, FTSE Russell and Standard & Poor’s announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices. Under the announced policies, our dual class capital structure would make us ineligible for inclusion in any of these indices. Given the sustained flow of investment funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.
No public market for our Class A common stock currently exists, and an active public trading market may not develop or be sustained following this offering.
No public market for our Class A common stock currently exists. An active public trading market for our Class A common stock may not develop following the closing of this offering or, if developed, it may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.
We will have broad discretion in the use of the net proceeds to us from this offering and the concurrent private placements and may not use them effectively.
We will have broad discretion in the application of the net proceeds to us from this offering and the concurrent private placements , including for any of the purposes described in the section titled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variety of factors that will determine our use of the net proceeds from this offering and the concurrent private placements , our ultimate use may vary substantially from our currently intended use. Investors will need to rely upon the judgment of our management with respect to the use of proceeds. Pending use, we may invest the net proceeds from this offering and the concurrent private placements in short-term, investment-grade, interest-bearing securities, such as money market accounts, certificates of deposit, commercial paper, and guaranteed obligations of the U.S. government that may not generate a high yield for our stockholders. If we do not use the net proceeds that we receive in this offering and the concurrent private placements effectively, our business, financial condition, results of operations, and prospects could be harmed, and the market price of our Class A common stock could decline.
Future sales of our Class A common stock in the public market could cause the market price of our Class A common stock to decline.
Sales of a substantial number of shares of our Class A common stock in the public market following the closing of this offering, or the perception that these sales might occur, could depress the market price of our Class A common stock and could impair our ability to raise capital through the sale of additional equity securities. Many of our existing security holders have substantial unrecognized gains on the value of the equity they hold based upon the price of this offering, and therefore, they may take steps to sell their shares or otherwise secure the unrecognized gains on those shares. We are unable to predict the timing of or the effect that such sales may have on the prevailing market price of our Class A common stock.
All of our directors and officers and the holders of substantially all of our capital stock and securities convertible into our capital stock are or will be subject to lock-up agreements that restrict their ability to transfer shares of our capital stock during specified periods of time after the date of this prospectus, subject to certain exceptions. Subjec t to compliance with Rule 144, shares of our Class B common stock as well as shares unde rlying outstanding RSUs and shares subject to outstanding options will be eligible for sale in the public market in the near future as set forth below :
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Date Available for Sale in the Public Market
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Number of Shares of Common Stock
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The 91st day after the date of this prospectus (First Release).
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All of our current employees with a title below vice president, current contractors, former employees (other than Robert L. Muglia, our former chief executive officer, and his affiliates), and former contractors may sell a number of shares equal to 25% of (i) outstanding vested shares and (ii) shares subject to vested stock options and RSUs, each held by such holder or held by trusts for the benefit of such holder or of an immediate family member of such holder, and calculated as of the date of release (Vested Holdings). As of July 31, 2020, 25% of the outstanding Vested Holdings held by such holders was 11,295,695 shares.
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The second trading day immediately following the day that the closing price of our Class A common stock on The New York Stock Exchange exceeds 133% of the initial public offering price as set forth on the cover page of this prospectus, for at least 10 trading days in the 15 trading day period following the 90th day after the date of this prospectus.
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All other non-employee stockholders who are not members of our board of directors or our affiliates (including Mr. Muglia) and whose shares were not included in the First Release, may sell a number of shares equal to 25% of their Vested Holdings. As of July 31, 2020, 25% of the outstanding Vested Holdings held by such holders was 37,904,494 shares.
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The commencement of trading on the second full trading day following our second public release of quarterly or annual financial results following the date of this prospectus (the Lock-up Release Date).
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All remaining shares held by our stockholders not previously eligible for sale and not purchased in the concurrent private placements or the secondary transaction.
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The shares of Class A common stock purchased in the concurrent private placements and the shares of Class A common stock purchased in the secondary transaction by one of our stockholders will be subject to a market standoff agreement with us for a period of up to 365 days after the date of this prospectus.
In addition, an aggregate of 2,1 80 shares will be eligible for sale in the public market in order to satisfy tax withholding obligations in connection with the settlement of RSUs outstanding as of July 31, 2020 that fully vest in conne ction with this offering, and an aggregate of 10,570 shares wil l be eligible for sale in the public market in order to satisfy tax withholding obligations in connection with the settlement of additional RSUs outstanding as of July 31, 2020 that vest after this offering and through the Lock-up Release Date .
As of July 31, 2020, there were 4,853,231 RSUs for shares of Class B common stock outstanding and 72,228,820 shares of Class B common stock issuable upon the exercise of options outstanding. We intend to register all of the shares of Class A common stock and Class B common stock issuable upon exercise of outstanding options and RSUs or other equity incentives we may grant in the future, for public resale under the Securities Act of 1933, as amended (the Securities Act). The shares of Class A common stock will become eligible for sale in the public market to the extent such options are exercised and RSUs settle, subject to the lock-up agreements described above and compliance with applicable securities laws.
Further, based on shares outstanding as of July 31, 2020 , holders of approximately 190,885,696 shares of Class B common stock, or 68.5 % of our capital stock after the closing of this offering and the concurrent private placements , and hold ers of approximately 10,292,043 shares of our Class A common stock, assuming an initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, will have rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans, or otherwise will dilute all other stockholders.
We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors, and consultants under our equity incentive plans. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our Class A common stock to decline.
If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, the market price and trading volume of our Class A common stock could decline.
The market price and trading volume of our Class A common stock following the closing of this offering will be heavily influenced by the way analysts interpret our financial information and other disclosures. We do not have control over these analysts. If few securities analysts commence coverage of us, or if industry analysts cease coverage of us, our stock price would be negatively affected. If securities or industry analysts do not publish research or reports about our business, downgrade our Class A common stock, or publish negative reports about our business, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our Class A common stock could decrease, which might cause our stock price to decline and could decrease the trading volume of our Class A common stock.
You will experience immediate and substantial dilution in the net tangible book value of the shares of Class A common stock you purchase in this offering.
The initial public offering price of our Class A common stock is substantially higher than the pro forma net tangible book value per share of our common stock immediately after this offering. If you purchase shares of our Class A common stock in this offering, you will suffer immediate dilution of $68.14 per share, or $67.17 per share if the underwriters exercise their over-allotment option in full, representing the difference between our pro forma as adjusted net tangible book value per share after giving effect to the sale of Class A common stock in this offering and the concurrent private placements at the assumed initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus. See the section titled “Dilution.”
We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our Class A common stock.
We have never declared or paid any cash dividends on our capital stock, and we do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, you may need to rely on sales of our Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on your investment.
We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our Class A common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act (Section 404), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to
public companies, which may make our Class A common stock less attractive to investors. In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards.
We will remain an emerging growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of this offering; (2) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates.
We cannot predict if investors will find our Class A common stock less attractive if we choose to rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future results of operations may not be comparable to the results of operations of certain other companies in our industry that adopted such standards. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock, and our stock price may be more volatile.
We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance with our public company responsibilities and corporate governance practices.
As a public company, we will incur significant legal, accounting, and other expenses that we did not incur as a private company, which we expect to further increase after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the New York Stock Exchange , and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel will need to devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.
As a result of being a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our Class A common stock.
We will be required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting as of January 31, 2022. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. In addition, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting in our first annual report required to be filed with the SEC following the date we are no longer an “emerging growth company.” We have recently commenced the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404, but we may not be able to complete our evaluation, testing, and any required remediation in a timely fashion once initiated. Our compliance with Section 404 will require that we incur substantial expenses and expend significant management efforts. We have only recently established an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404.
During the evaluation and testing process of our internal controls, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to certify that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our Class A common stock could decline, and we could be subject to sanctions or investigations by the
SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management , and limit the market price of our Class A common stock.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as they will be in effect upon the closing of this offering, may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws will include provisions that:
•authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our Class A common stock;
•require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;
•specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our Chief Executive Officer;
•establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;
•establish that our board of directors is divided into three classes, with each class serving three-year staggered terms;
•prohibit cumulative voting in the election of directors;
•provide that our directors may only be removed for cause;
•provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and
•require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of voting stock to amend our bylaws and certain provisions of our certificate of incorporation.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our Class A common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that you would receive a premium for your shares of our Class A common stock in an acquisition.
Our amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America as the exclusive forums for certain disputes between us and our stockholders, which will restrict our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
Our amended and restated certificate of incorporation, as will be in effect following the effectiveness of the registration statement of which this prospectus forms a part, will provide that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: any derivative action or proceeding brought on our behalf, any action
asserting a breach of a fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine. This choice of forum provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees. If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations or financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
•our expectations regarding our revenue, expenses, and other operating results;
•our ability to acquire new customers and successfully retain existing customers;
•our ability to increase consumption on our platform;
•our ability to achieve or sustain our profitability;
•future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements;
•the costs and success of our sales and marketing efforts, and our ability to promote our brand;
•our growth strategies for our Cloud Data Platform;
•the estimated addressable market opportunity for our Cloud Data Platform;
•our reliance on key personnel and our ability to identify, recruit, and retain skilled personnel;
•our ability to effectively manage our growth, including any international expansion;
•our ability to protect our intellectual property rights and any costs associated therewith;
•the effects of COVID-19 or other public health crises;
•our ability to compete effectively with existing competitors and new market entrants; and
•the growth rates of the markets in which we compete.
You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this prospectus. And while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new
information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.
MARKET AND INDUSTRY DATA
This prospectus contains statistical data, estimates, and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. While we believe the industry and market data included in this prospectus are reliable and are based on reasonable assumptions, these data involve many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. None of the industry publications referred to in this prospectus were prepared on our or on our affiliates’ behalf or at our expense. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors,” that could cause results to differ materially from those expressed in these publications and other publicly available information.
The sources of certain statistical data, estimates, and forecasts contained in this prospectus are the following independent industry publications or reports:
•IDC, Business Intelligence End User Survey, February 2020.
•IDC, The Digitization of the World - From Edge to Core, November 2018.
•IDC, FutureScape: Worldwide Cloud 2019 Prediction, October 2018.
•IDC, Worldwide Big Data Analytics Software Forecast 2019-2023, September 2019.
USE OF PROCEEDS
We estimate that we will receive net proceeds from this offering and the concurrent private placements of approximately $2.7 billion (or approximately $3.0 billion if the underwriters exercise their option to purchase additional shares of our Class A common stock from us in full) based on an assumed initial public offering price of $80.00 per share , which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses .
A $1.00 increase (decrease) in the assumed initial public offering price of $80.00 per share would increase (decrease) the net proceeds to us from this offering and the concurrent private placements by approximately $27.1 million , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of Class A common stock offered by us would increase (decrease) the net proceeds to us from this offering and the concurrent private placements by approximately $77.4 million , assuming the assumed initial public offering price of $80.00 per share , which is the midpoint of the price range set forth on the cove r page of this prospectus, remains the same, and after deducting underwriting discounts and commissions.
The principal purposes of this offering and the concurrent private placements are to increase our capitalization and financial flexibility and create a public market for our Class A common stock. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from this offering and the concurrent private placements . However, we currently intend to use the net proceeds we receive from this offering and the concurrent private placements for general corporate purposes, including working capital, operating expenses, and capital expenditures. We may also use a portion of the net proceeds to acquire complementary businesses, products, services, or technologies. However, we do not have agreements or commitments to enter into any acquisitions at this time.
We will have broad discretion over how to use the net proceeds to us from this offering and the concurrent private placements . We may invest the net proceeds to us from the offering that are not used as described above in investment-grade, interest-bearing instruments.
DIVIDEND POLICY
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future. Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects, and other factors our board of directors may deem relevant.
CAPITALIZATION
The following table sets forth our cash, cash equivalents, short-term and long-term investments, and capitalization as of July 31, 2020:
•on an actual basis;
• on a pro forma basis, giving effect to (i) the automatic conversion of all of our outstanding shares of our convertible preferred stock as of July 31, 2020 into an aggregate of 182,271,099 shares of Class B common stock, which will occur immediately upon the closing of this offerin g , (ii) stock - based compensation expense of approximately $29.1 million related to RSUs subject to service-based and performance-based vesting conditions, as further desc ribed in Note 2 to our consolidated financial statements included elsewhere in this prospe ctus , and (iii) the filing and effectiveness of our amended and restated certificate of incorporation ; and
• on a pro forma as adjusted basis, giving effect to ( i ) the pro forma adjustments set forth above , ( ii ) our receipt of estimated net proceeds from the sale of shares of Class A common stock in this offering and the concurrent private placements at an assumed initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses r elated to the offering , and ( iii ) the conversion of the Class B common stock to Class A common stock in connection with the secondary transaction by one of our stockholders .
You should read this table together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.
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As of July 31, 2020
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Actual
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Pro Forma
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Pro Forma As Adjusted
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(in thousands, except share and per share data)
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Cash, cash equivalents, and short-term and long-term investments
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$
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886,820
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$
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886,820
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$
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3,551,452
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Redeemable convertible preferred stock, $0.0001 par value per share, 182,271,099 shares authorized, issued, and outstanding, actual; no shares authorized, issued, and outstanding, pro forma and pro forma as adjusted
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$
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1,415,047
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$
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—
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$
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—
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Stockholders’ (deficit) equity:
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Preferred stock, $0.0001 par value per share, no shares authorized, issued, and outstanding, actual; 200,000,000 shares authorized, no shares issued and outstanding, pro forma and pro forma as adjusted
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—
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—
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—
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Class A common stock, $0.0001 par value per share, 2,000 shares authorized, no shares issued and outstanding, actual; 2,500,000,000 shares authorized and no shares issued and outstanding, pro forma; 2,500,000,000 shares authorized and 38,292,043 shares issued and outstanding, pro forma as adjusted
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—
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—
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4
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Class B common stock, $0.0001 par value per share, 354,136,000 shares authorized, 62,257,063 shares issued and outstanding, actual; 355,000,000 shares authorized, 244,528,162 shares issued and outstanding, pro forma; 355,000,000 shares authorized, 240,486,119 shares issued and outstanding, pro forma as adjusted
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6
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24
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24
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Additional paid-in capital
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219,046
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1,663,208
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4,325,500
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Accumulated other comprehensive income
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1,146
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1,146
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1,146
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Accumulated deficit
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(871,597)
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(900,730)
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(900,730)
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Total stockholders’ (deficit) equity
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(651,399)
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763,648
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3,425,944
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Total capitalization
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$
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763,648
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$
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763,648
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$
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3,425,944
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A $1.00 increase (decrease) in the assumed initial public offering price of $80.00 per share , which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of our pro forma as adjusted cash, additional paid-in capital, total stockholders’ equity, and total capitalization by approximately $27.1 million , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of Class A common stock offered by us would increase (decrease) each of our pro forma as adjusted cash, additional paid-in capital, total stockholders’ equity, and total capitalization by approximately $77.4 million , assuming the assumed initial public offering price of $80.00 per share , which is the midpoint of the price r ange set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions.
The number of shares of Class A common stock and Class B common stock that will be outstanding after this offering , the concurrent private placements , and the secondary transaction by one of our s tockholders is based on no shares of Class A common stock and 244,528,162 shares of Class B common stock outstanding as of July 31, 2020 , and excludes:
•32,336 shares of Class B common stock issuable upon the exercise of a warrant to purchase shares of Class B common stock outstanding as of July 31, 2020, with an exercise price of $0.74 per share;
•72,228,820 shares of Class B common stock issuable upon the exercise of stock options outstanding as of July 31, 2020 under our 2012 Plan with a weighted-average exercise price of $6.70 per share;
• 136,000 shares of Class B common stock issuable upon the exercise of outstanding stock options granted after July 31, 2020 through September 4, 2020 under our 2012 Plan, with a weighted-average exercise price of $ 71.91 per share;
• 4,851,121 shares of Class B common stock issuable upon the vesting and settlement of RSUs outstanding as of July 31, 2020 , for which the performance-based vesting condition will be satisfied in connection with this offering, but for which the service-based vesting condition was not satisfied as of July 31, 2020 , and 2,110 sha r es of Class B common stock issuable u pon the vesting and settlement of RSUs outstand ing as of July 31, 2020 , for which the performance -based vesting w ill be satisfied in connection with this offering and for which the service -based vesting condition was satisfied as of July 31, 2020 ;
• 2,84 1,823 shares of Class B common stock issuable upon the vesting and settlement of outstanding RSUs granted after July 31, 2020 through September 4, 2020 , for which the performance-based vesting condition will be satisfied in connection with this offering;
• 18,299,095 shares of Class B common stock reserved for future issuance under our 2012 Plan as of July 31, 2020 , which shares will cease to be available for issuance at the time our 2020 Plan becomes effective;
• 34,100,000 shares of Class A common stock reserved for future issuance under our 2020 Plan, which will become effective in connection with this offering, as well as (i) any annual automatic evergreen increases in the number of shares of Class A common stock reserved for future issuance under our 2020 Plan and (ii) upon the expiration, forfeiture, cancellation, or reacquisition of any shares of Class B common stock underlying outstanding stock awards granted under our 2012 Plan, an equal number of shares of Class A common stock , such number of shares not to exceed 78,816,888 ; and
• 5,700,000 shares of Class A common stock reserved for issuance under our ESPP, which will become effective in connection with this offering, as well as any annual automatic evergreen increases in the number of shares of Class A common stock reserved for future issuance under our ESPP.
DILUTION
If you invest in our Class A common stock in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per share of Class A common stock and the pro forma as adjusted net tangible book value per share immediately after this offering and the concurrent private placements .
Our historical net tangible book value (deficit) as of July 31, 2020 was $(774.4) million, or $(12.44) per share of common stock. Our historical net tangible book value (deficit) per share represents our total tangible assets less our total liabilities and convertible preferred stock (which is not included within stockholders’ deficit), divided by the number of shares of common stock outstanding as of July 31, 2020.
Our pro forma net tangible book value as of July 31, 2020 was $640.6 million , or $2.62 per share. Pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the number of our shares of common stock outstanding as of July 31, 2020 , after giving effect to (i) the automatic conversion of all of our outstanding shares of our convertible preferred stock as of July 31, 2020 into an aggregate of 182,271,099 shares of Class B common stock, which will occur immediately upon the closing of this offering , (ii) stock - based compensation expense of approximately $29.1 million related to RSUs subject to service-based and performance-based vesting conditions, as further described in Note 2 to our consolidated financial statements included elsewhere in this prospectus , and (iii) the filing an d effectiveness of our amended and restated certificate of incorporation .
After giving effect to the sale by us of 34,250,000 shares of Class A common stock in this offering and the concurrent private placements at an assumed initial public offering price of $80.00 per share , which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses related to the offering , our pro forma as adjusted net tangible book value as of July 31, 2020 would have been $3.3 billion , or $11.86 per share. This amount represents an immediate increase in pro forma as adjusted net tangible book value of $9.24 per share to our existing stockholders and an immediate dilution in pro forma as adjusted net tangible book value of $68.14 per share to new investors purchasing Class A common stock in this offering. We determine dilution by subtracting the pro forma as adjusted net tangible book value per share after this offering from the amount of cash that a new investor paid for a share of Class A common stock. The following table illustrates this dilution on a per share basis:
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|
|
Assumed initial public offering price per share
|
|
|
$
|
80.00
|
|
|
Historical net tangible book value (deficit) per share as of July 31, 2020
|
$
|
(12.44)
|
|
|
|
|
Increase per share attributable to the pro forma adjustments described above
|
15.06
|
|
|
|
|
Pro forma net tangible book value per share as of July 31, 2020, before giving effect to this offering and the concurrent private placements
|
2.62
|
|
|
|
|
Increase in pro forma as adjusted net tangible book value per share attributable to new investors purchasing shares in this offering and the concurrent private placements
|
9.24
|
|
|
|
|
Pro forma as adjusted net tangible book value per share after this offering and the concurrent private placements
|
|
|
11.86
|
|
|
Dilution in pro forma as adjusted net tangible book value per share to new investors in this offering and the concurrent private placements
|
|
|
$
|
68.14
|
|
The dilution information discussed above is illustrative only and may change based on the actual initial public offering price and other terms of this offering. A $1.00 increase (decrease) in the assumed initial public offering price of $80.00 per share , which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value per share after this offering and the concurrent private placements by $0.10 per share and increase (decrease) the dilution to new investors by $0.90 per share, in each case assuming the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions. Each increase of 1,000,000 shares in the number of shares of Class A common stock offered by us would increase our pro forma as adjusted net tangible book value by approximately $0.23 per share and decrease the dilution to new investors by approximately $0.23 per share, in each case assuming the assumed initial public offering price of
$80.00 per share remains the same, and after deducting underwriting discounts and commissions. Similarly, each decrease of 1,000,000 shares in the number of shares of Class A common stock offered by us would decrease our pro forma as adjusted net tangible book value by approximately $0.24 per share and increase the dilution to new investors by approximately $0.24 per share, in each case assuming the assumed initial public offering price of $80.00 per share remains the same, and after deducting underwriting discounts and commissions.
If the underwriters exercise their option to purchase additional shares of Class A common stock in full, the pro forma net tangible book value per share, as adjusted to give effect to this offering and the concurrent private placements , would be $12.83 per share, the increase in pro forma net tangible book valu e per s hare to existing stockholders woul d be $10.21 per share , and the dilution in pro forma net tangible book value per share to new investors in this offering would be $67.17 per share .
The following table summarizes, as of July 31, 2020 , on a pro forma as adjusted basis as described above, the number of shares of our common stock, the total consideration and the average price per share (1) paid to us by existing stockholders and (2) to be paid by new investors acquiring our Class A common stock in this offering and the concurrent private placements at an assumed initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses .
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Purchased
|
|
|
|
Total Consideration
|
|
|
|
Average Price
Per Share
|
|
|
Number
|
|
Percent
|
|
Amount
|
|
Percent
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
Existing stockholders
|
244,528,162
|
|
87.7
|
%
|
|
$
|
1,423,150
|
|
|
34.2
|
%
|
|
$
|
5.82
|
|
|
New investors
|
28,000,000
|
|
10.0
|
|
|
2,240,000
|
|
|
53.8
|
|
|
80.00
|
|
|
Concurrent private placement investors
|
6,250,000
|
|
2.3
|
|
|
500,000
|
|
|
12.0
|
|
|
80.00
|
|
|
Total
|
278,778,162
|
|
100.0
|
%
|
|
$
|
4,163,150
|
|
|
100.0
|
%
|
|
|
Each $1.00 increase (decrease) in the assumed initial public offering price of $80.00 per share , which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors and total consideration paid by all stockholders by approximately $27.1 million , assuming that the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same , and after deducting underwriting discounts and commissions.
The number of shares of Class A common stock and Class B common stock that will be outstanding after this offering , the concurrent private placements , and the secondary transaction by one of our stockholders is based on no shares of Class A common stock and 244,528,162 shares of Class B common stock outstanding as of July 31, 2020 , and excludes:
•32,336 shares of Class B common stock issuable upon the exercise of a warrant to purchase shares of Class B common stock outstanding as of July 31, 2020, with an exercise price of $0.74 per share;
•72,228,820 shares of Class B common stock issuable upon the exercise of stock options outstanding as of July 31, 2020 under our 2012 Plan with a weighted-average exercise price of $6.70 per share;
• 136,000 shares of Class B common stock issuable upon the exercise of outstanding stock options granted after July 31, 2020 through September 4, 2020 under our 2012 Plan, with a weighted-average exercise price of $ 71.91 per share;
• 4,851,121 shares of Class B common stock issuable upon the vesting and settlement of RSUs outstanding as of July 31, 2020 , for which the performance-based vesting condition will be satisfied in connection with this offering, but for which the service-based vesting condition was not satisfied as of July 31, 2020 , and 2,110 shares of Class B common stock issuable upon the vesting and settlement of RSUs outstanding as of July 31, 2020 , for which the performance-based vesting will be satisfied in connection with this offering and for which the service-based vesting condition was satisfied as of July 31, 2020 ;
• 2,84 1,823 shares of Class B common stock issuable upon the vesting and settlement of outstanding RSUs granted after July 31, 2020 through September 4, 2020 , for which the performance-based vesting condition will be satisfied in connection with this offering;
• 18,299,095 shares of Class B common stock reserved for future issuance under our 2012 Plan as of July 31, 2020 , which shares will cease to be available for issuance at the time our 2020 Plan becomes effective;
• 34,100,000 shares of Class A common stock reserved for future issuance under our 2020 Plan, which will become effective in connection with this offering, as well as (i) any annual automatic evergreen increases in the number of shares of Class A common stock reserved for future issuance under our 2020 Plan and (ii) upon the expiration, forfeiture, cancellation, or reacquisition of any shares of Class B common stock underlying outstanding stock awards granted under our 2012 Plan, an equal number of shares of Class A common stock , such number of shares not to exceed 78,816,888 ; and
• 5,700,000 shares of Class A common stock reserved for issuance under our ESPP, which will become effective in connection with this offering, as well as any annual automatic evergreen increases in the number of shares of Class A common stock reserved for future issuance under our ESPP.
To the extent that any outstanding options or warrants are exercised or new options or RSUs are issued under our stock-based compensation plans, or we issue additional shares of common stock in the future, there will be further dilution to investors participating in this offering. If all outstanding options and RSUs under our 2012 Plan as of July 31, 2020 were exercised or settled, then our existing stockholders, including the holders of these options, would own 89.2 % and our new investors would own 10.8 % of the total number of shares of our Class A common stock and Class B common stock outstanding on the closing of this offering , the concurrent private placements , and the secondary transaction by one of our stockholders .
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
The following selected consolidated statements of operations data for the fiscal years ended January 31, 2019 and 2020 and the consolidated balance sheet data as of January 31, 2019 and 2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. We derived the selected consolidated statements of operations data for the six months ended July 31, 2019 and 2020 and the consolidated balance sheet data as of July 31, 2020 from our unaudited consolidated financial statements that are included elsewhere in this prospectus. The unaudited consolidated financial data set forth below have been prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for the fair statement of such data. Our historical results are not necessarily indicative of the results that may be expected for any other period in the future. You should read this information in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, the accompanying notes, and other financial information included elsewhere in this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
96,666
|
|
|
$
|
264,748
|
|
|
$
|
104,044
|
|
|
$
|
241,960
|
|
|
Cost of revenue(1)
|
51,753
|
|
|
116,557
|
|
|
52,546
|
|
|
93,003
|
|
|
Gross profit
|
44,913
|
|
|
148,191
|
|
|
51,498
|
|
|
148,957
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing(1)
|
125,642
|
|
|
293,577
|
|
|
137,465
|
|
|
190,540
|
|
|
Research and development(1)
|
68,681
|
|
|
105,160
|
|
|
47,782
|
|
|
69,811
|
|
|
General and administrative(1)
|
36,055
|
|
|
107,542
|
|
|
49,095
|
|
|
62,692
|
|
|
Total operating expenses
|
230,378
|
|
|
506,279
|
|
|
234,342
|
|
|
323,043
|
|
|
Operating loss
|
(185,465)
|
|
|
(358,088)
|
|
|
(182,844)
|
|
|
(174,086)
|
|
|
Interest income
|
8,759
|
|
|
11,551
|
|
|
6,761
|
|
|
4,137
|
|
|
Other expense, net
|
(502)
|
|
|
(1,005)
|
|
|
(779)
|
|
|
(1,042)
|
|
|
Loss before income taxes
|
(177,208)
|
|
|
(347,542)
|
|
|
(176,862)
|
|
|
(170,991)
|
|
|
Provision for income taxes
|
820
|
|
|
993
|
|
|
362
|
|
|
287
|
|
|
Net loss
|
$
|
(178,028)
|
|
|
$
|
(348,535)
|
|
|
$
|
(177,224)
|
|
|
$
|
(171,278)
|
|
|
Net loss per share attributable to common stockholders – basic and diluted(2)
|
$
|
(4.67)
|
|
|
$
|
(7.77)
|
|
|
$
|
(4.25)
|
|
|
$
|
(3.01)
|
|
|
Weighted-average shares used in computing net loss per share attributable to common stockholders – basic and diluted(2)
|
38,162,228
|
|
|
44,847,442
|
|
|
41,691,615
|
|
|
56,809,625
|
|
|
Pro forma net loss per share attributable to common stockholders – basic and diluted (unaudited)(2)
|
|
|
$
|
(1.63)
|
|
|
|
|
$
|
(0.72)
|
|
|
Weighted-average shares used in computing pro forma net loss per share attributable to common stockholders – basic and diluted (unaudited)(2)
|
|
|
214,327,427
|
|
|
|
|
238,369,506
|
|
________________
(1)Includes stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
Cost of revenue
|
$
|
1,895
|
|
|
$
|
3,650
|
|
|
$
|
1,850
|
|
|
$
|
2,281
|
|
|
Sales and marketing
|
15,647
|
|
|
20,757
|
|
|
10,626
|
|
|
10,233
|
|
|
Research and development
|
28,284
|
|
|
15,743
|
|
|
6,411
|
|
|
9,818
|
|
|
General and administrative
|
6,912
|
|
|
38,249
|
|
|
15,580
|
|
|
16,317
|
|
|
Total stock-based compensation expense
|
$
|
52,738
|
|
|
$
|
78,399
|
|
|
$
|
34,467
|
|
|
$
|
38,649
|
|
Stock-based compensation expense for the fiscal year ended January 31, 2019 included $30.3 million of compensation expense related to the amount paid in excess of the estimated fair value of common stock at the date of transaction in connection with two issuer tender offers. See Note 11 to our consolidated financial statements included elsewhere in this prospectus for further details.
(2)See Note 2 and Note 13 to our consolidated financial statements included elsewhere in this prospectus for an explanation of the calculations of our net loss per share attributable to common stockholders, basic and diluted, pro forma net loss per share attributable to common stockholders, basic and diluted, and the weighted-average shares used to compute these amounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of January 31,
|
|
|
|
As of July 31,
|
|
|
2019
|
|
2020
|
|
2020
|
|
|
(in thousands)
|
|
|
|
|
|
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
Cash, cash equivalents, and short-term and long-term investments
|
$
|
608,798
|
|
|
$
|
457,582
|
|
|
$
|
886,820
|
|
|
Total assets
|
764,288
|
|
|
1,012,720
|
|
|
1,437,241
|
|
|
Working capital(1)
|
554,047
|
|
|
248,739
|
|
|
315,789
|
|
|
Redeemable convertible preferred stock
|
910,853
|
|
|
936,474
|
|
|
1,415,047
|
|
|
Additional paid-in capital
|
39,296
|
|
|
155,340
|
|
|
219,046
|
|
|
Accumulated deficit
|
(351,784)
|
|
|
(700,319)
|
|
|
(871,597)
|
|
|
Total stockholders’ deficit
|
(312,467)
|
|
|
(544,757)
|
|
|
(651,399)
|
|
________________
(1)Working capital is defined as current assets less current liabilities.
Key Business Metrics
We monitor the key business metrics set forth below to help us evaluate our business and growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts, and assess operational efficiencies. The calculation of the key metrics discussed below may differ from other similarly titled metrics used by other companies, securities analysts, or investors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Product revenue (in millions)
|
$
|
95.7
|
|
|
$
|
252.2
|
|
|
$
|
100.6
|
|
|
$
|
227.0
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
(unaudited)
|
|
|
|
(unaudited)
|
|
|
|
Remaining performance obligations (in millions)
|
$
|
128.0
|
|
|
$
|
426.3
|
|
|
$
|
221.1
|
|
|
$
|
688.2
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
Total customers
|
948
|
|
|
2,392
|
|
|
1,547
|
|
|
3,117
|
|
|
Net revenue retention rate
|
180
|
%
|
|
169
|
%
|
|
223
|
%
|
|
158
|
%
|
|
Customers with trailing 12-month product revenue greater than $1 million
|
14
|
|
|
41
|
|
|
22
|
|
|
56
|
|
Product Revenue
Product revenue is a key metric for us because we recognize revenue based on platform consumption, which is inherently variable at our customers’ discretion, and not based on the amount and duration of contract terms. Product revenue includes compute, storage, and data transfer resources, which are consumed by customers on our platform as a single, integrated offering. Customers have the flexibility to consume more than their contracted capacity during the contract term and may have the ability to roll over unused capacity to future periods, generally on the purchase of additional capacity at renewal. Our consumption-based business model distinguishes us from subscription-based software companies that generally recognize revenue ratably over the contract term and may not permit rollover. Because customers have flexibility in the timing of their consumption, which can exceed their contracted capacity or extend beyond the original contract term in many cases, the amount of product revenue recognized in a given period is an important indicator of customer satisfaction and the value derived from our platform. While customer use of our platform in any period is not necessarily indicative of future use, we estimate future revenue using predictive models based on customers’ historical usage to plan and issue financial forecasts. Product revenue excludes our professional services and other revenue, which
has been less than 10% of total revenue in each of the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020.
Remaining Performance Obligations
Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. RPO excludes performance obligations from on-demand arrangements and certain time and materials contracts that are billed in arrears. RPO is not necessarily indicative of future product revenue growth because it does not account for the timing of customers’ consumption or their consumption of more than their contracted capacity. Moreover, RPO is influenced by a number of factors, including the timing of renewals, the timing of purchases of additional capacity, average contract terms, seasonality, and the extent to which customers are permitted to roll over unused capacity to future periods, generally upon the purchase of additional capacity at renewal. Due to these factors, it is important to review RPO in conjunction with product revenue and other financial metrics disclosed elsewhere in this prospectus.
Total Customers
We count the total number of customers at the end of each period. For purposes of determining our customer count, we treat each customer account that has a corresponding capacity contract as a unique customer, and a single organization with multiple divisions, segments, or subsidiaries may be counted as multiple customers. For purposes of determining our customer count, we do not include customers that consume our platform only under on-demand arrangements. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity. We believe that the number of customers is an important indicator of the growth of our business and future revenue trends.
Net Revenue Retention Rate
We believe the growth in use of our platform by our existing customers is an important measure of the health of our business and our future growth prospects. We monitor our dollar-based net revenue retention rate to measure this growth. To calculate this metric, we first specify a measurement period consisting of the trailing two years from our current period end. Next, we define as our measurement cohort the population of customers under capacity contracts that used our platform at any point in the first month of the first year of the measurement period. We then calculate our net revenue retention rate as the quotient obtained by dividing our product revenue from this cohort in the second year of the measurement period by our product revenue from this cohort in the first year of the measurement period. Any customer in the cohort that did not use our platform in the second year remains in the calculation and contributes zero product revenue in the second year. Our net revenue retention rate is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity. Since we will continue to attribute the historical product revenue to the consolidated contract, consolidation of capacity contracts within a customer’s organization typically will not impact our net revenue retention rate unless one of those customers was not a customer at any point in the first month of the first year of the measurement period. We expect our net revenue retention rate to decrease over time as customers that have consumed our platform for an extended period of time become a larger portion of both our overall customer base and our product revenue that we use to calculate net revenue retention rate, and as their consumption growth primarily relates to existing use cases rather than new use cases.
Customers with Trailing 12-Month Product Revenue Greater than $1 Million
Large customer relationships lead to scale and operating leverage in our business model. Compared with smaller customers, large customers present a greater opportunity for us to sell additional capacity because they have larger budgets, a wider range of potential use cases, and greater potential for migrating new workloads to our platform over time. As a measure of our ability to scale with our customers and attract large enterprises to our platform, we count the number of customers under capacity arrangements that contributed more than $1 million in product revenue in the trailing 12 months. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the section titled “Selected Consolidated Financial and Other Data” and the consolidated financial statements and related notes included elsewhere in this prospectus. Some of the information contained in this discussion and analysis, including information with respect to our planned investments in our research and development, sales and marketing, and general and administrative functions, includes forward-looking statements that involve risks and uncertainties. You should review the sections titled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We believe in a data connected world where organizations have seamless access to explore, share, and unlock the value of data. To realize this vision, we are pioneering the Data Cloud, an ecosystem where Snowflake customers, partners, and data providers can break down data silos and derive value from rapidly growing data sets in secure, governed, and compliant ways.
Our Cloud Data Platform is the innovative technology that powers the Data Cloud. Our platform enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data. We deliver our platform through a customer-centric, consumption-based business model, only charging customers for the resources they use.
Our platform solves the decades-old problem of data silos and data governance. Leveraging the elasticity and performance of the public cloud, our platform enables customers to unify and query data to support a wide variety of use cases. It also provides frictionless and governed data access so users can securely share data inside and outside of their organizations, generally without copying or moving the underlying data. As a result, customers can blend existing data with new data for broader context, augment data science efforts, or create new monetization streams. Delivered as a service, our platform requires near-zero maintenance, enabling customers to focus on deriving value from their data rather than managing infrastructure.
Snowflake was started in 2012 to create a data warehouse built for the cloud. Beginning with our first customers in 2014, the response was beyond our expectations as we addressed major shortcomings of existing solutions and expanded from a data warehouse into an integrated cloud data platform. What began as a journey to the cloud has evolved into a much more powerful vision of the Data Cloud. From July 1, 2020 to July 31, 2020, we processed an average of 507 million daily queries across all of our customer accounts, up from an average of 254 million daily queries during the corresponding month of the prior fiscal year. The number of daily queries does not directly correlate with revenue, as revenue is further dependent upon the duration of such queries, the type of resource used, and the volume of data processed for the queries, among other factors.
Our cloud-native architecture consists of three independently scalable layers across storage, compute, and cloud services. The storage layer ingests massive amounts and varieties of structured and semi-structured data to create a unified data record. The compute layer provides dedicated resources to enable users to simultaneously access common data sets for many use cases without latency. The cloud services layer intelligently optimizes each use case’s performance requirements with no administration. This architecture is built on three major public clouds across 22 regional deployments around the world. These deployments are interconnected to create our single Cloud Data Platform, delivering a consistent, global user experience.
We generate the substantial majority of our revenue from fees charged to our customers based on the storage, compute, and data transfer resources consumed on our platform as a single, integrated offering. For storage resources, consumption fees are based on the average terabytes per month of all of the customer’s data stored in our platform. For compute resources, consumption fees are based on the type of compute resource used and the duration of use or, for some features, the volume of data processed. For data transfer resources, consumption fees are based on terabytes of data transferred, the public cloud provider used, and the region to and from which the transfer is executed.
Our customers typically enter into capacity arrangements on an annual basis, or consume our platform under on-demand arrangements in which we charge for use of our platform monthly in arrears. Consumption for most customers accelerates from the beginning of their usage to the end of their contract terms and often exceeds their initial capacity commitment amounts. When this occurs, our customers have the option to amend their existing agreement with us to purchase additional capacity or request early renewals. When a customer’s consumption during the contract term does not exceed its capacity commitment amount, it may have the option to roll over any unused capacity to future periods, generally on the purchase of additional capacity. For these reasons, we believe our deferred revenue is not a meaningful indicator of future revenue that will be recognized in any given time period.
Our go-to-market strategy is focused on acquiring new customers and driving continued use of our platform for existing customers. We primarily focus our selling efforts on large organizations and sell our platform through a direct sales force, which targets technical and business leaders who are adopting a cloud strategy and leveraging data to improve their business performance. Our sales organization is comprised of sales development, inside sales, and field sales personnel and is segmented by the size of prospective customers. Once our platform has been adopted, we focus on increasing the migration of additional customer workloads to our platform to drive increased consumption, as evidenced by our net revenue retention rate, which exceeded 150% as of January 31, 2019 and 2020 and July 31, 2020.
Our platform is used globally by organizations of all sizes across a broad range of industries. As of July 31, 2020, we had 3,117 total customers, increasing from 948 and 2,392 as of January 31, 2019 and 2020, respectively. Our platform has been adopted by many of the world’s largest organizations that view Snowflake as a key strategic partner in their cloud and data transformation initiatives. As of July 31, 2020, our customers included seven of the Fortune 10 and 146 of the Fortune 500, based on the 2020 Fortune 500 list, and those customers contributed approximately 4% and 26% of our revenue for the six months ended July 31, 2020, respectively. The number of customers that contributed more than $1 million in trailing 12-month product revenue increased from 22 to 56 as of July 31, 2019 and 2020, respectively.
We have achieved significant growth in recent periods. For the fiscal years ended January 31, 2019 and 2020, our revenue was $96.7 million and $264.7 million, respectively, representing year-over-year growth of 174%. For the six months ended July 31, 2019 and 2020, our revenue was $104.0 million and $242.0 million, respectively, representing year-over-year growth of 133%. Our net loss was $178.0 million and $348.5 million for the fiscal years ended January 31, 2019 and 2020, respectively, and $177.2 million and $171.3 million for the six months ended July 31, 2019 and 2020, respectively.
Key Factors Affecting Our Performance
Adoption of our Cloud Data Platform
Our future success depends in large part on the market adoption of our Cloud Data Platform. While we see growing demand for our platform, particularly from large enterprises, many of these organizations have invested substantial technical, financial, and personnel resources in their legacy database products or big data offerings, despite their inherent limitations. While this makes it difficult to predict customer adoption rates and future demand, we believe that the benefits of our platform put us in a strong position to capture the significant market opportunity ahead.
Expanding Within our Existing Customer Base
Our large base of customers represents a significant opportunity for further consumption of our platform. As of July 31, 2020, our customers included seven of the Fortune 10 and 146 of the Fortune 500. While we have seen a rapid increase in the number of customers that have contributed more than $1 million in product revenue in the trailing 12 months, we believe that there is a substantial opportunity to continue growing these customers further, as well as continuing to expand the usage of our platform within our other existing customers. We plan to continue investing in our direct sales force to encourage increased consumption and adoption of new use cases among our existing customers.
Once deployed, our customers often expand their use of our platform more broadly within the enterprise and across their ecosystem of customers and partners as they migrate more data to the public cloud, identify new use cases, and realize the benefits of our platform. However, because we generally recognize product revenue on consumption and not ratably over the term of the contract, we do not have visibility into the timing of revenue recognition from any particular customer. In any given period, there is a
risk that customer consumption of our platform will be slower than we expect, which may cause fluctuations in our revenue and results of operations. New software releases or hardware improvements may make our platform more efficient, enabling customers to consume fewer compute, storage, and data transfer resources to accomplish the same workloads. Our ability to increase usage of our platform by, and sell additional contracted capacity to, existing customers, and, in particular, large enterprise customers, will depend on a number of factors, including our customers’ satisfaction with our platform, competition, pricing, overall changes in our customers’ spending levels, the effectiveness of our efforts to help our customers realize the benefits of our platform, and the extent to which customers migrate new workloads to our platform over time.
Acquiring New Customers
We believe there is a substantial opportunity to further grow our customer base by continuing to make significant investments in sales and marketing and brand awareness. Our ability to attract new customers will depend on a number of factors, including our success in recruiting and scaling our sales and marketing organization and competitive dynamics in our target markets. We intend to expand our direct sales force, with a focus on increasing sales to large organizations. While our platform is built for organizations of all sizes and industries, we have only recently focused our selling efforts on large enterprise customers. We may not achieve anticipated revenue growth from expanding our sales force to focus on large enterprises if we are unable to hire, develop, integrate, and retain talented and effective sales personnel; if our new and existing sales personnel are unable to achieve desired productivity levels in a reasonable period of time; or if our sales and marketing programs are not effective.
Investing in Growth and Scaling our Business
We are focused on our long-term revenue potential. We believe that our market opportunity is large, and we will continue to invest significantly in scaling across all organizational functions in order to grow our operations both domestically and internationally. We have a history of introducing successful new features and capabilities on our platform, and we intend to continue to invest heavily to grow our business to take advantage of our expansive market opportunity rather than optimize for profitability or cash flow in the near future.
Key Business Metrics
We monitor the key business metrics set forth below to help us evaluate our business and growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts, and assess operational efficiencies. The calculation of the key metrics discussed below may differ from other similarly titled metrics used by other companies, securities analysts, or investors.
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Fiscal Year Ended January 31,
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Six Months Ended July 31,
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2019
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2020
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2019
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2020
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(unaudited)
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Product revenue (in millions)
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$
|
95.7
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|
|
$
|
252.2
|
|
|
$
|
100.6
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|
|
$
|
227.0
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January 31,
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July 31,
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2019
|
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2020
|
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2019
|
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2020
|
|
|
(unaudited)
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(unaudited)
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Remaining performance obligations (in millions)
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$
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128.0
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$
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426.3
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|
$
|
221.1
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$
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688.2
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January 31,
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July 31,
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2019
|
|
2020
|
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2019
|
|
2020
|
|
Total customers
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948
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|
2,392
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|
|
1,547
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|
|
3,117
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|
Net revenue retention rate
|
180
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%
|
|
169
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%
|
|
223
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%
|
|
158
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%
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Customers with trailing 12-month product revenue greater than $1 million
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14
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|
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41
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|
|
22
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|
|
56
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Product Revenue
Product revenue is a key metric for us because we recognize revenue based on platform consumption, which is inherently variable at our customers’ discretion, and not based on the amount and
duration of contract terms. Product revenue includes compute, storage, and data transfer resources, which are consumed by customers on our platform as a single, integrated offering. Customers have the flexibility to consume more than their contracted capacity during the contract term and may have the ability to roll over unused capacity to future periods, generally on the purchase of additional capacity at renewal. Our consumption-based business model distinguishes us from subscription-based software companies that generally recognize revenue ratably over the contract term and may not permit rollover. Because customers have flexibility in the timing of their consumption, which can exceed their contracted capacity or extend beyond the original contract term in many cases, the amount of product revenue recognized in a given period is an important indicator of customer satisfaction and the value derived from our platform. While customer use of our platform in any period is not necessarily indicative of future use, we estimate future revenue using predictive models based on customers’ historical usage to plan and issue financial forecasts. Product revenue excludes our professional services and other revenue, which has been less than 10% of total revenue in each of the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020.
Remaining Performance Obligations
Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. RPO excludes performance obligations from on-demand arrangements and certain time and materials contracts that are billed in arrears. RPO is not necessarily indicative of future product revenue growth because it does not account for the timing of customers’ consumption or their consumption of more than their contracted capacity. Moreover, RPO is influenced by a number of factors, including the timing of renewals, the timing of purchases of additional capacity, average contract terms, seasonality, and the extent to which customers are permitted to roll over unused capacity to future periods, generally upon the purchase of additional capacity at renewal. Due to these factors, it is important to review RPO in conjunction with product revenue and other financial metrics disclosed elsewhere in this prospectus.
Total Customers
We count the total number of customers at the end of each period. For purposes of determining our customer count, we treat each customer account that has a corresponding capacity contract as a unique customer, and a single organization with multiple divisions, segments, or subsidiaries may be counted as multiple customers. For purposes of determining our customer count, we do not include customers that consume our platform only under on-demand arrangements. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity. We believe that the number of customers is an important indicator of the growth of our business and future revenue trends.
Net Revenue Retention Rate
We believe the growth in use of our platform by our existing customers is an important measure of the health of our business and our future growth prospects. We monitor our dollar-based net revenue retention rate to measure this growth. To calculate this metric, we first specify a measurement period consisting of the trailing two years from our current period end. Next, we define as our measurement cohort the population of customers under capacity contracts that used our platform at any point in the first month of the first year of the measurement period. We then calculate our net revenue retention rate as the quotient obtained by dividing our product revenue from this cohort in the second year of the measurement period by our product revenue from this cohort in the first year of the measurement period. Any customer in the cohort that did not use our platform in the second year remains in the calculation and contributes zero product revenue in the second year. Our net revenue retention rate is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity. Since we will continue to attribute the historical product revenue to the consolidated contract, consolidation of capacity contracts within a customer’s organization typically will not impact our net revenue retention rate unless one of those customers was not a customer at any point in the first month of the first year of the measurement period. We expect our net revenue retention rate to decrease over time as customers that have consumed our platform for an extended period of time become a larger portion of both our overall customer base and our product revenue that we use to calculate net revenue retention rate, and as their consumption growth primarily relates to existing use cases rather than new use cases.
Customers with Trailing 12-Month Product Revenue Greater than $1 Million
Large customer relationships lead to scale and operating leverage in our business model. Compared with smaller customers, large customers present a greater opportunity for us to sell additional capacity because they have larger budgets, a wider range of potential use cases, and greater potential for migrating new workloads to our platform over time. As a measure of our ability to scale with our customers and attract large enterprises to our platform, we count the number of customers under capacity arrangements that contributed more than $1 million in product revenue in the trailing 12 months. Our customer count is subject to adjustments for acquisitions, consolidations, spin-offs, and other market activity.
Impact of COVID-19
The COVID-19 pandemic has caused general business disruption worldwide beginning in January 2020. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations, cash flows, and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted. We have experienced, and may continue to experience, a modest adverse impact on certain parts of our business following the implementation of shelter-in-place orders to mitigate the outbreak of COVID-19, including a lengthening of the sales cycle for some prospective customers and delays in the delivery of professional services and trainings to our customers. We have also experienced, and may continue to experience, a modest positive impact on other aspects of our business, including an increase in consumption of our platform by existing customers. Moreover, we have seen slower growth in certain operating expenses due to reduced business travel, deferred hiring for some positions, and the virtualization or cancellation of customer and employee events. While a reduction in operating expenses may have an immediate positive impact on our results of operations, we do not yet have visibility into the full impact this will have on our business. We cannot predict how long we will continue to experience these impacts as shelter-in-place orders and other related measures are expected to change over time. Our results of operations, cash flows, and financial condition have not been adversely impacted to date. However, as certain of our customers or partners experience downturns or uncertainty in their own business operations or revenue resulting from the spread of COVID-19, they may continue to decrease or delay their spending, request pricing discounts, or seek renegotiations of their contracts, any of which may result in decreased revenue and cash receipts for us. In addition, we may experience customer losses, including due to bankruptcy or our customers ceasing operations, which may result in an inability to collect accounts receivable from these customers. In addition, in response to the spread of COVID-19, we have required substantially all of our employees to work remotely to minimize the risk of the virus to our employees and the communities in which we operate, and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, and business partners.
The global impact of COVID-19 continues to rapidly evolve, and we will continue to monitor the situation and the effects on our business and operations closely. We do not yet know the full extent of potential impacts on our business or operations or on the global economy as a whole, particularly if the COVID-19 pandemic continues and persists for an extended period of time. Given the uncertainty, we cannot reasonably estimate the impact on our future results of operations, cash flows, or financial condition. For additional details, see the section titled “Risk Factors.”
Components of Results of Operations
Revenue
We deliver our platform over the internet as a service. Customers choose to consume our platform under either capacity arrangements, in which they commit to a certain amount of consumption at specified prices, or under on-demand arrangements, in which we charge for use of our platform monthly in arrears. Under capacity arrangements, from which a substantial majority of our revenue is derived, we typically bill our customers annually in advance of their consumption. However, in future periods, we expect to see an increase in capacity contracts providing for quarterly upfront billings and monthly in arrears billings as our customers increasingly want to align consumption and timing of payments. Revenue from on-demand arrangements typically relates to initial consumption as part of customer onboarding and, to a lesser extent, overage consumption beyond a customer’s contracted usage amount or following the expiration of a customer’s contract. Revenue from on-demand arrangements represented less than 10% of our
revenue for the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020.
We recognize revenue as customers consume compute, storage, and data transfer resources under either of these arrangements. In limited instances, customers pay an annual deployment fee to gain access to a dedicated instance of a virtual private deployment. We recognize the deployment fee ratably over the contract term. Such deployment revenue represented approximately 1% of our revenue for the fiscal years ended January 31, 2019 and 2020.
Our customer contracts for capacity typically have a one-year term. To the extent our customers enter into such contracts and either consume our platform in excess of their capacity commitments or continue to use our platform after expiration of the contract term, they are charged for their incremental consumption. In many cases, our customer contracts permit customers to roll over any unused capacity to a subsequent order, generally on the purchase of additional capacity. For those customers who do not have a capacity arrangement, our on-demand arrangements generally have a monthly stated contract term and can be terminated at any time by either the customer or us.
We generate the substantial majority of our revenue from fees charged to our customers based on the storage, compute, and data transfer resources consumed on our platform as a single, integrated offering. We do not make any one of these resources available for consumption without the others. Instead, each of compute, storage, and data transfer work together to drive consumption on our platform. For storage resources, consumption for a given customer is based on the average terabytes per month of all of such customer’s data stored in our platform. For compute resources, consumption is based on the type of compute resource used and the duration of use or, for some features, the volume of data processed. For data transfer resources, consumption is based on terabytes of data transferred, the public cloud provider used, and the region to and from which the transfer is executed.
Because customers have flexibility in their consumption and we generally recognize revenue on consumption and not ratably over the term of the contract, we do not have the visibility into the timing of revenue recognition from any particular customer contract that typical subscription-based software companies may have. As our customer base grows, we expect our ability to forecast customer consumption in the aggregate will improve. However, in any given period, there is a risk that customers will consume our platform more slowly than we expect, which may cause fluctuations in our revenue and results of operations.
Our revenue also includes professional services and other revenue, which consists of consulting, on-site technical solution services, and training related to our platform. Our professional services revenue is recognized over time based on input measures, including time and materials costs incurred relative to total costs, with consideration given to output measures, such as contract deliverables, when applicable. Other revenue consists of fees from customer training delivered on-site or through publicly available classes.
Allocation of Overhead Costs
Overhead costs that are not substantially dedicated for use by a specific functional group are allocated based on headcount. Such costs include costs associated with office facilities, depreciation of property and equipment, and IT-related personnel and other expenses, such as software and subscription services.
Cost of Revenue
Cost of revenue consists of cost of product revenue and cost of professional services and other revenue. Cost of revenue also includes allocated overhead costs.
Cost of product revenue. Cost of product revenue consists primarily of third-party cloud infrastructure expenses incurred in connection with our customers’ use of our platform and the deployment and maintenance of our platform on public clouds, including different regional deployments, and personnel-related costs associated with customer support and maintaining service availability, including salaries, benefits, bonuses, and stock-based compensation. Cost of product revenue also includes amortization of internal-use software development costs, amortization of acquired developed technology intangible
assets, and expenses associated with software and subscription services dedicated for use by our customer support team and our engineering team responsible for maintaining our platform.
Cost of professional services and other revenue. Cost of professional services and other revenue consists primarily of personnel-related costs associated with our professional services and training departments, including salaries, benefits, bonuses, and stock-based compensation, and costs of contracted third-party partners.
We intend to continue to invest additional resources in our platform infrastructure and our customer support and professional services organizations to support the growth of our business. Some of these investments, including certain support costs and costs of expanding our business internationally, are incurred in advance of generating revenue, and either the failure to generate anticipated revenue or fluctuations in the timing of revenue could affect our gross margin from period to period.
Operating Expenses
Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. Personnel costs are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation, and sales commissions. Operating expenses also include allocated overhead costs.
Sales and Marketing
Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing staff, including salaries, benefits, bonuses, and stock-based compensation. Sales and marketing expenses also include draws and sales commissions paid to our sales force and referral fees paid to independent third parties, including amortization of deferred commissions. Prior to the six months ended July 31, 2020, we primarily amortized sales commissions over a period of benefit that we determined to be five years as they were earned on new customer or customer expansion contracts. As a result of modifications to our sales compensation plan during the six months ended July 31, 2020, we now expense a portion of these sales commissions in the period earned, as they are earned based on the rate of our customers’ consumption of our platform, which we expect will accelerate our sales and marketing expenses in the near term. The remaining portion of the sales commissions is earned upon origination of the new customer or customer expansion contract and is deferred and amortized over the period of benefit that we determined to be five years. In addition, sales and marketing expenses include expenses from our user conferences and programs, offset by proceeds from such conferences and programs, advertising costs, software and subscription services dedicated for use by our sales and marketing organizations, and outside services contracted for sales and marketing purposes. We expect that our sales and marketing expenses will increase in absolute dollars and continue to be our largest operating expense for the foreseeable future as we grow our business. However, we expect that our sales and marketing expenses will decrease as a percentage of our revenue over time.
Research and Development
Research and development expenses consist primarily of personnel-related expenses associated with our research and development staff, including salaries, benefits, bonuses, and stock-based compensation. Research and development expenses also include contractor or professional services fees, third-party cloud infrastructure expenses incurred in developing our platform, and computer equipment, software, and subscription services dedicated for use by our research and development organization. We expect that our research and development expenses will increase in absolute dollars as our business grows, particularly as we incur additional costs related to continued investments in our platform. However, we expect that our research and development expenses will decrease as a percentage of our revenue over time. In addition, research and development expenses that qualify as internal-use software development costs are capitalized, the amount of which may fluctuate significantly from period to period.
General and Administrative
General and administrative expenses consist primarily of personnel-related expenses for our finance, legal, human resources, facilities, and administrative personnel, including salaries, benefits, bonuses, and stock-based compensation. General and administrative expenses also include external legal, accounting,
and other professional services fees, software and subscription services dedicated for use by our general and administrative functions, and other corporate expenses.
Following the closing of this offering, we expect to incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations, and increased expenses for insurance, investor relations, and professional services. We expect that our general and administrative expenses will increase in absolute dollars as our business grows but will decrease as a percentage of our revenue over time.
Interest Income
Interest income consists primarily of interest income earned on our cash equivalents and short-term and long-term investments.
Other Income (Expense), Net
Other income (expense), net consists primarily of the effect of exchange rates on our foreign currency-denominated asset and liability balances, and interest expense.
Provision for (Benefit from) Income Taxes
Provision for (benefit from) income taxes consists primarily of income taxes in certain foreign and state jurisdictions in which we conduct business. We maintain a full valuation allowance against our U.S. deferred tax assets because we have concluded that it is more likely than not that the deferred tax assets will not be realized.
Results of Operations
The following table sets forth our consolidated statements of operations data for the periods indicated:
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|
|
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|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
Revenue
|
$
|
96,666
|
|
|
$
|
264,748
|
|
|
$
|
104,044
|
|
|
$
|
241,960
|
|
|
Cost of revenue(1)
|
51,753
|
|
|
116,557
|
|
|
52,546
|
|
|
93,003
|
|
|
Gross profit
|
44,913
|
|
|
148,191
|
|
|
51,498
|
|
|
148,957
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing(1)
|
125,642
|
|
|
293,577
|
|
|
137,465
|
|
|
190,540
|
|
|
Research and development(1)
|
68,681
|
|
|
105,160
|
|
|
47,782
|
|
|
69,811
|
|
|
General and administrative(1)
|
36,055
|
|
|
107,542
|
|
|
49,095
|
|
|
62,692
|
|
|
Total operating expenses
|
230,378
|
|
|
506,279
|
|
|
234,342
|
|
|
323,043
|
|
|
Operating loss
|
(185,465)
|
|
|
(358,088)
|
|
|
(182,844)
|
|
|
(174,086)
|
|
|
Interest income
|
8,759
|
|
|
11,551
|
|
|
6,761
|
|
|
4,137
|
|
|
Other expense, net
|
(502)
|
|
|
(1,005)
|
|
|
(779)
|
|
|
(1,042)
|
|
|
Loss before income taxes
|
(177,208)
|
|
|
(347,542)
|
|
|
(176,862)
|
|
|
(170,991)
|
|
|
Provision for income taxes
|
820
|
|
|
993
|
|
|
362
|
|
|
287
|
|
|
Net loss
|
$
|
(178,028)
|
|
|
$
|
(348,535)
|
|
|
$
|
(177,224)
|
|
|
$
|
(171,278)
|
|
________________
(1)Includes stock-based compensation expense as follows:
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|
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|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
Cost of revenue
|
$
|
1,895
|
|
|
$
|
3,650
|
|
|
$
|
1,850
|
|
|
$
|
2,281
|
|
|
Sales and marketing
|
15,647
|
|
|
20,757
|
|
|
10,626
|
|
|
10,233
|
|
|
Research and development
|
28,284
|
|
|
15,743
|
|
|
6,411
|
|
|
9,818
|
|
|
General and administrative
|
6,912
|
|
|
38,249
|
|
|
15,580
|
|
|
16,317
|
|
|
Total stock-based compensation expense
|
$
|
52,738
|
|
|
$
|
78,399
|
|
|
$
|
34,467
|
|
|
$
|
38,649
|
|
Stock-based compensation expense for the fiscal year ended January 31, 2019 included $30.3 million of compensation expense related to the amount paid in excess of the estimated fair value of common stock at the date of the transaction in connection with two issuer tender offers. See Note 11 to our consolidated financial statements included elsewhere in this prospectus for further details.
The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
(as a percentage of total revenue)
|
|
|
|
|
|
|
|
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Cost of revenue
|
54
|
|
|
44
|
|
|
51
|
|
|
38
|
|
|
Gross profit
|
46
|
|
|
56
|
|
|
49
|
|
|
62
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing
|
130
|
|
|
111
|
|
|
132
|
|
|
79
|
|
|
Research and development
|
71
|
|
|
40
|
|
|
46
|
|
|
29
|
|
|
General and administrative
|
37
|
|
|
41
|
|
|
47
|
|
|
26
|
|
|
Total operating expenses
|
238
|
|
|
192
|
|
|
225
|
|
|
134
|
|
|
Operating loss
|
(192)
|
|
|
(136)
|
|
|
(176)
|
|
|
(72)
|
|
|
Interest income
|
9
|
|
|
4
|
|
|
7
|
|
|
1
|
|
|
Other expense, net
|
—
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
Loss before income taxes
|
(183)
|
|
|
(132)
|
|
|
(170)
|
|
|
(71)
|
|
|
Provision for income taxes
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net loss
|
(184)
|
%
|
|
(132)
|
%
|
|
(170)
|
%
|
|
(71)
|
%
|
Comparison of the Six Months Ended July 31, 2019 and 2020
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Product
|
$
|
100,584
|
|
|
$
|
227,033
|
|
|
$
|
126,449
|
|
|
126
|
%
|
|
Professional services and other
|
3,460
|
|
|
14,927
|
|
|
11,467
|
|
|
331
|
%
|
|
Total revenue
|
$
|
104,044
|
|
|
$
|
241,960
|
|
|
$
|
137,916
|
|
|
133
|
%
|
|
Percentage of revenue:
|
|
|
|
|
|
|
|
|
Product
|
97
|
%
|
|
94
|
%
|
|
|
|
|
|
Professional services and other
|
3
|
|
|
6
|
|
|
|
|
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
|
|
|
Product revenue increased primarily due to increased consumption of our platform by existing customers, as evidenced by our net revenue retention rate of 158% during the six months ended July 31, 2020, as well as capacity sales price increases of approximately 11% year over year, primarily associated
with better discipline over discounting. We had 56 customers with product revenue of greater than $1 million for the trailing 12 months ended July 31, 2020, increasing from 22 customers as of July 31, 2019, representing approximately 46% and 47% of our product revenue for the trailing 12 months ended July 31, 2020 and July 31, 2019, respectively. Approximately 94% of our revenue during the six months ended July 31, 2020 was derived from existing customers under capacity arrangements, approximately 3% of our revenue was derived from new customers under capacity arrangements, and the remainder was driven by on-demand arrangements.
Professional services and other revenue increased as we expanded our professional services organization to help our customers further realize the benefits of our platform. We expect professional services and other revenue for the fiscal year ending January 31, 2021 to increase as a percentage of total revenue.
Cost of Revenue, Gross Profit (Loss), and Gross Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
Product
|
$
|
43,199
|
|
|
$
|
78,249
|
|
|
$
|
35,050
|
|
|
81
|
%
|
|
Professional services and other
|
9,347
|
|
|
14,754
|
|
|
5,407
|
|
|
58
|
%
|
|
Total cost of revenue
|
$
|
52,546
|
|
|
$
|
93,003
|
|
|
$
|
40,457
|
|
|
77
|
%
|
|
Gross profit (loss):
|
|
|
|
|
|
|
|
|
Product
|
$
|
57,385
|
|
|
$
|
148,784
|
|
|
$
|
91,399
|
|
|
|
|
Professional services and other
|
(5,887)
|
|
|
173
|
|
|
6,060
|
|
|
|
|
Total gross profit
|
$
|
51,498
|
|
|
$
|
148,957
|
|
|
$
|
97,459
|
|
|
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
Product
|
57
|
%
|
|
66
|
%
|
|
|
|
|
|
Professional services and other
|
(170)
|
%
|
|
1
|
%
|
|
|
|
|
|
Total gross margin
|
49
|
%
|
|
62
|
%
|
|
|
|
|
|
Headcount (at period end)
|
|
|
|
|
|
|
|
|
Product
|
59
|
|
|
101
|
|
|
|
|
|
|
Professional services and other
|
54
|
|
|
117
|
|
|
|
|
|
|
Total headcount
|
113
|
|
|
218
|
|
|
|
|
|
Cost of product revenue increased primarily due to an increase of $30.0 million in third-party cloud infrastructure expenses, an increase of $3.6 million in personnel-related costs (including an increase of $0.1 million in stock-based compensation) as a result of increased headcount, an increase of $0.7 million in amortization of internal-use software development costs, and an increase of $0.7 million in expenses associated with software and subscription services dedicated for use by our customer support team.
Cost of professional services and other revenue increased primarily due to an increase of $4.6 million in personnel-related costs (including an increase of $0.4 million in stock-based compensation) as a result of increased headcount and an increase of $0.7 million in costs associated with contracted third-party partners.
Our product gross margin increased primarily due to better discipline over discounting, higher volume-based discounts for purchases of third-party cloud infrastructure, and increased scale across our cloud infrastructure regions. Given that we have only recently started to scale our professional services organization, we do not believe year-over-year changes in professional services and other gross margins are meaningful.
Sales and Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Sales and marketing
|
$
|
137,465
|
|
|
$
|
190,540
|
|
|
$
|
53,075
|
|
|
39
|
%
|
|
Percentage of revenue
|
132
|
%
|
|
79
|
%
|
|
|
|
|
|
Headcount (at period end)
|
798
|
|
|
1,141
|
|
|
|
|
|
Sales and marketing expenses increased primarily due to a net increase of $32.0 million in personnel-related expenses (including stock-based compensation as discussed further below, but excluding commission expenses) as a result of increased headcount, an increase of $4.9 million in advertising costs, an increase of $4.5 million in allocated overhead costs, primarily due to rent associated with our new headquarters and increased IT-related costs, an increase of $2.1 million in contractor fees, partially offset by a decrease of $7.0 million in recruiting expenses. Our personnel-related expenses, sales-related conferences and events, and expenses from user conferences and programs were less than anticipated due to COVID-19, which resulted in us delaying hiring and reducing travel and event spend. Expenses associated with commissions and third-party referral fees, including amortization of deferred commissions, increased $15.9 million for the six months ended July 31, 2020, compared to the six months ended July 31, 2019. The increase was due to an increase in bookings and modifications to our sales compensation plan during the six months ended July 31, 2020, as discussed in “Components of Results of Operations” above.
Stock-based compensation expense decreased $0.4 million, primarily due to a decrease of $3.5 million in stock-based compensation expense related to certain restricted stock awards granted to a third-party service provider that fully vested as of January 31, 2020. This was partially offset by an increase in headcount during the six months ended July 31, 2020.
Research and Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Research and development
|
$
|
47,782
|
|
|
$
|
69,811
|
|
|
$
|
22,029
|
|
|
46
|
%
|
|
Percentage of revenue
|
46
|
%
|
|
29
|
%
|
|
|
|
|
|
Headcount (at period end)
|
261
|
|
|
384
|
|
|
|
|
|
Research and development expenses increased primarily due to an increase of $17.8 million in personnel-related expenses (including an increase of $3.4 million in stock-based compensation) as a result of increased headcount, an increase of $3.7 million in third-party cloud infrastructure expenses incurred in developing our platform, and an increase of $0.6 million in expenses associated with subscription services dedicated for use by our research and development organization, partially offset by immaterial items.
General and Administrative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
General and administrative
|
$
|
49,095
|
|
|
$
|
62,692
|
|
|
$
|
13,597
|
|
|
28
|
%
|
|
Percentage of revenue
|
47
|
%
|
|
26
|
%
|
|
|
|
|
|
Headcount (at period end)
|
161
|
|
|
294
|
|
|
|
|
|
General and administrative expenses increased primarily due to an increase of $7.9 million in personnel-related expenses (including an increase of $0.7 million in stock-based compensation) as a result of increased headcount, an increase of $3.2 million in outside services, primarily related to legal and accounting services, an increase of $1.0 million in business license fees, property taxes, and other business taxes, an increase of $0.9 million in expenses associated with software and subscription services dedicated for use by our general and administrative functions, and an increase of $0.5 million in
allocated overhead expenses, primarily due to rent associated with our new headquarters and increased IT-related costs to support the growth of our business, partially offset by a decrease of $1.2 million in rent expense due to a decrease in unused lease spaces and an increase in sublease income.
Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Interest income
|
$
|
6,761
|
|
|
$
|
4,137
|
|
|
$
|
(2,624)
|
|
|
(39)
|
%
|
Interest income decreased primarily due to lower yields on investments, partially offset by the effect of higher cash and investment balances.
Provision for Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Loss before income taxes
|
$
|
(176,862)
|
|
|
$
|
(170,991)
|
|
|
$
|
5,871
|
|
|
(3)
|
%
|
|
Provision for income taxes
|
362
|
|
|
287
|
|
|
(75)
|
|
|
(21)
|
|
|
Effective tax rate
|
(0.2)
|
%
|
|
(0.2)
|
%
|
|
|
|
|
We maintain a full valuation allowance on our U.S. deferred tax assets, and the significant components of the tax expense recorded are current cash taxes in various jurisdictions. The cash tax expenses are impacted by each jurisdiction’s individual tax rates, laws on the timing of recognition of income and deductions, and availability of net operating losses and tax credits. Our effective tax rate might fluctuate significantly on a quarterly basis and could be adversely affected to the extent earnings are lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates.
Comparison of the Fiscal Years Ended January 31, 2019 and 2020
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Product
|
$
|
95,683
|
|
|
$
|
252,229
|
|
|
$
|
156,546
|
|
|
164
|
%
|
|
Professional services and other
|
983
|
|
|
12,519
|
|
|
11,536
|
|
|
1,174
|
%
|
|
Total revenue
|
$
|
96,666
|
|
|
$
|
264,748
|
|
|
$
|
168,082
|
|
|
174
|
%
|
|
Percentage of revenue:
|
|
|
|
|
|
|
|
|
Product
|
99
|
%
|
|
95
|
%
|
|
|
|
|
|
Professional services and other
|
1
|
|
|
5
|
|
|
|
|
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
|
|
|
Product revenue increased primarily due to increased consumption of our platform by existing customers, as evidenced by our net revenue retention rate of 169% during the fiscal year ended January 31, 2020, as well as capacity sales price increases of approximately 12% year over year associated with better discipline over discounting. We had 41 customers with product revenue of greater than $1 million for the trailing 12 months ended January 31, 2020, increasing from 14 customers as of January 31, 2019, representing approximately 47% and 46% of our product revenue for the trailing 12 months ended January 31, 2020 and January 31, 2019, respectively. Approximately 84% of our revenue during the fiscal year ended January 31, 2020 was derived from existing customers under capacity arrangements, approximately 12% of our revenue was derived from new customers under capacity arrangements, and the remainder was driven by on-demand arrangements.
Professional services and other revenue increased as we expanded our professional services organization to help our customers further realize the benefits of our platform. We expect professional services and other revenue to increase as a percentage of total revenue for the fiscal year ending January 31, 2021 and increase in absolute dollars in future periods.
Cost of Revenue, Gross Profit (Loss), and Gross Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
Product
|
$
|
41,575
|
|
|
$
|
96,622
|
|
|
$
|
55,047
|
|
|
132
|
%
|
|
Professional services and other
|
10,178
|
|
|
19,935
|
|
|
9,757
|
|
|
96
|
%
|
|
Total cost of revenue
|
$
|
51,753
|
|
|
$
|
116,557
|
|
|
$
|
64,804
|
|
|
125
|
%
|
|
Gross profit (loss):
|
|
|
|
|
|
|
|
|
Product
|
$
|
54,108
|
|
|
$
|
155,607
|
|
|
$
|
101,499
|
|
|
|
|
Professional services and other
|
(9,195)
|
|
|
(7,416)
|
|
|
1,779
|
|
|
|
|
Total gross profit
|
$
|
44,913
|
|
|
$
|
148,191
|
|
|
$
|
103,278
|
|
|
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
Product
|
57
|
%
|
|
62
|
%
|
|
|
|
|
|
Professional services and other
|
(935)
|
%
|
|
(59)
|
%
|
|
|
|
|
|
Total gross margin
|
46
|
%
|
|
56
|
%
|
|
|
|
|
|
Headcount (at period end)
|
|
|
|
|
|
|
|
|
Product
|
36
|
|
|
81
|
|
|
|
|
|
|
Professional services and other
|
47
|
|
|
84
|
|
|
|
|
|
|
Total headcount
|
83
|
|
|
165
|
|
|
|
|
|
Cost of product revenue increased primarily due to an increase of $37.3 million in third-party cloud infrastructure expenses, an increase of $10.4 million in personnel-related costs (including an increase of $0.9 million in stock-based compensation) as a result of increased headcount, an increase of $2.7 million in allocated overhead costs, primarily due to rent associated with our new headquarters and increased IT-related costs to support the growth of our business, and an increase of $2.4 million in expenses associated with software and subscription services dedicated for use by our customer support team.
Cost of professional services and other revenue increased primarily due to an increase of $9.6 million in personnel-related costs (including an increase of $0.8 million in stock-based compensation) as a result of increased headcount and an increase of $0.9 million in allocated overhead costs, primarily due to rent associated with our new headquarters and increased IT-related costs to support the growth of our business, partially offset by immaterial items.
Our product gross margin increased primarily due to better discipline over discounting, higher volume-based discounts for purchases of third-party cloud infrastructure, and increased scale across our cloud infrastructure regions. Given that we have only recently started to scale our professional services organization, we do not believe year-over-year changes in professional services and other gross margins are meaningful.
Sales and Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Sales and marketing
|
$
|
125,642
|
|
|
$
|
293,577
|
|
|
$
|
167,935
|
|
|
134
|
%
|
|
Percentage of revenue
|
130
|
%
|
|
111
|
%
|
|
|
|
|
|
Headcount (at period end)
|
551
|
|
|
989
|
|
|
|
|
|
Sales and marketing expenses increased primarily due to an increase of $100.2 million in personnel-related expenses (including an increase of $5.1 million in stock-based compensation, but excluding commission expenses) as a result of increased headcount, an increase of $18.8 million in advertising costs, an increase of $17.3 million in allocated overhead costs, primarily due to rent associated with our new headquarters and increased IT-related costs, an increase of $6.3 million in outside services, an increase of $3.4 million in expenses incurred for sales-related conferences and events, and an increase of $3.0 million in expenses from our user conferences and programs, partially offset by immaterial items. Expenses associated with commissions and third-party referral fees, including amortization of deferred commissions, increased $19.2 million for the fiscal year ended January 31, 2020, compared to the fiscal year ended January 31, 2019, due to increased bookings.
Research and Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Research and development
|
$
|
68,681
|
|
|
$
|
105,160
|
|
|
$
|
36,479
|
|
|
53
|
%
|
|
Percentage of revenue
|
71
|
%
|
|
40
|
%
|
|
|
|
|
|
Headcount (at period end)
|
164
|
|
|
311
|
|
|
|
|
|
Research and development expenses increased primarily due to a net increase of $15.5 million in personnel-related expenses (including stock-based compensation as discussed further below) as a result of increased headcount, an increase of $10.0 million in allocated overhead costs, primarily due to rent associated with our new headquarters and increased IT-related costs to support the growth of our business, and an increase of $8.7 million in third-party cloud infrastructure expenses incurred in developing our platform.
During the fiscal year ended January 31, 2019, we completed two issuer tender offers, which resulted in $30.3 million of stock-based compensation, of which $21.8 million was included in research and development expenses, for the amount paid to purchase shares of our Class B common stock in excess of fair value. Accordingly, stock-based compensation for the fiscal year ended January 31, 2020 decreased $12.5 million compared to the fiscal year ended January 31, 2019, although the amount of the decrease was partially offset by an increase in stock-based compensation attributable to increased headcount during the fiscal year ended January 31, 2020.
General and Administrative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
General and administrative
|
$
|
36,055
|
|
|
$
|
107,542
|
|
|
$
|
71,487
|
|
|
198
|
%
|
|
Percentage of revenue
|
37
|
%
|
|
41
|
%
|
|
|
|
|
|
Headcount (at period end)
|
140
|
|
|
211
|
|
|
|
|
|
General and administrative expenses increased primarily due to an increase of $50.5 million in personnel-related expenses as a result of increased headcount (including an increase of $31.3 million in stock-based compensation partially attributable to the modification of certain awards held by our former Chief Executive Officer), an increase of $8.2 million in outside services, primarily related to legal and accounting services, an increase of $5.9 million in allocated overhead expenses, primarily due to rent associated with our new headquarters and increased IT-related costs to support the growth of our business, and an increase of $5.9 million in unallocated rent expense related to unused lease spaces to accommodate planned headcount growth.
Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Interest income
|
$
|
8,759
|
|
|
$
|
11,551
|
|
|
$
|
2,792
|
|
|
32
|
%
|
Interest income increased primarily due to higher cash and investment balances.
Provision for Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Change
|
|
% Change
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
Loss before income taxes
|
$
|
(177,208)
|
|
|
$
|
(347,542)
|
|
|
$
|
(170,334)
|
|
|
96
|
%
|
|
Provision for income taxes
|
820
|
|
|
993
|
|
|
173
|
|
|
21
|
%
|
|
Effective tax rate
|
(0.5)
|
%
|
|
(0.3)
|
%
|
|
|
|
|
The provision for income taxes increased primarily as a result of the increase in pre-tax income related to international operations, offset by the partial release of a valuation allowance as a result of an acquisition.
We maintain a full valuation allowance on our U.S. deferred tax assets, and the significant components of the tax expense recorded are current cash taxes in various jurisdictions. The cash tax expenses are impacted by each jurisdiction’s individual tax rates, laws on the timing of recognition of income and deductions and availability of net operating losses and tax credits. Our effective tax rate fluctuates significantly and could be adversely affected to the extent earnings are lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates.
Quarterly Results of Operations
The following tables summarize our selected unaudited quarterly consolidated statements of operations data, the percentage of revenues that each line item represents, and the key business metrics for each of the eight quarters in the period ended July 31, 2020. The information for each of these quarters has been prepared on the same basis as our audited annual consolidated financial statements and reflects, in the opinion of management, all adjustments of a normal, recurring nature that are necessary for the fair statement of the results of operations for these periods. This data should be read in conjunction with our audited consolidated financial statements included elsewhere in this prospectus. Historical results are not necessarily indicative of the results that may be expected for the full fiscal year or any other period.
Consolidated Statements of Operations Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, 2018
|
|
January 31, 2019
|
|
April 30, 2019
|
|
July 31, 2019
|
|
October 31, 2019
|
|
January 31, 2020
|
|
April 30, 2020
|
|
July 31, 2020
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
28,680
|
|
|
$
|
36,678
|
|
|
$
|
43,705
|
|
|
$
|
60,339
|
|
|
$
|
73,012
|
|
|
$
|
87,692
|
|
|
$
|
108,815
|
|
|
$
|
133,145
|
|
|
Cost of revenue(1)
|
13,824
|
|
|
20,389
|
|
|
24,038
|
|
|
28,508
|
|
|
29,489
|
|
|
34,522
|
|
|
42,557
|
|
|
50,446
|
|
|
Gross profit
|
14,856
|
|
|
16,289
|
|
|
19,667
|
|
|
31,831
|
|
|
43,523
|
|
|
53,170
|
|
|
66,258
|
|
|
82,699
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing(1)
|
32,257
|
|
|
46,181
|
|
|
64,052
|
|
|
73,413
|
|
|
75,668
|
|
|
80,444
|
|
|
97,877
|
|
|
92,663
|
|
|
Research and development(1)
|
12,820
|
|
|
27,574
|
|
|
21,618
|
|
|
26,164
|
|
|
27,669
|
|
|
29,709
|
|
|
33,278
|
|
|
36,533
|
|
|
General and administrative(1)
|
8,773
|
|
|
14,304
|
|
|
21,272
|
|
|
27,823
|
|
|
30,318
|
|
|
28,129
|
|
|
31,506
|
|
|
31,186
|
|
|
Total operating expenses
|
53,850
|
|
|
88,059
|
|
|
106,942
|
|
|
127,400
|
|
|
133,655
|
|
|
138,282
|
|
|
162,661
|
|
|
160,382
|
|
|
Operating loss
|
(38,994)
|
|
|
(71,770)
|
|
|
(87,275)
|
|
|
(95,569)
|
|
|
(90,132)
|
|
|
(85,112)
|
|
|
(96,403)
|
|
|
(77,683)
|
|
|
Interest income
|
2,025
|
|
|
4,196
|
|
|
3,594
|
|
|
3,167
|
|
|
2,491
|
|
|
2,299
|
|
|
2,448
|
|
|
1,689
|
|
|
Other income (expense), net
|
(180)
|
|
|
(21)
|
|
|
(287)
|
|
|
(492)
|
|
|
(40)
|
|
|
(186)
|
|
|
67
|
|
|
(1,109)
|
|
|
Loss before income taxes
|
(37,149)
|
|
|
(67,595)
|
|
|
(83,968)
|
|
|
(92,894)
|
|
|
(87,681)
|
|
|
(82,999)
|
|
|
(93,888)
|
|
|
(77,103)
|
|
|
Provision for (benefit from) income taxes
|
199
|
|
|
308
|
|
|
(159)
|
|
|
521
|
|
|
376
|
|
|
255
|
|
|
(244)
|
|
|
531
|
|
|
Net loss
|
$
|
(37,348)
|
|
|
$
|
(67,903)
|
|
|
$
|
(83,809)
|
|
|
$
|
(93,415)
|
|
|
$
|
(88,057)
|
|
|
$
|
(83,254)
|
|
|
$
|
(93,644)
|
|
|
$
|
(77,634)
|
|
________________
(1)Includes stock-based compensation as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, 2018
|
|
January 31, 2019
|
|
April 30, 2019
|
|
July 31, 2019
|
|
October 31, 2019
|
|
January 31, 2020
|
|
April 30, 2020
|
|
July 31, 2020
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
$
|
302
|
|
|
$
|
1,229
|
|
|
$
|
780
|
|
|
$
|
1,070
|
|
|
$
|
832
|
|
|
$
|
968
|
|
|
$
|
1,117
|
|
|
$
|
1,164
|
|
|
Sales and marketing
|
3,216
|
|
|
7,163
|
|
|
5,560
|
|
|
5,066
|
|
|
4,802
|
|
|
5,329
|
|
|
5,098
|
|
|
5,135
|
|
|
Research and development
|
1,945
|
|
|
13,681
|
|
|
2,954
|
|
|
3,457
|
|
|
4,411
|
|
|
4,921
|
|
|
4,664
|
|
|
5,154
|
|
|
General and administrative
|
1,240
|
|
|
2,721
|
|
|
6,722
|
|
|
8,858
|
|
|
12,913
|
|
|
9,756
|
|
|
9,566
|
|
|
6,751
|
|
|
Stock-based compensation expense
|
$
|
6,703
|
|
|
$
|
24,794
|
|
|
$
|
16,016
|
|
|
$
|
18,451
|
|
|
$
|
22,958
|
|
|
$
|
20,974
|
|
|
$
|
20,445
|
|
|
$
|
18,204
|
|
Stock-based compensation expense for the three months ended January 31, 2019 included $16.0 million of compensation expense, of which $11.0 million was included in research and development expenses, related to the amount paid in excess of the estimated fair value of common stock at the date of the transaction in connection with our issuer tender offers. See Note 11 to our consolidated financial statements included elsewhere in this prospectus for further details.
Percentage of Revenue Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, 2018
|
|
January 31, 2019
|
|
April 30, 2019
|
|
July 31, 2019
|
|
October 31, 2019
|
|
January 31, 2020
|
|
April 30, 2020
|
|
July 31, 2020
|
|
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Cost of revenue
|
48
|
|
|
56
|
|
|
55
|
|
|
47
|
|
|
40
|
|
|
39
|
|
|
39
|
|
|
38
|
|
|
Gross margin
|
52
|
|
|
44
|
|
|
45
|
|
|
53
|
|
|
60
|
|
|
61
|
|
|
61
|
|
|
62
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
112
|
|
|
125
|
|
|
146
|
|
|
122
|
|
|
104
|
|
|
92
|
|
|
90
|
|
|
70
|
|
|
Research and development
|
45
|
|
|
75
|
|
|
49
|
|
|
43
|
|
|
38
|
|
|
34
|
|
|
30
|
|
|
27
|
|
|
General and administrative
|
31
|
|
|
39
|
|
|
49
|
|
|
46
|
|
|
42
|
|
|
32
|
|
|
29
|
|
|
23
|
|
|
Total operating expenses
|
188
|
|
|
239
|
|
|
244
|
|
|
211
|
|
|
184
|
|
|
158
|
|
|
149
|
|
|
120
|
|
|
Operating margin
|
(136)
|
|
|
(195)
|
|
|
(199)
|
|
|
(158)
|
|
|
(124)
|
|
|
(97)
|
|
|
(88)
|
|
|
(58)
|
|
|
Interest income
|
7
|
|
|
11
|
|
|
8
|
|
|
5
|
|
|
4
|
|
|
2
|
|
|
2
|
|
|
1
|
|
|
Other income (expense), net
|
—
|
|
|
—
|
|
|
(1)
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
Loss before income taxes
|
(129)
|
|
|
(184)
|
|
|
(192)
|
|
|
(154)
|
|
|
(120)
|
|
|
(95)
|
|
|
(86)
|
|
|
(58)
|
|
|
Provision for (benefit from) income taxes
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net loss
|
(130)
|
%
|
|
(185)
|
%
|
|
(192)
|
%
|
|
(155)
|
%
|
|
(121)
|
%
|
|
(95)
|
%
|
|
(86)
|
%
|
|
(58)
|
%
|
Quarterly Changes in Revenue
Revenue increased sequentially in each of the quarters presented primarily due to increased consumption of our platform by existing customers and the addition of new customers. Because our revenue is based on consumption and consumption is at the discretion of our customers, our historical revenue results are not necessarily indicative of future performance.
Quarterly Changes in Cost of Revenue
Cost of revenue increased sequentially in each of the quarters presented primarily as a result of increased third-party cloud infrastructure expenses, driven by the initial cost of new deployments and increased consumption of our platform by customers, as well as increased personnel-related expenses resulting from increased headcount.
Quarterly Changes in Gross Margin
Our improved gross margin during the last four quarters presented is primarily attributable to higher volume-based discounts for purchases of third-party cloud infrastructure, increased scale across our cloud infrastructure regions, and improved platform pricing discipline.
Quarterly Changes in Operating Expenses
Operating expenses have generally increased sequentially in each of the quarters presented primarily due to increased headcount and other related costs to support our growth. However, after the outbreak of
COVID-19, we have seen slower growth in certain operating expenses due to reduced business travel, deferred hiring for some positions, and the virtualization or cancellation of customer and employee events. We intend to continue to make significant investments in research and development as we add features and enhance our platform. We also intend to invest in our sales and marketing organization to drive future revenue growth.
Key Business Metrics
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Three Months Ended
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October 31, 2018
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|
January 31, 2019
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|
April 30, 2019
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|
July 31, 2019
|
|
October 31, 2019
|
|
January 31, 2020
|
|
April 30, 2020
|
|
July 31, 2020
|
|
Product revenue (in millions)
|
$
|
28.5
|
|
|
$
|
36.4
|
|
|
$
|
42.8
|
|
|
$
|
57.8
|
|
|
$
|
69.2
|
|
|
$
|
82.4
|
|
|
$
|
101.8
|
|
|
$
|
125.2
|
|
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|
|
|
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|
October 31, 2018
|
|
January 31, 2019
|
|
April 30, 2019
|
|
July 31, 2019
|
|
October 31, 2019
|
|
January 31, 2020
|
|
April 30, 2020
|
|
July 31, 2020
|
|
Remaining performance obligations (in millions)
|
$
|
82.8
|
|
|
$
|
128.0
|
|
|
$
|
137.9
|
|
|
$
|
221.1
|
|
|
$
|
273.0
|
|
|
$
|
426.3
|
|
|
$
|
467.8
|
|
|
$
|
688.2
|
|
|
Total customers
|
702
|
|
|
948
|
|
|
1,194
|
|
|
1,547
|
|
|
1,934
|
|
|
2,392
|
|
|
2,720
|
|
|
3,117
|
|
|
Net revenue retention rate
|
165
|
%
|
|
180
|
%
|
|
187
|
%
|
|
223
|
%
|
|
189
|
%
|
|
169
|
%
|
|
171
|
%
|
|
158
|
%
|
|
Customers with trailing 12-month product revenue greater than $1 million
|
14
|
|
|
14
|
|
|
16
|
|
|
22
|
|
|
31
|
|
|
41
|
|
|
48
|
|
|
56
|
|
During the three months ended July 31, 2019, we experienced a significant increase in our net revenue retention rate as a result of a large enterprise customer’s increased consumption of our platform.
In addition, historically, we have received a higher volume of orders from new and existing customers in the fourth fiscal quarter of each year as a result of industry buying patterns. As a result, our sequential growth in RPO has historically been highest in the fourth fiscal quarter of each year. During the three months ended January 31, 2020, we experienced a significant increase in RPO, which reflects seasonality and increases in contract duration. During the three months ended July 31, 2020, we experienced a significant increase in RPO primarily due to a large enterprise customer entering into a multi-year capacity contract.
We expect our net revenue retention rate to decrease over time as customers that have consumed our platform for an extended period of time become a larger portion of both our overall customer base and our product revenue that we use to calculate net revenue retention rate, and as their consumption growth primarily relates to existing use cases rather than new use cases.
Liquidity and Capital Resources
Since inception, we have financed operations primarily through proceeds received from sales of equity securities and payments received from our customers as further detailed below. As of January 31, 2020 and July 31, 2020, our principal sources of liquidity were cash, cash equivalents, and short-term and long-term investments totaling $457.6 million and $886.8 million, respectively. Our investments consist of U.S. government and agency securities, corporate notes and bonds, commercial paper, certificates of deposit, and asset-backed securities.
We believe that our existing cash, cash equivalents, and short-term and long-term investments will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the price at which we are able to purchase public cloud capacity, expenses associated with our international expansion, the introduction of platform enhancements, and the continuing market adoption of our platform. In the future, we may enter into arrangements to acquire or invest in complementary businesses, products, and technologies. We may be required to seek additional equity or debt financing. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, results of operations, and financial condition.
The following table shows a summary of our cash flows for the periods presented:
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Fiscal Year Ended January 31,
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Six Months Ended July 31,
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|
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|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
$
|
(143,982)
|
|
|
$
|
(176,558)
|
|
|
$
|
(110,016)
|
|
|
$
|
(45,277)
|
|
|
Net cash (used in) provided by investing activities
|
(362,642)
|
|
|
138,495
|
|
|
134,951
|
|
|
(441,403)
|
|
|
Net cash provided by financing activities
|
413,601
|
|
|
57,469
|
|
|
15,891
|
|
|
498,592
|
|
Operating Activities
Our largest source of operating cash is payments received from our customers. Our primary uses of cash from operating activities are for personnel-related expenses, sales and marketing expenses, third-party cloud infrastructure expenses, and overhead expenses. We have generated negative cash flows and have supplemented working capital through net proceeds from the sale of equity securities.
Cash used in operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation, net of amounts capitalized, depreciation and amortization of property and equipment, amortization of acquired intangible assets, amortization of operating lease right-of-use assets, amortization of deferred commissions, and changes in operating assets and liabilities during each period.
For the six months ended July 31, 2020, cash used in operating activities was $45.3 million, primarily consisting of our net loss of $171.3 million, adjusted for non-cash charges of $77.1 million, and net cash inflows of $48.9 million provided by changes in our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were a $46.8 million increase in deferred revenue, resulting primarily from increased prepaid capacity arrangements, a $27.1 million decrease in accounts receivable due to timing of collections, and an $11.0 million increase in accrued expenses and other liabilities due to increased headcount and growth in our business, partially offset by a $17.4 million decrease in operating lease liabilities due to payments related to our operating lease obligations, a $14.3 million increase in deferred commissions earned on bookings, and a $2.8 million decrease in accounts payable due to the timing of payments.
For the six months ended July 31, 2019, cash used in operating activities was $110.0 million, primarily consisting of our net loss of $177.2 million, adjusted for non-cash charges of $51.4 million, and net cash inflows of $15.8 million provided by changes in our operating assets and liabilities, net of effect of an acquisition. The main drivers of the changes in operating assets and liabilities, net of effect of acquisitions, were a $69.0 million increase in deferred revenue, resulting primarily from increased prepaid capacity arrangements, a $9.5 million increase in accrued expenses and other liabilities due to increased headcount and growth in our business, and a $4.0 million increase in accounts payable. These amounts were partially offset by a $44.7 million increase in accounts receivable due to an increase in sales, a $19.3 million increase in deferred commissions earned on bookings and a $5.3 million increase in prepaid expenses and other assets, primarily driven by prepaid software and subscription services.
C ash used in operating activities decreased $64.7 million during the six months ended July 31, 2020 , compared to the six months ended July 31, 2 019 , primarily due to an increase of $196.6 million in cash collected from cu stomers res ulti n g from increased sales . This was partially offset by increased expenditures due to an increase in headcount and growth in our business. W e expect cash used in operating a ctivities to decrease for the fiscal year ending January 31, 2021 compared to the fiscal year end ed January 31, 2020 .
For the fiscal year ended January 31, 2020, cash used in operating activities was $176.6 million, primarily consisting of our net loss of $348.5 million, adjusted for non-cash charges of $122.6 million, and net cash inflows of $49.3 million provided by changes in our operating assets and liabilities, net of effect of acquisitions. The main drivers of the changes in operating assets and liabilities, net of effect of acquisitions, were a $223.0 million increase in deferred revenue, resulting primarily from increased prepaid capacity arrangements, a $1.1 million increase in accounts payable, and a $35.0 million increase in accrued expenses and other liabilities due to increased headcount. These amounts were partially offset by a $116.9 million increase in accounts receivable due to an increase in sales, a $10.8 million increase
in prepaid expenses and other assets, primarily driven by prepaid software and subscription services, a $68.6 million increase in deferred commissions earned on bookings, and a $13.5 million decrease in operating lease liabilities due to payments related to our operating lease obligations.
For the fiscal year ended January 31, 2019, cash used in operating activities was $144.0 million, primarily consisting of our net loss of $178.0 million, adjusted for non-cash charges of $27.8 million, and net cash inflows of $6.2 million provided by changes in our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities, net of the effect of acquisitions, were a $79.6 million increase in deferred revenue, resulting primarily from increased prepaid capacity arrangements, a $5.2 million increase in accounts payable, and a $20.8 million increase in accrued expenses and other liabilities due to increased headcount. These amounts were partially offset by a $51.4 million increase in accounts receivable due to an increase in sales, a $9.1 million increase in prepaid expenses and other assets, primarily driven by prepaid software and subscription services, a $36.3 million increase in deferred commissions earned on bookings, and a $2.5 million decrease in operating lease liabilities due to payments related to our operating lease obligations.
Investing Activities
Cash used in investing activities during the six months ended July 31, 2020 was $441.4 million, as a result of net purchases of investments, purchases of property and equipment to support additional office facilities, purchases of intangible assets, cash paid for an acquisition, and capitalized internal-use software development costs.
Cash provided by investing activities during the six months ended July 31, 2019 was $135.0 million, primarily as a result of net sales, maturities, and redemptions of investments, partially offset by purchases of property and equipment to support additional office facilities and cash paid for an acquisition, net of cash acquired.
Cash provided by investing activities during the fiscal year ended January 31, 2020 was $138.5 million, primarily as a result of net sales, maturities, and redemptions of investments, partially offset by purchases of property and equipment to support additional office facilities, and cash paid for acquisitions, net of cash acquired.
Cash used in investing activities during the fiscal year ended January 31, 2019 was $362.6 million, as a result of net purchases of investments, purchases of property and equipment to support additional office facilities, and capitalized internal-use software development costs.
Financing Activities
Cash provided by financing activities for the six months ended July 31, 2019 and 2020 was $15.9 million and $498.6 million, respectively, primarily as a result of proceeds from the issuance of equity securities.
Cash provided by financing activities for the fiscal year ended January 31, 2020 was $57.5 million, primarily as a result of proceeds from the issuance of equity securities.
Cash provided by financing activities for the fiscal year ended January 31, 2019 was $413.6 million, primarily as a result of proceeds from the issuance of equity securities, partially offset by our purchases of common stock in connection with two issuer tender offers.
Contractual Obligations and Commitments
The following table summarizes our contractual obligations as of January 31, 2020:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due By Period
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Less than 1
Year
|
|
1-3 Years
|
|
3-5 Years
|
|
|
More than 5
Years
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
Operating lease commitments
|
$
|
203,584
|
|
|
$
|
14,148
|
|
|
$
|
35,714
|
|
|
$
|
33,905
|
|
|
|
$
|
119,817
|
|
|
Purchase commitments
|
246,678
|
|
|
12,794
|
|
|
140,231
|
|
|
93,653
|
|
(1)
|
|
—
|
|
|
Total
|
$
|
450,262
|
|
|
$
|
26,942
|
|
|
$
|
175,945
|
|
|
$
|
127,558
|
|
|
|
$
|
119,817
|
|
________________
(1) Includes $50.7 million of remaining non-cancelable contractual commitments as of January 31, 2020 related to one of our third-party cloud infrastructure agreements, under which we committed to spend an aggregate of at least $60.0 million between March 2019 and December 2023 with no minimum purchase commitment during any year. We had made payments totaling $9.3 million under this agreement as of January 31, 2020 . This agreement was subsequently amended in August 2020. Under the amended agreement, we have committed to spend an aggregate of at least $550.0 million, which is not included in the table above, between September 2020 and December 2025 with no minimum purchase commitment during any year. If we fail to meet the minimum purchase commitment by December 2025, we are required to pay the difference , and such payment can be applied to qualifying expenditures for cloud infrastructure services for up to twelve months after Decemb er 2025.
The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. Our operating lease commitments, net of sublease receipts, relate primarily to our facilities. Purchase commitments relate mainly to third-party cloud infrastructure agreements and subscription arrangements used to facilitate our operations at the enterprise level. Our long-term purchase commitments may be satisfied earlier than in the payment periods presented above as we continue to grow and scale our business.
The purchase commitment amounts in the table above include the remaining non-cancellable commitments of $118.8 million in aggregate related to a third-party cloud infrastructure agreement that was subsequently amended in July 2020. The table above reflects $1.8 million, $58.5 million, and $58.5 million that would have been due during the fiscal years ending January 31, 2021, 2022 and 2023, respectively, if such agreement had not been amended. Under the amended agreement, we have committed to spend $1.2 billion between August 2020 and July 2025 on cloud infrastructure services ($115.0 million between August 2020 and July 2021, $185.0 million between August 2021 and July 2022, $250.0 million between August 2022 and July 2023, $300.0 million between August 2023 and July 2024, and $350.0 million between August 2024 and July 2025). If we fail to meet the minimum purchase commitment during any year, we are required to pay the difference.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates.
Interest Rate Risk
As of July 31, 2020, we had $886.8 million of cash, cash equivalents, and short-term and long-term investments in a variety of securities, including U.S. government and agency securities, corporate notes and bonds, commercial paper, certificates of deposit, asset-backed securities, and money market funds. In addition, we had $15.0 million of restricted cash primarily due to outstanding letters of credit
established in connection with lease agreements for our facilities. Our cash, cash equivalents, and short-term and long-term investments are held for working capital purposes. We do not enter into investments for trading or speculative purposes. A hypothetical 10% increase or decrease in interest rates would have resulted in a decrease of $51.6 million or an increase of $1.1 million in the market value of our cash equivalents, and short-term and long-term investments as of July 31, 2020.
Foreign Currency Exchange Risk
Our reporting currency and the functional currency of our wholly-owned foreign subsidiaries is the U.S. dollar. All of our sales are currently denominated in U.S. dollars, and therefore our revenue is not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily in the United States, Canada, Germany, Netherlands, France, the United Kingdom, Singapore, and Australia. Our consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments, although we may choose to do so in the future. We do not believe a 10% increase or decrease in the relative value of the U.S. dollar would have a material impact on our operating results.
Critical Accounting Policies and Estimates
Our consolidated financial statements and the related notes thereto included elsewhere in this prospectus are prepared in accordance with GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.
We believe that the accounting policies described below involve a substantial degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information, see Note 2 to our consolidated financial statements included elsewhere in this prospectus.
Revenue Recognition
We account for revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue From Contracts With Customers (ASC 606) for all periods presented.
We deliver our platform over the internet as a service. Customers choose to consume our platform under either capacity arrangements, in which they commit to a certain amount of consumption at specified prices, or under on-demand arrangements, in which we charge for use of our platform monthly in arrears. Under capacity arrangements, from which a majority of our revenue is derived, we typically bill our customers annually in advance of their consumption. We recognize revenue as customers consume compute, storage, and data transfer resources under either of these arrangements. In limited instances, customers pay an annual deployment fee to gain access to a dedicated instance of a virtual private deployment. We recognize the deployment fee ratably over the contract term. Revenue from on-demand arrangements typically relates to initial consumption as part of customer onboarding and, to a lesser extent, overage consumption beyond a customer’s contracted usage amount or following the expiration of a customer’s contract. Revenue from on-demand arrangements represented less than 10% of our revenue for the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020.
Customers do not have the contractual right to take possession of our platform. Pricing for our platform includes embedded support services, data backup, and disaster recovery services, as well as future updates, when and if available, offered during the contract term.
Our customer contracts for capacity typically have a one-year term. To the extent our customers enter into such contracts and either consume our platform in excess of their capacity commitments or continue
to use our platform after expiration of the contract term, they are charged for their incremental consumption. In many cases, our customer contracts permit customers to roll over any unused capacity to a subsequent order, generally on the purchase of additional capacity. Customer contracts are generally non-cancelable during the contract term, although customers can terminate for breach if we materially fail to perform. For those customers who do not have a capacity arrangement, our on-demand arrangements generally have a monthly stated contract term and can be terminated at any time by either the customer or us.
For storage resources, consumption for a given customer is based on the average terabytes per month of all of such customer’s data stored in our platform. For compute resources, consumption is based on the type of compute resource used and the duration of use or, for some features, the volume of data processed. For data transfer resources, consumption is based on terabytes of data transferred, the public cloud provider used, and the region to and from which the transfer is executed.
Our revenue also includes professional services and other revenue, which consists of consulting, on-site technical solution services, and training related to our platform. Our professional services revenue is recognized over time based on input measures, including time and materials costs incurred relative to total costs, with consideration given to output measures, such as contract deliverables, when applicable. Other revenue consists of fees from customer training delivered on-site or through publicly available classes.
We determine revenue recognition in accordance with ASC 606 through the following five steps:
1) Identify the contract with a customer. We consider the terms and conditions of the contracts and our customary business practices in identifying our contracts under ASC 606. We determine we have a contract with a customer when the contract has been approved by both parties, we can identify each party’s rights regarding the services to be transferred, we can identify the payment terms for the services, we have determined the customer to have the ability and intent to pay, and the contract has commercial substance. At contract inception, we evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. We apply judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s payment history or, in the case of a new customer, credit and financial information pertaining to the customer.
2) Identify the performance obligations in the contract. Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. We treat consumption of our platform for compute, storage, and data transfer resources as one single performance obligation because they are consumed by customers as a single, integrated offering. We do not make any one of these resources available for consumption without the others. Instead, each of compute, storage, and data transfer work together to drive consumption on our platform. We treat the virtual private deployments for customers, professional services, on-site technical solution services, and training each as a separate and distinct performance obligation. Some of our customers have negotiated an option to purchase additional capacity at a stated discount. These options generally do not provide a material right as they are priced at our stand-alone selling price (SSP), as described below, as the stated discounts are not incremental to the range of discounts typically given.
3) Determine the transaction price. The transaction price is determined based on the consideration we expect to receive in exchange for transferring services to the customer. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue recognized under the contract will not occur. None of our contracts contain a significant financing component. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental entities (e.g., sales and other indirect taxes).
4) Allocate the transaction price to performance obligations in the contract. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative SSP. The determination of a relative SSP for each distinct performance obligation requires judgment. We determine SSP for performance obligations
based on overall pricing objectives, which take into consideration market conditions and customer-specific factors, including a review of internal discounting tables, the services being sold, the volume of capacity commitments, and other factors.
5) Recognize revenue when or as we satisfy a performance obligation. Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised service to a customer. Revenue is recognized when control of the services is transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those services. We determined an output method to be the most appropriate measure of progress because it most faithfully represents when the value of the services is simultaneously received and consumed by the customer, and control is transferred. Virtual private deployment fees are recognized ratably over the term of the deployment as the deployment service represents a stand-ready performance obligation provided throughout the deployment term.
Stock-Based Compensation
We measure and recognize compensation expense for all stock-based awards, including stock options, RSUs, and restricted stock awards (RSAs), granted to employees, directors, and non-employees, based on the estimated fair value of the awards on the date of grant.
The fair value of each stock option granted is estimated using the Black-Scholes option-pricing model. Generally, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. We also grant certain awards that have performance-based vesting conditions. Stock-based compensation expense for such awards is recognized using an accelerated attribution method from the time it is deemed probable that the vesting condition will be met through the time the service-based vesting condition has been achieved. If an award contains a provision whereby vesting is accelerated upon a change in control, we recognize stock-based compensation expense on a straight-line basis, as a change in control is considered to be outside of our control and is not considered probable until it occurs. Forfeitures are accounted for in the period in which they occur.
Our option-pricing model requires the input of subjective assumptions, including the fair value of the underlying common stock, the expected term of the option, the expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of our common stock. The assumptions used in our option-pricing model represent our best estimates. These estimates involve inherent uncertainties and the application of judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.
These assumptions are estimated as follows:
•Fair value of underlying common stock. Because our common stock is not yet publicly traded, we must estimate the fair value of our common stock. Our board of directors considers numerous objective and subjective factors to determine the fair value of our common stock at each meeting in which equity grants are approved.
•Expected volatility. Expected volatility is a measure of the amount by which the stock price is expected to fluctuate. Since we do not have sufficient trading history of our common stock, we estimate the expected volatility of our options at the grant date by taking the average historical volatility of a group of comparable publicly traded companies over a period equal to the expected term of the options.
•Expected term. We determine the expected term based on the average period the options are expected to remain outstanding using the simplified method, generally calculated as the midpoint of the options’ vesting term and contractual expiration period, as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.
•Risk-free rate. We use the U.S. Treasury yield for our risk-free interest rate that corresponds with the expected term.
•Expected dividend yield. We utilize a dividend yield of zero, as we do not currently issue dividends, nor do we expect to do so in the future.
The following table summarizes the weighted-average assumptions used in estimating the fair value of stock options granted to employees and non-employees during each of the periods presented:
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Fiscal Year Ended January 31,
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Six Months Ended July 31,
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2019
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|
2020
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2019
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|
2020
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Expected term (in years)
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6.27
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|
|
5.98
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|
|
6.00
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|
|
6.03
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|
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Expected volatility
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42.9
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%
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|
36.9
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%
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|
37.1
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%
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|
36.9
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%
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|
Risk-free interest rate
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2.9
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%
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|
2.0
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%
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|
2.2
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%
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1.2
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%
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Expected dividend yield
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—
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%
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|
—
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%
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|
—
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%
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|
—
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%
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Our RSUs typically have both service-based and performance-based vesting conditions. The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter. The performance-based vesting condition is satisfied on the earlier of (i) the effective date of a registration statement of the company filed under the Securities Act for the sale of our common stock or (ii) immediately prior to the closing of a change in control of the company. Both events are not deemed probable until consummated, and therefore, all stock-based compensation expense related to RSUs remained unrecognized as of July 31, 2020. If the effectiveness of a registration statement had occurred on July 31, 2020, we would have recognized $29.1 million of stock-based compensation expense for all RSUs that had fully or partially satisfied the service-based vesting condition on that date and would have $199.8 million of unrecognized compensation cost to be recognized over a weighted-average period of 2.1 years.
We will continue to use judgment in evaluating the assumptions related to our stock-based compensation on a prospective basis. As we continue to accumulate additional data related to our common stock, we may have refinements to our estimates, which could materially impact our future stock-based compensation expense.
Common Stock Valuations
The fair value of the common stock underlying our stock-based awards has historically been determined by our board of directors, with input from management and corroboration from contemporaneous third-party valuations. We believe that our board of directors has the relevant experience and expertise to determine the fair value of our common stock. Given the absence of a public trading market of our common stock, and in accordance with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, our board of directors exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock at each grant date. These factors include:
•contemporaneous valuations of our common stock performed by independent third-party specialists;
•the prices, rights, preferences, and privileges of our convertible preferred stock relative to those of our common stock;
•the prices paid for common or convertible preferred stock sold to third-party investors by us and prices paid in secondary transactions for shares repurchased by us in arm’s-length transactions, including any tender offers;
•the lack of marketability inherent in our common stock;
•our actual operating and financial performance;
•our current business conditions and projections;
•the hiring of key personnel and the experience of our management;
•the history of the company and the introduction of new products;
•our stage of development;
•the likelihood of achieving a liquidity event, such as an initial public offering (IPO), a merger, or acquisition of our company given prevailing market conditions;
•the operational and financial performance of comparable publicly traded companies; and
•the U.S. and global capital market conditions and overall economic conditions.
In valuing our common stock, the fair value of our business was determined using various valuation methods, including combinations of income and market approaches with input from management. The income approach estimates value based on the expectation of future cash flows that a company will generate. These future cash flows are discounted to their present values using a discount rate that is derived from an analysis of the cost of capital of comparable publicly traded companies in our industry or similar business operations as of each valuation date and is adjusted to reflect the risks inherent in our cash flows. The market approach estimates value based on a comparison of the subject company to comparable public companies in a similar line of business. From the comparable companies, a representative market value multiple is determined and then applied to the subject company’s financial forecasts to estimate the value of the subject company.
For each valuation, the fair value of our business determined by the income and market approaches was then allocated to the common stock using either the option-pricing method (OPM), or a hybrid of the probability-weighted expected return method (PWERM) and OPM methods. Our valuations prior to April 30, 2019 were allocated based on the OPM. Beginning April 30, 2019, our valuations were allocated based on a hybrid method of the PWERM and the OPM.
In addition, we also considered any secondary transactions involving our capital stock. In our evaluation of those transactions, we considered the facts and circumstances of each transaction to determine the extent to which they represented a fair value exchange and assigned the transactions an appropriate weighting in the valuation of our common stock. Factors considered include the number of different buyers and sellers, transaction volume, timing relative to the valuation date, whether the transactions occurred between willing and unrelated parties, and whether the transactions involved investors with access to our financial information.
Application of these approaches and methodologies involves the use of estimates, judgments, and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses, and future cash flows, discount rates, market multiples, the selection of comparable public companies, and the probability of and timing associated with possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact our valuations as of each valuation date and may have a material impact on the valuation of our common stock.
For valuations after the closing of this offering, our board of directors will determine the fair value of each share of underlying common stock based on the closing price of our common stock as reported on the date of grant. Future expense amounts for any particular period could be affected by changes in our assumptions or market conditions.
Based on the assumed initial public offering price per share of $80.00 , which is the midpoint of the price range set forth on the cover page of this prospectus, the aggregate intrinsic value of our outstanding stock options as of July 31, 2020 was $5.3 billion , with $1.8 billion related to vested stock options .
Recently Adopted Accounting Pronouncements
See the sections titled “Basis of Presentation and Summary of Significant Accounting Policies—Accounting Pronouncements Recently Adopted” and “—Accounting Pronouncements Not Yet Adopted” in Note 2 to our consolidated financial statements included elsewhere in this prospectus for more information.
JOBS Act Accounting Election
We are an emerging growth company, as defined in the Jumpstart Our Business Startups (JOBS) Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards
would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act for the adoption of certain accounting standards until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
BUSINESS
We believe in a data connected world where organizations have seamless access to explore, share, and unlock the value of data. To realize this vision, we are pioneering the Data Cloud, an ecosystem where Snowflake customers, partners, and data providers can break down data silos and derive value from rapidly growing data sets in secure, governed, and compliant ways.
Our Cloud Data Platform is the innovative technology that powers the Data Cloud. Our platform enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data. We deliver our platform through a customer-centric, consumption-based business model, only charging customers for the resources they use.
Our platform solves the decades-old problem of data silos and data governance. Leveraging the elasticity and performance of the public cloud, our platform enables customers to unify and query data to support a wide variety of use cases. It also provides frictionless and governed data access so users can securely share data inside and outside of their organizations, generally without copying or moving the underlying data. As a result, customers can blend existing data with new data for broader context, augment data science efforts, or create new monetization streams. Delivered as a service, our platform requires near-zero maintenance, enabling customers to focus on deriving value from their data rather than managing infrastructure.
Our cloud-native architecture consists of three independently scalable layers across storage, compute, and cloud services. The storage layer ingests massive amounts and varieties of structured and semi-structured data to create a unified data record. The compute layer provides dedicated resources to enable users to simultaneously access common data sets for many use cases without latency. The cloud services layer intelligently optimizes each use case’s performance requirements with no administration. This architecture is built on three major public clouds across 22 regional deployments around the world. These deployments are interconnected to create our single Cloud Data Platform, delivering a consistent, global user experience.
Our platform supports a wide range of use cases that enable our customers’ most important business objectives, including data engineering, data lake, data warehousing, data science, data applications, and data sharing. For example, CIOs choose us to help migrate petabytes of raw data to the public cloud and transform it into analytics-ready data. CMOs choose us to create 360-degree customer views. Business leaders choose us to distill insights from their most important business metrics. Data scientists choose us to simplify data transformation to build better machine learning algorithms. Businesses choose us as the analytical engine to power their digital services. CEOs choose us as a strategic partner to accelerate their cloud strategies and deliver new revenue-generating services. From July 1, 2020 to July 31, 2020, we processed an average of 507 million daily queries across all of our customer accounts, up from an average of 254 million daily queries during the corresponding month of the prior fiscal year.
Our business benefits from powerful network effects. The Data Cloud will continue to grow as organizations move their siloed data from cloud-based repositories and on-premises data centers to the Data Cloud. The more customers adopt our platform, the more data can be exchanged with other Snowflake customers, partners, and data providers, enhancing the value of our platform for all users. We believe this network effect will help us drive our vision of the Data Cloud.
Our platform is used globally by organizations of all sizes across a broad range of industries. As of July 31, 2020, we had 3,117 customers, increasing from 1,547 customers as of July 31, 2019. As of July 31, 2020, our customers included seven of the Fortune 10 and 146 of the Fortune 500, based on the 2020 Fortune 500 list, and those customers contributed approximately 4% and 26% of our revenue for the six months ended July 31, 2020, respectively. As our customers experience the benefits of our platform, they typically expand their usage significantly, as evidenced by our net revenue retention rate, which was 158% as of July 31, 2020. The number of customers that contributed more than $1 million in trailing 12-month product revenue increased from 22 to 56 as of July 31, 2019 and 2020, respectively.
We have achieved significant growth in recent periods. For the fiscal years ended January 31, 2019 and 2020, our revenue was $96.7 million and $264.7 million, respectively, representing year-over-year growth of 174%. For the six months ended July 31, 2019 and 2020, our revenue was $104.0 million and $242.0 million, respectively, representing year-over-year growth of 133%. Our net loss was $178.0 million
and $348.5 million for the fiscal years ended January 31, 2019 and 2020, respectively, and $177.2 million and $171.3 million for the six months ended July 31, 2019 and 2020, respectively.
Industry Background
Important technology and industry trends are changing the ways organizations leverage their data, including:
•Data is becoming paramount to business success. Data is at the heart of business innovation. It helps set new standards for managing customer relationships, delivering engaging and personalized customer experiences, anticipating new market trends, predicting customer behavior, and informing new business strategies. We believe organizations everywhere are seeking ways to transform their businesses by capturing, analyzing, and mobilizing data.
•The explosion of data is offering richer insights. The rise of cloud-based workloads has led to a proliferation of connected devices, applications, and social media, resulting in an explosion of digital data. According to IDC, there will be 175 zettabytes of data by 2025, representing a CAGR of 27% from 33 zettabytes of data in 2018. This data contains valuable insights for organizations, including key business and performance metrics, customer attributes and behavior, and product strengths and capabilities.
•Cloud adoption is accelerating and diversifying. The migration from static on-premises IT architectures to global, dynamic, and multi-cloud architectures is accelerating, providing massive scalability and technology resources. The public cloud is becoming the new center of gravity for data. According to IDC, 49% of data will be stored in public cloud environments by 2025, an increase from approximately 30% today. Additionally, according to a 2019 IDC report, 90% of Global 1000 Organizations will have a multi-cloud management strategy by 2024.
•Everyone is becoming a data consumer. Historically, data and analytics technologies were only accessible for a few, highly trained individuals. The increasing importance of data in the digital economy, and the increase in business applications for knowledge workers, is empowering every role and function within an organization to become a mainstream data consumer. For example, in a 2020 study by IDC, 60% of enterprises cited more pervasive adoption of analytics solutions by more employees and faster time to insights as first order benefits of data and analytics.
•Technology consumption is moving from fixed capacity to utility. Subscription-based business models opened up technology markets to companies that could not previously afford large upfront capital investments and forced software vendors to be more customer focused. However, the fixed pricing of a subscription-based business model often results in customers paying for unused software. We believe that business models are evolving from a fixed to a utility model, where customers pay only for the resources they consume.
Limitations of Existing Data Technologies
Many organizations have attempted to capture the value of data using solutions built on on-premises legacy database or big data architectures. Legacy database architectures have inherent scalability and capacity constraints and were not originally designed for the adoption of cloud-based workloads. These shortcomings have resulted in data silos, governance challenges, and limited business insights. Big data architectures have attempted to solve the problem of data silos with large pools of cost-effective storage, but in doing so have often created data integrity and governance challenges. In recent years, cloud-based companies, including certain public cloud providers, have introduced solutions that are derived from legacy database and big data architectures. Despite being deployed in the public cloud, these solutions generally suffer from the same limitations due to weaknesses in the underlying architectures.
These existing solutions have some or all of the following limitations:
•Not built for today’s dynamic and diverse data requirements. Legacy database architectures were designed for structured data types from internal business systems and typically fail to capture, manage, organize, and classify semi-structured data generated from connected devices, applications, and social media. Big data architectures can capture diverse data types, but the data is generally stored in inconsistent formats requiring transformation prior to use, often resulting in errors and duplicates.
•Inability to support large data volumes. In legacy database architectures, the storage and compute layers are often tightly coupled. This fundamental design limitation leads to storage capacity constraints, redundant data storage, and insufficient compute resources to ingest and transform ever-increasing volumes of data. Big data architectures provide the ability to store large volumes of data, but can often take hours or days to query larger data sets, limiting speed, data relevance, and actionability for many organizations.
•Inability to simultaneously support many use cases and users. In legacy database architectures, storage and compute resources are inelastic and difficult to scale. As a result, only a subset of users or use cases can be effectively addressed at any given point in time. Big data architectures have larger capacity, but often lack the ability to guarantee consistency and integrity of data when accessed and manipulated.
•Lack of optimized price-performance. Solutions built on legacy database and big data architectures are often time-consuming and costly to operate and require manual organization of data prior to use. In optimizing for price over performance, most big data offerings lack sophisticated query processing that database technologies have had for decades. On the other hand, solutions built on legacy database architectures are often forced to make tradeoffs due to resource scarcity, resulting in compromised performance. As a use case expands and consumes more resources, these legacy approaches can lack scalability and require more time, cost, and effort to provision additional resources.
•Difficult to use. Solutions built on big data architectures often result in project failures due to the significant amount of effort required to configure the infrastructure. Because they require different programming languages, the implementation of these big data architectures regularly requires data analysts to learn new skills to query data.
•Expensive to manage and maintain. Legacy database and big data architectures often require maintenance of the underlying infrastructure, upgrades and patches, and system configuration. As a use case grows in scale, these offerings can require substantial overhead costs to manage and support infrastructure requirements.
•Inability to support a multi-cloud, cross-region strategy. Solutions built on legacy database architectures by public cloud providers are typically only intended to run on specific infrastructures, in specific regions, limiting the flexibility to distribute and share data across public clouds and regions or select optimal functionality. Overreliance on a single public cloud provider can also create disadvantages with regard to pricing negotiations. Some solutions built on legacy database and big data architectures can be hosted in multiple regions across public clouds, but this generally results in more data silos due to architectural limitations.
•Inability to facilitate data sharing. Solutions built on legacy database and big data architectures generally result in data copies, data security concerns, and poor governance when facilitating data sharing. Some public clouds have begun offering marketplaces that provide basic data sharing capabilities. However, these offerings have significant limitations on sharing capacity and do not adequately address data security and governance requirements.
The Rise of the Data Cloud
Data silos have been an enduring challenge blocking organizations from realizing the full value of their data. To solve this problem, organizations have invested billions of dollars in disparate on-premises systems, infrastructure clouds, and application clouds. Yet, the data silo problem persists.
The Data Cloud is our vision of a world without data silos, allowing organizations to access, share, and derive better insights from their data. Customers can share and provide access to each other’s data, augment data science and machine learning algorithms with more data sets, connect global supply chains through data hubs, and create new monetization channels by connecting data providers and consumers. As our Data Cloud grows through broad adoption and increasing usage, there are enhanced benefits from greater data availability.
Our Solution
Our Cloud Data Platform is built on a cloud-native architecture that leverages the massive scalability and performance of the public cloud. Our platform allows customers to consolidate data into a single source of truth to drive meaningful business insights, power applications, and share data across regions and public clouds. Key elements of our platform include:
•Diverse data types. Our platform integrates and optimizes both structured and semi-structured data as a common data set, without sacrificing performance or flexibility.
•Massive scalability of data volumes. Our platform leverages the scalability and performance of the public cloud to support growing data sets without sacrificing performance.
•Multiple use cases and users simultaneously. Our platform makes compute resources dynamically available to address the demand of as many users and use cases as needed. Because the storage layer is independent of compute, the data is centralized and simultaneously accessible by many users without compromising performance or data integrity.
•Optimized price-performance. Our platform uses advanced optimizations to efficiently access only the data required to deliver the desired results. It delivers speed without the need for tuning or the expense of manually organizing data prior to use. Organizations can adjust their consumption to precisely match their needs, always optimizing for price-performance.
•Easy to use. Our platform can be up and running in seconds and is priced based on a consumption-based business model, reducing hidden costs and ensuring customers pay only for what they use. We also use a familiar programming model and query language, saving organizations from additional time and costs to learn new skills or hire specialized analysts or data scientists.
•Delivered as a service with no overhead. Our platform is delivered as a service, eliminating the cost, time, and resources associated with managing underlying infrastructure. We deliver automated platform updates regularly with zero planned downtime, eliminating expensive and time-consuming version and patch management. This gives customers the ability to consume more data at a lower total cost of ownership compared with other solutions.
•Multi-cloud and multi-region. Our platform is available on three major public clouds across 22 regional deployments around the world. These deployments are interconnected to create our single Cloud Data Platform, delivering a consistent, global user experience.
•Seamless and secure data sharing. Our platform enables governed and secure sharing of live data within an organization and externally across customers and partners, generally without copying or moving the underlying data. When sharing data across regions and public clouds, our platform allows customers to easily replicate data and maintain a single source of truth.
Key Benefits to our Customers
Our Cloud Data Platform enables customers to:
•Transform into data-driven businesses. Our platform eliminates data silos, empowers secure and governed access to data, and removes data management and infrastructure complexities. This enables organizations to drive greater insights, improve products and services, and pursue new business opportunities.
•Consolidate data into a single, analytics-ready source of truth. Our platform simplifies our customers’ data infrastructure by centralizing data in an analytics-ready format. As a result, organizations are able to deliver secure, fast, and accurate decision making. It also simplifies governance and minimizes the errors, complexity, and costs associated with managing data silos.
•Increase agility and augment insights through seamless data sharing. Our platform allows customers to seamlessly share and consume live data across their organizations without moving the underlying data. By simplifying data access across the organization, our customers can make faster, better decisions. Through data sharing within their ecosystems, our customers are able to
blend their existing data with broader context to gain deeper insights and enhance their partnerships.
•Create new monetization streams and data-driven applications. Our platform allows customers to unlock previously untapped monetization streams and create new data-driven applications. This enables organizations to better reach, engage, and retain their end customers.
•Benefit from a global multi-cloud strategy. Our platform delivers a consistent product experience across regions and public clouds. With a global multi-cloud strategy, organizations can optimize for the best features and functionality each public cloud provides, without becoming overly reliant on a single public cloud provider. Our customers can optimize their cloud costs, seamlessly migrate data among public clouds without having to alter existing security policies, and implement regional strategies, including to meet regulatory and data sovereignty requirements.
•Reduce time spent managing infrastructure. Because we deliver our platform as a service, our customers can focus on driving immediate value from their data and not on managing complex and expensive infrastructure.
•Enable greater data access through enhanced data governance. Security and governance, including the encryption of data in transit and at rest, were designed into our platform architecture. This provides customers with the confidence to share their data inside their organizations, as well as with their partners, customers, and suppliers, to unlock new insights.
Network Effects
Our business benefits from powerful network effects, which create accelerating demand for our platform and provide us with competitive advantages. The Data Cloud will continue to grow as organizations move their siloed data from cloud-based repositories and on-premises data centers to the Data Cloud. The more customers adopt our platform, the more they can share data with, or receive data from, other Snowflake customers, partners, and data providers, enhancing the value of the insights delivered by our platform for all users.
Starschema Inc., a data provider to leading organizations, made its COVID-19 epidemiological data available on our Data Marketplace on March 18, 2020. As of July 31, 2020, hundreds of Snowflake customers have consumed this data directly from their accounts to analyze the impact of the outbreak. Our platform allows our customers to unify third-party data sets with their internal data to analyze and measure the impact of COVID-19 on their business operations, sales, and supply chains to make data-driven decisions in near real-time. In addition, customers are able to augment their analysis with other third-party data. For example, customers can use data from Weather Source, LLC, another data provider on our marketplace, to correlate the relationships between disease infection rates and the weather.
The chart below illustrates the data sharing between Snowflake accounts from February 1, 2020 to July 31, 2020. The blue circle at the center of the cluster represents the hundreds of Snowflake customers that consumed the Starschema COVID-19 data set. This demonstrates how data added to the Data Cloud by one organization can benefit all of our customers in the ecosystem. As more data is migrated to the Data Cloud, we believe our customers will consume and exchange more data, creating a powerful network effect for our business.
Our Opportunity
We believe the addressable market opportunity for our Cloud Data Platform is approximately $81 billion as of January 31, 2020. To estimate our market opportunity, we first identify the number of companies worldwide across all industries with at least 200 employees, based on certain independent industry data from the S&P Capital IQ database. We segment these companies into three categories: companies with at least 5,000 employees, companies with between 1,000 and 4,999 employees, and companies with between 200 and 999 employees. In each category, we apply the average annualized revenue from all customers in that category during the three months ended January 31, 2020.
We are disrupting large, existing, and fast-growing markets. We believe our platform immediately addresses the markets for Analytics Data Management and Integration Platforms and Business Intelligence and Analytics Tools, which IDC estimates will have a combined value of $56 billion by the end of 2020 and $84 billion by the end of 2023.
Our data sharing opportunity has not been defined or quantified by any research institutions. However, we believe that this opportunity is substantial and largely untapped.
Our Growth Strategies
We intend to invest in our business to advance the Data Cloud through the adoption of our platform. Our growth strategies include:
•Innovate and advance our platform. We have a history of technological innovation, releasing new features on a regular basis and making frequent updates to our platform. We intend to continue making significant investments in research and development and hiring top technical talent to enable new use cases, strengthen our technical lead in our platform’s architecture, and increase our differentiation through enhanced data sharing capabilities. For example, we introduced our Data Exchange in 2019, significantly enhancing our data sharing capabilities and advancing our vision of the Data Cloud.
•Drive growth by acquiring new customers. We believe that nearly all organizations will eventually embrace a cloud strategy, and that the opportunity to continue growing our customer
base, particularly with larger organizations, is substantial. To drive new customer growth, we intend to continue investing in sales and marketing, with a focus on replacing legacy database solutions and big data offerings. As a result of these efforts, we added approximately 1,400 customers during the fiscal year ended January 31, 2020.
•Drive increased usage within our existing customer base. As customers realize the benefits of our platform, they typically increase their platform consumption by processing, storing, and sharing more data. As a result, our net revenue retention rate was 158% as of July 31, 2020. We plan to continue investing in sales and marketing, with a focus on driving more consumption on our platform to grow large customer relationships, which lead to scale and operating leverage in our business model.
•Expand our global footprint. As organizations around the world increase their public cloud adoption, we believe there is a significant opportunity to expand the use of our platform outside of North America. We have made investments in sales and marketing, customer support, and public cloud deployments across EMEA and Asia-Pacific regions. For the fiscal year ended January 31, 2020, approximately 12% of our revenue came from customers outside of the United States, and we believe there is an opportunity to increase our global presence over time.
•Expand data sharing across our global ecosystem. Our platform provides an innovative way for organizations to share, collaborate, and connect with data. We plan to continue investing in adding new customers, partners, and data providers to connect on our platform and in driving market awareness of this innovation.
•Grow and invest in our partner network. Our Snowflake Partner Network is comprised of system integrator partners, who help accelerate the adoption of our platform, and technology partners, who help provide end-to-end solutions to our customers. We plan to continue investing in building out our partner program to drive more consumption on our platform, broaden our distribution footprint, and drive greater awareness of our platform.
Cloud Data Platform
Our platform unifies data and supports a growing variety of use cases, including data engineering, data lakes, data warehousing, data science, data applications, and data exchange. Customers can leverage our platform for any one of these use cases, but when taken together, it provides an integrated, end-to-end solution that delivers greater insights, faster data transformations, and improved data sharing. Delivered as a service, our platform is deployed across multiple public clouds and regions, is easy to use, and requires near-zero maintenance.
Use Cases
Organizations use our Cloud Data Platform to power the following use cases:
•Data Engineering. Our platform enables data engineers, IT departments, data science teams, and business analytics teams to efficiently build and manage data pipelines using SQL, a well-
known query language, to transform raw data into actionable data for business insights. For Data Engineering, our platform enables organizations to:
◦Drive faster decision making. Ingest data and transform it in real time to ensure access to up-to-date information to drive better business outcomes.
◦Dynamically meet peak business demands. Meet fluctuating demands by instantly scaling resources up and down.
•Data Lake. Our platform can serve as a central data repository or augment existing data lakes with performance, scalability, and security. For Data Lake, our platform enables organizations to:
◦Build a modern scalable data lake in the cloud. Consolidate all structured and semi-structured data into one centralized place with the scalability, security, and analytical power of data warehousing in the cloud to enable real-time analytics on all data.
◦Enact better governance and security to enable broader data access. Simplify data governance and provide rich security and controls to ensure data is managed and accessed according to regulatory and corporate requirements.
•Data Warehouse. Our platform provides reporting and analytics to increase business intelligence. For Data Warehouse, our platform enables organizations to:
◦Support multiple users and activities concurrently. Enable multiple activities, such as repeatable analytics, rendering of dashboards, or ad hoc explorations, such as data science model training, with flexible compute capacity, no resource contention, and no provisioning of any infrastructure.
◦Generate comprehensive data insights. Customers can run SQL-based queries on both structured and semi-structured data to capitalize on a more comprehensive view of their data to drive maximum insights.
◦Simplify data governance. Gain immediate insight into data and usage patterns and set policies and configurations to maximize governance.
•Data Science. A majority of data science efforts involve transforming massive amounts of raw data at scale to enable advanced analytics, such as advanced statistical analysis and machine learning techniques. For Data Science, our platform enables organizations to:
◦Accelerate transformations across massive data sets. Store and transform data at scale with the massive scalability and performance of the public cloud.
◦Integrate with leading data science tools and languages. Manage resources for data transformation and use leading data science tools, with the support of Scala, R, Java, and Python, to build machine learning algorithms in a single cloud platform.
•Data Applications. Our platform can power new applications as well as enable existing applications with capabilities for reporting and analytics. For Data Applications, our platform enables organizations to:
◦Develop analytical applications. Build data-driven applications with our platform serving as the analytical engine to provide massive scalability and insights.
◦Embed Snowflake into existing applications. Feed data and analytics directly into business applications in the context of daily workstreams.
•Data Exchange. Our platform enables organizations to share, connect, collaborate, monetize, and acquire live data sets. For Data Exchange, our platform enables organizations to:
◦Create a private data hub. Build a private data hub for employees across all parts of the organization to access, collaborate, and analyze data.
◦Acquire data sets to enrich analytics. Leverage public data sets on the Snowflake Data Exchange to enrich insights, augment analysis, and inform machine learning algorithms.
◦Invite external parties to access governed data. Invite customers, suppliers, and partners, to securely access their data to streamline operations and increase transparency.
◦Monetize new data sets. Upload public data sets to Snowflake Data Exchange and tap into new monetization streams.
◦Easy data replication. Our platform allows for easy replication of data for multiple users across multiple public cloud providers and regions without compromising data integrity and governance, enabling our customers and their users to rely on a single source of truth.
Architecture
Our Cloud Data Platform was built from the ground up to take advantage of the cloud, and is built on an innovative multi-cluster, shared data architecture. It consists of three independently scalable layers deployed and connected globally across public clouds and regions:
•Centralized storage. The storage layer is based on scalable cloud storage and can manage both structured and semi-structured data. It can be grown independently of compute resources, allowing for maximum scalability and elasticity, and ensures a single, persistent copy of the data. The stored data is automatically partitioned, and metadata is extracted during loading to enable efficient processing.
•Multi-cluster compute. The compute layer is designed to capitalize on the instant elasticity and performance of the public cloud. Compute clusters can be spun up and down easily within seconds, enabling our platform to retrieve the optimal data required from the storage layer to answer queries and transform data with optimized price-performance. This functionality allows a multitude of users and use cases to operate on a single copy of the data.
•Cloud services. The cloud services layer acts as the brain of the platform ensuring the different components work in unison to deliver a consistent user-friendly customer experience. It performs a variety of tasks, including security operations, system monitoring, query optimization, and metadata and state tracking throughout the platform.
This architecture is built on three major public clouds across 22 regional deployments around the world. These deployments are interconnected to create our single Cloud Data Platform, delivering a consistent, global user experience.
Our Customers
Our platform is used globally by organizations of all sizes across a broad range of industries. As of July 31, 2020, we had 3,117 customers, increasing from 1,547 customers as of July 31, 2019. As of July 31, 2020, our customers included seven of the Fortune 10 and 146 of the Fortune 500. The number of customers that contributed more than $1 million in product revenue in the trailing 12 months increased from 22 to 56 as of July 31, 2019 and 2020, respectively. In May 2020, we achieved a Net Promoter Score (NPS) of 71. NPS is a third-party measurement of the willingness of customers to recommend a company’s products or services to other potential customers. An NPS can range from a low of –100 to a high of +100, and is viewed as a proxy for measuring customers’ brand loyalty and satisfaction with a company’s product or service.
The following is a representative list of our customers by industry vertical whose usage and spend is representative of our customers within those verticals :
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Advertising, Media
& Entertainment
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Financial Services
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Healthcare, Wellness
& Life Sciences
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2K Games
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AXA
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Amino
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Accordant Media
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Bankrate
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Asics
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KIXEYE
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Capital One
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HC1
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Nielsen
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CapSpecialty
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McKesson
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PLAYSTUDIOS
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Chime
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Strava
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Sharethrough
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Experian
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Manufacturing & Retail
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Online Services &
Marketplaces
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Technology
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Logitech
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Ask
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Adobe
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Madison Reed
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Blackboard
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Akamai
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Office Depot
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DoorDash
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DocuSign
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Sainsbury’s
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Instacart
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Dropbox
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Sony
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OfferUP
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Keboola
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US Foods
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Rent the Runway
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Micron
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On June 30, 2017, we entered into a subscription and services agreement with Capital One Services, LLC (Capital One), which was amended on September 14, 2018, December 20, 2018, and July 23, 2020, under which we provide Capital One access to and use of our Cloud Data Platform. From time to time, we enter into order forms for prepaid capacity arrangements under this agreement. We refer to such agreement, as amended, together with any order forms, as the Capital One Agreement.
Under the Capital One Agreement, we provide customary warranties regarding our platform, and we have agreed to issue Capital One credit towards its future usage of our platform in the event our platform does not meet our targeted service level availability in a given month.
Subject to certain exceptions and limitations, we have agreed to indemnify, defend, and hold Capital One harmless from and against any third-party claim alleging that our platform infringes a U.S. patent, copyright, or trademark. The Capital One Agreement terminates on the later of (i) three years from the effective date or (ii) the first date upon which there are no order forms in effect. We or Capital One may terminate the Capital One Agreement for, among other things, the other party’s failure to cure any material breach of the Capital One Agreement after written notice. In the event we or Capital One are acquired, Capital One may terminate the Capital One Agreement and part or all of any and all statements of work. Additionally, Capital One may terminate (i) part or all of any or all statements of work for services, other than for its use of our platform, for convenience at any time upon 30 days advance notice without a
right of refund of prepaid fees and subject to any unpaid fees becoming due and payable and (ii) the Capital One Agreement and part or all of any or all statements of work, upon written notice without a right of refund of any prepaid fees, if any government regulator having jurisdiction over Capital One or its affiliates, or any of their activities, objects to the Capital One Agreement or any aspect of our provision of services thereunder. For the fiscal years ended January 31, 2019 and 2020, Capital One accounted for approximately 17% and 11% of our revenue, respectively.
Customer Case Studies
The following are examples of how some of our customers have adopted our platform. We believe these customers’ usage is representative of usage by our customers generally and shows the breadth of our platform and adoption across geographies, verticals, and customer size.
Capital One
Background
Capital One offers a broad spectrum of financial products and services to consumers, small businesses, and commercial clients through a variety of channels. To support its business objective of delivering personalized unique experiences to customers, it required a data warehouse solution that was not bounded by any arbitrary limits on storage, number of database objects, number of users or concurrent user queries, while ensuring lines of business could easily and securely share data. With such a large data scientist, data analyst, and business analyst community, it is imperative that performance is consistent and predictable no matter the workload.
Our Solution
In 2017, Capital One migrated its analytics workloads to our Cloud Data Platform. Once implemented, our platform spread rapidly to additional lines of business to satisfy latent demand for greater data access within the broader organization and address new business opportunities. For example, our platform now helps Capital One target and deliver personalized recommendations of additional products to customers. It also enables Capital One to transform and integrate data for near real-time marketing campaigns and to ingest and perform analytics on petabytes of log files going back as long as needed by various operations stakeholders.
Key Benefits
•Manage more data by volume and support more simultaneous user queries;
•Reduce cycle time of onboarding of new workloads and use cases;
•Provide consistent and predictable query response time (even during high usage);
•Ability to rapidly scale to meet business analytics demands; and
•Meets Capital One’s high availability and resiliency needs.
FactSet
Background
FactSet is a global provider of integrated financial information, analytical applications, and industry-leading services. It creates flexible, open data and technology solutions for over 100,000 investment professionals around the world, providing access to financial data and analytics that investors use to make crucial decisions. To support mutual FactSet-Snowflake customers looking to use Snowflake to improve query response times, provide native support for semi-structured data types, and reduce the time and expense of managing a combination of solutions, FactSet decided to make its content sets available on our platform so they could be integrated in a fast and frictionless way with non-FactSet provided data.
Our Solution
In May 2020, FactSet made selected data sets available on our Cloud Data Platform, allowing mutual customers to access FactSet content alongside non-FactSet data without having to manage complex
data sharing processes or operate their own infrastructure. FactSet made 24 data sets available on our platform, including FactSet’s fundamental, consensus estimates, geographic revenue, and supply chain data. Additional content, including alternative datasets such as spending trends, news sentiment, and ESG data, have also been deployed on our platform.
Key Benefits
•Enable joint FactSet-Snowflake customers to integrate their own data sets with additional FactSet data to drive greater insights;
•Provides global FactSet customers an additional way to access and consume FactSet data; and
•Offers FactSet customers immediate access to data for evaluation and testing, eliminating the need for the extract, transform, and load (ETL) processes.
Leading European Retailer
Background
Before adopting our platform, a leading European retailer with brands spanning across food, retail, clothing, and financial services used a patchwork of primarily legacy on-premises data warehouse solutions spread across multiple operating divisions. This resulted in data silos and increased cost and complexity making it difficult to answer simple questions with data. A few years ago, the retailer began pursuing a cloud strategy to consolidate data from multiple business segments and better understand customer activity across brands and channels.
Our Solution
In 2018, the retailer implemented our Cloud Data Platform to perform the analytics workloads for one of its major brands, replacing a legacy on-premises solution. As the retailer continued to migrate additional workloads to our platform, it could consolidate its data and create real-time customer views across point-of-sale, loyalty programs, and banking. Our platform empowered its business analysts with accurate, timely, and continuous data flows and reporting, which has enabled them to build out new data products they could not access on their legacy solution.
Key Benefits
•Consolidate massive amounts of data generated daily to optimize business decisions;
•Reduce the average query time to seconds using our platform, compared to hours using prior solutions; and
•Flexibility to easily move between public cloud providers as part of a multi-cloud strategy.
Our Technology
Innovation is at the core of our culture. We have developed innovative technology across our platform, including storage, query capabilities, compute model, data sharing, managed service, global infrastructure, and integrated security.
•Managed Service
◦High availability. Within a region, all components of our platform are distributed over multiple data centers to ensure high availability. Hardware and software problems are automatically detected and addressed by the system, with full transparency to our customers.
◦Transactions. Our platform supports full ACID compliant transactional integrity, ensuring that data remains consistent even when our platform is concurrently used by many users and use cases.
◦Fail-safe. Our platform provides an automatic, non-configurable seven-day period in which data deletions and modifications are recoverable. This allows customers to avoid difficult tradeoffs between high recovery times, data loss, or downtime.
•Storage
◦Columnar data. Our platform stores data in a proprietary columnar representation, which optimizes the performance of analytical and reporting queries. It also provides high compression ratios, resulting in economic benefits for customers.
◦Micro-partitioning. Our platform automatically partitions all data it stores without the need for user specification or configuration. It creates small files called “micro partitions” based on size, enabling optimizations in query processing to retrieve only the data relevant for user queries, simplifying user administration and enhancing performance.
◦Metadata. When data is ingested, our platform automatically extracts and stores metadata to speed up query processing. It does so by collecting data distribution information for all columns in every micro-partition.
◦Semi-structured data. Our platform supports semi-structured data, including JSON, Avro, and Parquet. Data in these formats can be ingested and queried with performance comparable to a relational, structured representation.
•Query Capabilities. Our platform is engineered to query petabytes of data. It implements support for a large subset of the ANSI SQL standard for read operations and data modification operations. Our platform provides additional features, including:
◦Time travel. Our platform keeps track of all changes happening to a table, which enables customers to query previous versions based on their preferences. Customers can query as of a relative point in time or as of an absolute point in time. This has a broad array of use cases for customers, including error recovery, time-based analysis, and data quality checks.
◦Cloning. Our architecture enables us to offer zero-copy cloning, an operation by which entire tables, schemas, or databases can be duplicated—or cloned—without having to copy or duplicate the underlying data. Our platform leverages the separation between cloud services and storage to be able to track independent clones of objects sharing the same physical copy of the underlying data. This enables a variety of customer use cases such as making copies of production data for data scientists, creating custom snapshots in time, or testing data pipelines.
•Compute Model. Our platform offers a variety of capabilities to operate on data, from ingestion to transformation, as well as rich query and analysis. Our compute services are primarily presented to users in one of two models, either through explicit specification of compute clusters we call virtual warehouses or through a number of serverless services.
◦Virtual warehouses. Our platform exposes compute clusters as a core concept called virtual warehouses. Our customers are able to create as few or as many virtual warehouses as they want and specify compute capacity at tiered levels. These clusters can be configured to run only when needed, with cluster instantiation operations typically completed in seconds. Virtual warehouses can also be configured as a multi-cluster warehouse in which our platform can automatically add and remove additional instances of a given cluster to address variations in query demands. This gives us the ability to offer extremely high levels of concurrency with a simple configuration specification.
◦Serverless services. We offer a number of additional services that automatically provide the capacity our customers require. For example, our data ingestion service automatically ingests data from cloud storage and allocates compute capacity based on the amount of data ingested; our clustering service continuously rearranges the physical layout of data to ensure conformity with clustering key specifications, improving performance; our materialized views service propagates changes from underlying tables to views that have materialized subsets or summaries; our replication service moves data between regions or clouds; and our search optimization service analyzes changes in data and maintains information that speeds up lookup queries.
•Data Sharing. In our platform, data sharing is defined through access control and not through data movement. As such, the data consumer sees no latency relative to updates from the data provider, and incurs no cost to move or transform data to make it usable.
•Global Infrastructure
◦Database replication. Our platform enables customers to replicate data from one region or public cloud to another region or public cloud while maintaining transactional integrity.
◦Business continuity. Our platform enables failing over and failing back a database and redirecting clients transparently across regions or public clouds. This provides an integrated and global disaster recovery capability.
◦Global listings for sharing. Our platform enables a listing to be published globally to access consumers across regions or public clouds.
•Built-in Security. We built our platform with security as a core tenet. Our platform provides a number of capabilities for customers to confidently use our platform while preserving the security requirements of their organizations, including:
◦Authentication. Our platform supports rich authentication capabilities, including federated authentication with a variety of identity providers, as well as support for multi-factor authentication.
◦Access control. Our platform provides a fine-grained security model based on role-based access control. It provides granular privileges on system objects and actions.
◦Data encryption. Our platform encrypts all data, both in motion and at rest, and simplifies operations by providing automatic re-keying of data. It also supports customer-managed keys, where an additional layer of encryption is provided by keys controlled by customers, giving them the ability to control access to the data.
Sales and Marketing
We sell our Cloud Data Platform through our direct sales team, which consists of field sales and inside sales professionals segmented by customer size and region. Our direct sales team is primarily focused on new customer acquisitions and driving increased usage of our platform from existing customers. The breadth of our platform allows us to engage at every level of an organization, including data analysts and data engineers through our self-service model and C-suite executives through our direct sales team on large cloud transformations. The substantial majority of our global sales and marketing efforts are carried out by teams located in North America. Outside of North America, we have dedicated direct sales teams for the EMEA and Asia-Pacific regions for organizations of all sizes.
Many organizations initially adopt our platform through a self-service trial on our website. We deploy a range of marketing strategies to drive traffic to our website and usage of our platform. Our marketing team combines the creation of inbound demand with direct marketing, business development, and marketing efforts targeted at business and technology leaders.
Partnerships
Our partnership strategy is focused on delivering complete end-to-end solutions for our customers, driving general awareness of our platform, and broadening our distribution and reach to new customers. Our Snowflake Partner Network is a global program that manages our business relationships with a broad-based network of companies. Our partnerships consist of channel partners, system integrators, and technology partners. Collectively, these partners help us source leads and provide training and implementation of our platform. Our system integrator partners help make the adoption and migration of our platform easier by providing implementations, value-added professional services, managed services, and resale services. Our technology partners provide strategic value to our customers by providing software tools, such as data loading, business intelligence, machine learning, data governance, and security, to augment the capabilities of our platform. We continue to invest in formal alliances with the leading consulting, data management, and implementation service providers to help our customers
migrate their legacy database solutions to the cloud. Over time, we expect our partner network to drive more customers and consumption to our platform.
Research and Development
Our research and development organization is responsible for the design, development, testing, and delivery of new technologies, features, integrations, and improvements of our platform. It is also responsible for operating and scaling our platform, including the underlying public cloud infrastructure. Research and development employees are located primarily in our offices in San Mateo, California; Bellevue, Washington; and Berlin, Germany.
Our research and development organization consists of teams specializing in software engineering, user experience, product management, data science, technical program management, and technical writing. As of July 31, 2020, we had 384 employees in our research and development organization. We intend to continue to invest in our research and development capabilities to expand our platform.
Our Competition
The markets we serve are highly competitive and rapidly evolving. With the introduction of new technologies and innovations, we expect the competitive environment to remain intense. Our competition includes the following:
•large, well-established, public cloud providers that generally compete in all of our markets, including AWS, Azure, and GCP;
•less-established public and private cloud companies with products that compete in some of our markets; and
•other established vendors of legacy database solutions or big data offerings.
We believe we compete favorably based on the following competitive factors:
•ability to provide and innovate around an architecture that is purpose-built for the cloud;
•ability to efficiently and seamlessly ingest diverse data types in one location at scale;
•ability to drive business value and ROI;
•ability to support multiple use cases in one platform;
•ability to provide seamless and secure access of data to many users simultaneously;
•ability to seamlessly and securely share and move data across public clouds or regions;
•ability to provide a consistent user experience across multiple public cloud providers;
•ability to provide pricing transparency and optimized price-performance benefits;
•ability to elastically scale up and scale down in high-intensity use cases;
•ease of deployment, implementation, and use;
•performance, scalability, and reliability;
•security and governance; and
•quality of service and customer satisfaction.
See the section titled “Risk Factors” for a more comprehensive description of risks related to competition.
Our Employees
As of July 31, 2020, we had 2,037 employees operating across 19 countries. None of our employees are represented by a labor union with respect to his or her employment. In certain countries in which we operate, such as France, we are subject to, and comply with, local labor law requirements, which may automatically make our employees subject to industry-wide collective bargaining agreements. We have not experienced any work stoppages, and we consider our relations with our employees to be good.
Intellectual Property
Intellectual property rights are important to the success of our business. We rely on a combination of patent, copyright, trademark, and trade secret laws in the United States and other jurisdictions, as well as license agreements, confidentiality procedures, non-disclosure agreements with third parties, and other contractual protections, to protect our intellectual property rights, including our proprietary technology, software, know-how, and brand. We use open source software in our services.
As of July 31, 2020, we held 41 issued U.S. patents and had 174 U.S. patent applications pending. We also held 27 issued patents in foreign jurisdictions. Our issued patents are scheduled to expire between November 2020 and December 2039. As of July 31, 2020, we held 11 registered trademarks in the United States, and also held 31 registered or protected trademarks in foreign jurisdictions. We continually review our development efforts to assess the existence and patentability of new intellectual property.
Although we rely on intellectual property rights, including patents, copyrights, trademarks, and trade secrets, as well as contractual protections to establish and protect our proprietary rights, we believe that factors such as the technological and creative skills of our personnel, creation of new services, features and functionality, and frequent enhancements to our platform are more essential to establishing and maintaining our technology leadership position.
We control access to and use of our proprietary technology and other confidential information through the use of internal and external controls, including contractual protections with employees, contractors, customers, and partners. We require our employees, consultants, and other third parties to enter into confidentiality and proprietary rights agreements, and we control and monitor access to our software, documentation, proprietary technology, and other confidential information. Our policy is to require all employees and independent contractors to sign agreements assigning to us any inventions, trade secrets, works of authorship, developments, processes, and other intellectual property generated by them on our behalf and under which they agree to protect our confidential information. In addition, we generally enter into confidentiality agreements with our customers and partners. See the section titled “Risk Factors” for a more comprehensive description of risks related to our intellectual property.
Our Facilities
Our headquarters are located in San Mateo, California, where we occupy facilities totaling approximately 210,115 square feet under a lease that expires in February 2032. We have other offices, including Dublin, California; Bellevue, Washington; London, United Kingdom; Amsterdam, Netherlands; and Berlin, Germany. These offices are leased, and we do not own any real property. We believe that our current facilities are adequate to meet our current needs.
Legal Proceedings
From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows, or financial condition. Defending such proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
MANAGEMENT
The following table sets forth information for our executive officers and directors as of September 1 , 2020 :
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Name
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Age
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Title
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Executive Officers
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Frank Slootman
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61
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Chief Executive Officer and Chairman
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Michael P. Scarpelli
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53
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Chief Financial Officer
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Benoit Dageville
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54
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President of Products and Director
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Christopher W. Degnan
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46
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Chief Revenue Officer
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Directors
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Jeremy Burton(3)
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52
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Director
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Teresa Briggs(1)
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60
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Director
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Carl M. Eschenbach(2)
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53
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Director
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Mark S. Garrett(1)(3)
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62
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Director
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Kelly A. Kramer(1)
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53
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Director
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John D. McMahon(2)
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64
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Director
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Michael L. Speiser(2)(3)*
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49
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Director
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Jayshree V. Ullal(2)
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59
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Director
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________________
* Lead Independent Director
(1)Member of the audit committee.
(2)Member of the compensation committee.
(3)Member of the nominating and governance committee.
Executive Officers
Frank Slootman has served as our Chief Executive Officer and as a member of our board of directors since April 2019 and as Chairman of our board of directors since December 2019. Before joining us, Mr. Slootman served as Chairman of the board of directors of ServiceNow, Inc., an enterprise IT cloud company, from October 2016 to June 2018. From May 2011 to April 2017, Mr. Slootman served as President and Chief Executive Officer and as a member of the board of directors of ServiceNow. From January 2011 to April 2011, Mr. Slootman served as a Partner of Greylock Partners, a venture capital firm. From July 2009 to January 2011, Mr. Slootman served as President of the Backup Recovery Systems Division at EMC Corporation, a computer data storage company, and as an advisor from January 2011 to February 2012. From July 2003 until its acquisition by EMC in July 2009, Mr. Slootman served as President and Chief Executive Officer of Data Domain Corporation, an electronic storage solution company. Mr. Slootman previously served as a member of the board of directors of Pure Storage, Inc. from May 2014 to February 2020, and Imperva, Inc., from August 2011 to March 2016. Mr. Slootman holds undergraduate and graduate degrees in Economics from the Netherlands School of Economics, Erasmus University Rotterdam. Mr. Slootman is qualified to serve on our board of directors because of his management experience and business expertise, including his prior executive-level leadership and experience scaling companies, as well as his past board service at a number of other publicly traded companies.
Michael P. Scarpelli has served as our Chief Financial Officer since August 2019. Before joining us, Mr. Scarpelli served as Chief Financial Officer of ServiceNow, Inc. from August 2011 to August 2019. From July 2009 to August 2011, Mr. Scarpelli served as Senior Vice President of Finance and Business Operations of the Backup Recovery Systems Division at EMC Corporation. From September 2006 until its acquisition by EMC in July 2009, Mr. Scarpelli served as Chief Financial Officer of Data Domain Corporation. Mr. Scarpelli previously served as a member of the board of directors of Nutanix, Inc. from December 2013 to June 2020. Mr. Scarpelli holds a B.A. degree in Economics from the University of Western Ontario.
Benoit Dageville is one of our co-founders and has served as a member of our board of directors since August 2012. Dr. Dageville currently serves as our President of Products, and previously served as our Chief Technology Officer from August 2012 to May 2019. Before our founding, Dr. Dageville served in
various engineering roles at Oracle Corporation, a software and technology company, including as Architect in the Manageability Group from January 2002 to July 2012. Dr. Dageville holds B.S., M.S., and Ph.D. degrees in Computer Science from Jussieu University. Dr. Dageville is qualified to serve on our board of directors because of his experience and perspective as one of our co-founders as well as his extensive experience driving product innovation.
Christopher W. Degnan has served as our Chief Revenue Officer since August 2018, and previously served as our VP of Sales from July 2014 to August 2018, and as our Director, Sales from November 2013 to July 2014. Before joining us, Mr. Degnan served as AVP of the West at EMC Corporation from July 2013 to November 2013. From July 2012 until its acquisition by EMC in July 2013, Mr. Degnan served as VP Western Region at Aveksa, Inc., an identity and access management software company. From April 2004 to July 2012, Mr. Degnan served in various sales positions at EMC, including as District Sales Manager from June 2008 to July 2012. Mr. Degnan holds a B.A. degree in Human Resources from the University of Delaware.
Directors
Jeremy Burton has served as a member of our board of directors since March 2016. Since November 2018, Mr. Burton has served as the Chief Executive Officer of Observe, Inc., an information technology and services company. Prior to Observe, Mr. Burton served as Executive Vice President, Marketing & Corporate Development of Dell Technologies, a worldwide technology company, from September 2016 to April 2018, and in various roles at EMC Corporation, including as President of Products from April 2014 to September 2016 and Executive Vice President and Chief Marketing Officer from March 2010 to March 2014. Mr. Burton holds a B.Eng. (Hons) degree in Information Systems Engineering from the University of Surrey. Mr. Burton is qualified to serve on our board of directors because of his operational and marketing expertise.
Teresa Briggs has served as a member of our board of directors since December 2019. Ms. Briggs served as Vice Chair & West Region and San Francisco Managing Partner of Deloitte LLP, a global professional services firm, from June 2011 to April 2019, and as Managing Partner, Silicon Valley from June 2006 to June 2011. Ms. Briggs currently serves on the board of directors of ServiceNow, Inc., DocuSign, Inc., and JAND, Inc. (dba Warby Parker), and previously served on the board of directors of Deloitte USA LLP from January 2016 to March 2019. Ms. Briggs also served as an adjunct member of Deloitte’s Center for Board Effectiveness. She is currently a Distinguished Careers Fellow at Stanford University. Ms. Briggs holds a B.S. degree in Accounting from the University of Arizona, Eller College of Management. Ms. Briggs is qualified to serve on our board of directors because of her financial expertise and management experience.
Carl M. Eschenbach has served as a member of our board of directors since May 2019. Since April 2016, Mr. Eschenbach has been a managing member at Sequoia Capital Operations, LLC, a venture capital firm. Prior to joining Sequoia Capital, Mr. Eschenbach spent 14 years at VMware, Inc., a global virtual infrastructure software provider, most recently as its President and Chief Operating Officer, a role he held from December 2012 to March 2016. Mr. Eschenbach served as VMware’s Co-President and Chief Operating Officer from April 2012 to December 2012, as Co-President, Customer Operations from January 2011 to April 2012, and as Executive Vice President of Worldwide Field Operations from May 2005 to January 2011. Mr. Eschenbach currently serves on the board of directors of Zoom Video Communications, Inc., Workday, Inc., and Palo Alto Networks, Inc., as well as several private companies. Mr. Eschenbach holds an Electronics Technician diploma from DeVry University. Mr. Eschenbach is qualified to serve on our board of directors because of his operational and sales experience in the technology industry and knowledge of high-growth companies.
Mark S. Garrett has served as a member of our board of directors since April 2018. Mr. Garrett served as Executive Vice President and Chief Financial Officer of Adobe Systems Incorporated, a global software company, from February 2007 to April 2018. From June 2004 to February 2007, Mr. Garrett served as Senior Vice President and Chief Financial Officer of the Software Group of EMC Corporation. Mr. Garrett currently serves on the board of directors of GoDaddy Inc., Pure Storage, Inc., and Cisco Systems, Inc. He previously served on the board of directors of Informatica Corporation, from October 2008 to August 2015, and Model N, Inc., from January 2008 to May 2016. Mr. Garrett holds a B.S. degree in Accounting and Marketing from Boston University and an M.B.A. degree from Marist College. Mr. Garrett is qualified to serve on our board of directors because of his financial expertise and management experience.
Kelly A. Kramer has served as a member of our board of directors since January 2020. Since January 2015, Ms. Kramer has served as Executive Vice President and Chief Financial Officer of Cisco Systems, Inc., a worldwide technology company. From January 2012 to January 2015, Ms. Kramer served in various finance roles at Cisco, including Senior Vice President, Corporate Finance and Senior Vice President, Business Technology and Operations Finance. Prior to Cisco, she served in various finance roles at GE Healthcare Systems, GE Healthcare Diagnostic Imaging, and GE Healthcare Biosciences. Ms. Kramer currently serves on the board of directors of Gilead Sciences, Inc. Ms. Kramer holds a B.S. degree in Mathematics from Purdue University. Ms. Kramer is qualified to serve on our board of directors because of her financial expertise and management experience.
John D. McMahon has served as a member of our board of directors since September 2013. From April 2008 to September 2011, Mr. McMahon served as Senior Vice President, Worldwide Sales and Services at BMC Software, Inc., a computer software company, after BMC’s acquisition of BladeLogic, Inc., a computer software company, where he served as Chief Operating Officer from August 2005 to April 2008. Prior to BladeLogic, Mr. McMahon was Senior VP-Worldwide Sales at Ariba, Inc. Preceding Ariba, Mr. McMahon served as Executive VP-Worldwide Sales at GeoTel Communications, LLC, which was acquired by Cisco Systems, Inc., and earlier as Executive VP-Worldwide Sales at Parametric Technology Corporation. Mr. McMahon serves on the board of directors of MongoDB, Inc., as well as several private companies. Mr. McMahon holds a B.S.E.E. degree in Electrical Engineering from the New Jersey Institute of Technology. Mr. McMahon is qualified to serve on our board of directors because of his software sales experience.
Michael L. Speiser has served as a member of our board of directors since our inception in July 2012, and as our lead independent director since December 2019. Mr. Speiser also served as our Chief Executive Officer and Chief Financial Officer from August 2012 to June 2014. Since 2008, Mr. Speiser has served as a Managing Director at Sutter Hill Ventures, a venture capital firm. Mr. Speiser previously served on the board of directors of Pure Storage, Inc., ending in 2019, and currently serves on the board of several private companies. Mr. Speiser holds a B.A. in Political Science from the University of Arizona and an M.B.A. from Harvard Business School. Mr. Speiser is qualified to serve on our board of directors because of his leadership and operational experience in the technology industry and knowledge of high-growth companies.
Jayshree V. Ullal has served on our board of directors since June 2020. Since October 2008, Ms. Ullal has served as President and Chief Executive Officer of Arista Networks, Inc., a cloud networking company. From September 1993 to May 2008, Ms. Ullal served in various positions at Cisco Systems, Inc., with her last position as senior vice president of the data center, switching and services group. Ms. Ullal holds a B.S. degree in Engineering (Electrical) from San Francisco State University and an M.S. degree in Engineering Management from Santa Clara University. She is a 2013 recipient of the Santa Clara University School of Engineering Distinguished Engineering Alumni Award. Ms. Ullal is qualified to serve on our board of directors because of her extensive experience as a senior executive and chief executive officer in the cloud computing industry.
Corporate Governance
Appointment of Officers
Our executive officers are appointed by, and serve at the discretion of, our board of directors. There are no family relationships between any of our directors or executive officers.
Board Composition
Our business and affairs are managed under the direction of our board of directors. We currently have ten directors and no vacancies. Pursuant to our amended and restated certificate of incorporation as in effect prior to the closing of this offering and an amended and restated voting agreement between us and certain of our stockholders, our current directors are elected as follows:
•The seat occupied by Mr. Speiser is elected by the holders of a majority of our Series A convertible preferred stock, voting separately as a single class, as the designee of Sutter Hill Ventures;
•The seat occupied by Dr. Dageville is elected by the holders of a majority of our common stock, voting separately as a single class, as the designee of certain key holders of our common stock;
•The seats occupied by Ms. Briggs, Mr. Burton, Mr. Eschenbach, Mr. Garrett, Ms. Kramer, Mr. McMahon, and Ms. Ullal are elected by the holders of a majority of our capital stock, voting together as a single class on an as-converted basis, as the designee of the other members of our board of directors; and
•The seat occupied by Mr. Slootman is elected by the holders of a majority of our capital stock, voting together as a single class on an as-converted basis, to be our then-current Chief Executive Officer.
The provisions of our amended and restated voting agreement by which the directors are currently elected will terminate in connection with this offering and there will be no contractual obligations regarding the election of our directors following this offering.
After this offering, the number of directors will be fixed by our board of directors, subject to the terms of our amended and restated certificate and restated bylaws that will become effective in connection with the closing of this offering. Each of our current directors will continue to serve until the election and qualification of his or her successor, or his or her earlier death, resignation, or removal.
Our board of directors may establish the authorized number of directors from time to time by resolution. In accordance with our amended and restated certificate of incorporation that will be in effect in connection with the closing of this offering, immediately after this offering, our board of directors will be divided into three classes with staggered three-year terms. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Our directors will be divided among the three classes as follows:
•the Class I directors will be Benoit Dageville, Mark S. Garrett, and Jayshree V. Ullal, whose terms will expire at the first annual meeting of stockholders to be held in 2021;
•the Class II directors will be Kelly A. Kramer, Frank Slootman, and Michael L. Speiser, whose terms will expire at the second annual meeting of stockholders to be held in 2022; and
•the Class III directors will be Teresa Briggs, Jeremy Burton, Carl M. Eschenbach, and John D. McMahon, whose terms will expire at the third annual meeting of stockholders to be held in 2023.
We expect that any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one third of the directors. The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.
Director Independence
Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning her or his background, employment, and affiliations, our board of directors has determined that each of our directors, other than Dr. Dageville and Mr. Slootman, do not have relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the listing standards of the New York Stock Exchange. In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our shares held by each non-employee director and the transactions described in the section titled “Certain Relationships and Related Party Transactions.”
Lead Independent Director
Our board of directors has adopted, to be effective in connection with this offering, corporate governance guidelines that provide that one of our independent directors will serve as our lead independent director. Our board of directors has appointed Mr. Speiser to serve as our lead independent
director. As lead independent director, Mr. Speiser will provide leadership to our board of directors if circumstances arise in which the role of Chief Executive Officer and Chairman of our board of directors may be, or may be perceived to be, in conflict, and perform such additional duties as our board of directors may otherwise determine and delegate.
Committees of Our Board of Directors
Our board of directors has established an audit committee, a compensation committee, and a nominating and governance committee. The composition and responsibilities of each of the committees of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time.
Audit Committee
Our audit committee consists of Teresa Briggs, Kelly A. Kramer, and Mark S. Garrett, who serves as the committee’s chair. Our board of directors has determined that each of our audit committee members satisfies the independence requirements under the New York Stock Exchange listing standards and Rule 10A-3(b)(1) of the Exchange Act. Each member of our audit committee can read and understand fundamental financial statements in accordance with applicable requirements, and our board of directors has determined that each of Ms. Briggs, Mr. Garrett, and Ms. Kramer is an “audit committee financial expert” within the meaning of SEC regulations. In arriving at these determinations, our board of directors has examined each audit committee member’s scope of experience and the nature of their employment in the corporate finance sector.
The principal duties and responsibilities of our audit committee include, among other things:
•selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;
•helping to ensure the independence and performance of the independent registered public accounting firm;
•helping to maintain and foster an open avenue of communication between management and the independent registered public accounting firm;
•discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;
•developing and overseeing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;
•reviewing our policies on risk assessment and risk management, including information security policies and practices;
•overseeing the organization and performance of our internal audit function;
•establishing our investment policy to govern our cash investment program;
•reviewing related party transactions;
•obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes its internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and
•approving (or, as permitted, pre-approving) all audit and all permissible non-audit services to be performed by the independent registered public accounting firm.
Our audit committee operates under a written charter that satisfies the applicable listing standards of the New York Stock Exchange.
Compensation Committee
Our compensation committee consists of Carl M. Eschenbach, John D. McMahon, Michael L. Speiser, and Jayshree V. Ullal, who serves as the committee’s chair. Our board of directors has determined that each of our compensation committee members is independent under the New York Stock Exchange listing standards. The compensation committee has a compensation subcommittee, consisting of Mr. Eschenbach, Ms. Ullal, and Mr. McMahon, to which our board of directors has delegated the responsibility for approving transactions between us and our officers and directors that are within the scope of Rule 16b-3 promulgated under the Exchange Act. Each of Mr. Eschenbach, Ms. Ullal, and Mr. McMahon is a “non-employee director” as defined in Rule 16b-3 under the Exchange Act.
The principal duties and responsibilities of our compensation committee include, among other things:
•approving the retention of compensation consultants and outside service providers and advisors;
•reviewing and approving, or recommending that our board of directors approve, the compensation, individual and corporate performance goals and objectives and other terms of employment of our executive officers, including evaluating the performance of our Chief Executive Officer and, with his assistance, that of our other executive officers;
•reviewing and recommending to our board of directors the compensation of our directors;
•administering our equity and non-equity incentive plans;
•reviewing our practices and policies of employee compensation as they relate to risk management and risk-taking incentives;
•reviewing and evaluating succession plans for our executive officers and making recommendations to our board of directors with respect to the selection of appropriate individuals to succeed these positions;
•preparing the compensation committee report required to be included in our proxy statement under the rules and regulations of the SEC;
•reviewing and approving, or recommending that our board of directors approve, incentive compensation and equity plans; and
•reviewing and establishing general policies relating to compensation and benefits of our employees and reviewing our overall compensation philosophy.
Our compensation committee operates under a written charter that satisfies the applicable listing standards of the New York Stock Exchange.
Nominating and Governance Committee
Our nominating and governance committee consists of Jeremy Burton, Mark S. Garrett, and Michael L. Speiser, who serves as the committee’s chair. Our board of directors has determined that each member of the nominating and governance committee is independent under the New York Stock Exchange listing standards.
The nominating and corporate governance committee’s responsibilities include, among other things:
•identifying, evaluating, and recommending that our board of directors approve, nominees for election to our board of directors and its committees;
•approving the retention of director search firms;
•evaluating the performance of our board of directors, committees of our board of directors, and of individual directors;
•considering and making recommendations to our board of directors regarding the composition of our board of directors and its committees; and
•evaluating the adequacy of our corporate governance practices and reporting.
Our nominating and governance committee operates under a written charter that satisfies the applicable listing standards of the New York Stock Exchange.
Global Code of Conduct and Ethics
We have adopted a Global Code of Conduct and Ethics that applies to all our employees, officers, contractors, and directors. This includes our principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions. The full text of our Global Code of Conduct and Ethics is posted on our website at www.snowflake.com. We intend to disclose on our website any future amendments of our Global Code of Conduct and Ethics or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions, or our directors from provisions in the Global Code of Conduct and Ethics. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus.
Stock Ownership Guidelines
In an effort to align our directors’ and executive officers’ interests with those of our stockholders, we have adopted stock ownership guidelines to be effective in connection with this offering. Within five years of becoming subject to the guidelines, our non-employee directors are expected to hold Snowflake stock valued at not less than five times their total annual cash retainer for board and committee service. Within five years of becoming subject to the guidelines, our executive officers are expected to hold Snowflake stock valued at not less than a multiple of their annual base salaries, consisting of five times annual base salary for our Chief Executive Officer and Chief Financial Officer and two times annual base salary for our other executive officers.
Compensation Committee Interlocks and Insider Participation
None of the members of the compensation committee are currently, or have been at any time, one of our officers or employees, except Michael L. Speiser who served as our Chief Executive Officer and Chief Financial Officer from August 2012 to June 2014. None of our executive officers currently serve, or have served during the last year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation committee.
Director Compensation
The following table sets forth information regarding compensation earned by or paid to our directors for the fiscal year ended January 31, 2020, other than (i) Frank Slootman, our Chief Executive Officer and Chairman, and Benoit Dageville, our President of Products, who are also members of our board of directors but did not receive any additional compensation for service as a director, and (ii) Mr. Muglia, our former Chief Executive Officer, who served on our board of directors until April 2019 but did not receive any additional compensation for service as a director. The compensation of Mr. Slootman, Dr. Dageville, and Mr. Muglia as named executive officers is set forth below under “Executive Compensation—Summary Compensation Table.” The table below includes information regarding the compensation earned by or paid to Thierry Cruanes, our Chief Technology Officer, who is an employee and was a
member of our board of directors but did not receive any additional compensation for service as a director.
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Name
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Option
Awards ($)(1)
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All Other Compensation ($)
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Total ($)(6)
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Jeremy Burton
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410,382
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—
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410,382
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Teresa Briggs
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255,417
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—
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255,417
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Thierry Cruanes(2)
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1,836,642
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378,243
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2,214,885
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Carl M. Eschenbach
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—
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—
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—
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Mark S. Garrett
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—
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—
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—
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Kelly A. Kramer
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409,529
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—
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409,529
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John D. McMahon
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—
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—
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—
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Michael L. Speiser
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—
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—
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—
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Jayshree V. Ullal(3)
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—
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—
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—
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John L. Walecka(4)
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—
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—
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—
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Kevin Wang(5)
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—
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—
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—
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________________
(1)Amount reported represents the aggregate grant-date fair value of equity awards granted to our directors during the fiscal year ended January 31, 2020 under our 2012 Plan, computed in accordance with Financial Accounting Standard Board Accounting Standards Codification, Topic 718 (ASC Topic 718). The assumptions used in calculating the grant-date fair value of the equity awards reported in this column are set forth in the notes to our audited consolidated financial statements included elsewhere in this prospectus. This amount does not reflect the actual economic value that may be realized by the directors.
(2) During the fiscal years ended January 31, 2018, 2019, and 2020, Dr. Cruanes earned a base salary of $257,500, $ 285,417 , and $301,9 23 , respectively. During the fiscal years ended January 31, 2019 and 2020, Dr. Cruanes earned $34,542 and $76,308, respectively, each pursuant to a bonus earned based on the achievement of company performance goals as determined by our compensation committee, in his role as our Chief Technology Officer. Dr. Cruanes resigned as a member of our board of directors in June 2020.
(3)Ms. Ullal joined our board of directors in June 2020.
(4)Mr. Walecka resigned as a member of our board of directors in June 2020.
(5)Mr. Wang resigned as a member of our board of directors in June 2020.
(6)The following table sets forth information on stock options granted to non-employee directors and Dr. Cruanes during the fiscal year ended January 31, 2020, the aggregate number of shares of our Class B common stock underlying outstanding stock options held by our non-employee directors and Dr. Cruanes as of January 31, 2020, and the aggregate number of shares of our Class B common stock underlying outstanding unvested stock options held by our non-employee directors and Dr. Cruanes as of January 31, 2020:
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Name
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Number of Shares Underlying Stock Options Granted During the Fiscal Year Ended January 31, 2020
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Number of Shares Underlying Stock Options Held as of January 31, 2020
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Number of Shares Underlying Unvested Stock Options Held as of January 31, 2020
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Jeremy Burton
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50,000
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477,546(1)
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67,815
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Teresa Briggs
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50,000
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30,000(2)
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30,000(3)
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Thierry Cruanes(4)
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400,000
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1,560,000(5)
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578,335
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Carl M. Eschenbach
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—
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—
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—
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Mark S. Garrett
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—
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767,186(6)
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543,424
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Kelly A. Kramer
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50,000
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50,000(7)
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50,000
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John D. McMahon
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—
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889,016(8)
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166,667
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Michael L. Speiser
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—
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—
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—
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Jayshree V. Ullal
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—
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—
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—
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John L. Walecka
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—
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—
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—
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Kevin Wang
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—
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—
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—
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________________
(1)Consists of (i) a stock option to purchase 50,000 shares of our Class B common stock at an exercise price per share of $21.79, which was granted in January 2020 and (ii) a stock option to purchase 427,546 shares of our Class B common stock at an exercise price per share of $0.74, which was granted in September 2016. The shares subject to each option are immediately exercisable and vest in 48 equal monthly installments beginning on January 22, 2020 and March 1, 2016, respectively, subject to Mr. Burton’s continuous service through each such vesting date. In the event of a change in control, 100% of the unvested shares subject to each option will vest immediately prior to such change in control.
(2)Consists of a stock option to purchase 50,000 shares of our Class B common stock at an exercise price per share of $13.48, which was granted in December 2019. On December 16, 2019, Ms. Briggs transferred all of the shares subject to the stock option to The Teresa Briggs Trust, of which she is the trustee. On December 17, 2019, The Teresa Briggs Trust early exercised 20,000 shares subject to the option (the Briggs Early Exercise). The shares subject to the option are immediately exercisable and vest in 48 equal monthly installments beginning on December 3, 2019, subject to Ms. Briggs’ continuous service through each such vesting date. In the event of a change in control, 100% of the unvested shares subject the option (including any shares that have been early exercised and are subject to our repurchase) will vest immediately prior to such change in control.
(3)Excludes the shares of Class B common stock subject to the Briggs Early Exercise, of which 18,959 shares were unvested as of January 31, 2020 and subject to our repurchase.
(4)Dr. Cruanes resigned as a member of our board of directors in June 2020.
(5)Consists of (i) a stock option to purchase 300,000 shares of our Class B common stock at an exercise price per share of $0.26, which was granted in January 2015 (the January 2015 Option), (ii) a stock option to purchase 320,000 shares of our Class B Common stock at an exercise price per share of $0.74, which was granted in January 2017 (the January 2017 Option), (iii) a stock option to purchase 640,000 shares of our Class B common stock at an exercise price per share of $0.74, which was granted in February 2017 (the February 2017 Option), and (iv) a stock option to purchase 400,000 shares of our Class B common stock at an exercise price per share of $13.48, which was granted in December 2019 (the December 2019 Option). The shares subject to the January 2015 Option were fully vested as of September 2018, and Dr. Cruanes exercised 100,000 shares subject to the January 2015 Option in January 2019. The shares subject to the January 2017 Option are immediately exercisable and vest in 24 equal monthly installments beginning on August 1, 2018, subject to Dr. Cruanes’ continuous service through each such vesting date. The shares subject to the February 2017 Option vest in 48 equal monthly installments beginning on August 1, 2016, subject to Dr. Cruanes’ continuous service through each such vesting date. The shares subject to the December 2019 Option are immediately exercisable and vest in 48 equal monthly installments beginning on December 11, 2019, subject to Dr. Cruanes’ continuous service through each such vesting date. In the event of Dr. Cruanes’ termination without cause or resignation for good reason in connection with a change in control, 100% of the unvested shares subject to the January 2017 Option, February 2017 Option, and December 2019 Option will vest immediately prior to such change in control.
(6)Consists of a stock option to purchase 767,186 shares of our Class B common stock at an exercise price per share of $3.74, which was granted in April 2018. On December 2, 2019, Mr. Garrett transferred 95,898 shares subject to the stock option to each of (i) the Mark Garrett 2011 Irrevocable Trust FBO Brittany R.G. Smith, U/T/D 7/21/11, (ii) the Amy Garrett 2011 Irrevocable Trust FBO Brittany R.G. Smith, U/T/D 7/21/11, (iii) the Mark Garrett 2011 Irrevocable Trust FBO Lee A. Garrett, U/T/D 7/21/11, and (iv) the Amy Garrett 2011 Irrevocable Trust FBO Lee A. Garrett, U/T/D 7/21/11 (the Garrett Family Trusts), each of which Mark Garrett and Amy Garrett are trustees. As of January 31, 2020, the Garrett Family Trusts each held a stock option to purchase 95,898 shares of our Class B common stock and Mark Garrett held a stock option to purchase 383,594 shares of our Class B common stock. The shares subject to each option are immediately exercisable and vest in 72 equal monthly installments beginning on April 6, 2018, subject to Mr. Garrett’s continuous service through each such vesting date. In the event of a change in control, 100% of the unvested shares subject to each option will vest immediately prior to such change in control.
(7)Consists of a stock option to purchase 50,000 shares of our Class B common stock at an exercise price per share of $21.79, which was granted in January 2020. The shares subject to the option vest in 48 equal monthly installments beginning on January 3, 2020, subject to Ms. Kramer’s continuous service through each such vesting date. In the event of a change in control, 100% of the unvested shares subject to the option will vest immediately prior to such change in control.
(8)Consists of (i) a stock option to purchase 489,016 shares of our Class B common stock at an exercise price per share of $0.07, which was granted in September 2013 (the September 2013 Option) and (ii) a stock option to purchase 400,000 shares of our Class B common stock at an exercise price per share of $1.41, which was granted in June 2017 (the June 2017 Option). The shares subject to the September 2013 Option were fully vested as of September 2017. The shares subject to the June 2017 Option are immediately exercisable and vest in 48 equal monthly installments beginning on September 17, 2017, subject to Mr. McMahon’s continuous service through each such vesting date. In the event of a change in control, 100% of the unvested shares subject to the June 2017 Option will vest immediately prior to such change in control.
Non-Employee Director Compensation Policy
Prior to this offering, we did not have a formal policy with respect to compensation payable to our non-employee directors for service as directors. From time to time, we have granted equity awards to certain non-employee directors to entice them to join our board of directors and for their continued service on our board of directors. We also have reimbursed our directors for expenses associated with attending meetings of our board of directors and committees of our board of directors.
In August 2020, our board of directors approved a director compensation policy for non-employee directors to be effective in connection with this offering. Pursuant to this policy, our non-employee directors will receive the following compensation.
Equity Compensation
Each new non-employee director who joins our board of directors after our initial public offering will automatically receive an RSU for Class A common stock having a value of $440,000 based on the average fair market value of the underlying Class A common stock for the 20 trading days prior to and ending on the date of grant (Initial RSU). Each Initial RSU will vest over three years, with one-third of the Initial RSU vesting on the first, second, and third anniversary of the date of grant.
On the date of each annual meeting of our stockholders, each person who is then a non-employee director will automatically receive an RSU for Class A common stock having a value of $300,000 based on the average fair market value of the underlying Class A common stock for the 20 trading days prior to and ending on the date of grant (Annual RSU); provided, that, for a non-employee director who was appointed to the board less than 365 days prior to the annual meeting of our stockholders, the $300,000 will be pro-rated based on the number of days from the date of appointment until such annual meeting. Each Annual RSU will vest on the earlier of (i) the date of the following year’s annual meeting of our stockholders (or the date immediately prior to the next annual meeting of our stockholders if the non-employee director’s service as a director ends at such meeting due to the director’s failure to be re-elected or the director not standing for re-election); or (ii) the first anniversary of the date of grant.
All outstanding awards held by each non-employee director who is in service as of immediately prior to a “corporate transaction” (as defined in the director compensation policy) will become fully vested as of immediately prior to the closing of such corporate transaction.
Cash Compensation
In addition, each non-employee director is entitled to receive the following cash compensation for services on our board of directors and its committees as follows:
•$30,000 annual cash retainer for service as a board member and an additional annual cash retainer of $15,000 for service as lead independent director of our board of directors, if any;
•$10,000 annual cash retainer for service as a member of the audit committee and $20,000 annual cash retainer for service as chair of the audit committee (in lieu of the committee member service retainer);
•$6,000 annual cash retainer for service as a member of the compensation committee and $13,500 annual cash retainer for service as chair of the compensation committee (in lieu of the committee member service retainer); and
•$4,000 annual cash retainer for service as a member of the nominating and governance committee and $7,500 annual cash retainer for service as chair of the nominating and governance committee (in lieu of the committee member service retainer).
The annual cash compensation amounts are payable in equal quarterly installments, in arrears following the end of each quarter in which the service occurred, pro-rated for any partial quarters.
Expenses
We will reimburse each eligible non-employee director for ordinary, necessary, and reasonable out-of-pocket travel expenses to cover in-person attendance at and participation in meetings of our board of directors and any committee of the board.
EXECUTIVE COMPENSATION
Our named executive officers, consisting of our principal executive officer, former principal executive officer, and the next two most highly compensated executive officers, as of January 31, 2020, were:
•Frank Slootman, Chief Executive Officer;
•Robert L. Muglia, former Chief Executive Officer;
•Michael P. Scarpelli, Chief Financial Officer; and
•Benoit Dageville, President of Products.
Summary Compensation Table
The following table presents all of the compensation awarded to or earned by or paid to our named executive officers for the fiscal year ended January 31, 2020.
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Name and Principal Position
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Salary
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Option Awards(1)
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Stock Awards
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Non-Equity
Incentive Plan Compensation(2)
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All Other Compensation
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Total
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Frank Slootman(3)
Chief Executive Officer
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$
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287,981
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$
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59,874,582
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$
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—
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$
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307,886
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$
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233(4)
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$
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60,470,682
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Robert L. Muglia(5)
Former Chief Executive Officer
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72,885
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—
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16,652,753(6)
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—
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315,772(7)
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17,041,410
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Michael P. Scarpelli(8)
Chief Financial Officer
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138,461
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20,157,901
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—
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150,730
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146(4)
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20,447,238
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Benoit Dageville
President of Products
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292,707(9)
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1,836,642
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—
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70,308
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887(4)
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2,200,544
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________________
(1)Amounts shown in this column do not reflect dollar amounts actually received by our named executive officers. Instead, these amounts reflect the aggregate grant-date fair value of each stock option granted during the fiscal year ended January 31, 2020, computed in accordance with the provisions of FASB ASC Topic 718. The assumptions used in calculating the grant-date fair value of the equity awards reported in this column are set forth in the notes to our audited consolidated financial statements included elsewhere in this prospectus. Our named executive officers will only realize compensation to the extent the trading price of our Class A common stock is greater than the exercise price of the shares underlying such stock options.
(2)The amounts reported in this column represent total bonuses earned based on the achievement of company performance goals as determined by our compensation committee.
(3)Mr. Slootman was hired as our Chief Executive Officer in April 2019. His annualized base salary as of January 31, 2020 was $375,000.
(4)Amounts reported represent life insurance premiums paid by us on behalf of the named executive officer, and with respect to Dr. Dageville only, reimbursement for certain travel expenses of his spouse in connection with a company-sponsored event.
(5)Mr. Muglia resigned as our Chief Executive Officer in April 2019. Prior to his resignation, Mr. Muglia was entitled to an annual base salary of $300,000.
(6)The amount disclosed represents the incremental fair value of (i) $5,258,762 associated with the acceleration of vesting of 647,000 shares of Class B common stock and (ii) $11,393,990 associated with the modification of vesting of 1,401,834 shares of Class B common stock, each calculated in accordance with FASB ASC Topic 718.
(7)The amount disclosed includes $65 in life insurance premium payments made by us on behalf of Mr. Muglia and the following amounts paid to Mr. Muglia pursuant to the terms of his separation agreement with us: (i) $300,000 in cash severance payments and (ii) $15,707 in COBRA premiums.
(8)Mr. Scarpelli was hired as our Chief Financial Officer in August 2019. His annualized base salary as of January 31, 2020 was $300,000.
(9)The base salary paid to Dr. Dageville during the fiscal year ended January 31, 2020 was comprised of 58,767 Euros and 226,923 USD. The amount reported reflects an exchange rate of 1 Euro to 1.1194 USD based on the average exchange rate published by the Federal Reserve Bank for calendar year 2019. His annualized base salary as of January 31, 2020 in USD was $300,000.
Outstanding Equity Awards as of January 31, 2020
The following table sets forth certain information about outstanding equity awards granted to our named executive officers that remain outstanding as of January 31, 2020.
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Option Awards
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Stock Awards
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Name
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Grant Date(1)
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Number of
Securities
Underlying
Unexercised
Options
Exercisable (#)
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Number of
Securities
Underlying
Unexercised
Options
Unexercisable (#)
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Option
Exercise
Price
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Option
Expiration
Date
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Number of Shares or Units of Stock that Have Not Vested (#)
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Market Value of Shares or Units of Stock that Have Not Vested(2)
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Frank Slootman
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5/29/2019
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13,677,476(3)
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—
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$
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8.88
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5/28/2029
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—
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$
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—
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5/29/2019
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4,692(4)
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36,599(4)
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8.88
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5/28/2029
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—
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—
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Robert L. Muglia
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2/3/2017
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—
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—
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—
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—
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1,401,834(5)
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35,494,437
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Michael P. Scarpelli
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8/27/2019
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3,690,560(6)
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—
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8.88
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8/26/2029
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—
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—
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Benoit Dageville
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1/14/2015
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300,000(7)
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—
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0.26
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1/13/2025
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—
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—
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1/30/2017
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320,000(8)
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—
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0.74
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1/29/2027
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—
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—
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2/8/2017
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546,666(9)
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93,334(9)
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0.74
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2/7/2027
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—
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—
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12/11/2019
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400,000(10)
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—
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13.48
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12/10/2029
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—
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—
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________________
(1)All equity awards listed in this table were granted pursuant to our 2012 Plan, the terms of which are described below under “—Equity Incentive Plans—Amended and Restated 2012 Equity Incentive Plan.”
(2)This amount reflects the fair market value of our Class B common stock of $25.32 per share as of January 31, 2020 (the determination of the fair market value by our board of directors as of the most proximate date) multiplied by the amount shown in the column for the number of shares that have not vested.
(3)1/48th of the shares underlying the option vest monthly starting on April 26, 2019, subject to Mr. Slootman’s continuous service through each such vesting date. This option is immediately exercisable, subject to our right to repurchase unvested shares in the event that Mr. Slootman’s service with us terminates. The stock option is subject to acceleration upon certain events as described in the section titled “—Change of Control Agreements.”
(4)1/48th of the shares underlying the option vest monthly starting on April 26, 2019, subject to Mr. Slootman’s continuous service through each such vesting date. The stock option is subject to acceleration upon certain events as described in the section titled “—Change of Control Agreements.”
(5)Mr. Muglia resigned as our Chief Executive Officer in April 2019. Under the terms of his separation agreement, Mr. Muglia continued to provide advisor services until April 30, 2020, on which date all unvested shares vested.
(6)1/48th of the shares underlying the option vest monthly starting on August 19, 2019, subject to Mr. Scarpelli’s continuous service through each such vesting date. This option is immediately exercisable, subject to our right to repurchase unvested shares in the event that Mr. Scarpelli’s service with us terminates. The stock option is subject to acceleration upon certain events as described in the section titled “—Change of Control Agreements.”
(7)The shares subject to this option were fully vested as of September 2018.
(8)1/24th of the shares underlying the option vest monthly starting on August 1, 2018, subject to Dr. Dageville’s continuous service through each such vesting date. This option is immediately exercisable, subject to our right to repurchase unvested shares in the event that Dr. Dageville’s service with us terminates. The stock option is subject to acceleration upon certain events as described in the section titled “—Change of Control Agreements.”
(9)1/48th of the shares underlying the option vest monthly starting on August 1, 2016, subject to Dr. Dageville’s continuous service through each such vesting date. The stock option is subject to acceleration upon certain events as described in the section titled “—Change of Control Agreements.”
(10)1/48th of the shares underlying the option vest monthly starting on December 11, 2019, subject to Dr. Dageville’s continuous service through each such vesting date. This option is immediately exercisable, subject to our right to repurchase unvested shares in the event that Dr. Dageville’s service with us terminates. The stock option is subject to acceleration upon certain events as described in the section titled “—Change of Control Agreements.”
Emerging Growth Company Status
We are an “emerging growth company,” as defined in the JOBS Act. As an emerging growth company we will be exempt from certain requirements related to executive compensation, including, but not limited to, the requirements to hold a non-binding advisory vote on executive compensation and to provide information relating to the ratio of total compensation of our Chief Executive Officer to the median of the annual total compensation of all of our employees, each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Pension Benefits
Our named executive officers did not participate in, or otherwise receive any benefits under, any pension or retirement plan sponsored by us during the fiscal year ended January 31, 2020.
Non-Qualified Deferred Compensation
Our named executive officers did not participate in, or earn any benefits under, a non-qualified deferred compensation plan sponsored by us during the fiscal year ended January 31, 2020.
Employment, Severance, and Change in Control Arrangements
We have entered into offer letters with Dr. Dageville, Mr. Slootman, Mr. Muglia, and Mr. Scarpelli, the terms of which are described below. Each of our executive officers has also executed our standard form of proprietary information and inventions agreement.
Frank Slootman
In April 2019, we entered into an offer letter with Frank Slootman to serve as our Chief Executive Officer. The offer letter has no specific term and provides for at-will employment. Mr. Slootman’s current annual base salary is $375,000, and he is currently eligible for a target annual discretionary performance bonus of up to 100% of his annual base salary, based on individual and corporate performance goals. In May 2019, we issued to Mr. Slootman options to purchase 15,242,240 shares of our Class B common stock with an exercise price of $8.88 per share, which vest monthly over 48 months beginning April 2019.
In addition, under Mr. Slootman’s offer letter, if Mr. Slootman’s employment is terminated without cause (as defined in the offer letter) or he terminates his employment for good reason (as defined in the offer letter), and such separation is not a result of Mr. Slootman’s death or disability, Mr. Slootman is entitled to a lump sum payment equal to three months of his base salary, provided that he signs and allows to become effective a general release of all claims. Upon a change in control (as defined in the 2012 Plan), all unvested shares subject to his outstanding equity awards with a time-based vesting schedule shall vest in full. Mr. Slootman may also be entitled to severance and change in control benefits under our Severance and Change in Control Plan. See the section titled “Severance and Change in Control Plan” below.
Robert L. Muglia
In May 2014, we entered into an offer letter with Robert Muglia to serve as our Chief Executive Officer. The offer letter had no specific term and provided for at-will employment. Mr. Muglia’s annual base salary for the fiscal year ended January 31, 2020 was $300,000, and he was eligible for a target annual discretionary performance bonus of up 66.67% of his annual base salary, based on individual and corporate performance goals. Mr. Muglia resigned as our Chief Executive Officer in April 2019, and in connection therewith, we entered into a separation agreement defining the terms of his resignation as Chief Executive Officer and transition to an advisor role. In exchange for a general release of claims, Mr. Muglia received (i) $300,000 in severance pay; (ii) payment of COBRA premiums for up to 18 months following termination; and (iii) accelerated vesting of 647,000 shares of unvested Class B common stock held by Mr. Muglia as of the date of his resignation. Upon Mr. Muglia’s resignation as Chief Executive Officer, 1,401,834 shares of unvested Class B common stock remained subject to a right of repurchase by us. On April 30, 2020, these 1,401,834 shares of Class B common stock vested in accordance with the terms of his separation agreement. Mr. Muglia remains party to a confidentiality, assignment of inventions, and non-solicitation agreement. The separation agreement also includes a covenant not to provide any services, while serving in his advisor role, to any company or person that competes with us.
Michael P. Scarpelli
In April 2019, we entered into an offer letter with Michael P. Scarpelli to serve as our Chief Financial Officer. The offer letter has no specific term and provides for at-will employment. Mr. Scarpelli’s current annual base salary is $300,000, and he is currently eligible for a target annual discretionary performance bonus of up to 100% of his annual base salary, based on individual and corporate performance goals. In August 2019, we issued to Mr. Scarpelli options to purchase 3,810,560 shares of Class B common stock with an exercise price of $8.88 per share, which vest monthly over 48 months beginning August 2019. Under the terms of his offer letter, Mr. Scarpelli also purchased 762,112 shares of our Series F convertible preferred stock at a price per share of $14.96125 for an aggregate purchase price of $11.4 million.
In addition, under Mr. Scarpelli’s offer letter, if Mr. Scarpelli’s employment is terminated without cause (as defined in the offer letter) or he terminates his employment for good reason (as defined in the offer
letter), and such separation is not a result of Mr. Scarpelli’s death or disability, Mr. Scarpelli is entitled to a lump sum payment equal to three months of his base salary, provided that he signs and allows to become effective a general release of all claims. Upon a change in control (as defined in the 2012 Plan), all unvested shares subject to his outstanding equity awards with a time-based vesting schedule shall vest in full. Mr. Scarpelli may also be entitled to severance and change in control benefits under our Severance and Change in Control Plan. See the section titled “Severance and Change in Control Plan” below.
Benoit Dageville
In August 2020, we entered into a confirmatory offer letter with Benoit Dageville to serve as our President of Products. The confirmatory offer letter has no specific term and provides for at-will employment. Dr. Dageville’s current annual base salary is $300,000, and he is currently eligible for a target annual discretionary performance bonus of up to $100,000, based on individual and corporate performance goals.
In addition, under the terms of Dr. Dageville’s stock options, if, during three months prior to a change in control (as defined in the 2012 Plan) and ending eighteen months after a change in control, Dr. Dageville’s employment with us is terminated without cause (as defined in the 2012 Plan) or he terminates his employment for good reason (as defined in the agreements underlying his stock options), and such separation is not a result of Dr. Dageville’s death or disability, then all of the unvested shares subject to each option shall accelerate and immediately vest, provided that he signs and allows to become effective a general release of all claims. Dr. Dageville may also be entitled to severance and change in control benefits under our Severance and Change in Control Plan. See the section titled “Severance and Change in Control Plan” below.
Severance and Change in Control Plan
In July 2020, we adopted a Severance and Change in Control Plan (CIC Plan) that provides severance and change in control benefits to each of our executive officers, including our named executive officers, and certain other participants, under the conditions described below. The CIC Plan provides different benefits for three different “tiers” of employees. Our Chief Executive Officer and Chief Financial Officer are “tier 1” employees, and our other executive officers are “tier 2” employees.
Under the CIC Plan, upon a “change of control” (as defined in the CIC Plan), 100% of then-unvested equity awards held by tier 1 employees will accelerate and become vested (and, if applicable, exercisable). In addition, upon a termination other than for “cause,” death, or “disability” or upon resignation for “good reason” (each as defined in the CIC Plan) that occurs during the period beginning three months prior to a change in control and ending 18 months following such change in control, tier 1 and tier 2 employees will each be entitled to receive (i) a cash payment equal to 12 months of base salary, (ii) a cash payment equal to the participant’s target annual bonus, (iii) reimbursement of the employer portion of COBRA premiums for up to 12 months for tier 1 employees and six months for tier 2 employees; and (iv) for tier 2 employees, acceleration of vesting (and, if applicable, exercisability) of 100% of then-unvested equity awards held by such tier 2 employee. For any equity acceleration, vesting of performance-based awards will be based on the participant’s target achievement level (or actual achievement level if the performance metrics are measurable at the time of acceleration).
Upon termination other than for cause, death, or disability or upon resignation for good reason that does not occur in connection with a change of control, tier 1 and tier 2 employees will be entitled to receive (i) a cash payment equal to 12 months of base salary, and (ii) reimbursement of the employer portion of COBRA premiums for up to 12 months for tier 1 employees and six months for tier 2 employees.
All benefits upon a termination of services are subject to the participant signing a general release of all claims. If our executive officers are entitled to any benefits other than the benefits under the CIC Plan, each of his or her benefits under the CIC Plan shall be provided only to the extent more favorable than the corresponding benefit under such other arrangement. See the section titled “Employment, Severance, and Change in Control Arrangements” above.
Non-Equity Incentive Plan Compensation
Cash Incentive Bonus Plan
We have adopted a Cash Incentive Bonus Plan for our executive officers and other eligible employees to be effective in connection with this offering. Each participant is eligible to receive cash bonuses based on the achievement of certain performance goals, as determined in the sole discretion of the compensation committee of our board of directors. Each participant’s target award may be a percentage of a participant’s annual base salary as of the beginning or end of a performance period or a fixed dollar amount. In addition, to be eligible to earn a bonus under the Cash Incentive Bonus Plan, a participant must be employed by us on the last day of the performance period, unless otherwise determined by the compensation committee of our board of directors.
Other Benefits
401(k) Plan
We maintain a tax-qualified retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to defer compensation up to certain limits imposed by the Code. We have the ability to make matching and discretionary contributions to the 401(k) plan but have not done so to date. Employee contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. Employees are immediately and fully vested in their own contributions. The 401(k) plan is intended to be qualified under Section 401(a) of the Code, with the related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan are deductible by us when made, and contributions and earnings on those amounts are generally not taxable to a participating employee until withdrawn or distributed from the 401(k) plan.
Insurance Premiums
Our U.S. employees, including our named executive officers, currently participate in various health and welfare employee benefits under plans sponsored by us. These plans offer benefits including medical, dental, and vision coverage; life insurance, accidental death and dismemberment, and disability coverage; and flexible spending accounts, among others. Employees eligible for these benefits are regular and intern classes, including our named executives, who work 20 or more hours per week. The cost of this coverage is primarily paid for by us, with employees paying a portion of the cost through payroll deductions.
Equity Incentive Plans
2020 Equity Incentive Plan
Our board of directors adopted, and our stockholders approved, our 2020 Plan in September 2020. Our 2020 Plan will become effective in connection with this offering. Once the 2020 Plan is effective, no further grants will be made under the 2012 Plan.
Awards. Our 2020 Plan provides for the grant of incentive stock options (ISOs) within the meaning of Section 422 of the Code to employees, including employees of any parent or subsidiary, and for the grant of non-statutory stock options (NSOs), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other forms of awards to employees, directors, and consultants, including employees and consultants of our affiliates.
Authorized Shares . Initially, the maximum number of shares of our Class A common stock that may be issued under our 2020 Plan after it becomes effective will not exceed 34,100,000 shares of our Class A common stock , plus the number of shares of Class A c ommon s tock that return to the 2020 Plan from the 2012 Plan, as described in more detail below, if any, as such shares become available from time to time. The maximum number of shares of our Class A common stock that may be issued on the exercise of ISOs under our 2020 Plan is 338,750,664 s hares .
In addition, the number of shares of our Class A common stock reserved for issuance under our 2020 Plan will automatically increase on February 1 of each fiscal year, for a period of up to ten years, through February 1, 2030, in an amount equal to (1) 5% of the total number of shares of our common stock (both
Class A and Class B) outstanding on January 31 of the preceding fiscal year, or (2) a lesser number of shares of our Class A common stock determined by our board of directors prior to the date of the increase.
Shares subject to stock awards granted under our 2020 Plan that expire or terminate without being exercised or otherwise issued in full or that are paid out in cash rather than in shares do not reduce the number of shares available for issuance under our 2020 Plan. Shares withheld under a stock award to satisfy the exercise, strike, or purchase price of a stock award or to satisfy a tax withholding obligation do not reduce the number of shares available for issuance under our 2020 Plan. If any shares of our Class A common stock issued pursuant to a stock award are forfeited back to or repurchased or reacquired by us (1) because of the failure to vest, (2) to satisfy the exercise, strike, or purchase price, or (3) to satisfy a tax withholding obligation in connection with an award, the shares that are forfeited or repurchased or reacquired will revert to and again become available for issuance under the 2020 Plan. Any shares previously issued which are reacquired in satisfaction of tax withholding obligations or as consideration for the exercise or purchase price of a stock award will again become available for issuance under the 2020 Plan.
Shares subject to outstanding stock awards granted under the 2012 Plan and that (1) are not issued because such stock award or any portion thereof expires or otherwise terminates without all of the shares covered by such stock award having been issued; (2) are not issued because such stock award or any portion thereof is settled in cash; (3) are forfeited back to or repurchased by us because of the failure to meet a contingency or condition required for the vesting of such shares; (4) are withheld or reacquired to satisfy the exercise, strike, or purchase price; or (5) are withheld or reacquired to satisfy a tax withholding obligation will become available for grant under the 2020 P lan, but any such shares that are shares of Class B common stock will instead be added to the share reserve of the 2020 Plan as shares of Class A common stock . S uch number of shares will not exceed 78, 816,888 .
Plan Administration. Our board of directors, or a duly authorized committee of our board of directors, will administer our 2020 Plan and is referred to as the “plan administrator” herein. Our board of directors may also delegate to one or more of our officers the authority to (1) designate employees (other than officers) to receive stock awards, to the extent permitted by applicable law, and (2) determine the number of shares subject to such stock awards. Under our 2020 Plan, our board of directors has the authority to determine award recipients, grant dates, the numbers and types of stock awards to be granted, the applicable fair market value, and the provisions of each stock award, including the period of exercisability and the vesting schedule applicable to a stock award.
Under the 2020 Plan, the board of directors also generally has the authority to effect, with the consent of any materially adversely affected participant, (1) the reduction of the exercise, purchase, or strike price of any outstanding option or stock appreciation right; (2) the cancellation of any outstanding option or stock appreciation right and the grant in substitution therefore of other awards, cash, or other consideration; or (3) any other action that is treated as a repricing under generally accepted accounting principles.
Stock Options. ISOs and NSOs are granted under stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for stock options, within the terms and conditions of the 2020 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our Class A common stock on the date of grant. Options granted under the 2020 Plan vest at the rate specified in the stock option agreement as determined by the plan administrator.
The plan administrator determines the term of stock options granted under the 2020 Plan, up to a maximum of ten years. Unless the terms of an optionholder’s stock option agreement provide otherwise, if an optionholder’s service relationship with us or any of our affiliates ceases for any reason other than disability, death, or cause, the optionholder may generally exercise any vested options for a period of three months following the cessation of service. This period may be extended in the event that exercise of the option is prohibited by applicable securities laws. If an optionholder’s service relationship with us or any of our affiliates ceases due to death, or an optionholder dies within a certain period following cessation of service, the optionholder or a beneficiary may generally exercise any vested options for a period of 18 months following the date of death. If an optionholder’s service relationship with us or any of our affiliates ceases due to disability, the optionholder may generally exercise any vested options for a period of 12 months following the cessation of service. In the event of a termination for cause, options
generally terminate upon the termination date. In no event may an option be exercised beyond the expiration of its term.
Acceptable consideration for the purchase of our Class A common stock issued upon the exercise of a stock option will be determined by the plan administrator and may include (1) cash, check, bank draft, or money order, (2) a broker-assisted cashless exercise, (3) the tender of shares of our Class A common stock previously owned by the optionholder, (4) a net exercise of the option if it is an NSO, or (5) other legal consideration approved by the plan administrator.
Unless the plan administrator provides otherwise, options and stock appreciation rights generally are not transferable except by will or the laws of descent and distribution. Subject to approval of the plan administrator or a duly authorized officer, an option may be transferred pursuant to a domestic relations order.
Tax Limitations on ISOs. The aggregate fair market value, determined at the time of grant, of our common stock with respect to ISOs that are exercisable for the first time by an award holder during any calendar year under all of our stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our parent or subsidiary corporations unless (1) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant, and (2) the term of the ISO does not exceed five years from the date of grant.
Restricted Stock Unit Awards. Restricted stock unit awards are granted under restricted stock unit award agreements adopted by the plan administrator. Restricted stock unit awards may be granted in consideration for any form of legal consideration that may be acceptable to our board of directors and permissible under applicable law. A restricted stock unit award may be settled by cash, delivery of shares of our Class A common stock, a combination of cash and shares of our Class A common stock as determined by the plan administrator, or in any other form of consideration set forth in the restricted stock unit award agreement. Additionally, dividend equivalents may be credited in respect of shares covered by a restricted stock unit award. Except as otherwise provided in the applicable award agreement, restricted stock unit awards that have not vested will be forfeited once the participant’s continuous service ends for any reason.
Restricted Stock Awards. Restricted stock awards are granted under restricted stock award agreements adopted by the plan administrator. A restricted stock award may be awarded in consideration for cash, check, bank draft, or money order, past services to us, or any other form of legal consideration that may be acceptable to our board of directors and permissible under applicable law. The plan administrator determines the terms and conditions of restricted stock awards, including vesting and forfeiture terms. If a participant’s service relationship with us ends for any reason, we may receive any or all of the shares of Class A common stock held by the participant that have not vested as of the date the participant terminates service with us through a forfeiture condition or a repurchase right.
Stock Appreciation Rights. Stock appreciation rights are granted under stock appreciation right agreements adopted by the plan administrator. The plan administrator determines the strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of our Class A common stock on the date of grant. A stock appreciation right granted under the 2020 Plan vests at the rate specified in the stock appreciation right agreement as determined by the plan administrator. Stock appreciation rights may be settled in cash or shares of our Class A common stock or in any other form of payment, as determined by our board of directors and specified in the stock appreciation right agreement.
The plan administrator determines the term of stock appreciation rights granted under the 2020 Plan, up to a maximum of ten years. If a participant’s service relationship with us or any of our affiliates ceases for any reason other than cause, disability, or death, the participant may generally exercise any vested stock appreciation right for a period of three months following the cessation of service. This period may be further extended in the event that exercise of the stock appreciation right following such a termination of service is prohibited by applicable securities laws. If a participant’s service relationship with us, or any of our affiliates, ceases due to disability or death, or a participant dies within a certain period following cessation of service, the participant or a beneficiary may generally exercise any vested stock appreciation right for a period of 12 months in the event of disability and 18 months in the event of death. In the event of a termination for cause, stock appreciation rights generally terminate immediately upon the occurrence
of the event giving rise to the termination of the individual for cause. In no event may a stock appreciation right be exercised beyond the expiration of its term.
Performance Awards. The 2020 Plan permits the grant of performance awards that may be settled in stock, cash, or other property. Performance awards may be structured so that the stock or cash will be issued or paid only following the achievement of certain pre-established performance goals during a designated performance period. Performance awards that are settled in cash or other property are not required to be valued in whole or in part by reference to, or otherwise based on, our Class A common stock.
The performance goals may be based on any measure of performance selected by our board of directors. The performance goals may be based on company-wide performance or performance of one or more business units, divisions, affiliates, or business segments, and may be either absolute or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. The performance goals may be based on GAAP or non-GAAP results, and any actual results may be adjusted by our board of directors or a committee thereof for one-time items, unbudgeted, or unexpected items.
Other Stock Awards. The plan administrator may grant other awards based in whole or in part by reference to our Class A common stock. The plan administrator will set the number of shares under the stock award (or cash equivalent) and all other terms and conditions of such awards.
Non-Employee Director Compensation Limit. The aggregate value of all compensation granted or paid to any non-employee director with respect to any calendar year, including awards granted and cash fees paid by us to such non-employee director, will not exceed (1) $750,000 in total value or (2) if such non-employee director is first appointed or elected to our board of directors during such calendar year, $1,000,000 in total value.
Changes to Capital Structure. In the event there is a specified type of change in our capital structure, such as a stock split, reverse stock split, or recapitalization, appropriate adjustments will be made to (1) the class and maximum number of shares reserved for issuance under the 2020 Plan, (2) the class and maximum number of shares by which the share reserve may increase automatically each year, (3) the class and maximum number of shares that may be issued on the exercise of ISOs, and (4) the class and number of shares and exercise price, strike price, or purchase price, if applicable, of all outstanding stock awards.
Corporate Transactions. The following applies to stock awards under the 2020 Plan in the event of a corporate transaction (as defined in the 2020 Plan), unless otherwise provided in a participant’s stock award agreement or other written agreement with us or one of our affiliates or unless otherwise expressly provided by the plan administrator at the time of grant.
In the event of a corporate transaction, any stock awards outstanding under the 2020 Plan may be assumed, continued or substituted by any surviving or acquiring corporation (or its parent company), and any reacquisition or repurchase rights held by us with respect to the stock award may be assigned to our successor (or its parent company). If the surviving or acquiring corporation (or its parent company) does not assume, continue or substitute for such stock awards, then (i) with respect to any such stock awards that are held by participants whose continuous service has not terminated prior to the effective time of the corporate transaction, or current participants, the vesting (and exercisability, if applicable) of such stock awards will be accelerated in full (or, in the case of performance awards with multiple vesting levels depending on the level of performance, vesting will accelerate at 100% of the target level) to a date prior to the effective time of the corporate transaction (contingent upon the effectiveness of the corporate transaction), and such stock awards will terminate if not exercised (if applicable) at or prior to the effective time of the corporate transaction, and any reacquisition or repurchase rights held by us with respect to such stock awards will lapse (contingent upon the effectiveness of the corporate transaction), and (ii) any such stock awards that are held by persons other than current participants will terminate if not exercised (if applicable) prior to the effective time of the corporate transaction, except that any reacquisition or repurchase rights held by us with respect to such stock awards will not terminate and may continue to be exercised notwithstanding the corporate transaction.
In the event a stock award will terminate if not exercised prior to the effective time of a corporate transaction, the plan administrator may provide, in its sole discretion, that the holder of such stock award
may not exercise such stock award but instead will receive a payment equal in value to the excess (if any) of (i) the per share amount payable to holders of Class A common stock in connection with the corporate transaction, over (ii) any per share exercise price payable by such holder, if applicable. In addition, any escrow, holdback, earn out or similar provisions in the definitive agreement for the corporate transaction may apply to such payment to the same extent and in the same manner as such provisions apply to the holders of our Class A common stock.
Plan Amendment or Termination. Our board of directors has the authority to amend, suspend, or terminate our 2020 Plan at any time, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. Certain material amendments also require the approval of our stockholders. No ISOs may be granted after the tenth anniversary of the date our board of directors adopts our 2020 Plan. No stock awards may be granted under our 2020 Plan while it is suspended or after it is terminated.
2020 Employee Stock Purchase Plan
Our board of directors adopted, and our stockholders approved, our ESPP in September 2020. The ESPP will become effective in connection with this offering. The purpose of the ESPP is to secure the services of new employees, to retain the services of existing employees and to provide incentives for such individuals to exert maximum efforts toward our success and that of our affiliates. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code.
Share Reserve . Following this offering, the ESPP will authorize the issuance of 5,700,000 shares of our Class A common stock pursuant to purchase rights granted to our employees or to employees of any of our designated affiliates. The number of shares of our Class A common stock reserved for issuance will automatically increase on February 1 of each year, for up to ten years, through February 1, 2030, by the lesser of (1) 1% of the total number of shares of our common stock (both Class A and Class B) outstanding on January 31 of the preceding fiscal year, and (2) 8,500,000 shares of our Class A common stock ; provided , t hat prior to the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth in clauses (1) and (2).
Administration . Our board of directors has delegate d concurrent authority to administer the ESPP to our compensation committee. The ESPP is implemented through a series of offerings under which eligible employees are granted purchase rights to purchase shares of our Class A common stock on specified dates during such offerings. Under the ESPP, we may specify offerings with durations of not more than 27 months, and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of our Class A common stock will be purchased for employees participating in the offering. An offering under the ESPP may be terminated under certain circumstances.
Payroll Deductions. Generally, all regular employees, including executive officers, employed by us or by any of our designated affiliates, may participate in the ESPP and may contribute, normally through payroll deductions, up to 15% of their earnings (as defined in the ESPP) for the purchase of our Class A common stock under the ESPP. Unless otherwise determined by our board of directors, Class A common stock will be purchased for the accounts of employees participating in the ESPP at a price per share equal to the lower of (a) 85% of the fair market value of a share of our Class A common stock on the first trading date of an offering or (b) 85% of the fair market value of a share of our Class A common stock on the date of purchase.
Limitations. Employees may have to satisfy one or more of the following service requirements before participating in the ESPP, as determined by our board of directors, including: (1) being customarily employed for more than 20 hours per week; (2) being customarily employed for more than five months per calendar year; or (3) continuous employment with us or one of our affiliates for a period of time (not to exceed two years). No employee may purchase shares under the ESPP at a rate in excess of $25,000 worth of our common stock based on the fair market value per share of our common stock at the beginning of an offering for each year such a purchase right is outstanding. Finally, no employee will be eligible for the grant of any purchase rights under the ESPP if immediately after such rights are granted, such employee has voting power over 5% or more of our outstanding capital stock measured by vote or value pursuant to Section 424(d) of the Code.
Changes to Capital Structure. In the event that there occurs a change in our capital structure through such actions as a stock split, merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, large nonrecurring cash dividend, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or similar transaction, the board of directors will make appropriate adjustments to (1) the number of shares reserved under the ESPP, (2) the maximum number of shares by which the share reserve may increase automatically each year, (3) the number of shares and purchase price of all outstanding purchase rights, and (4) the number of shares that are subject to purchase limits under ongoing offerings.
Corporate Transactions. In the event of a corporate transaction (as defined in the ESPP), any then-outstanding rights to purchase our stock under the ESPP may be assumed, continued, or substituted for by any surviving or acquiring entity (or its parent company). If the surviving or acquiring entity (or its parent company) elects not to assume, continue, or substitute for such purchase rights, then the participants’ accumulated payroll contributions will be used to purchase shares of our Class A common stock within 10 business days prior to such corporate transaction, and such purchase rights will terminate immediately.
ESPP Amendments, Termination. Our board of directors has the authority to amend or terminate our ESPP, provided that except in certain circumstances such amendment or termination may not materially impair any outstanding purchase rights without the holder’s consent. We will obtain stockholder approval of any amendment to our ESPP if required by applicable law or listing requirements.
Amended and Restated 2012 Equity Incentive Plan
Our board of directors adopted, and our stockholders approved, our 2012 Plan in August 2012. Our 2012 Plan has been periodically amended, most recently in March 2020. Our 2012 Plan permits the grant of ISOs, NSOs, stock appreciation rights, restricted or unrestricted stock awards, restricted stock units, and other stock-based awards. ISOs may be granted only to our employees and to any of our parent or subsidiary corporation’s employees. All other awards may be granted to employees, directors, and consultants of ours and to any of our parent or subsidiary corporation’s employees or consultants. Our 2012 Plan will be terminated prior to the closing of this offering, and thereafter we will not grant any additional awards under our 2012 Plan. However, our 2012 Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder.
As of July 31, 2020, stock options to purchase 72,228,820 shares of our Class B common stock with a weighted-average exercise price of $6.70 per share were outstanding, 616,400 shares of our Class B common stock remained restricted stock subject to future vesting requirements, 4,853,231 shares of our Class B common stock issuable upon the vesting and settlement of RSUs were outstanding, and 18,299,095 shares of our Class B common stock remained available for the future grant of awards under our 2012 Plan.
Administration. Our board of directors or a committee delegated by our board of directors administers our 2012 Plan. Subject to the terms of our 2012 Plan, the administrator has the power to, among other things, determine the eligible persons to whom, and the times at which, awards will be granted, to determine the terms and conditions of each award (including the number of shares subject to the award, the exercise price of the award, if any, and when the award will vest and, as applicable, become exercisable), to modify or amend outstanding awards, or accept the surrender of outstanding awards and substitute new awards, to accelerate the time(s) at which an award may vest or be exercised, and to construe and interpret the terms of our 2012 Plan and awards granted thereunder.
Options. The exercise price per share of ISOs granted under our 2012 Plan must be at least 100% of the fair market value per share of our Class B common stock on the grant date. NSOs may be granted with a per share exercise price that is less than 100% of the per share fair market value of our Class B common stock. Subject to the provisions of our 2012 Plan, the administrator determines the other terms of options, including any vesting and exercisability requirements, the method of payment of the option exercise price, the option expiration date, and the period following termination of service during which options may remain exercisable.
Changes to Capital Structure. In the event there is a specified type of change in our capital structure, such as a stock dividend, stock split or reverse stock split, appropriate adjustments will be made to (1) the number of shares available for issuance under our 2012 Plan, and (2) the number of shares covered by and, as applicable, the exercise price of each outstanding award granted under our 2012 Plan.
Corporate Transaction. In the event of a “corporate transaction” (as defined in the 2012 Plan), our board of directors generally may take one or more of the following actions with respect to outstanding awards:
•arrange for the assumption, continuation, or substitution of the award by the surviving or acquiring corporation (or its parent company);
•arrange for the assignment of any reacquisition or repurchase rights held by us to the surviving or acquiring corporation (or its parent company);
•accelerate the vesting and, if applicable, exercisability of the award and provide for its termination prior to the effective time of the change in control;
•arrange for the lapse of any reacquisition or repurchase rights held by us;
•cancel or arrange for the cancellation of the award in exchange for such cash consideration, if any, as our board of directors may deem appropriate; or
•make a payment equal to the excess of (1) the value of the property the participant would have received upon exercise of the award over (2) the exercise price or strike price otherwise payable in connection with the award.
Our board of directors is not obligated to treat all awards in the same manner.
Change in Control. The administrator may provide, in an individual award agreement or in any other written agreement between a participant and us, that the stock award will be subject to additional acceleration of vesting and exercisability in the event of a “change in control” (as defined in the 2012 Plan).
Plan Amendment or Termination. Our board of directors may amend, modify, or terminate our 2012 Plan at any time. As discussed above, we will terminate our 2012 Plan prior to the closing of this offering and no new awards will be granted thereunder following such termination.
Limitations of Liability and Indemnification Matters
On the closing of this offering, our amended and restated certificate of incorporation will contain provisions that limit the liability of our current and former directors for monetary damages to the fullest extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for:
•any breach of the director’s duty of loyalty to the corporation or its stockholders;
•any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
•unlawful payments of dividends or unlawful stock repurchases or redemptions; or
•any transaction from which the director derived an improper personal benefit.
Such limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.
Our amended and restated certificate of incorporation that will be in effect on the closing of this offering will authorize us to indemnify our directors, officers, employees, and other agents to the fullest extent permitted by Delaware law. Our amended and restated bylaws that will be in effect on the closing of this offering will provide that we are required to indemnify our directors and officers to the fullest extent permitted by Delaware law and may indemnify our other employees and agents. Our amended and restated bylaws that will be in effect on the closing of this offering will also provide that, on satisfaction of certain conditions, we will advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee, or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We have entered and expect to continue to enter into agreements to indemnify our
directors, executive officers, and other employees as determined by the board of directors. With certain exceptions, these agreements provide for indemnification for related expenses including attorneys’ fees, judgments, fines, and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these amended and restated certificate of incorporation and amended and restated bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain customary directors’ and officers’ liability insurance.
The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted for directors, executive officers or persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Rule 10b5-1 Sales Plans
Our directors and officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our Class A common stock or Class B common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades under parameters established by the director or officer when entering into the plan, without further direction from them. In certain circumstances, the director or officer may amend a Rule 10b5-1 plan and may terminate a plan at any time.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Other than compensation arrangements for our directors and executive officers, which are described elsewhere in this prospectus, below we describe transactions since February 1, 2017 to which we were a party or will be a party, in which:
•the amounts involved exceeded or will exceed $120,000; and
•any of our directors, executive officers, or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest.
Series D, Series E, Series F, and Series G Convertible Preferred Stock Financing
In March and August 2017, we sold an aggregate of 29,981,998 shares of Series D convertible preferred stock at a price of $3.5021 per share for aggregate gross proceeds of approximately $105.0 million. Each share of Series D convertible preferred stock will automatically convert into one share of our Class B common stock immediately upon the closing of this offering.
In January and September 2018, we sold an aggregate of 35,446,984 shares of Series E convertible preferred stock at a price of $7.4617 per share for aggregate gross proceeds of approximately $264.5 million. Each share of Series E convertible preferred stock will automatically convert into one share of our Class B common stock immediately upon the closing of this offering.
In October 2018, February 2019, and August 2019, we sold an aggregate of 30,839,786 shares of Series F convertible preferred stock at a price of $14.96125 per share for aggregate gross proceeds of approximately $461.4 million. Each share of Series F convertible preferred stock will automatically convert into one share of our Class B common stock immediately upon the closing of this offering.
In February 2020, we sold an aggregate of 8,480,857 shares of Series G-1 convertible preferred stock and 3,868,970 shares of Series G-2 convertible preferred stock, each at a price of $38.77 per share, for aggregate gross proceeds of approximately $478.8 million. Each share of Series G-1 convertible preferred stock and Series G-2 convertible preferred stock will automatically convert into one share of our Class B common stock immediately upon the closing of this offering.
The following table summarizes the participation in the foregoing transactions by our directors, executive officers, and holders of more than 5% of any class of our capital stock as of the date of such transactions:
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Related Party
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Shares of Series D Convertible Preferred Stock
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Shares of Series E Convertible Preferred
Stock
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Shares of Series F Convertible Preferred
Stock
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Shares of Series G-1 Convertible Preferred
Stock
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Aggregate
Purchase
Price
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Entities affiliated with Altimeter Capital(1)
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5,710,858
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13,401,770
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3,947,801
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967,666
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$
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216,580,432
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Entities affiliated with ICONIQ Strategic Partners(2)
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15,704,862
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13,401,770
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3,694,749
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900,667
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245,196,908
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Entities affiliated with Redpoint Ventures(3)
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1,142,170
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536,070
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1,938,340
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585,179
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59,687,366
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Entities affiliated with Sequoia Capital Operations LLC(4)
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—
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6,700,884
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13,367,864
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550,408
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271,339,260
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Entities affiliated with Sutter Hill Ventures(5)
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3,831,204
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134,018
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4,949,346
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1,322,166
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139,726,041
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Garrett Family Investment Partnership(6)
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—
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134,018
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—
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—
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1,000,002
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John McMahon 1995 Family Trust(7)
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45,718
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—
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—
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—
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160,109
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Michael P. Scarpelli(8)
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—
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—
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762,112
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24,594
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12,355,658
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________________
(1)Includes shares of convertible preferred stock purchased by Altimeter Partners Fund, L.P., Altimeter Private Partners Fund I, L.P., Altimeter Private Partners Fund II, L.P., Altimeter Growth Partners Fund III, L.P., Altimeter Growth Partners Fund IV, L.P.,
and Altimeter Growth Sierra Fund, L.P. Mr. Wang, a former member of our board of directors, is a general partner at Altimeter Capital. Mr. Wang resigned from our board of directors in June 2020.
(2)Includes shares of convertible preferred stock purchased by ICONIQ Strategic Partners III, L.P., ICONIQ Strategic Partners III-B, L.P., ICONIQ Strategic Partners III Co-Investment, L.P., Series SF, ICONIQ Strategic Partners IV, L.P., and ICONIQ Strategic Partners IV-B, L.P.
(3)Includes shares of convertible preferred stock purchased by Redpoint Omega III, L.P., Redpoint Omega Associates III, LLC, Redpoint Ventures IV, L.P., Redpoint Associates IV, LLC, Redpoint Ventures V, L.P., and Redpoint Associates V, LLC. Mr. Walecka, a former member of our board of directors, is a founding partner of Redpoint Ventures. Mr. Walecka resigned from our board of directors in June 2020.
(4)Includes shares of convertible preferred stock purchased by Sequoia Capital Growth Fund III, LP, Sequoia Capital Global Growth Fund III - Endurance Partners, L.P, Sequoia Capital U.S. Growth Fund VI, L.P., Sequoia Capital U.S. Growth VI Principals Fund, L.P., Sequoia Capital U.S. Growth Fund VII, L.P., and Sequoia Capital U.S. Growth VII Principals Fund, L.P. Mr. Eschenbach, a member of our board of directors, is a general partner at Sequoia Capital Operations, LLC.
(5)Includes shares purchased by Sutter Hill Ventures, a California Limited Partnership, Mr. Speiser and entities affiliated with Mr. Speiser, and individuals other than Mr. Speiser who are affiliated with Sutter Hill Ventures or entities affiliated with such individuals. Mr. Speiser, a member of our board of directors, is a managing director and member of the management committee of the general partner of Sutter Hill Ventures. Mr. Speiser may also be deemed to have shared voting and investment power with respect to the shares purchased by Sutter Hill Ventures.
(6)Includes shares purchased by Amy Garrett and Mark Garrett as co-trustees of the Garrett Family Investment Partnership. Mr. Garrett is a member of our board of directors.
(7)Includes shares of convertible preferred stock purchased by John McMahon as trustee of the John McMahon 1995 Family Trust. Mr. McMahon is a member of our board of directors.
(8)Includes shares of convertible preferred stock purchased by (i) Michael Scarpelli, as settlor and beneficiary of The Michael P. Scarpelli 2019 Grantor Retained Annuity Trust and (ii) Michael Scarpelli and Janet Scarpelli as co-trustees of The Scarpelli Family Trust. Mr. Scarpelli is our Chief Financial Officer.
Tender Offers during the Fiscal Year Ended January 31, 2019
In March 2018, we repurchased an aggregate of 3,859,088 shares of our outstanding Class B common stock at a purchase price of $7.4617 per share for an aggregate purchase price of approximately $28.8 million. The following table summarizes our repurchases of common stock from our directors and executive officers in this tender offer.
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Name
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Shares of
Common
Stock
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Purchase
Price
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Thierry Cruanes(1)
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800,000
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$
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5,969,360
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Benoit Dageville(2)
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800,000
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5,969,360
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Christopher W. Degnan(3)
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150,000
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1,119,255
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________________
(1)Dr. Cruanes is our Chief Technology Officer and a former member of our board of directors. Dr. Cruanes resigned from our board of directors in June 2020.
(2)Dr. Dageville is our President of Products and a member of our board of directors.
(3)Mr. Degnan is our Chief Revenue Officer.
In January 2019, we repurchased an aggregate of 2,151,504 shares of our outstanding Class B common stock at a purchase price of $14.96125 per share for an aggregate purchase price of approximately $32.2 million. The following table summarizes our repurchases of common stock from our directors and executive officers in this tender offer.
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Name
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Shares of
Common
Stock
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Purchase
Price
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Thierry Cruanes(1)
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400,000
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$
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5,984,500
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Christopher W. Degnan(2)
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54,000
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807,908
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________________
(1)Dr. Cruanes is our Chief Technology Officer and a former member of our board of directors. Dr. Cruanes resigned from our board of directors in June 2020.
(2)Mr. Degnan is our Chief Revenue Officer.
Third-Party Tender Offer during the Fiscal Year Ending January 31, 2021
In February 2020, we entered into an agreement with entities affiliated with Coatue US 19 LLC as lead purchaser and several other purchasers, including entities affiliated with Sequoia Capital Operations LLC, pursuant to which we agreed to waive certain transfer restrictions in connection with, and assist in the administration of, a third-party tender offer that such entities proposed to commence. In February 2020, these entities commenced a third-party tender offer to purchase shares of our Class B common stock from certain of our security holders and this third-party tender offer was completed in March 2020.
An aggregate of 8,614,597 shares of our Class B common stock were tendered pursuant to the third-party tender offer at a price of $38.77 per share. The following table summarizes the sales of Class B common stock from our directors and executive officers in this third-party tender offer.
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Name
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Shares of
Common
Stock
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Purchase
Price
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The Cruanes Family Trust(1)
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200,000
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$
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7,754,000
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The Snow Trust(2)
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500,000
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19,385,000
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Christopher W. Degnan(3)
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282,538
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10,953,998
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Robert L. Muglia(4)
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2,021,022
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78,355,023
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Thomas Tuchscherer(5)
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49,870
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1,933,460
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________________
(1)Dr. Cruanes is our Chief Technology Officer, a former member of our board of directors, and trustee of the Cruanes Family Trust. Dr. Cruanes resigned from our board of directors in June 2020.
(2)Dr. Dageville is our President of Products, a member of our board of directors, and trustee of the Snow Trust.
(3)Mr. Degnan is our Chief Revenue Officer.
(4)Mr. Muglia is our former Chief Executive Officer and a former member of our board of directors. Mr. Muglia resigned as our Chief Executive Officer and as a member of our board of directors in April 2019.
(5)Mr. Tuchscherer is our former Chief Financial Officer. Mr. Tuchscherer resigned as our Chief Financial Officer in August 2019.
Relationship with Observe, Inc.
Mr. Burton, a member of our board of directors, is currently the Chief Executive Officer of Observe, Inc. Observe has been our customer since 2018. Pursuant our customer agreement with Observe, Observe made payments for consumption to us of $60,000 and $100,000 during the fiscal years ended January 31, 2019 and 2020, respectively. In addition, Observe has paid us $250,000 for anticipated consumption during the fiscal year ending January 31, 2021. Our agreements with Observe are negotiated in the ordinary course of business.
Relationship with Cisco Systems, Inc.
Ms. Kramer, a member of our board of directors, is currently the Executive Vice President and Chief Financial Officer of Cisco Systems, Inc. Cisco, through its related entities, has been our customer since 2017. Pursuant to our customer agreements with Cisco and its related entities, Cisco made payments to us of $125,347 and $4,811,673 during the fiscal years ended January 31, 2019 and 2020 , respectively. In addition, Cisco made payments to us under these customer agreements of $ 3 ,661,147 in the six months ended July 31, 2020 . Since July 31, 2020 , Cisco made payments to us under these customer agreements o f $290,023 , and we anticipate t hat Cisco will make additional payments of approximately $3. 1 million in the three months ending October 31, 2020 . Our agreements with Cisco and its related entities are negotiated in the ordinary course of business.
Relationship with CTP Aviation
Frank Slootman, our Chief Executive Officer and a member of our board of directors, owns an aircraft that is used in a pool of aircraft by CTP Aviation, a charter aircraft company, pursuant to a sale and lease-back arrangement. We book charter aircraft for business travel services for Mr. Slootman and other employees through CTP Aviation, and from time to time, Mr. Slootman's plane is used for business trips chartered by us. As part of the lease-back arrangement between Mr. Slootman and CTP Aviation, when Mr. Slootman's plane is used by CTP Aviation (including any travel booked by us), he is paid a portion of the flight-related charges. We paid CTP Aviation $289,419 and $55,642 for Mr. Slootman's business travel during the fiscal year ended January 31, 2020 and the six months ended July 31, 2020, respectively.
Investor Rights, Voting, and Co-Sale Agreements
In connection with our convertible preferred stock financings, we entered into investor rights, voting, and right of first refusal and co-sale agreements containing registration rights, information rights, voting rights, and rights of first refusal, among other things, with certain holders of our convertible preferred stock and certain holders of our common stock, including entities affiliated with Altimeter Capital, ICONIQ Strategic Partners, Redpoint Ventures, Sequoia Capital Operations LLC, Sutter Hill Ventures, Thierry Cruanes, Mark Garrett, John McMahon, Robert Muglia, and Michael P. Scarpelli. These stockholder
agreements will terminate upon the closing of this offering, except for the registration rights granted under our investor rights agreement, as more fully described in “Description of Capital Stock—Registration Rights.”
Offer Letter Agreements
We have entered into offer letter agreements with certain of our executive officers. For more information regarding these agreements with our named executive officers, see the section titled “Executive Compensation—Employment Arrangements.”
Stock Option Grants to Directors and Executive Officers
We have granted stock options to certain of our directors and executive officers. For more information regarding the stock options and stock awards granted to our directors and named executive officers, see the sections titled “Executive Compensation” and “Management—Director Compensation.”
Employment Arrangement with an Immediate Family Member of our President of Products
Cedric Dageville, the son of Benoit Dageville, our President of Products and a member of our board of directors, is a corporate account executive. During the fiscal years ended January 31, 2018, 2019, and 2020, we paid Cedric Dageville cash compensation and commissions of $10,260, $64,298, and $126,298, respectively, in addition to equity. For each fiscal period, Cedric Dageville’s compensation was based on reference to external market practices of similar positions or internal pay equity when compared to the compensation paid to employees in similar positions who were not related to our President of Products and directors. Cedric Dageville was also eligible for equity awards on the same general terms and conditions as applicable to employees in similar positions who were not related to our President of Products and directors.
Indemnification Agreements
Our amended and restated certificate of incorporation that will be in effect on the closing of this offering will contain provisions limiting the liability of directors, and our amended and restated bylaws that will be in effect on the closing of this offering will provide that we will indemnify each of our directors and officers to the fullest extent permitted under Delaware law. Our amended and restated certificate of incorporation and amended and restated bylaws that will be in effect on the closing of this offering will also provide our board of directors with discretion to indemnify our employees and other agents when determined appropriate by the board. In addition, we have entered into an indemnification agreement with each of our directors and executive officers, which requires us to indemnify them. For more information regarding these agreements, see the section titled “Executive Compensation—Limitations of Liability and Indemnification Matters.”
Policies and Procedures for Transactions with Related Persons
In August 2020, we adopted a Related Party Transactions Policy to be effective in connection with this offering. Pursuant to this policy, our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our common stock, and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related person transaction with us without the approval or ratification of our board of directors or our audit committee. Any request for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of any class of our common stock, or any member of the immediate family of any of the foregoing persons, in which the amount involved exceeds $120,000 and such person would have a direct or indirect interest, must be presented to our board of directors or our audit committee for review, consideration, and approval. In approving or rejecting any such proposal, our board of directors or our audit committee is to consider the material facts of the transaction, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to the beneficial ownership of our shares as of July 31, 2020 by:
•each named executive officer;
•each of our directors;
•our directors and executive officers as a group; and
•each person or entity known by us to own beneficially more than 5% of our Class A common stock and Class B common stock (by number or by voting power).
We have determined beneficial ownership in accordance with the rules and regulations of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares that they beneficially own, subject to applicable community property laws.
Applicable percentage ownership before th is offering , the concurrent private placements , and the secondary transaction is based on no shares of Class A common stock and 244,528,162 shares of Class B common stock outstanding as of July 31, 2020 , assuming the automatic conversion of all outstanding shares of convertible preferred stock into an aggregate of 182,271,099 shares of Class B common stock, which will occur immediately upon the closing of this offering. Applicable percentage ownership after th is offering , the concurrent private placement s , and the secondary transaction is based on (i) the sale of 4,042,043 shares of Class A common stock in the secondary transactio n, (ii) the issuance of 6,250,000 shares of Class A common stock in the concurrent private placements at an assumed initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and (iii) the sale of 28,000,000 shares of Class A common stock in this offering, assuming no exercise by the underwriters of their option to purchase additional shares of Class A common stock from us , and excluding any potential purchases in this offering by the persons and entities named in the table below. Since the purchasers in the concurrent private placements and the secondary tran sa c tion did not beneficially own more than 5% of our Class A common stock or Class B common stock as of July 31, 2020, they are not set forth in the table be low. In computing the number of shares beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares subject to options held by the person that are currently exercisable, or exercisable or would vest based on service-based vesting conditions within 60 days of July 31, 2020 . However, except as described above, we did not deem such shares outstanding for the purpose of computing the percentage ownership of any other person.
Unless otherwise indicated, the address for each beneficial owner listed in the table below is c/o Snowflake Inc., 450 Concar Drive, San Mateo, California, 94402.
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Name of Beneficial Owner
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Shares Beneficially Owned Before This Offering and the Concurrent Private Placements
Class B
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% Total
Voting
Power
Before
this
Offering and the Concurrent Private Placements(1)
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Shares Beneficially Owned After this Offering and the Concurrent Private Placements
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% Total Voting Power After this Offering and the Concurrent Private Placements(1)
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Shares
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%
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Class A
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Class B
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Shares
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%
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Shares
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%
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Named Executive Officers and Directors:
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Frank Slootman(2)
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15,213,149
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5.9
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%
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5.9
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%
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—
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—
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15,213,149
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6.0
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%
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5.9
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%
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Robert Muglia(3)
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8,084,086
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3.3
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%
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3.3
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%
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—
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—
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4,042,043
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1.7
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%
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1.7
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%
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Michael P. Scarpelli(4)
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4,597,266
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1.9
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%
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1.9
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%
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—
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—
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4,597,266
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1.9
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%
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1.9
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%
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Benoit Dageville(5)
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8,360,000
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3.4
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%
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3.4
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%
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—
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—
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8,360,000
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3.5
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%
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3.4
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%
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Jeremy Burton(6)
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477,546
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*
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*
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—
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—
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477,546
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*
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*
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Teresa Briggs(7)
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50,000
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*
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*
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—
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—
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50,000
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*
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*
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Carl M. Eschenbach(8)
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—
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—
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—
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—
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—
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—
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—
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—
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Mark S. Garrett(9)
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901,204
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*
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*
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—
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—
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901,204
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*
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*
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Kelly A. Kramer(10)
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8,333
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*
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*
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—
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—
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8,333
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*
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*
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John D. McMahon(11)
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1,237,110
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*
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*
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—
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—
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1,237,110
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*
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*
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Michael L. Speiser(12)
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49,564,848
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20.3
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%
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20.3
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%
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—
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—
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41,919,208
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17.4
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%
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17.2
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%
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Jayshree V. Ullal(13)
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50,000
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*
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*
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—
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—
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50,000
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*
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*
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All directors and officers as a group (13 persons)(14)
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90,198,644
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33.8
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%
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33.8
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%
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—
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—
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78,510,961
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29.9
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%
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29.4
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%
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Other 5% Stockholders:
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Entities affiliated with Altimeter Partners Fund, L.P.(15)
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36,286,307
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14.8
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%
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14.8
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%
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—
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—
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36,286,307
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15.1
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%
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14.9
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%
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Entities affiliated with ICONIQ Strategic Partners III, L.P.(16)
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33,752,048
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13.8
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%
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13.8
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%
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—
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—
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33,752,048
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14.0
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%
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13.8
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%
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Entities affiliated with Redpoint Ventures V, L.P.(17)
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21,928,585
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9.0
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%
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9.0
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%
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—
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—
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21,928,585
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9.1
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%
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9.0
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%
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Entities affiliated with Sequoia Capital Growth Fund III, LP(18)
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20,619,156
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8.4
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%
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8.4
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%
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—
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—
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20,619,156
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8.6
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%
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8.4
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%
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Entities affiliated with Sutter Hill Ventures(19)
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49,564,848
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20.3
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%
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20.3
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%
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—
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—
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41,919,208
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17.4
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%
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17.2
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%
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________________
*Less than 1 percent
(1)Percentage of total voting power represents voting power with respect to all shares of our Class A and Class B common stock, as a single class. The holders of our Class B common stock are entitled to ten votes per share, and holders of our Class A common stock are entitled to one vote per share. See the section titled “Description of Capital Stock—Class A Common Stock and Class B Common Stock” for more information about the voting rights of our Class A and Class B common stock.
(2)Consists of (i) 1,423,473 shares of Class B common stock held by Mr. Slootman, (ii) 100,000 shares of Class B common stock held by the Slootman Family 2019 Extended Family Trust for which Mr. Slootman is a trustee, and (iii) 13,689,676 shares of Class B common stock subject to stock options held by Mr. Slootman that are exercisable within 60 days of July 31, 2020, of which 9,843,947 shares would be unvested as of such date.
(3) Consists of (i) 7 8 8,350 shares of Class B common stock held by the Laura Ellen Muglia Descendants’ Trust, (ii) 7 8 8,350 shares of Class B common stock held by the Robert L. Muglia Descendants’ Trust, (iii) 206,345 shares of Class B common stock held by Laura Ell en Muglia, and (i v ) 6, 30 1,041 shares of Class B common stock held by Mr. Muglia. In September 2020, Mr. Muglia and his affiliated trust entered into a Stock Purchase Agreement to sell an aggregate of 4,042,043 shares of Class A Common Stock for a purchase price per share equal to the initial public offering price to Berkshire Hathaway Inc . Mr. Muglia ’ s hold ings after this offering reflect the assumed closing of this sale , which will occur immediately subsequent to the closing of this offering .
(4)Consists of (i) 144,594 shares of Class B common stock held by Mr. Scarpelli, (ii) 601,554 shares of Class B common stock held by the Michael P. Scarpelli 2019 Grantor Retained Annuity Trust, (iii) 160,558 shares of Class B common stock held by the Scarpelli Family Trust for which Mr. Scarpelli is a trustee, and (iv) 3,690,560 shares of Class B common stock subject to stock options held by Mr. Scarpelli that are exercisable within 60 days of July 31, 2020, of which 2,778,534 shares would be unvested as of such date.
(5)Consists of (i) 6,250,000 shares of Class B common stock held by The Snow Trust UTA dated 9/10/19 for which Dr. Dageville is a trustee, (ii) 350,000 shares of Class B common stock held by The Snow 2020 Grantor Retained Annuity Trust for which Dr. Dageville is a trustee, (iii) 50,000 shares of Class B common stock held by The Cedric Dageville GST Exempt Trust for which Dr. Dageville is a trustee, (iv) 50,000 shares of Class B common stock held by The Marine Dageville GST Exempt Trust for which Dr. Dageville is a trustee, and (v) 1,660,000 shares of Class B common stock subject to stock options held by Dr. Dageville that are exercisable within 60 days of July 31, 2020, of which 325,000 shares would be unvested as of such date.
(6)Consists of 477,546 shares of Class B common stock subject to stock options held by Mr. Burton that are exercisable within 60 days of July 31, 2020, of which 41,667 shares would be unvested as of such date.
(7)Consists of (i) 20,000 shares of Class B common stock held by The Teresa Briggs Trust (Briggs Trust) for which Ms. Briggs is a trustee, of which 12,709 shares are unvested and remain subject to our repurchase right, and (ii) 30,000 shares of Class B common stock subject to stock options held by the Briggs Trust that are exercisable within 60 days of July 31, 2020, all shares of which would be unvested as of such date.
(8)Mr. Eschenbach, a member of our board of directors, is a general partner at Sequoia Capital Operations, LLC. Mr. Eschenbach disclaims beneficial ownership of all shares held by the Sequoia Capital entities referred to in Footnote 18 below.
(9)Consists of (i) 134,018 shares of Class B common stock held by Garrett Family Investment Partnership for which Mr. Garrett is the general partner, (ii) 95,898 shares of Class B common stock subject to stock options that are exercisable within 60 days of July 31, 2020, held by each of (a) the Mark Garrett 2011 Irrevocable Trust FBO Brittany R.G. Smith, U/T/D 7/21/11, (b) the Amy Garrett 2011 Irrevocable Trust FBO Brittany R.G. Smith, U/T/D 7/21/11, (c) the Mark Garrett 2011 Irrevocable Trust FBO Lee A. Garrett, U/T/D 7/21/11, and (d) the Amy Garrett 2011 Irrevocable Trust FBO Lee A. Garrett, U/T/D 7/21/11 (the Garrett Family Trusts), for which Mr. Garrett is a trustee, of which 57,272 shares from each of the Garrett Family Trusts would be unvested as of such date, and (iii) 383,594 shares of Class B common stock subject to a stock option held by Mr. Garrett that is exercisable within 60 days of July 31, 2020, of which 229,093 shares would be unvested as of such date.
(10)Consists of 8,333 shares of Class B common stock subject to stock options held by Ms. Kramer that are exercisable within 60 days of July 31, 2020.
(11)Consists of (i) 151,188 shares of Class B common stock held by Mr. McMahon, (ii) 151,188 shares of Class B common stock held by The John McMahon Software Irrevocable Trust, (iii) 45,718 shares held by the John McMahon 1995 Family Trust for which Mr. McMahon is a trustee, and (iv) 889,016 shares of Class B common stock subject to stock options held by Mr. McMahon that are exercisable within 60 days of July 31, 2020, of which 100,000 shares would be unvested as of such date.
(12)Consists of (i) 4,117,529 shares of Class B common stock held by the Speiser Trust U/A/D 7/19/06 (Speiser Trust), for which Mr. Speiser is a trustee, (ii) 933,952 shares of Class B common stock held by Chatter Peak Partners, L.P. (Chatter Peak), for which Mr. Speiser is a trustee of a trust which is the general partner, and (iii) 38,700 shares of Class B common stock held by Wells Fargo Bank, N.A. FBO Michael L. Speiser Roth IRA, Mr. Speiser’s Roth IRA account. Mr. Speiser is a managing director and member of the management committee (Management Committee) of the general partner of Sutter Hill Ventures, a California Limited Partnership (SHV) and shares voting and investment power over the shares held of record by SHV. See Footnote 19 below.
(13)Consists of 50,000 shares of Class B common stock subject to stock options held by Ms. Ullal that are exercisable within 60 days of July 31, 2020, of which 46,875 shares would be unvested as of such date.
(14) P rior to this off ering , c onsists of (i) 67,853,839 shares of Class B common stock held by all named executive officers, executive officers , and directors as a group , of which 12,709 shares are unvested and remain subject to our repurchase right, and (ii) 22, 344,805 shares of Class B common stock subject to stock options that are exercisable within 60 days of July 31, 2020 , of which 1 4,316,787 shares would be unvested as of such date . A fter this offering, c onsists of (i) 56,166,156 shares of Class B common stock held by all named executive officers, executive officers , and directors as a group , of which 12,709 shares are unvested and remain subject to our repurchase right, and (ii) 22,344,805 shares of Class B common stock subject to stock options that are exercisable within 60 days of July 31, 2020 , of which 14,316,787 shares would be unvested as of such date.
(15)Consists of (i) 15,037,910 shares of Class B common stock held by Altimeter Private Partners Fund I, L.P. (APPF I), (ii) 5,139,772 shares of Class B common stock held by Altimeter Private Partners Fund II, L.P. (APPF II), (iii) 8,706,337 shares of Class B common stock held by Altimeter Partners Fund, L.P. (APF), (iv) 4,379,699 shares of Class B common stock held by Altimeter Growth Partners Fund III, L.P. (AGPF III), (v) 2,248,456 shares of Class B common stock held by Altimeter Growth Sierra Fund, L.P. (AGSF), and (vi) 774,133 shares of Class B common stock held by Altimeter Growth Partners Fund IV, L.P. (AGPF IV). APPF I, APPF II, APF, AGPF III, AGSF, and AGPF IV are the Altimeter Entities. Altimeter Private General Partner, LLC is the general partner of APPF I, Altimeter Private General Partner II, LLC is the general partner of APPF II, Altimeter General Partner, LLC is the general partner of APF, Altimeter Growth General Partner III, LLC is the general partner of AGPF III, Altimeter Growth Sierra General Partner, LLC is the general partner of AGSF, and Altimeter Growth General Partner IV is the general partner of AGPF IV (collectively, the Altimeter Fund GPs). Each of the Altimeter Fund GPs has delegated share voting and investment power to Altimeter Capital Management, LP (the Investment Manager). The sole general partner of the Investment Manager is Altimeter Capital General Partner, LLC (the General Partner), and Brad Gerstner is the sole managing principal of the Investment Manager and the General Partner, and may be deemed to share voting and investment power over these shares. The address for each of the Altimeter entities is One International Place, Suite 4610, Boston, Massachusetts 02110.
(16)Consists of (i) 12,642,172 shares of Class B common stock held by ICONIQ Strategic Partners III, L.P. (ICONIQ III), (ii) 13,508,323 shares of Class B common stock held by ICONIQ Strategic Partners III-B, L.P. (ICONIQ III-B), (iii) 6,700,886 shares of Class B common stock held by ICONIQ Strategic Partners III Co-Invest, L.P., Series SF (ICONIQ SF), (iv) 338,993 shares of Class B common stock held by ICONIQ Strategic Partners IV, L.P. (ICONIQ IV), and (v) 561,674 shares of Class B common stock held by ICONIQ Strategic Partners IV-B, L.P. (ICONIQ IV-B). ICONIQ III, ICONIQ III-B, and ICONIQ SF are the ICONIQ III Entities. ICONIQ IV and ICONIQ IV-B are the ICONIQ IV Entities. ICONIQ Strategic Partners III GP, L.P. (ICONIQ GP III) is the general partner of the ICONIQ III Entities. ICONIQ Strategic Partners III TT GP, Ltd. (ICONIQ Parent GP III) is the general partner of ICONIQ GP III. ICONIQ Strategic Partners IV GP, L.P. (ICONIQ GP IV) is the general partner of the ICONIQ IV Entities. ICONIQ Strategic Partners IV TT GP, Ltd. (ICONIQ Parent GP IV) is the general partner of ICONIQ GP IV. Divesh Makan and William Griffith are the sole equity holders and directors of ICONIQ Parent GP III and may be deemed to have shared voting, investment, and dispositive power with respect to the shares held by the ICONIQ III Entities. Matthew Jacobson, Divesh Makan, and William Griffith are the sole equity holders and directors of ICONIQ Parent GP IV and may be deemed to have shared voting, investment, and dispositive power with respect to the shares held by the ICONIQ IV Entities. The address of each of the ICONIQ entities is 394 Pacific Avenue, 2nd Floor, San Francisco, California 94111.
(17)Consists of (i) 1,908,311 shares of Class B common stock held by Redpoint Omega III, L.P. (RO III), (ii) 89,920 shares of Class B common stock held by Redpoint Omega Associates III, L.L.C. (ROA III), (iii) 125,741 shares of Class B common stock held by Redpoint Ventures IV, L.P. (RV IV), (iv) 3,224 shares of Class B common stock held by Redpoint Associates IV, L.L.C. (RA IV), (v) 19,306,353 shares of Class B common stock held by Redpoint Ventures V, L.P. (RV V), and (vi) 495,036 shares of Class B common stock held by Redpoint Associates V, L.L.C. (RA V). Redpoint Omega III, LLC (RO III LLC) is the sole general partner of RO III. Voting and dispositive decisions with respect to the shares held by RO III and ROA III are made by the managers of RO III LLC and ROA III: Logan Bartlett, W. Allen Beasley, Satish Dharmaraj, R. Thomas Dyal, Elliot Geidt, Scott C. Raney, and John L. Walecka. Redpoint Ventures IV, LLC (RV IV LLC) is the sole general partner of RV IV. Voting and dispositive decisions with respect to the shares held by RV IV and RA IV are made by the managers of RV IV LLC and RA IV: W. Allen Beasley, Jeffrey D. Brody, Satish Dharmaraj, R. Thomas Dyal, Timothy M. Haley, Christopher B. Moore, Scott C. Raney, John L. Walecka, and Geoffrey Y. Yang. Redpoint Ventures V, LLC (RV V LLC) is the sole general partner of RV V. Voting and dispositive decisions with respect to the shares held by RV V and RA V are made by the managers of RV V LLC and RA V: W. Allen Beasley, Jeffrey D. Brody, Satish Dharmaraj, R. Thomas Dyal, Timothy M. Haley, Christopher B. Moore, Scott C. Raney, John L. Walecka, Geoffrey Y. Yang, and David Yuan. The address for the Redpoint Entities is 3000 Sand Hill Road, Building 2, Suite 290, Menlo Park, California 94025.
(18)Consists of (i) 10,213,048 shares of Class B common stock held by Sequoia Capital Global Growth Fund III - Endurance Partners, L.P. (GGF III), (ii) 3,154,816 shares of Class B common stock held by Sequoia Capital Growth Fund III, L.P. (GF III), (iii) 544,464 shares of Class B common stock held by Sequoia Capital U.S. Growth Fund VI, L.P. (GFVI), (iv) 5,944 shares of Class B common stock held by Sequoia Capital U.S. Growth VI Principals Fund, L.P. (GFVI PF), (v) 6,291,460 shares of Class B common stock held by Sequoia Capital U.S. Growth Fund VII, L.P. (GFVII), and (vi) 409,424 shares of Class B common stock held by Sequoia Capital U.S. Growth VII Principals Fund, L.P. (GFVII PF). SC US (TTGP), Ltd. is (i) the general partner of SCGGF III - Endurance Partners Management, L.P., which is the general partner of GGF III; (ii) the general partner of SC U.S. Growth VI Management, L.P., which is the general partner of each of GFVI and GFVI PF (collectively, the GFVI Funds); and (iii) the general partner of SC U.S. Growth VII Management, L.P., which is the general partner of each of GFVII and GFVII PF (collectively, the GFVII Funds). As a result, SC US (TTGP), Ltd. may be deemed to share voting and dispositive power with respect to the shares held by GGF III, the GFVI Funds, and the GFVII Funds. SCGF III Management, LLC is a general partner of GF III, and, as a result, SCGF III Management, LLC may be deemed to share voting and dispositive power with respect to the shares held by GF III. The directors and stockholders of SC US (TTGP), Ltd. who exercise voting and investment discretion with respect to the GFVII Funds include Carl Eschenbach, one of our directors. In addition, the directors and stockholders of SC US (TTGP), Ltd. who exercise voting and investment discretion with respect to GGF III are Douglas M. Leone and Roelof Botha. As a result, and by virtue of the relationships described in this paragraph, each such person may be deemed to share voting and dispositive power with respect to the shares held by the GFVII Funds and GGF III, as applicable. Mr. Eschenbach expressly disclaims beneficial ownership of the shares held by the Sequoia Capital entities. The address for each of these entities is 2800 Sand Hill Road, Suite 101, Menlo Park, California 94025.
(19) Consists of (i) 27,309,222 shares of Class B common stock directly owned by SHV, and (ii) an aggregate of 22,255,626 shares of Class B common stock of which (a) 14,609,986 shares of common stock are held by entities controlled by members of the Management Committee, including the 5,090,181 shares of Class B common stock beneficially owned by Mr. Speiser and described in Footnote 12, and (b) 7,645,640 shares of Class B common stock held by other individuals and entities affiliated with SHV over which certain employees of, and individuals associated with, SHV have voting or investment power under a power of attorney (POA). The POA will no longer confer the right to vote the shares on the effectiveness of this registration statement . SHV ’ s holding s after the closing of thi s offering gives e ffect to the termination of the POA and is not the result of any disposition of any such shares . Voting and investment authority over the shares beneficially owned by SHV are shared by members of the Management Committee, which consists of Tench Coxe, Stefan A. Dyckerhoff, Samuel J. Pullara III, Michael L. Speiser, and James N. White. The address for SHV is 755 Page Mill Road, Suite A-200, Palo Alto, California 94304.
DESCRIPTION OF CAPITAL STOCK
General
The following description of our capital stock and certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws are summaries and are qualified by reference to the amended and restated certificate of incorporation and the amended and restated bylaws that will be in effect on the closing of this offering. Copies of these documents have been filed with the SEC as exhibits to our registration statement, of which this prospectus forms a part. The descriptions of the common stock and preferred stock reflect changes to our capital structure that will be in effect on the closing of this offering.
On the closing of this offering , our authorized capital stock will consist of 2,500,000,000 shares of our Class A common stock, $0.0001 par value per share, 355,000,000 shares of our Class B common stock, $0.0001 par value per share, and 200,000,000 shares of undesignated preferred stock $0.0001 par value per share.
As of July 31, 2020, assuming the conversion and reclassification of all outstanding shares of our convertible preferred stock into 182,271,099 shares of our Class B common stock, which will occur immediately upon the closing of this offering, there were outstanding:
•no shares of our Class A common stock; and
•244,528,162 shares of our Class B common stock, held by 1,026 stockholders of record.
Immediately subsequent to the closing of this offering, one of our stockholders will sell 4,042,043 shares of Class B common stock, which shares will convert in to Class A common stock on transfer, at the initial public offering price in a secondary transaction .
Our board of directors is authorized, without stockholder approval, except as required by the listing standards of the New York Stock Exchange, to issue additional shares of our capital stock.
Class A Common Stock and Class B Common Stock
Voting Rights
The Class A common stock is entitled to one vote per share on any matter that is submitted to a vote of our stockholders. Holders of our Class B common stock are entitled to ten votes per share on any matter submitted to our stockholders. Holders of shares of Class B common stock and Class A common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by Delaware law.
Under Delaware law, holders of our Class A common stock or Class B common stock would be entitled to vote as a separate class if a proposed amendment to our amended and restated certificate of incorporation would increase or decrease the aggregate number of authorized shares of such class, increase or decrease the par value of the shares of such class, or alter or change the powers, preferences, or special rights of the shares of such class so as to affect them adversely. As a result, in these limited instances, the holders of a majority of the Class A common stock could defeat any amendment to our amended and restated certificate of incorporation. For example, if a proposed amendment of our amended and restated certificate of incorporation provided for the Class A common stock to rank junior to the Class B common stock with respect to (1) any dividend or distribution, (2) the distribution of proceeds were we to be acquired, or (3) any other right, Delaware law would require the vote of the Class A common stock. In this instance, the holders of a majority of Class A common stock could defeat that amendment to our amended and restated certificate of incorporation.
Our amended and restated certificate of incorporation that will be in effect on the closing of this offering will not provide for cumulative voting for the election of directors.
Economic Rights
Except as otherwise will be expressly provided in our amended and restated certificate of incorporation that will be in effect on the closing of this offering or required by applicable law, all shares of
Class A common stock and Class B common stock will have the same rights and privileges and rank equally, share ratably, and be identical in all respects for all matters, including those described below.
Dividends and Distributions
Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of Class A common stock and Class B common stock will be entitled to share equally, identically, and ratably, on a per share basis, with respect to any dividend or distribution of cash or property paid or distributed by the company, unless different treatment of the shares of the affected class is approved by the affirmative vote of the holders of a majority of the outstanding shares of such affected class, voting separately as a class. See the section titled “Dividend Policy” for additional information.
Liquidation Rights
On our liquidation, dissolution, or winding-up, the holders of Class A common stock and Class B common stock will be entitled to share equally, identically, and ratably in all assets remaining after the payment of any liabilities, liquidation preferences, and accrued or declared but unpaid dividends, if any, with respect to any outstanding preferred stock, unless a different treatment is approved by the affirmative vote of the holders of a majority of the outstanding shares of such affected class, voting separately as a class.
Change of Control Transactions
The holders of Class A common stock and Class B common stock will be treated equally and identically with respect to shares of Class A common stock or Class B common stock owned by them, unless different treatment of the shares of each class is approved by the affirmative vote of the holders of a majority of the outstanding shares of the class treated differently, voting separately as a class, on (a) the closing of the sale, transfer, or other disposition of all or substantially all of our assets, (b) the consummation of a consolidation, merger, or reorganization which results in our voting securities outstanding immediately before the transaction (or the voting securities issued with respect to our voting securities outstanding immediately before the transaction) representing less than a majority of the combined voting power of the voting securities of the company or the surviving or acquiring entity, or (c) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons of securities of the company if, after closing, the transferee person or group would hold 50% or more of the outstanding voting power of the company (or the surviving or acquiring entity). However, consideration to be paid or received by a holder of common stock in connection with any such assets sale, consolidation, merger, or reorganization under any employment, consulting, severance, or other compensatory arrangement will be disregarded for the purposes of determining whether holders of common stock are treated equally and identically.
Subdivisions and Combinations
If we subdivide or combine in any manner outstanding shares of Class A common stock or Class B common stock, the outstanding shares of the other classes will be subdivided or combined in the same proportion and manner.
No Preemptive or Similar Rights
Our Class A common stock and Class B common stock are not entitled to preemptive rights, and are not subject to conversion, redemption, or sinking fund provisions, except for the conversion provisions with respect to the Class B common stock described below.
Conversion
Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. After the closing of this offering, on any transfer of shares of Class B common stock, whether or not for value, each such transferred share will automatically convert into one share of Class A common stock, except for certain transfers described in our amended and restated certificate of incorporation that will be in effect on the closing of this offering, including transfers for tax and estate planning purposes, so long as the transferring holder continues to hold sole voting and dispositive power with respect to the shares transferred.
Any holder’s shares of Class B common stock will convert automatically into Class A common stock, on a one-to-one basis, upon the following: (1) the sale or transfer of such share of Class B common stock; (2) the death of the Class B common stockholder (or nine months after the date of death if the stockholder is one of our founders); and (3) on the final conversion date, defined as the earlier of (a) the first trading day falling nine months after the date on which the outstanding shares of Class B common stock represent less than 10% of the then outstanding Class A and Class B common stock; (b) the seventh anniversary of this offering; or (c) the date specified by a vote of the holders of a majority of the outstanding shares of Class B common stock, voting as a single class.
Once transferred and converted into Class A common stock, the Class B common may not be reissued.
Fully Paid and Non-Assessable
In connection with this offering, our legal counsel will opine that the shares of our Class A common stock to be issued under this offering will be fully paid and non-assessable.
Preferred Stock
As of July 31, 2020, there were 182,271,099 shares of our convertible preferred stock outstanding. Immediately upon the closing of this offering, each outstanding share of our convertible preferred stock will convert into one share of our Class B common stock.
On the closing of this offering and under our amended and restated certificate of incorporation that will be in effect on the closing of this offering, our board of directors may, without further action by our stockholders, fix the rights, preferences, privileges, and restrictions of up to an aggregate of 200,000,000 shares of preferred stock in one or more series and authorize their issuance. These rights, preferences, and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of our Class A common stock or Class B common stock. Any issuance of our preferred stock could adversely affect the voting power of holders of our Class B common stock, and the likelihood that such holders would receive dividend payments and payments on liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring, or preventing a change of control or other corporate action. On the closing of this offering, no shares of preferred stock will be outstanding. We have no present plan to issue any shares of preferred stock.
Options
As of July 31, 2020, we had outstanding options to purchase 72,228,820 shares of our Class B common stock, with a weighted-average exercise price of approximately $6.70 per share under our 2012 Plan.
Restricted Stock Units
As of July 31, 2020, we had 4,853,231 RSUs for shares of our Class B common stock outstanding under our 2012 Plan.
Warrant
As of July 31, 2020, we had outstanding a warrant to purchase an aggregate of 32,336 shares of our Class B common stock, with an exercise price of $0.74. This warrant is exercisable at any time on or before expiration on January 20, 2027.
Registration Rights
Stockholder Registration Rights
We are party to an investor rights agreement that provides that certain holders of our convertible preferred stock, including certain holders of at least 5% of our capital stock and entities affiliated with certain of our directors, have certain registration rights, as set forth below. This investor rights agreement was entered into in February 2020. The registration of shares of our common stock by the exercise of
registration rights described below would enable the holders to sell these shares without restriction under the Securities Act when the applicable registration statement is declared effective. We will pay the registration expenses, other than underwriting discounts and commissions, of the shares registered by the demand, piggyback, and Form S-3 registrations described below.
Generally, in an underwritten offering, the managing underwriter, if any, has the right, subject to specified conditions, to limit the number of shares such holders may include. The demand, piggyback, and Form S-3 registration rights described below will expire three years after the effective date of the registration statement, of which this prospectus is a part, or with respect to any particular stockholder, such time after the effective date of the registration statement that such stockholder (a) holds less than 1% of our outstanding common stock (including shares issuable on conversion of outstanding convertible preferred stock) and (b) can sell all of its shares under Rule 144 of the Securities Act during any 90-day period.
Demand Registration Rights
The holders of an aggregate of 182,271,099 shares of our Class B common stock will be entitled to certain demand registration rights. At any time beginning 180 days after the closing of this offering, the holders of a majority of these shares may, on not more than one occasion, request that we register all or a portion of their shares.
Piggyback Registration Rights
In connection with this offering, the holders of an aggregate of 190,885,696 shares of our Class B common stock and 10,292,043 shares of our Class A common stock, assuming an initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, were entitled to, and the necessary percentage of holders waived, their rights to notice of this offering and to include their shares of registrable securities in this offering. After this offering, in the event that we propose to register any of our securities under the Securities Act, either for our own account or for the account of other security holders, the holders of these shares will be entitled to certain piggyback registration rights allowing the holder to include their shares in such registration, subject to certain marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act, other than with respect to a demand registration or a registration statement on Forms S-4 or S-8, the holders of these shares are entitled to notice of the registration and have the right to include their shares in the registration, subject to limitations that the underwriters may impose on the number of shares included in the offering.
Form S-3 Registration Rights
The holders of an aggregate of 182,271,099 shares of Class B common stock will be entitled to certain Form S-3 registration rights. If we are qualified to file a registration statement on Form S-3 and if the reasonably anticipated aggregate gross proceeds of the shares offered would equal or exceed $1.0 million, the holders of our registrable securities have the right to demand we file registration statements on Form S-3. We will not be required to effect more than two registrations on Form S-3 within any 12-month period.
Anti-Takeover Provisions
Certificate of Incorporation and Bylaws to Be in Effect on the Closing of this Offering
Because our stockholders do not have cumulative voting rights, stockholders holding a majority of the voting power of our shares of common stock will be able to elect all of our directors. Our amended and restated certificate of incorporation and amended and restated bylaws to be effective on the closing of this offering will provide for stockholder actions at a duly called meeting of stockholders or, before the date on which all shares of common stock convert into a single class, by written consent. A special meeting of stockholders may be called by a majority of our board of directors, the chair of our board of directors and our chief executive officer. Our amended and restated bylaws to be effective on the closing of this offering will establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors.
Our amended and restated certificate of incorporation to be effective on the closing of this offering will further provide for a dual-class common stock structure, which provides our current investors, officers, and employees with control over all matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets.
In accordance with our amended and restated certificate of incorporation to be effective on the closing of this offering, immediately after this offering, our board of directors will be divided into three classes with staggered three-year terms.
The foregoing provisions will make it more difficult for another party to obtain control of us by replacing our board of directors. Since our board of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change our control.
These provisions, including the dual-class structure of our common stock, are intended to preserve our existing control structure after the closing of this offering, facilitate our continued product innovation and the risk-taking that it requires, permit us to continue to prioritize our long-term goals rather than short-term results, enhance the likelihood of continued stability in the composition of our board of directors and its policies, and to discourage certain types of transactions that may involve an actual or threatened acquisition of us. These provisions are also designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and may have the effect of deterring hostile takeovers or delaying changes in our control or management. As a consequence, these provisions may also inhibit fluctuations in the market price of our stock that could result from actual or rumored takeover attempts.
Section 203 of the Delaware General Corporation Law
When we have a class of voting stock that is either listed on a national securities exchange or held of record by more than 2,000 stockholders, we will be subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, subject to certain exceptions.
Choice of Forum
Our amended and restated certificate of incorporation to be effective on the closing of this offering will provide that the Court of Chancery of the State of Delaware be the exclusive forum for actions or proceedings brought under Delaware statutory or common law: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a breach of fiduciary duty; (3) any action asserting a claim against us arising under the Delaware General Corporation Law; (4) any action regarding our amended and restated certificate of incorporation or our amended and restated bylaws; (5) any action as to which the Delaware General Corporate Law confers jurisdiction to the Court of Chancery of the State of Delaware; or (6) any action asserting a claim against us that is governed by the internal affairs doctrine. The provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act. Our amended and restated certificate of incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
Limitations of Liability and Indemnification
See the section titled “Executive Compensation—Limitations on Liability and Indemnification Matters.”
Exchange Listing
Our Class A common stock is currently not listed on any securities exchange. O ur Class A common stock has been approved for listing on the New York Stock Exchange under the symbol “SNOW.”
Transfer Agent and Registrar
On the closing of this offering, the transfer agent and registrar for our Class A common stock and Class B common stock will be Computershare Trust Company, N.A . The transfer agent’s address is 2 50 R oyall Street, C a nton, Massachusetts 02021 .
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no public market for our Class A common stock. Future sales of substantial amounts of our Class A common stock, including shares issued on the exercise of outstanding options, in the public market after this offering, or the possibility of these sales or issuances occurring, could adversely affect the prevailing market price for our Class A common stock or impair our ability to raise equity capital.
Based on our shares outstanding as of July 31, 2020 , on the closing of this offering , the concurrent private placements , and the secondary transaction by one of our stockholders , a total of 38,292,043 shares of Class A common stock and 240,486,119 shares of Class B common stock will be outstanding, assuming the automatic conversion of all of our outstanding shares of convertible preferred stock into an aggregate of 182,271,099 shares of Class B common stock. Of these shares, all of the Class A common stock sold in this offering by us, plus any shares sold by us on the exercise of the underwriters’ option to purchase additional Class A common stock, will be freely tradable in the public market without restriction or further registration under the Securities Act, unless these shares are held by “affiliates,” as that term is defined in Rule 144 under the Securities Act.
The remaining shares of Class A common stock and Class B common stock will be, and shares of Class A common stock or Class B common stock subject to stock options and RSUs will be on issuance, “restricted securities,” as that term is defined in Rule 144 under the Securities Act. These restricted securities are eligible for public sale only if they are registered under the Securities Act or if they qualify for an exemption from registration under Rules 144 or 701 under the Securities Act, which are summarized below. Restricted securities may also be sold outside of the United States to non-U.S. persons in accordance with Rule 904 of Regulation S.
As a result of the lock-up agreements described below and subject to the provisions of Rules 144 or 701 under the Securities Act, these restricted securities will be available for sale in the public market as follows:
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Date Available for Sale in the Public Market
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Number of Shares of Common Stock
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The 91st day after the date of this prospectus (First Release).
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All of our current employees with a title below vice president, current contractors, former employees (other than Robert L. Muglia, our former chief executive officer, and his affiliates), and former contractors may sell a number of shares equal to 25% of (i) outstanding vested shares and (ii) shares subject to vested stock options and RSUs, each held by such holder or held by trusts for the benefit of such holder or of an immediate family member of such holder, and calculated as of the date of release (Vested Holdings). As of July 31, 2020, 25% of the outstanding Vested Holdings held by such holders was 11,295,695 shares.
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The second trading day immediately following the day that the closing price of our Class A common stock on The New York Stock Exchange exceeds 133% of the initial public offering price as set forth on the cover page of this prospectus, for at least 10 trading days in the 15 trading day period following the 90th day after the date of this prospectus.
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All other non-employee stockholders who are not members of our board of directors or our affiliates (including Mr. Muglia) and whose shares were not included in the First Release, may sell a number of shares equal to 25% of their Vested Holdings. As of July 31, 2020, 25% of the outstanding Vested Holdings held by such holders was 37,904,494 shares.
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The commencement of trading on the second full trading day following our second public release of quarterly or annual financial results following the date of this prospectus (the Lock-up Release Date).
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All remaining shares held by our stockholders not previously eligible for sale and not purchased in the concurrent private placements or the secondary transaction.
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Rule 144
In general, under Rule 144 as currently in effect, once we have been subject to public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, an eligible stockholder is entitled to sell such shares without complying with the manner of sale, volume limitation, or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. To be an eligible stockholder under Rule 144, such stockholder must not be deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and must have beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then such person is entitled to sell such shares without complying with any of the requirements of Rule 144, subject to the expiration of the lock-up agreements described below.
In general, under Rule 144, as currently in effect, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell shares upon expiration of the lock-up agreements described below. Beginning 90 days after the date of this prospectus, within any three-month period, such stockholders may sell a number of shares that does not exceed the greater of:
• 1% of the number of Class A common stock then outstanding, which will equal approximately 382,920 shares immediately after this offering , the concurrent private placements, and the secondary transaction by one of our stockholders , assuming no exercise of the underwriters’ option to purchase additional shares of Class A common stock from us; or
• the average weekly trading volume of our Class A common stock on T he New York Stock Exchange during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.
Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.
Rule 701
Rule 701 generally allows a stockholder who was issued shares under a written compensatory plan or contract and who is not deemed to have been an affiliate of our company during the immediately preceding 90 days, to sell these shares in reliance on Rule 144, but without being required to comply with the public information, holding period, volume limitation, or notice provisions of Rule 144. Rule 701 also permits affiliates of our company to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 shares, however, are required by that rule to wait until 90 days after the date of this prospectus before selling those shares under Rule 701, subject to the expiration of the lock-up agreements described below.
Form S-8 Registration Statements
We intend to file one or more registration statements on Form S-8 under the Securities Act with the SEC to register the offer and sale of shares of our Class A common stock and Class B common stock that are issuable under our 2012 Plan, 2020 Plan, and ESPP. These registration statements will become effective immediately on filing. Shares covered by these registration statements will then be eligible for sale in the public markets, subject to vesting restrictions, any applicable lock-up agreements described below, and Rule 144 limitations applicable to affiliates.
Lock-up Arrangements
Our directors, executive officers, and the holders of substantially all of our common stock and securities exercisable for or convertible into our Class A common stock and Class B common stock outstanding on the closing of this offering, have agreed, or will agree, with the underwriters not to, during specified periods of time after the date of this prospectus, subject to certain exceptions, without the prior written consent of Goldman Sachs & Co. LLC, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise dispose of any of our shares of common stock, any options or warrants to purchase any of our shares of common stock or any securities convertible into or
exchangeable for or that represent the right to receive shares of our common stock. Under the terms of the lock-up agreements with the underwriters:
•Beginning on the 91st day after the date of this prospectus, our current employees with a title below vice president, current contractors, former employees (other than Robert L. Muglia, our former chief executive officer, and his affiliates), and former contractors, may sell a number of shares equal to 25% of their Vested Holdings.
•Beginning on the second trading day immediately following the day that the closing price of our Class A common stock on The New York Stock Exchange exceeds 133% of the initial public offering price as set forth on the cover page of this prospectus, for at least 10 trading days in the 15 trading day period following the 90th day after the date of this prospectus, all other non-employee stockholders who are not members of our board of directors or our affiliates and whose shares were not included in the First Release (including Mr. Muglia and his affiliates), may sell a number of shares equal to 25% of their Vested Holdings. We will report such release on a current report on Form 8-K following the closing of trading on the date that is at least two trading days prior to such release.
•Beginning on the commencement of trading on the second full trading day following our second public release of quarterly or annual financial results following the date of this prospectus, all remaining shares will be eligible for sale.
Notwithstanding anything else in this paragraph, we may elect, by written notice to Goldman Sachs & Co. LLC at least five days before any release described in the first or second bullet above, that no such early release will occur. If we so elect that no such release will occur, we will publicly announce such decision at least two trading days prior to the date scheduled for such release.
Notwithstanding the foregoing, and subject to certain conditions, the lock-up restrictions described in the immediately preceding paragraph do not apply to our directors, officers, and other holders of substantially all of our outstanding securities with respect to:
•transfers of shares of common stock or any security convertible into or exercisable or exchangeable for common stock as a bona fide gift or charitable contribution;
•transfers of shares of common stock or any security convertible into or exercisable or exchangeable for common stock to an immediate family member or a trust for the direct or indirect benefit of the stockholder or such immediate family member of the stockholder;
•transfers or distributions of shares of common stock or any security convertible into or exercisable or exchangeable for common stock by a stockholder that is a trust to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust;
•transfers of shares of common stock or any security convertible into or exercisable or exchangeable for common stock upon death, by will, or intestacy;
•transactions relating to shares of Class A common stock acquired in this offering or in open market transactions after the completion of this offering;
•the sale of shares to satisfy income, employment, or social tax withholding and remittance obligations arising in connection with the settlement of RSUs; provided, that, if required, any public report or filing under Section 16 of the Exchange Act will clearly indicate in the footnotes thereto that such transfer was solely pursuant to the circumstances described in this clause;
•the exercise of a stock option or the receipt of shares on the vesting or settlement of an RSU, granted under our equity incentive plans described elsewhere in this prospectus, and the receipt of shares of common stock upon such exercise, provided that the underlying shares will continue to be subject to the restrictions on transfer set forth in the lock-up agreement and, provided, further that, if required, any public report or filing under Section 16 of the Exchange Act will clearly indicate in the footnotes thereto that the filing relates to the exercise of a stock option, that no shares were sold to the public by the reporting person and that the shares received upon exercise of the stock option are subject to the lock-up agreement;
•the disposition of shares of common stock to us, or the withholding of shares of common stock by us, solely in connection with the payment of taxes due with respect to the exercise of stock options or vesting or settlement of RSUs; provided, that, if required, any public report or filing under Section 16 of the Exchange Act will clearly indicate in the footnotes thereto that such disposition to us or withholding by us of shares or securities was solely to us pursuant to the circumstances described in this clause;
•distributions by a legal entity of shares of common stock or any security convertible into or exercisable or exchangeable for common stock to limited partners, members, stockholders or holders of similar equity interests or to another legal entity or investment fund managed by or affiliated with such legal entity;
•transfers of shares of common stock or any security convertible into or exercisable or exchangeable for common stock pursuant to a domestic relations order, divorce decree, or court order;
•transfers to us in connection with the repurchase of common stock related to the termination of a stockholder’s employment with us pursuant to contractual agreements with us;
•transfers of shares of common stock or any security convertible into or exercisable or exchangeable for common stock after the closing of this offering pursuant to a bona fide merger, consolidation or other similar transaction involving a change of control approved by our board of directors, provided that, in the event that such change of control transaction is not completed, the securities owned by a security holder shall remain subject to the lock-up agreement;
•the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of common stock, provided that (i) such plan does not provide for the transfer of common stock during the restricted period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required or voluntarily made regarding the establishment of such plan, such announcement or filing will include a statement to the effect that no transfer of common stock may be made under such plan during the restricted period; or
•to the conversion of outstanding preferred stock into shares of Class B common stock in connection with the closing of this offering or any conversion of Class B common stock into Class A common stock, provided that such shares of common stock received upon conversion remain subject to the terms of the lock-up agreement; provided further that any filing required by Section 16 of the Exchange Act shall clearly indicate in the footnotes thereto the nature and conditions of such transfer.
Goldman Sachs & Co. LLC may release any of the securities subject to these lock-up agreements at any time, subject to applicable notice requirements.
In addition, we have agreed with our underwriters not to sell any shares of our common stock or securities convertible into or exchangeable for shares of our common stock for a period of 180 days after the date of this prospectus, subject to certain exceptions. Goldman Sachs & Co. LLC may, at any time, waive these restrictions.
In addition to the restrictions contained in the lock-up agreements described above, we have entered into agreements with all of our security holders that contain market stand-off provisions imposing restrictions on the ability of such security holders to offer, sell or transfer our equity securities for a period of 180 days following the date of this prospectus, which restrictions we intend to waive in connection with the lock-up agreements described above.
The 6,250,000 shares of Class A common stock we are selling in the concurrent private placements to Salesforce Ventures LLC and Berkshire Hathaway Inc. , assuming an initial public offering price of $80.00 p er share, which is the midpoint of the price range set forth on the cover page of this prospectus, and the 4,042,043 shares of Class A common stock one of our stockholders is selling to Berkshire Hathaway Inc. in a secondary transaction will be subject to market standoff agreements with us for a period of up to 365 days after the date of this prospectus as well as b e ing subject to lock-up agreements with the underwriters described above.
Registration Rights
Upon the closing of this offering , the concurrent private placements , and the secondary transaction by one of our stockholders , the holders of 190,885,696 shares of our Class B common stock and 10,292,043 shares of our Class A common stock, assuming an initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, or their transferees, will be entitled to certain rights with respect to the registration of the offer and sale of their shares under the Securities Act. Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act immediately on the effectiveness of the registration. See the section titled “Description of Capital Stock—Registration Rights” for additional information.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS OF OUR CLASS A COMMON STOCK
The following summary describes the material U.S. federal income tax consequences of the acquisition, ownership, and disposition of our common stock acquired in this offering by Non-U.S. Holders (as defined below). This discussion is not a complete analysis of all potential U.S. federal income tax consequences relating thereto, does not deal with non-U.S., state, and local consequences that may be relevant to Non-U.S. Holders in light of their particular circumstances, and does not address U.S. federal tax consequences (such as gift and estate taxes) other than income taxes. Special rules different from those described below may apply to certain Non-U.S. Holders that are subject to special treatment under the Internal Revenue Code of 1986, as amended (the Code), such as financial institutions, insurance companies, tax-exempt organizations, tax-qualified retirement plans, governmental organizations, broker-dealers and traders in securities, U.S. expatriates, “controlled foreign corporations,” “passive foreign investment companies,” corporations that accumulate earnings to avoid U.S. federal income tax, corporations organized outside of the United States, any state thereof, or the District of Columbia that are nonetheless treated as U.S. taxpayers for U.S. federal income tax purposes, persons that hold our common stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security,” or integrated investment or other risk reduction strategy, persons who acquire our common stock through the exercise of an option or otherwise as compensation, persons subject to the alternative minimum tax or federal Medicare contribution tax on net investment income, persons subject to special tax accounting rules under Section 451(b) of the Code, “qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds, partnerships and other pass-through entities or arrangements and investors in such pass-through entities or arrangements, persons deemed to sell our common stock under the constructive sale provisions of the Code, and persons that own, or are deemed to own, our Class B common stock. Such Non-U.S. Holders are urged to consult their own tax advisors to determine the U.S. federal, state, local, and other tax consequences that may be relevant to them. Furthermore, the discussion below is based upon the provisions of the Code and Treasury Regulations, rulings, and judicial decisions thereunder, each as of the date hereof, and such authorities may be repealed, revoked, or modified, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those discussed below. We have not requested a ruling from the U.S. Internal Revenue Service (the IRS) with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements and conclusions. This discussion assumes that the Non-U.S. Holder holds our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment).
This discussion is for informational purposes only and is not tax advice. Persons considering the purchase of our common stock pursuant to this offering should consult their own tax advisors concerning the U.S. federal income, gift, estate, and other tax consequences of acquiring, owning, and disposing of our common stock in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction, including any state, local, or foreign tax consequences, or under any applicable income tax treaty.
For the purposes of this discussion, a “Non-U.S. Holder” is a beneficial owner of common stock that is neither a U.S. Holder nor a partnership (or other entity treated as a partnership for U.S. federal income tax purposes regardless of its place of organization or formation). A “U.S. Holder” means a beneficial owner of our common stock that is for U.S. federal income tax purposes any of the following:
•an individual who is a citizen or resident of the United States;
•a corporation or other entity treated as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
•an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
•a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons (within the meaning of Section 7701(a)(30) of the Code) have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a United States person.
Distributions
As described in the section titled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders of our common stock in the foreseeable future. However, if we do make distributions of cash or property on our common stock to a Non-U.S. Holder, such distributions, to the extent made out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), generally will constitute dividends for U.S. tax purposes and will be subject to withholding tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty, subject to the discussions below regarding effectively connected income, backup withholding, and foreign accounts. To obtain a reduced rate of withholding under a treaty, a Non-U.S. Holder generally will be required to provide us with a properly executed IRS Form W-8BEN (in the case of individuals) or IRS Form W-8BEN-E (in the case of entities), or other appropriate form, certifying the Non-U.S. Holder’s entitlement to benefits under that treaty. We do not intend to adjust our withholding unless such certificates are provided to us or our paying agent before the payment of dividends and are updated as may be required by the IRS. In the case of a Non-U.S. Holder that is an entity, Treasury Regulations and the relevant tax treaty provide rules to determine whether, for purposes of determining the applicability of a tax treaty, dividends will be treated as paid to the entity or to those holding an interest in that entity. If a Non-U.S. Holder holds stock through a financial institution or other agent acting on the holder’s behalf, the holder will be required to provide appropriate documentation to such agent. The holder’s agent will then be required to provide certification to us or our paying agent, either directly or through other intermediaries. If you are eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty and you do not timely file the required certification, you may be able to obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim for a refund with the IRS.
We generally are not required to withhold tax on dividends paid to a Non-U.S. Holder that are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains in the United States) if a properly executed IRS Form W-8ECI, stating that the dividends are so connected, is furnished to us (or, if stock is held through a financial institution or other agent, to such agent). In general, such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular rates applicable to U.S. residents. A corporate Non-U.S. Holder receiving effectively connected dividends may also be subject to an additional “branch profits tax,” which is imposed, under certain circumstances, at a rate of 30% (or such lower rate as may be specified by an applicable treaty) on the corporate Non-U.S. Holder’s effectively connected earnings and profits, subject to certain adjustments. Non-U.S. Holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.
To the extent distributions on our common stock, if any, exceed our current and accumulated earnings and profits, they will first reduce the Non-U.S. Holder’s adjusted basis in our common stock, but not below zero, and then will be treated as gain to the extent of any excess amount distributed, and taxed in the same manner as gain realized from a sale or other disposition of common stock as described in the next section.
Gain on Disposition of Our Common Stock
Subject to the discussions below regarding backup withholding and foreign accounts, a Non-U.S. Holder generally will not be subject to U.S. federal income tax with respect to gain realized on a sale or other disposition of our common stock unless (a) the gain is effectively connected with a trade or business of such holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains in the United States), (b) the Non-U.S. Holder is a nonresident alien individual and is present in the United States for 183 or more days in the taxable year of the disposition and certain other conditions are met, or (c) we are or have been a “United States real property holding corporation” within the meaning of Code Section 897(c)(2) at any time within the shorter of the five-year period preceding such disposition or such holder’s holding period in our common stock. In general, we would be a United States real property holding corporation if the fair market value of our U.S. real property interests equals or exceeds 50% of the sum of the fair market value of our worldwide real property interests plus our other assets used or held for use in a trade or business. We believe that we have not been and we are not, and do not anticipate becoming, a United States real property holding corporation. Even if we are treated as a United States real property holding corporation, gain realized by a Non-U.S. Holder on a disposition of our common stock will not be subject to U.S. federal income tax so long as (1) the Non-U.S. Holder owned, directly, indirectly, and constructively, no
more than 5% of our common stock at all times within the shorter of (i) the five-year period preceding the disposition or (ii) the holder’s holding period in our common stock and (2) our common stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market. There can be no assurance that our common stock will continue to qualify as regularly traded on an established securities market. If any gain on your disposition is taxable because we are a United States real property holding corporation and your ownership of our common stock exceeds 5%, you will be taxed on such disposition generally in the manner as gain that is effectively connected with the conduct of a U.S. trade or business (subject to the provisions under an applicable income tax treaty), except that the branch profits tax generally will not apply.
If you are a Non-U.S. Holder described in (a) above, you will be required to pay tax on a net income basis at the U.S. federal income tax rates applicable to U.S. Holders, and corporate Non-U.S. Holders described in (a) above may be subject to the additional branch profits tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. If you are a Non-U.S. Holder described in (b) above, you will be subject to U.S. federal income tax at a flat 30% rate (or such lower rate as may be specified by an applicable income tax treaty) on the net gain derived from the disposition, which gain may be offset by certain U.S.-source capital losses (even though you are not considered a resident of the United States), provided that the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses. Non-U.S. Holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.
Information Reporting Requirements and Backup Withholding
Information returns are required to be filed with the IRS in connection with payments of dividends on our common stock. Unless you comply with certification procedures to establish that you are not a U.S. person, information returns may also be filed with the IRS in connection with the proceeds from a sale or other disposition of our common stock. You may be subject to backup withholding on payments on our common stock or on the proceeds from a sale or other disposition of our common stock unless you comply with certification procedures to establish that you are not a U.S. person or otherwise establish an exemption. Your provision of a properly executed applicable IRS Form W-8 certifying your non-U.S. status will permit you to avoid backup withholding. Amounts withheld under the backup withholding rules are not additional taxes and may be refunded or credited against your U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
Foreign Accounts
Sections 1471 through 1474 of the Code (commonly referred to as FATCA) impose a U.S. federal withholding tax of 30% on certain payments, including dividends paid on, and the gross proceeds of a disposition of, our common stock paid to a foreign financial institution (as specifically defined by applicable rules) unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such institution (which includes certain equity holders of such institution, as well as certain account holders that are foreign entities with U.S. owners). FATCA also generally imposes a federal withholding tax of 30% on certain payments, including dividends paid on, and the gross proceeds of a disposition of, our common stock to a non-financial foreign entity unless such entity provides the withholding agent with either a certification that it does not have any substantial direct or indirect U.S. owners or provides information regarding substantial direct and indirect U.S. owners of the entity. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements. The withholding tax described above will not apply if the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from the rules.
The U.S. Treasury Department has released proposed regulations which, if finalized in their present form, would eliminate the federal withholding tax of 30% applicable to the gross proceeds of a disposition of our common stock. In its preamble to such proposed regulations, the U.S. Treasury Department stated that taxpayers may generally rely on the proposed regulations until final regulations are issued. Non-U.S. Holders are encouraged to consult with their own tax advisors regarding the possible implications of FATCA on their investment in our common stock.
EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF PURCHASING, HOLDING, AND DISPOSING OF OUR COMMON STOCK, INCLUDING THE CONSEQUENCES OF ANY RECENT OR PROPOSED CHANGE IN APPLICABLE LAW.
UNDERWRITING
We and the underwriters named below will enter into an underwriting agreement with respect to the shares being offered. Subject to certain conditions, each underwriter will severally agree to purchase the number of shares indicated in the following table. Goldman Sachs & Co. LLC is the representative of the underwriters.
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Underwriters
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Number of Shares
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Goldman Sachs & Co. LLC
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Morgan Stanley & Co. LLC
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J.P. Morgan Securities LLC
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Allen & Company LLC
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Citigroup Global Markets Inc.
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Credit Suisse Securities (USA) LLC
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Barclays Capital Inc.
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Deutsche Bank Securities Inc.
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Mizuho Securities USA LLC
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Truist Securities, Inc.
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BTIG, LLC
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Canaccord Genuity LLC
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Capital One Securities, Inc.
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Cowen and Company, LLC
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D.A. Davidson & Co.
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JMP Securities LLC
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Oppenheimer & Co. Inc.
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Piper Sandler & Co.
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Stifel, Nicolaus & Company, Incorporated
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Academy Securities, Inc.
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Loop Capital Markets LLC
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Samuel A. Ramirez & Company, Inc.
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Siebert Williams Shank & Co., LLC
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Total:
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28,000,000
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The underwriters will be committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this option is exercised.
The underwriters will have an option to buy up to an additional 4,200,000 shares from us to cover sales by the underwriters of a greater number of shares than the total number set forth in the table above. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.
The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters by us. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase 4,200,000 additional shares.
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Paid by us
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No Exercise
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Full Exercise
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Per Share
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$
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$
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Total
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$
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$
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Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover page of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $ per share from the initial public offering price. After the initial offering of the shares, the representative may change the offering price and the other selling terms. The
offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.
We and all officers, directors, and holders of substantially all of our common stock have agreed or will agree with the underwriters, not to, without the prior written consent of Goldman Sachs & Co. LLC, during specified periods of time after the date of this prospectus, dispose of or hedge any of our or their common stock or securities convertible into or exchangeable for shares of common stock. See the section titled “Shares Eligible for Future Sale” for a discussion of certain transfer restrictions and possible early lock-up releases.
The 6,250,000 shares of Class A common stock we are selling in the concurrent private placements to Salesforce Ventures LLC and Berkshire Hathaway Inc. , assuming an initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and the 4,042,043 shares of Class A common stock one of our stockholders is selling to Berkshire Hathaway Inc. in a secondary transaction will be subject to market standoff agreements with us for a period of up to 365 days after the date of this prospectus as well as being subject to lock-up agreements with the underwriters described above.
Prior to the offering, there has been no public market for the shares. The initial public offering price will be negotiated among us and the representative. Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and earnings prospects, an assessment of our management, and the consideration of the above factors in relation to market valuation of companies in related businesses.
O ur Class A common stock has been approved for listing on the New York Stock Exchange under the symbol “SNOW . ”
In connection with the offering, the underwriters may purchase and sell shares of the Class A common stock in the open market. These transactions may include short sales, stabilizing transactions, and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering, and a short position represents the amount of such sales that have not been covered by subsequent purchases. A “covered short position” is a short position that is not greater than the amount of additional shares for which the underwriters’ option described above may be exercised. The underwriters may cover any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to cover the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the option described above. “Naked” short sales are any short sales that create a short position greater than the amount of additional shares for which the option described above may be exercised. The underwriters must cover any such naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Class A common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of the Class A common stock made by the underwriters in the open market prior to the completion of the offering.
The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representative has repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.
Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the Class A common stock, and together with the imposition of the penalty bid, may stabilize, maintain, or otherwise affect the market price of the Class A common stock. As a result, the price of the Class A common stock may be higher than the price that otherwise might exist in the open market. The underwriters are not required to engage in these activities and may end any of these activities at any time. These transactions may be effected on the relevant exchange, in the over-the-counter market or otherwise.
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Regulation (each, a Relevant Member State) an offer to the public of our Class A common stock may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of our Class A common stock may be made at any time under the following exemptions under the Prospectus Regulation:
(a)to any legal entity which is a qualified investor as defined in the Prospectus Regulation;
(b)to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), subject to obtaining the prior consent of the representative for any such offer; or
(c)in any other circumstances falling within Article 3(2) of the Prospectus Regulation,
provided that no such offer of shares of our Class A common stock shall result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article 3 of the Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to our Class A common stock in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and our Class A common stock to be offered so as to enable an investor to decide to purchase our Class A common stock, as the same may be varied in that Member State by any measure implementing the Prospectus Regulation in that Member State; and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129, and includes any relevant implementing measure in the Relevant Member State.
This European Economic Area selling restriction is in addition to any other selling restrictions set out below.
United Kingdom
In the United Kingdom, this prospectus is only addressed to and directed as qualified investors who are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order); or (ii) high net worth entities and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as relevant persons). Any investment or investment activity to which this prospectus relates is available only to relevant persons and will only be engaged with relevant persons. Any person who is not a relevant person should not act or rely on this prospectus or any of its contents.
Canada
The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions, and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption form, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this offering memorandum (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Hong Kong
The shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong) (Companies (Winding Up and Miscellaneous Provisions) Ordinance) or which do not constitute an invitation to the public within the meaning of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (Securities and Futures Ordinance), or (ii) to “professional investors” as defined in the Securities and Futures Ordinance and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance, and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” in Hong Kong as defined in the Securities and Futures Ordinance and any rules made thereunder.
Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore (MAS). Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor (as defined under Section 4A of the Securities and Futures Act, Chapter 289 of Singapore (the SFA)) under Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to conditions set forth in the SFA.
Where the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor, the securities (as defined in Section 239(1) of the SFA) of that corporation shall not be transferable for 6 months after that corporation has acquired the shares under Section 275 of the SFA except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person (as defined in Section 275(2) of the SFA), (2) where such transfer arises from an offer in that corporation’s securities pursuant to Section 275(1A) of the SFA, (3) where no consideration is or will be given for the transfer, (4) where the transfer is by operation of law, (5) as specified in Section 276(7) of the SFA, or (6) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore (Regulation 32).
Where the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is a trust (where the trustee is not an accredited investor (as defined in Section 4A of the SFA)) whose sole purpose is to hold investments and each beneficiary of the trust is an accredited investor, the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferable for 6 months after that trust has acquired the shares under Section 275 of the SFA except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person (as defined in Section 275(2) of the SFA), (2) where such transfer arises from an offer that is made on terms that such rights or interest are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction (whether such amount is to be paid for in cash or by exchange of securities or other assets), (3) where no consideration is or will be given for the transfer, (4) where the transfer is by operation of law, (5) as specified in Section 276(7) of the SFA, or (6) as specified in Regulation 32.
Solely for the purposes of its obligations pursuant to sections 309B(1)(a) and 309B(1)(c) of the SFA, the Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A of the SFA) that the Notes are “prescribed capital markets products” (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Excluded Investment Products (as defined in MAS
Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
Japan
The securities have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended), or the FIEA. The securities may not be offered or sold, directly or indirectly, in Japan or to or for the benefit of any resident of Japan (including any person resident in Japan or any corporation or other entity organized under the laws of Japan) or to others for reoffering or resale, directly or indirectly, in Japan or to or for the benefit of any resident of Japan, except pursuant to an exemption from the registration requirements of the FIEA and otherwise in compliance with any relevant laws and regulations of Japan.
We estimate that the total expenses of the offering and the concurrent private placements , excluding underwriting discounts and commissions, will be approximately $5.8 million .
We will agree to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act of 1933.
The underwriters will agree to reimburse us for certain expenses incurred by us in connection with this offering upon closing of this offering.
The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage, and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to the issuer and to persons and entities with relationships with the issuer, for which they received or will receive customary fees and expenses.
In the ordinary course of their various business activities, the underwriters and their respective affiliates, officers, directors, and employees may purchase, sell, or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps, and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities, or instruments of the issuer (directly, as collateral securing other obligations or otherwise) or persons and entities with relationships with the issuer. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas, or publish or express independent research views in respect of such assets, securities, or instruments and may at any time hold, or recommend to clients that they should acquire, long or short positions in such assets, securities, and instruments.
CONCURRENT PRIVATE PLACEMENTS
Each of Salesforce Ventures LLC and Berkshire Hathaway Inc. have entered into an agreement with us pursuant to which they have each agreed to purchase $250 million of our Class A common stock in a private placement at a per share price equal to the initial public offering price. Based on an assumed initial public offering price of $80.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, each of Salesforce Ventures LLC and Berkshire Hathaway Inc. will purchase 3,125,000 shares of our Class A common stock . We will receive the full proceeds and will not pay any underwriting discounts or commissions with respect to the shares that are sold in the private placements. Our agreements with each of Salesforce Ventures LLC and Berkshire Hathaway Inc. are contingent upon, and are scheduled to close immediately subsequent to, the closing of this offering as well as the satisfaction of certain conditions to closing. In addition, the sale of the shares to Salesforce Ventures LLC is contingent upon the expiration or termination of the applicable waiting periods under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, and applicable foreign antitrust laws. The sale of these shares to Salesforce Ventures LLC and Berkshire Hathaway Inc. will not be registered in this offering and will be subject to market standoff agreements with us for a period of up to 365 days after the date of this prospectus and lock-up agreements with the underwriters. See the section titled “Shares Eligible for Future Sale—Lock-Up Arrangements” for additional information regarding such restrictions. We refer to these private placements as the concurrent private placements.
LEGAL MATTERS
The validity of the shares of Class A common stock being offered by this prospectus will be passed upon for us by Cooley LLP, Palo Alto, California. Certain legal matters in connection with this offering will be passed upon for the underwriters by Goodwin Procter LLP, Redwood City, California. As of the date of this prospectus, GC&H Investments and GC&H Investments, LLC, entities comprised of partners and associates of Cooley LLP, beneficially own 87,254 and 524,319 shares, respectively, of our convertible preferred stock, all of which will be converted into an aggregate of 611,573 shares of Class B common stock immediately upon the closing of this offering.
CHANGE IN ACCOUNTANTS
On November 19, 2019, we dismissed Deloitte & Touche LLP as our independent auditors. On December 12, 2019, we retained PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm. The decision to change our independent auditors was approved by our audit committee of our board of directors.
Deloitte & Touche LLP did not issue a report on our audited financial statements for either of the fiscal years ended January 31, 2019 and January 31, 2020. We had no disagreements with Deloitte & Touche LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to its satisfaction, would have caused Deloitte & Touche LLP to make reference in connection with its opinion to the subject matter of the disagreement during the two fiscal years prior to its dismissal and the subsequent interim period through November 19, 2019. During the two most recent fiscal years preceding our dismissal of Deloitte & Touche LLP, and the subsequent interim period through November 19, 2019, there were no “reportable events” as such term is defined in Item 304(a)(1)(v) of Regulation S-K.
During the two years ended January 31, 2019 and through the period ended December 12, 2019, neither we, nor anyone acting on our behalf, consulted with PwC on matters that involved the application of accounting principles to a specified transaction, either completed or proposed, the type of audit opinion that might be rendered on our financial statements, or any other matter that was the subject of a disagreement as that term is used in Item 304 (a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K or a reportable event as that term is used in Item 304(a)(1)(v) and the related instructions to Item 304 of Regulation S-K.
EXPERTS
The financial statements as of January 31, 2019 and 2020 and for the years then ended included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
In connection with the acceptance of the audit and the inclusion of PwC’s opinion on our financial statements for the two years ended January 31, 2020, PwC and we completed an independence assessment to evaluate the services and relationships with us and our affiliates that may bear on PwC’s independence under the SEC and the Public Company Accounting Oversight Board (United States) (PCAOB) independence rules. A service was provided to us and a relationship with an affiliate of ours were identified that are inconsistent with the auditor independence rules provided in Rule 2-01 of Regulation S-X.
The services and relationship identified included: (i) PwC provided impermissible project management and project administration services to us through a subcontracting relationship with a third party from July 2019 through December 2019; and (ii) an impermissible employment relationship existed at an upstream affiliate of ours from February 2018 through June 2019. Both the relationship and services were terminated prior to the commencement of PwC’s professional engagement period for our financial statement audits for the years ended January 31, 2019 and 2020.
For the services and the relationship identified, PwC provided to our audit committee and management an overview of the facts and circumstances surrounding the services and relationship, including the entities involved, the nature and scope of the services provided, an approximation of the fees earned related to the services, and other relevant factors.
Considering the facts presented, our audit committee concluded that the relationship and services would not impact PwC’s application of objective and impartial judgment on any matters encompassed within the audit engagement performed by PwC for our financial statements for the years ended January 31, 2019 and 2020. Furthermore, our audit committee concluded that a reasonable investor with knowledge of the relevant facts and circumstances would reach the same conclusion.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of Class A common stock offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our Class A common stock, we refer you to the registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The SEC maintains an internet website that contains reports and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.
On the closing of this offering, we will be subject to the information reporting requirements of the Exchange Act, and we will file reports, proxy statements, and other information with the SEC. These reports, proxy statements and other information will be available at www.sec.gov.
We also maintain a website at www.snowflake.com. Information contained in, or accessible through, our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is only as an inactive textual reference.
SNOWFLAKE INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Snowflake Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Snowflake Inc. and its subsidiaries (the “Company”) as of January 31, 2020 and 2019, and the related consolidated statements of operations, comprehensive loss, redeemable convertible preferred stock and stockholders’ deficit and cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
San Jose, California
June 7, 2020, except for the effects of disclosing segment information and net loss per share discussed in Note 2, Note 13, and Note 14 to the consolidated financial statements, as to which the date is June 15, 2020
We have served as the Company's auditor since 2019.
SNOWFLAKE INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
Pro Forma
July 31, 2020
|
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
116,541
|
|
|
$
|
127,206
|
|
|
$
|
138,900
|
|
|
|
|
Short-term investments
|
492,257
|
|
|
306,844
|
|
|
451,976
|
|
|
|
|
Accounts receivable, net
|
63,359
|
|
|
179,459
|
|
|
151,210
|
|
|
|
|
Deferred commissions, current
|
11,607
|
|
|
26,358
|
|
|
26,279
|
|
|
|
|
Prepaid expenses and other current assets
|
15,188
|
|
|
25,327
|
|
|
25,083
|
|
|
|
|
Total current assets
|
698,952
|
|
|
665,194
|
|
|
793,448
|
|
|
|
|
Long-term investments
|
—
|
|
|
23,532
|
|
|
295,944
|
|
|
|
|
Property and equipment, net
|
7,215
|
|
|
27,136
|
|
|
42,766
|
|
|
|
|
Operating lease right-of-use assets
|
15,541
|
|
|
195,976
|
|
|
187,051
|
|
|
|
|
Goodwill
|
—
|
|
|
7,049
|
|
|
8,449
|
|
|
|
|
Intangible assets, net
|
20
|
|
|
4,795
|
|
|
15,695
|
|
|
|
|
Deferred commissions, non-current
|
32,658
|
|
|
69,516
|
|
|
69,795
|
|
|
|
|
Other assets
|
9,902
|
|
|
19,522
|
|
|
24,093
|
|
|
|
|
TOTAL ASSETS
|
$
|
764,288
|
|
|
$
|
1,012,720
|
|
|
$
|
1,437,241
|
|
|
|
|
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
8,258
|
|
|
$
|
8,488
|
|
|
$
|
7,713
|
|
|
|
|
Accrued expenses and other current liabilities
|
28,510
|
|
|
62,817
|
|
|
79,157
|
|
|
|
|
Operating lease liabilities, current
|
4,117
|
|
|
18,092
|
|
|
17,204
|
|
|
|
|
Deferred revenue, current
|
104,020
|
|
|
327,058
|
|
|
373,585
|
|
|
|
|
Total current liabilities
|
144,905
|
|
|
416,455
|
|
|
477,659
|
|
|
|
|
Operating lease liabilities, non-current
|
12,543
|
|
|
193,175
|
|
|
184,255
|
|
|
|
|
Deferred revenue, non-current
|
2,984
|
|
|
2,907
|
|
|
3,135
|
|
|
|
|
Other liabilities
|
5,470
|
|
|
8,466
|
|
|
8,544
|
|
|
|
|
Total liabilities
|
165,902
|
|
|
621,003
|
|
|
673,593
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES (NOTE 9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
Pro Forma
July 31, 2020
|
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
REDEEMABLE CONVERTIBLE PREFERRED STOCK:
|
|
|
|
|
|
|
|
|
Redeemable convertible preferred stock; $0.0001 par value per share; 169,581,486, 169,921,272, and 182,271,099 shares authorized as of January 31, 2019, January 31, 2020, and July 31, 2020 (unaudited), respectively; 168,309,042, 169,921,272, and 182,271,099 shares issued and outstanding as of January 31, 2019, January 31, 2020, and July 31, 2020 (unaudited), respectively; aggregate liquidation preference of $911,268, $935,389, and $1,414,192 as of January 31, 2019, January 31, 2020, and July 31, 2020 (unaudited), respectively; no shares issued and outstanding as of July 31, 2020, pro forma (unaudited)
|
910,853
|
|
|
936,474
|
|
|
1,415,047
|
|
|
$
|
—
|
|
|
STOCKHOLDERS’ (DEFICIT) EQUITY:
|
|
|
|
|
|
|
|
|
Class A common stock; $0.0001 par value per share; 2,000 shares authorized as of January 31, 2019, January 31, 2020, and July 31, 2020 (unaudited); no shares issued and outstanding as of January 31, 2019, January 31, 2020, and July 31, 2020 (unaudited); no shares issued and outstanding as of July 31, 2020, pro forma (unaudited)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Class B common stock, $0.0001 par value per share; 312,000,000, 312,000,000, and 354,136,000 shares authorized as of January 31, 2019, January 31, 2020, and July 31, 2020 (unaudited), respectively; 45,559,637, 55,452,421, and 62,257,063 shares issued and outstanding as of January 31, 2019, January 31, 2020, and July 31, 2020 (unaudited), respectively; 244,528,162 shares issued and outstanding as of July 31, 2020, pro forma (unaudited)
|
5
|
|
|
6
|
|
|
6
|
|
|
24
|
|
|
Additional paid-in capital
|
39,296
|
|
|
155,340
|
|
|
219,046
|
|
|
1,663,208
|
|
|
Accumulated other comprehensive income
|
16
|
|
|
216
|
|
|
1,146
|
|
|
1,146
|
|
|
Accumulated deficit
|
(351,784)
|
|
|
(700,319)
|
|
|
(871,597)
|
|
|
(900,730)
|
|
|
Total stockholders’ (deficit) equity
|
(312,467)
|
|
|
(544,757)
|
|
|
(651,399)
|
|
|
$
|
763,648
|
|
|
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ DEFICIT
|
$
|
764,288
|
|
|
$
|
1,012,720
|
|
|
$
|
1,437,241
|
|
|
|
See accompanying notes to consolidated financial statements.
SNOWFLAKE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Revenue
|
$
|
96,666
|
|
|
$
|
264,748
|
|
|
$
|
104,044
|
|
|
$
|
241,960
|
|
|
Cost of revenue
|
51,753
|
|
|
116,557
|
|
|
52,546
|
|
|
93,003
|
|
|
Gross profit
|
44,913
|
|
|
148,191
|
|
|
51,498
|
|
|
148,957
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing
|
125,642
|
|
|
293,577
|
|
|
137,465
|
|
|
190,540
|
|
|
Research and development
|
68,681
|
|
|
105,160
|
|
|
47,782
|
|
|
69,811
|
|
|
General and administrative
|
36,055
|
|
|
107,542
|
|
|
49,095
|
|
|
62,692
|
|
|
Total operating expenses
|
230,378
|
|
|
506,279
|
|
|
234,342
|
|
|
323,043
|
|
|
Operating loss
|
(185,465)
|
|
|
(358,088)
|
|
|
(182,844)
|
|
|
(174,086)
|
|
|
Interest income
|
8,759
|
|
|
11,551
|
|
|
6,761
|
|
|
4,137
|
|
|
Other expense, net
|
(502)
|
|
|
(1,005)
|
|
|
(779)
|
|
|
(1,042)
|
|
|
Loss before income taxes
|
(177,208)
|
|
|
(347,542)
|
|
|
(176,862)
|
|
|
(170,991)
|
|
|
Provision for income taxes
|
820
|
|
|
993
|
|
|
362
|
|
|
287
|
|
|
Net loss
|
$
|
(178,028)
|
|
|
$
|
(348,535)
|
|
|
$
|
(177,224)
|
|
|
$
|
(171,278)
|
|
|
Net loss per share attributable to common stockholders – basic and diluted
|
$
|
(4.67)
|
|
|
$
|
(7.77)
|
|
|
$
|
(4.25)
|
|
|
$
|
(3.01)
|
|
|
Weighted-average shares used in computing net loss per share attributable to common stockholders – basic and diluted
|
38,162,228
|
|
|
44,847,442
|
|
|
41,691,615
|
|
|
56,809,625
|
|
|
Pro forma net loss per share attributable to common stockholders – basic and diluted (unaudited)
|
|
|
$
|
(1.63)
|
|
|
|
|
$
|
(0.72)
|
|
|
Weighted-average shares used in computing pro forma net loss per share attributable to common stockholders – basic and diluted (unaudited)
|
|
|
214,327,427
|
|
|
|
|
238,369,506
|
|
See accompanying notes to consolidated financial statements.
SNOWFLAKE INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Net loss
|
$
|
(178,028)
|
|
|
$
|
(348,535)
|
|
|
$
|
(177,224)
|
|
|
$
|
(171,278)
|
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
Change in unrealized gains on investments, net of tax
|
40
|
|
|
200
|
|
|
68
|
|
|
930
|
|
|
Comprehensive loss
|
$
|
(177,988)
|
|
|
$
|
(348,335)
|
|
|
$
|
(177,156)
|
|
|
$
|
(170,348)
|
|
See accompanying notes to consolidated financial statements.
SNOWFLAKE INC.
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Convertible Preferred Stock
|
|
|
|
|
Class A and Class B
Common Stock
|
|
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Deficit
|
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
|
|
BALANCES—February 1, 2018
|
138,947,468
|
|
|
$
|
472,626
|
|
|
|
45,327,678
|
|
|
$
|
5
|
|
|
$
|
11,863
|
|
|
$
|
(24)
|
|
|
$
|
(143,736)
|
|
|
$
|
(131,892)
|
|
|
Effect of adoption of ASU 2018-07
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
377
|
|
|
—
|
|
|
(377)
|
|
|
—
|
|
|
Issuance of Series E redeemable convertible preferred stock at $7.4617 per share
|
134,018
|
|
|
1,000
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Issuance of Series F redeemable convertible preferred stock at $14.96125 per share, net of issuance costs of $53
|
29,227,556
|
|
|
437,227
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Issuance of common stock upon exercise of stock options
|
—
|
|
|
—
|
|
|
|
5,292,551
|
|
|
1
|
|
|
2,263
|
|
|
—
|
|
|
—
|
|
|
2,264
|
|
|
Repurchases and retirement of common stock in connection with issuer tender offers
|
—
|
|
|
—
|
|
|
|
(6,010,592)
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
(29,643)
|
|
|
(29,644)
|
|
|
Issuance of restricted common stock
|
—
|
|
|
—
|
|
|
|
950,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Vesting of early exercised stock options and restricted common stock
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
1,807
|
|
|
—
|
|
|
—
|
|
|
1,807
|
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
22,986
|
|
|
—
|
|
|
—
|
|
|
22,986
|
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(178,028)
|
|
|
(178,028)
|
|
|
BALANCES—January 31, 2019
|
168,309,042
|
|
|
910,853
|
|
|
|
45,559,637
|
|
|
5
|
|
|
39,296
|
|
|
16
|
|
|
(351,784)
|
|
|
(312,467)
|
|
|
Issuance of Series F redeemable convertible preferred stock at $14.96125 per share
|
1,612,230
|
|
|
24,121
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Issuance of common stock upon exercise of stock options
|
—
|
|
|
—
|
|
|
|
9,735,006
|
|
|
1
|
|
|
27,525
|
|
|
—
|
|
|
—
|
|
|
27,526
|
|
|
Repurchase of early exercised stock options and restricted common stock
|
—
|
|
|
—
|
|
|
|
(520,557)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Vesting of early exercised stock options and restricted common stock
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
5,791
|
|
|
—
|
|
|
—
|
|
|
5,791
|
|
|
Issuance of restricted common stock
|
—
|
|
|
—
|
|
|
|
16,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Issuance of common stock in connection with an acquisition
|
—
|
|
|
—
|
|
|
|
661,635
|
|
|
—
|
|
|
4,749
|
|
|
—
|
|
|
—
|
|
|
4,749
|
|
|
Stock-based compensation
|
—
|
|
|
1,500
|
|
|
|
—
|
|
|
—
|
|
|
77,979
|
|
|
—
|
|
|
—
|
|
|
77,979
|
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
200
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(348,535)
|
|
|
(348,535)
|
|
|
BALANCES—January 31, 2020
|
169,921,272
|
|
|
$
|
936,474
|
|
|
|
55,452,421
|
|
|
$
|
6
|
|
|
$
|
155,340
|
|
|
$
|
216
|
|
|
$
|
(700,319)
|
|
|
$
|
(544,757)
|
|
SNOWFLAKE INC.
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT (CONTINUED)
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Convertible Preferred Stock
|
|
|
|
|
Class A and Class B
Common Stock
|
|
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Deficit
|
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
|
|
BALANCES—January 31, 2019
|
168,309,042
|
|
|
$
|
910,853
|
|
|
|
45,559,637
|
|
|
$
|
5
|
|
|
$
|
39,296
|
|
|
$
|
16
|
|
|
$
|
(351,784)
|
|
|
$
|
(312,467)
|
|
|
Issuance of Series F redeemable convertible preferred stock at $14.96125 per share (unaudited)
|
850,118
|
|
|
12,719
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Issuance of common stock upon exercise of stock options (unaudited)
|
—
|
|
|
—
|
|
|
|
2,331,930
|
|
|
—
|
|
|
2,935
|
|
|
—
|
|
|
—
|
|
|
2,935
|
|
|
Repurchases of early exercised stock options and restricted common stock (unaudited)
|
—
|
|
|
—
|
|
|
|
(475,349)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Vesting of early exercised stock options and restricted common stock (unaudited)
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
1,036
|
|
|
—
|
|
|
—
|
|
|
1,036
|
|
|
Issuance of restricted common stock (unaudited)
|
—
|
|
|
—
|
|
|
|
16,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Issuance of common stock in connection with an acquisition (unaudited)
|
—
|
|
|
—
|
|
|
|
661,635
|
|
|
—
|
|
|
4,749
|
|
|
—
|
|
|
—
|
|
|
4,749
|
|
|
Stock-based compensation (unaudited)
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
34,919
|
|
|
—
|
|
|
—
|
|
|
34,919
|
|
|
Other comprehensive income (unaudited)
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
68
|
|
|
Net loss (unaudited)
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(177,224)
|
|
|
(177,224)
|
|
|
BALANCES—July 31, 2019 (unaudited)
|
169,159,160
|
|
|
$
|
923,572
|
|
|
|
48,094,553
|
|
|
$
|
5
|
|
|
$
|
82,935
|
|
|
$
|
84
|
|
|
$
|
(529,008)
|
|
|
$
|
(445,984)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Convertible Preferred Stock
|
|
|
|
|
Class A and Class B
Common Stock
|
|
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Deficit
|
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
|
|
BALANCES—January 31, 2020
|
169,921,272
|
|
|
$
|
936,474
|
|
|
|
55,452,421
|
|
|
$
|
6
|
|
|
$
|
155,340
|
|
|
$
|
216
|
|
|
$
|
(700,319)
|
|
|
$
|
(544,757)
|
|
|
Issuance of Series G-1 and Series G-2 redeemable convertible preferred stock at $38.77 per share, net of issuance costs of $230 (unaudited)
|
12,349,827
|
|
|
478,573
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Issuance of common stock upon exercise of stock options (unaudited)
|
—
|
|
|
—
|
|
|
|
6,844,642
|
|
|
—
|
|
|
20,736
|
|
|
—
|
|
|
—
|
|
|
20,736
|
|
|
Repurchase of early exercised stock options (unaudited)
|
—
|
|
|
—
|
|
|
|
(40,000)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Vesting of early exercised stock options and restricted common stock (unaudited)
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
3,585
|
|
|
—
|
|
|
—
|
|
|
3,585
|
|
|
Stock-based compensation (unaudited)
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
39,385
|
|
|
—
|
|
|
—
|
|
|
39,385
|
|
|
Other comprehensive income (unaudited)
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
930
|
|
|
—
|
|
|
930
|
|
|
Net loss (unaudited)
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(171,278)
|
|
|
(171,278)
|
|
|
BALANCES—July 31, 2020 (unaudited)
|
182,271,099
|
|
|
$
|
1,415,047
|
|
|
|
62,257,063
|
|
|
$
|
6
|
|
|
$
|
219,046
|
|
|
$
|
1,146
|
|
|
$
|
(871,597)
|
|
|
$
|
(651,399)
|
|
See accompanying notes to consolidated financial statements.
SNOWFLAKE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(178,028)
|
|
|
$
|
(348,535)
|
|
|
$
|
(177,224)
|
|
|
$
|
(171,278)
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
1,362
|
|
|
3,522
|
|
|
1,364
|
|
|
3,762
|
|
|
Non-cash operating lease costs
|
3,172
|
|
|
27,712
|
|
|
11,956
|
|
|
16,337
|
|
|
Amortization of deferred commissions
|
5,674
|
|
|
16,986
|
|
|
6,892
|
|
|
14,066
|
|
|
Stock-based compensation, net of amounts capitalized
|
22,409
|
|
|
78,399
|
|
|
34,467
|
|
|
38,649
|
|
|
Net (accretion) amortization of (discounts) premiums on investments
|
(5,011)
|
|
|
(5,459)
|
|
|
(4,243)
|
|
|
226
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
221
|
|
|
1,476
|
|
|
947
|
|
|
4,049
|
|
|
Changes in operating assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
(51,421)
|
|
|
(116,869)
|
|
|
(44,672)
|
|
|
27,129
|
|
|
Deferred commissions
|
(36,344)
|
|
|
(68,595)
|
|
|
(19,280)
|
|
|
(14,266)
|
|
|
Prepaid expenses and other assets
|
(9,091)
|
|
|
(10,811)
|
|
|
(5,285)
|
|
|
(1,452)
|
|
|
Accounts payable
|
5,170
|
|
|
1,116
|
|
|
4,000
|
|
|
(2,843)
|
|
|
Accrued expenses and other liabilities
|
20,811
|
|
|
34,994
|
|
|
9,477
|
|
|
10,993
|
|
|
Operating lease liabilities
|
(2,537)
|
|
|
(13,455)
|
|
|
2,566
|
|
|
(17,404)
|
|
|
Deferred revenue
|
79,631
|
|
|
222,961
|
|
|
69,019
|
|
|
46,755
|
|
|
Net cash used in operating activities
|
(143,982)
|
|
|
(176,558)
|
|
|
(110,016)
|
|
|
(45,277)
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
(2,058)
|
|
|
(18,583)
|
|
|
(11,347)
|
|
|
(6,748)
|
|
|
Capitalized internal-use software development costs
|
(1,958)
|
|
|
(4,265)
|
|
|
(1,621)
|
|
|
(3,170)
|
|
|
Cash paid for acquisitions, net of cash acquired
|
—
|
|
|
(6,314)
|
|
|
(6,314)
|
|
|
(6,035)
|
|
|
Purchases of intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,184)
|
|
|
Purchases of investments
|
(738,383)
|
|
|
(622,854)
|
|
|
(320,645)
|
|
|
(612,635)
|
|
|
Sales of investments
|
—
|
|
|
14,087
|
|
|
—
|
|
|
3,510
|
|
|
Maturities and redemptions of investments
|
379,757
|
|
|
776,424
|
|
|
474,878
|
|
|
189,859
|
|
|
Net cash (used in) provided by investing activities
|
(362,642)
|
|
|
138,495
|
|
|
134,951
|
|
|
(441,403)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs
|
438,227
|
|
|
24,121
|
|
|
12,719
|
|
|
478,573
|
|
|
Proceeds from early exercised stock options
|
2,754
|
|
|
6,213
|
|
|
564
|
|
|
159
|
|
|
Proceeds from exercise of stock options
|
2,264
|
|
|
27,526
|
|
|
2,936
|
|
|
20,736
|
|
|
Proceeds from repayment of a nonrecourse promissory note
|
—
|
|
|
—
|
|
|
—
|
|
|
2,090
|
|
|
Repurchases of common stock in connection with issuer tender offers
|
(29,644)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Repurchases of early exercised stock options and restricted common stock
|
—
|
|
|
(391)
|
|
|
(328)
|
|
|
(30)
|
|
|
Payments of deferred offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,336)
|
|
|
Payment of deferred purchase consideration for an acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
(600)
|
|
|
Net cash provided by financing activities
|
413,601
|
|
|
57,469
|
|
|
15,891
|
|
|
498,592
|
|
|
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
(93,023)
|
|
|
19,406
|
|
|
40,826
|
|
|
11,912
|
|
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period
|
215,593
|
|
|
122,570
|
|
|
122,570
|
|
|
141,976
|
|
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period
|
$
|
122,570
|
|
|
$
|
141,976
|
|
|
$
|
163,396
|
|
|
$
|
153,888
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
Cash paid for income taxes
|
$
|
235
|
|
|
$
|
1,428
|
|
|
$
|
541
|
|
|
$
|
369
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment included in accounts payable and accrued expenses
|
$
|
1,072
|
|
|
$
|
589
|
|
|
$
|
3,163
|
|
|
$
|
8,349
|
|
|
Unpaid deferred offering costs
|
$
|
—
|
|
|
$
|
173
|
|
|
$
|
—
|
|
|
$
|
495
|
|
|
|
|
|
|
|
|
|
|
|
Vesting of early exercised stock options and restricted common stock
|
$
|
1,807
|
|
|
$
|
5,791
|
|
|
$
|
1,036
|
|
|
$
|
1,495
|
|
|
Deferred purchase consideration for acquisitions
|
$
|
—
|
|
|
$
|
1,164
|
|
|
$
|
1,164
|
|
|
$
|
1,065
|
|
|
Equity consideration in connection with an acquisition
|
$
|
—
|
|
|
$
|
4,749
|
|
|
$
|
4,749
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
SNOWFLAKE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Description of Business
Description of Business
Snowflake Inc. (Snowflake or the Company) provides a cloud-based data platform, which enables customers to consolidate data to drive meaningful business insights, build data-driven applications, and share data. The Company delivers its platform through a customer-centric, consumption-based business model, only charging customers for the resources they use. The platform enables the Data Cloud, an ecosystem where Snowflake customers, partners, and data providers can break down data silos and benefit from rapidly growing data sets in a secure, governed, and compliant manner. Snowflake was incorporated in the state of Delaware on July 23, 2012 and is headquartered in San Mateo, California with various other global office locations.
2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
Fiscal Year
The Company’s fiscal year ends on January 31. For example, references to fiscal 2019 and 2020 refer to the fiscal year ended January 31, 2019 and January 31, 2020, respectively.
Principles of Consolidation
The consolidated financial statements include the accounts of Snowflake Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Stock Split
In November 2018, a 2-for-1 forward stock split of the Company’s then-outstanding common stock and redeemable convertible preferred stock was effected without any change in the par value per share. All information related to the Company’s common stock, redeemable convertible preferred stock, and stock awards has been retroactively adjusted to give effect to the 2-for-1 forward stock split.
Segment Information
The Company has a single operating and reportable segment. The Company’s chief operating decision maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. For information regarding the Company’s long-lived assets and revenue by geographic area, see Note 14.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates include stand-alone selling prices (SSP) for each distinct performance obligation, internal-use software development costs, expected period of benefit for deferred commissions, the useful lives of long-lived assets, the carrying value of operating lease right-of-use assets, valuation of the Company’s common stock, stock-based compensation, and accounting for income taxes.
The Company bases its estimates on historical experience and also on assumptions that management considers reasonable. The Company assesses these estimates on a regular basis; however, actual results could differ from these estimates.
The World Health Organization declared in March 2020 that the recent outbreak of the coronavirus disease (COVID-19) constituted a pandemic. The COVID-19 pandemic has caused general business disruption worldwide beginning in January 2020. While the Company has experienced and may continue to experience a modest adverse impact on certain parts of its business, including a lengthening in the sales cycle for some prospective customers and delays in the delivery of professional services and trainings to customers, the Company’s results of operations, cash flows, and financial condition have not been adversely impacted to date. However, as certain customers or partners experience downturns or uncertainty in their own business operations or revenue resulting from the spread of COVID-19, they may continue to decrease or delay their spending, request pricing discounts, or seek renegotiations of their contracts, any of which may result in decreased revenue and cash receipts for the Company. In addition, the Company may experience customer losses, including due to bankruptcy or customers ceasing operations, which may result in an inability to collect accounts receivable from these customers. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations, cash flows, and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted.
The global impact of COVID-19 continues to rapidly evolve, and the Company will continue to monitor the situation and the effects on its business and operations closely. The Company does not yet know the full extent of potential impacts on its business or operations or on the global economy as a whole, particularly if the COVID-19 pandemic continues and persists for an extended period of time. Given the uncertainty, the Company cannot reasonably estimate the impact on its future results of operations, cash flows, or financial condition. As of the date of issuance of the consolidated financial statements, the Company is not aware of any specific event or circumstance that would require it to update its estimates, judgments or the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to the Company’s consolidated financial statements.
Unaudited Interim Consolidated Financial Information
The accompanying interim consolidated balance sheet as of July 31, 2020, the interim consolidated statements of operations, of comprehensive loss, of cash flows, and of redeemable convertible preferred stock and stockholders’ deficit for the six months ended July 31, 2019 and 2020, and the related notes to such interim consolidated financial statements are unaudited. These unaudited interim consolidated financial statements are presented in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the SEC) and do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. In management’s opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of July 31, 2020 and the results of operations and cash flows for the six months ended July 31, 2019 and 2020. The results of operations for the six months ended July 31, 2020 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual period.
Unaudited Pro Forma Balance Sheet and Pro Forma Net Loss Per Share
Immediately prior to the consummation of a qualifying initial public offering (IPO), as defined in Note 10, all of the outstanding shares of the Company’s redeemable convertible preferred stock will automatically convert into 182,271,099 shares of Class B common stock. The unaudited pro forma balance sheet as of July 31, 2020 has been computed to give effect to the automatic conversion of the redeemable convertible preferred stock as though the conversion and reclassification had occurred on July 31, 2020.
During the six months ended July 31, 2020, the Company issued restricted stock units (RSUs) to its employees and directors with both service-based and performance-based vesting conditions. The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter, although a small portion of the Company’s RSUs are not subject to a one-year cliff vesting period and are subject only to quarterly vesting. The performance-based vesting condition is satisfied on the earlier of (i) the effective date of a registration statement of the Company filed under the Securities Act for the sale of the Company’s common stock or (ii) immediately prior to the closing of a change in control of the Company. None of the RSUs vest unless
the performance-based vesting condition is satisfied. Both events are not deemed probable until consummated; therefore, all stock-based compensation expense related to these RSUs remained unrecognized as of July 31, 2020.
The satisfaction of the performance-based vesting condition will be achieved upon the effective date of the Company’s registration statement, at which point the Company will record stock-based compensation expense for these RSUs using the accelerated attribution method. The remaining unrecognized stock-based compensation expense related to the RSUs will be recognized over the remaining requisite service period. Accordingly, the unaudited pro forma balance sheet information as of July 31, 2020 gives effect to stock-based compensation expense of $29.1 million for which the service-based vesting condition was fully or partially satisfied as of July 31, 2020. This pro forma adjustment is reflected as an increase in additional paid-in capital and accumulated deficit. The unaudited pro forma balance sheet does not give effect to the issuance of Class B common stock upon the vesting and settlement of RSUs that satisfied the service-based vesting condition as of July 31, 2020 as the amount is not material.
The shares of Class A common stock issuable and the proceeds expected to be received in a qualifying IPO are excluded from such pro forma information.
The unaudited pro forma basic and diluted net loss per share for the fiscal year ended January 31, 2020 and six months ended July 31, 2020 is computed to give effect to the conversion of the Company’s redeemable convertible preferred stock into Class B common stock as though the conversion had occurred as of the beginning of the period or on the date of issuance, if later. The vesting of RSUs with both service-based and performance-based vesting conditions has been excluded from the pro forma basic and diluted net loss per share calculations as the amounts are not material to the calculations. The stock-based compensation expense associated with these RSUs is also excluded from pro forma basic and diluted net loss per share as it is not expected to have a recurring impact on the Company’s consolidated financial statements.
Foreign Currency
The reporting currency of the Company is the United States dollar. The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. Accordingly, each foreign subsidiary remeasures monetary assets and liabilities at period-end exchange rates, while nonmonetary items are remeasured at historical rates. The Company derives all revenues in U.S. dollars. Expenses are remeasured at the exchange rates in effect on the day the transaction occurred, except for those expenses related to non-monetary assets and liabilities, which are remeasured at historical exchange rates. Remeasurement adjustments are recognized in other income (expense), net in the consolidated statements of operations, and have not been material for the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020 (unaudited).
Revenue Recognition
The Company accounts for revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue From Contracts With Customers (ASC 606) for all periods presented.
The Company delivers its platform over the internet as a service. Customers choose to consume the platform under either capacity arrangements, in which customers commit to a certain amount of consumption at specified prices, or under on-demand arrangements, in which the Company charges for use of the platform monthly in arrears. Under capacity arrangements, from which a majority of revenue is derived, the Company typically bills its customers annually in advance of their consumption. Revenue from on-demand arrangements typically relates to initial consumption as part of customer onboarding and, to a lesser extent, overage consumption beyond a customer’s contracted usage amount or following the expiration of a customer’s contract. Revenue from on-demand arrangements represented less than 10% of the Company’s revenue for the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020 (unaudited). The Company recognizes revenue as customers consume compute, storage, and data transfer resources under either of these arrangements. In limited instances, customers pay an annual deployment fee to gain access to a dedicated instance of a virtual private deployment. Deployment fees are recognized ratably over the contract term.
Customers do not have the contractual right to take possession of the Company’s platform. Pricing for the platform includes embedded support services, data backup and disaster recovery services, as well as future updates, when and if available, offered during the contract term.
Customer contracts for capacity typically have a one-year term. To the extent customers enter into such contracts and either consume the platform in excess of their capacity commitments or continue to use the platform after expiration of the contract term, they are charged for their incremental consumption. In many cases, customer contracts permit customers to roll over any unused capacity to a subsequent order, generally on the purchase of additional capacity. Customer contracts are generally non-cancelable during the contract term, although customers can terminate for breach if the Company materially fails to perform. For those customers who do not have a capacity arrangement, the Company’s on-demand arrangements generally have a monthly stated contract term and can be terminated at any time by either the customer or the Company.
For storage resources, consumption for a given customer is based on the average terabytes per month of all of such customer’s data stored in the platform. For compute resources, consumption is based on the type of compute resource used and the duration of use or, for some features, the volume of data processed. For data transfer resources, consumption is based on terabytes of data transferred, the public cloud provider used, and the region to and from which the transfer is executed.
The Company’s revenue also includes professional services and other revenue, which consists of consulting, on-site technical solution services and training related to the platform. Professional services revenue is recognized over time based on input measures, including time and materials costs incurred relative to total costs, with consideration given to output measures, such as contract deliverables, when applicable. Other revenue consists of fees from customer training delivered on-site or through publicly available classes. Professional services and other revenue were not material for the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020 (unaudited).
The Company determines revenue recognition in accordance with ASC 606 through the following five steps:
1) Identify the contract with a customer. The Company considers the terms and conditions of the contracts and the Company’s customary business practices in identifying its contracts under ASC 606. The Company determines it has a contract with a customer when the contract has been approved by both parties, it can identify each party’s rights regarding the services to be transferred and the payment terms for the services, it has determined the customer to have the ability and intent to pay, and the contract has commercial substance. At contract inception, the Company evaluates whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s payment history or, in the case of a new customer, credit and financial information pertaining to the customer.
2) Identify the performance obligations in the contract. Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. The Company treats consumption of its platform for compute, storage, and data transfer resources as one single performance obligation because they are consumed by customers as a single, integrated offering. The Company does not make any one of these resources available for consumption without the others. Instead, each of compute, storage, and data transfer work together to drive consumption on the Company’s platform. The Company treats its virtual private deployments for customers, professional services, on-site technical solution services, and training each as a separate and distinct performance obligation. Some customers have negotiated an option to purchase additional capacity at a stated discount. These options generally do not provide a material right as they are priced at the Company’s SSP, as described below, as the stated discounts are not incremental to the range of discounts typically given.
3) Determine the transaction price. The transaction price is determined based on the consideration the Company expects to receive in exchange for transferring services to the customer. Variable
consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue recognized under the contract will not occur. None of the Company’s contracts contain a significant financing component. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental entities (e.g., sales and other indirect taxes).
4) Allocate the transaction price to performance obligations in the contract. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative SSP. The determination of a relative SSP for each distinct performance obligation requires judgment. The Company determines SSP for performance obligations based on overall pricing objectives, which take into consideration market conditions and customer-specific factors, including a review of internal discounting tables, the services being sold, the volume of capacity commitments, and other factors.
5) Recognize revenue when or as the Company satisfies a performance obligation. Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised service to a customer. Revenue is recognized when control of the services is transferred to the customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company determined an output method to be the most appropriate measure of progress because it most faithfully represents when the value of the services is simultaneously received and consumed by the customer, and control is transferred. Virtual private deployment fees are recognized ratably over the term of the deployment as the deployment service represents a stand-ready performance obligation provided throughout the deployment term.
Revenue consists of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Product revenue
|
$
|
95,683
|
|
|
$
|
252,229
|
|
|
$
|
100,584
|
|
|
$
|
227,033
|
|
|
Professional services and other revenue
|
983
|
|
|
12,519
|
|
|
3,460
|
|
|
14,927
|
|
|
Total
|
$
|
96,666
|
|
|
$
|
264,748
|
|
|
$
|
104,044
|
|
|
$
|
241,960
|
|
Allocation of Overhead Costs
Overhead costs that are not substantially dedicated for use by a specific functional group are allocated based on headcount. Such costs include costs associated with office facilities, depreciation of property and equipment, and IT-related personnel and other expenses, such as software and subscription services.
Cost of Revenue
Cost of revenue consists primarily of third-party cloud infrastructure expenses incurred in connection with the customers’ use of the Snowflake platform and deploying and maintaining the platform on public clouds, including different regional deployments, personnel-related costs associated with the Company’s customer support team, engineering team that is responsible for maintaining the Company's service, and professional services and training departments, including salaries, benefits, bonuses, and stock-based compensation, and costs of contracted third-party partners for professional services. Cost of revenue also includes amortization of internal-use software development costs, amortization of acquired developed technology intangible assets, expenses associated with software and subscription services dedicated for use by the Company’s customer support team and engineering team responsible for maintaining the Company's service, and allocated overhead.
Research and Development Costs
Research and development costs are expensed as incurred, unless they qualify as internal-use software development costs. Research and development expenses consist primarily of personnel-related expenses associated with the Company’s research and development staff, including salaries, benefits, bonuses, and stock-based compensation. Research and development expenses also include contractor
or professional services fees, third-party cloud infrastructure expenses incurred in developing the Company’s platform, computer equipment, software and subscription services dedicated for use by the Company’s research and development organization, and allocated overhead.
Advertising Costs
Advertising costs are expensed as incurred and are included in sales and marketing expenses in the consolidated statements of operations. These costs were $10.9 million and $29.7 million for the fiscal years ended January 31, 2019 and 2020, respectively.
Income Taxes
The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining its provision for income taxes and deferred tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.
The Company records a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, the Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts for financial reporting purposes and the tax bases of assets and liabilities, as well as for loss and tax credit carryforwards. The deferred assets and liabilities are measured using the statutorily enacted tax rates anticipated to be in effect when those tax assets and liabilities are expected to be realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.
A valuation allowance is established if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income in assessing the need for a valuation allowance.
The Company’s tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not the position will be sustainable upon examination by the taxing authority, including resolution of any related appeals or litigation processes. This evaluation is based on all available evidence and assumes that the tax authorities have full knowledge of all relevant information concerning the tax position. The tax benefit recognized is measured as the largest amount of benefit which is more likely than not (greater than 50% likely) to be realized upon ultimate settlement with the taxing authority. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in income tax expense. The Company makes adjustments to these reserves in accordance with the income tax guidance when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on the Company’s financial condition and operating results.
Stock-Based Compensation
The Company measures and recognizes compensation expense for all stock-based awards, including stock options, restricted stock awards, and RSUs granted to employees, directors, and non-employees, based on the estimated fair value of the awards on the date of grant. The fair value of each stock option granted is estimated using the Black-Scholes option-pricing model. The determination of the grant-date fair value using an option-pricing model is affected by the estimated fair value of the Company’s common stock as well as assumptions regarding a number of other complex and subjective variables. These variables include expected stock price volatility over the expected term of the award, actual and projected employee stock option exercise behaviors, the risk-free interest rate for the expected term of the award, and expected dividends. Stock-based compensation is generally recognized on a straight-line basis over the requisite service period. The Company also grants certain awards that have performance-based vesting conditions. Stock-based compensation expense for such awards is recognized using an accelerated attribution method from the time it is deemed probable that the vesting condition will be met through the time the service-based vesting condition has been achieved. If an award contains a provision whereby vesting is accelerated upon a change in control, the Company recognizes stock-based
compensation expense on a straight-line basis, as a change in control is considered to be outside of the Company’s control and is not considered probable until it occurs. Forfeitures are accounted for in the period in which they occur.
Net Loss Per Share Attributable to Common Stockholders
Basic and diluted net loss per share attributable to common stockholders is computed in conformity with the two-class method required for participating securities. The Company considers all series of its redeemable convertible preferred stock and unvested common stock to be participating securities as the holders of such stock have the right to receive nonforfeitable dividends on a pari passu basis in the event that a dividend is paid on common stock. Under the two-class method, the net loss attributable to common stockholders is not allocated to the redeemable convertible preferred stock as the preferred stockholders do not have a contractual obligation to share in the Company’s losses.
Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive common stock equivalents to the extent they are dilutive. For purposes of this calculation, redeemable convertible preferred stock, stock options, restricted stock awards, early exercised stock options, and common stock warrants are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for all periods presented.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original or remaining maturities of three months or less when purchased to be cash equivalents.
Restricted Cash
Restricted cash primarily consists of collateralized letters of credit established in connection with lease agreements for the Company’s facilities. Restricted cash is included in current assets for leases that expire within one year and is included in non-current assets for leases that expire more than one year from the balance sheet date.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 1,
|
|
January 31,
|
|
|
|
July 31,
|
|
|
|
|
2018
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Cash and cash equivalents
|
$
|
214,698
|
|
|
$
|
116,541
|
|
|
$
|
127,206
|
|
|
$
|
148,774
|
|
|
$
|
138,900
|
|
|
Restricted cash – included in prepaid expenses and other current assets and other assets
|
895
|
|
|
6,029
|
|
|
14,770
|
|
|
14,622
|
|
|
14,988
|
|
|
Total cash, cash equivalents, and restricted cash
|
$
|
215,593
|
|
|
$
|
122,570
|
|
|
$
|
141,976
|
|
|
$
|
163,396
|
|
|
$
|
153,888
|
|
Investments
The Company determines the appropriate classification of its investments at the time of purchase and reevaluates such determination at each balance sheet date based on their maturities and the Company’s reasonable expectation with regard to those securities (i.e., expectations of sales and redemptions). All investments are classified as available-for-sale and are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive income. The Company evaluates its investments to assess whether those with unrealized loss positions are other than temporarily impaired, and considers impairments to be other than temporary if they are related to deterioration in credit risk or if it is more likely than not that the Company will sell the securities before the recovery of their cost basis. If the Company does not intend to sell a security and it is not more likely than not that it will be required to sell the security before recovery, the unrealized loss is separated into an amount representing the credit loss, which is recognized in other income (expense), net, and the amount related to all other factors, which is recorded in accumulated other comprehensive income (loss).
Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net in the consolidated statements of operations.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk primarily consist of cash, cash equivalents, investments, restricted cash, and accounts receivable. The Company maintains its cash, cash equivalents, investments, and restricted cash with high-quality financial institutions with investment-grade ratings. For accounts receivable, the Company is exposed to credit risk in the event of nonpayment by customers to the extent of the amounts recorded on the consolidated balance sheets.
For purposes of assessing concentration of credit risk and significant customers, a group of customers under common control or customers that are affiliates of each other are regarded as a single customer. The Company’s significant customers that represented 10% or more of revenue or accounts receivable, net for the periods presented were as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Accounts Receivable, Net
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
(unaudited)
|
|
Customer A
|
17
|
%
|
|
11
|
%
|
|
14
|
%
|
|
*
|
|
*
|
|
*
|
|
22
|
%
|
|
Customer B
|
*
|
|
*
|
|
*
|
|
*
|
|
11
|
%
|
|
*
|
|
*
|
|
Customer C
|
*
|
|
*
|
|
*
|
|
*
|
|
10
|
%
|
|
*
|
|
*
|
________________
*Less than 10%
Fair Value of Financial Instruments
The Company accounts for certain of its financial assets at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
The carrying amounts reflected in the consolidated balance sheets for accounts receivable, and accounts payable approximate their respective fair values due to the short maturities of those instruments. Available-for-sale debt securities are recorded at fair value on the consolidated balance sheets.
Accounts Receivable
Accounts receivable includes billed and unbilled receivables, net of allowance of doubtful accounts. Trade accounts receivable are recorded at invoiced amounts and do not bear interest. The expectation of collectability is based on a review of credit profiles of customers, contractual terms and conditions, current economic trends, and historical payment experience. The Company regularly reviews the adequacy of the allowance for doubtful accounts by considering the age of each outstanding invoice and the collection history of each customer to determine the appropriate amount of allowance for doubtful accounts. Accounts receivable deemed uncollectible are charged against the allowance for doubtful accounts when identified. Allowance for doubtful accounts was not material as of January 31, 2019 and 2020 and July 31, 2020 (unaudited).
Unbilled accounts receivable represents revenue recognized on contracts for which billings have not yet been presented to customers largely due to overage and on-demand capacity usage, as well as time-and-materials billed in arrears. The unbilled accounts receivable balance is due within one year. As of January 31, 2019 and 2020 and July 31, 2020 (unaudited), unbilled accounts receivable of $0.9 million, $2.0 million, and $2.5 million, respectively, was included in accounts receivable, net on the consolidated balance sheets.
Internal-Use Software Development Costs
The Company capitalizes qualifying internal-use software development costs related to its cloud platform. The costs consist of personnel costs (including related benefits and stock-based compensation) that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (1) the preliminary project stage is completed, and (2) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred.
Capitalized costs are included in property and equipment. These costs are amortized over the estimated useful life of the software, which is three years, on a straight-line basis, which represents the manner in which the expected benefit will be derived. The amortization of costs related to the platform applications is included in cost of revenue in the consolidated statements of operations.
Property and Equipment, Net
Property and equipment, net is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the related asset, ranging from generally three to seven years. Leasehold improvements are amortized over the shorter of estimated useful life or the remaining lease term. Expenses that improve an asset or extend its remaining useful life are capitalized. Costs of maintenance or repairs that do not extend the lives of the respective assets are charged to expenses as incurred.
Deferred Commissions
Sales commissions tied to new customer or customer expansion contracts earned by the Company’s sales force are considered incremental and recoverable costs of obtaining a contract with a customer. These incremental costs are deferred and then amortized over a period of benefit that is determined to be five years. The Company determined the period of benefit by taking into consideration the length of terms in its customer contracts, life of the technology, and other factors. Amounts expected to be recognized within one year of the balance sheet date are recorded as deferred commissions, current, and the remaining portion is recorded as deferred commissions, non-current, on the consolidated balance sheets. Amortization expense is included in sales and marketing expenses in the consolidated statements of operations. As a result of modifications to the Company’s sales compensation plan during the six months ended July 31, 2020 (unaudited), a portion of the sales commissions paid to the sales force is earned based on the rate of the customers’ consumption of the Company’s platform, in addition to a portion of the commissions earned upon the origination of the new customer or customer expansion contract. Sales commissions tied to customers’ consumption are not considered incremental costs and are expensed in the same period as they are earned. Deferred commissions are periodically analyzed for impairment. There were no impairment losses relating to the deferred commissions during the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2020 (unaudited).
Deferred Offering Costs
Deferred offering costs, which consist of direct incremental legal, accounting, and consulting fees relating to the Company’s proposed IPO, are capitalized in other assets on the consolidated balance sheets. The deferred offering costs will be offset against IPO proceeds upon the consummation of an IPO. In the event the planned IPO is terminated, the deferred offering costs will be expensed. There were no material deferred offering costs recorded as of January 31, 2019 and 2020. As of July 31, 2020 (unaudited), there was $2.8 million of deferred offering costs capitalized.
Business Combinations
The Company applies a screen test to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets to determine whether a transaction is accounted for as an asset acquisition or business combination. When the Company acquires a business, the purchase consideration is allocated to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated respective fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The Company’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable, and as a result, actual results may differ from estimates.
Accounting for Impairment of Long-Lived Assets (Including Goodwill and Intangible Assets)
Long-lived assets with finite lives include property and equipment, capitalized development software costs, and acquired intangible assets. The Company evaluates long-lived assets, including acquired intangible assets and capitalized internal-use software development costs, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the asset or asset group.
Goodwill is not amortized but rather tested for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Goodwill impairment is recognized when the quantitative assessment results in the carrying value of the reporting unit exceeding its fair value, in which case an impairment charge is recorded to goodwill to the extent the carrying value exceeds the fair value, limited to the amount of goodwill. The Company did not recognize any impairment of goodwill during the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2020 (unaudited).
Leases
The Company determines if an arrangement is or contains a lease at inception by evaluating various factors, including if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration and other facts and circumstances. Lease classification is determined at the lease commencement date. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, noncurrent on the consolidated balance sheets. The Company did not have any material finance leases during the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2020 (unaudited).
Right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments consist primarily of the fixed payments under the arrangement, less any lease incentives. Variable lease payments are expensed as incurred and include certain non-lease components, such as maintenance and other services provided by the lessor to the extent the charges are variable. The Company uses an estimate of its incremental borrowing rate (IBR) based on the information available at the lease commencement date in determining the present value of lease payments, unless the implicit rate is readily determinable. In determining the appropriate IBR, the Company considers various factors, including, but not limited to, its credit rating, the lease term, and the currency in which the arrangement is denominated. For leases that commenced prior to the Company’s adoption of ASU 2016-02, Leases (Topic 842), the IBR as of February 1, 2018 was used. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The Company does not separate non-lease components from lease components for its facility asset portfolio. In addition, the Company does not recognize right-of-use assets and lease liabilities for short-term leases, which have a lease term of 12 months or less and do not include an option to purchase the
underlying asset that the Company is reasonably certain to exercise. Lease cost for short-term leases is recognized on a straight-line basis over the lease term.
In addition, the Company subleases certain of its unoccupied facilities to third parties. Any impairment to the associated right-of-use assets, leasehold improvements, or other assets as a result of a sublease is recognized in the period the sublease is executed and recorded in the consolidated statements of operations. The Company recognizes sublease income on a straight-line basis over the sublease term.
Deferred Revenue
The Company records deferred revenue when the Company receives customer payments in advance of satisfying the performance obligations on the Company’s contracts. Capacity arrangements are generally billed and paid in advance of satisfaction of performance obligations, and the Company’s on-demand arrangements are billed in arrears generally on a monthly basis. Deferred revenue also includes amounts that have been invoiced but not yet collected, classified as accounts receivable, when the Company has an enforceable right to invoice for capacity arrangements. Deferred revenue relating to the Company’s capacity arrangements that have a contractual expiration date of less than 12 months are classified as current. For capacity arrangements that have a contractual expiration date of greater than 12 months, the Company apportions deferred revenue between current and non-current based upon an assumed ratable consumption of these capacity arrangements over the entire term of the arrangement, even though it does not recognize revenue ratably over the term of the contract as customers have flexibility in their consumption and revenue is generally recognized on consumption. In addition, in many cases, the Company’s customer contracts also permit customers to roll over any unused capacity to a subsequent order, generally on the purchase of additional capacity. As such, the current or non-current classification of deferred revenue may not reflect the actual timing of revenue recognition.
Accounting Pronouncements Recently Adopted
In February 2018, the FASB issued ASU 2018-02, Income Statement Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits a company to reclassify the disproportionate income tax effects of the 2017 Tax Cuts and Jobs Act on items within the accumulated other comprehensive income to retained earnings. The Company adopted this guidance on February 1, 2019, and the adoption did not have a material impact on the Company’s consolidated financial statements.
In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Non-Employee Share-Based Payment Accounting, which expands the scope of Topic 718, to include share-based payments issued to non-employees for goods or services. The new standard supersedes Subtopic 505-50. The Company adopted this guidance effective February 1, 2018 on a modified retrospective basis, and the adoption did not have a material impact on the Company’s consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which amends its conceptual framework to improve the effectiveness of disclosures in notes to financial statements. The Company adopted this guidance on February 1, 2019, and the adoption did not have a material impact on the Company’s consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected, with further clarifications made more recently. For trade receivables, loans, and other financial instruments, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities are required to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. This guidance is effective for the Company for its fiscal year beginning February 1, 2023 and interim periods within that fiscal year. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by this new guidance. This new guidance is effective for the Company for its fiscal year beginning February 1, 2021 and interim periods within its fiscal year beginning February 1, 2022. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in ASC 740, Income Taxes in order to reduce cost and complexity of its application. This new guidance is effective for the Company for its fiscal year beginning February 1, 2022 and interim periods within its fiscal year beginning February 1, 2023. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.
3. Cash Equivalents and Investments
The following is a summary of the Company’s cash equivalents, short-term investments, and long-term investments on the consolidated balance sheets (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31, 2019
|
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
Money market funds
|
$
|
79,594
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79,594
|
|
|
Total cash equivalents
|
79,594
|
|
|
—
|
|
|
—
|
|
|
79,594
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
U.S. government and agency securities
|
318,186
|
|
|
37
|
|
|
(5)
|
|
|
318,218
|
|
|
Commercial paper
|
113,833
|
|
|
—
|
|
|
—
|
|
|
113,833
|
|
|
Corporate notes and bonds
|
44,272
|
|
|
3
|
|
|
(3)
|
|
|
44,272
|
|
|
|
|
|
|
|
|
|
|
|
Asset-backed securities
|
15,936
|
|
|
—
|
|
|
(2)
|
|
|
15,934
|
|
|
Total investments
|
492,227
|
|
|
40
|
|
|
(10)
|
|
|
492,257
|
|
|
Total cash equivalents and investments
|
$
|
571,821
|
|
|
$
|
40
|
|
|
$
|
(10)
|
|
|
$
|
571,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31, 2020
|
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
U.S. government and agency securities
|
$
|
32,470
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
32,472
|
|
|
Money market funds
|
21,379
|
|
|
—
|
|
|
—
|
|
|
21,379
|
|
|
Commercial paper
|
446
|
|
|
—
|
|
|
—
|
|
|
446
|
|
|
Total cash equivalents
|
54,295
|
|
|
2
|
|
|
—
|
|
|
54,297
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
U.S. government and agency securities
|
259,738
|
|
|
216
|
|
|
(1)
|
|
|
259,953
|
|
|
Corporate notes and bonds
|
30,642
|
|
|
57
|
|
|
—
|
|
|
30,699
|
|
|
Commercial paper
|
17,006
|
|
|
2
|
|
|
—
|
|
|
17,008
|
|
|
Certificates of deposit
|
12,592
|
|
|
12
|
|
|
—
|
|
|
12,604
|
|
|
Asset-backed securities
|
10,104
|
|
|
8
|
|
|
—
|
|
|
10,112
|
|
|
Total investments
|
330,082
|
|
|
295
|
|
|
(1)
|
|
|
330,376
|
|
|
Total cash equivalents and investments
|
$
|
384,377
|
|
|
$
|
297
|
|
|
$
|
(1)
|
|
|
$
|
384,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 31, 2020
|
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
Money market funds
|
$
|
28,994
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,994
|
|
|
U.S. government and agency securities
|
23,702
|
|
|
—
|
|
|
(2)
|
|
|
23,700
|
|
|
Commercial paper
|
2,500
|
|
|
—
|
|
|
—
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
Total cash equivalents
|
55,196
|
|
|
—
|
|
|
(2)
|
|
|
55,194
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government and agency securities
|
618,532
|
|
|
968
|
|
|
(29)
|
|
|
619,471
|
|
|
Corporate notes and bonds
|
98,409
|
|
|
587
|
|
|
(4)
|
|
|
98,992
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of deposit
|
18,245
|
|
|
—
|
|
|
—
|
|
|
18,245
|
|
|
Commercial paper
|
10,708
|
|
|
12
|
|
|
—
|
|
|
10,720
|
|
|
Asset-backed securities
|
490
|
|
|
2
|
|
|
—
|
|
|
492
|
|
|
Total investments
|
746,384
|
|
|
1,569
|
|
|
(33)
|
|
|
747,920
|
|
|
Total cash equivalents and investments
|
$
|
801,580
|
|
|
$
|
1,569
|
|
|
$
|
(35)
|
|
|
$
|
803,114
|
|
As of January 31, 2020 and July 31, 2020, the contractual maturities of the Company’s available-for-sale debt securities are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31, 2020
|
|
July 31, 2020
|
|
|
Estimated
Fair Value
|
|
Estimated
Fair Value
|
|
|
|
|
(unaudited)
|
|
Due within 1 year
|
$
|
339,762
|
|
|
$
|
478,176
|
|
|
Due in 1 year to 3 years
|
23,532
|
|
|
295,944
|
|
|
Total
|
$
|
363,294
|
|
|
$
|
774,120
|
|
There were no impairments of available-for-sale marketable debt securities considered “other-than-temporary” during the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2020 (unaudited) as it was more likely than not the Company would hold the securities until maturity or a recovery of the cost basis.
The Company had no marketable equity securities during the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2020 (unaudited).
4. Fair Value Measurements
The following table presents the fair value hierarchy for the Company’s assets measured at fair value on a recurring basis as of January 31, 2019 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Cash equivalents:
|
|
|
|
|
|
|
Money market funds
|
$
|
79,594
|
|
|
$
|
—
|
|
|
$
|
79,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments:
|
|
|
|
|
|
|
U.S. government and agency securities
|
—
|
|
|
318,218
|
|
|
318,218
|
|
|
Commercial paper
|
—
|
|
|
113,833
|
|
|
113,833
|
|
|
Corporate notes and bonds
|
—
|
|
|
44,272
|
|
|
44,272
|
|
|
Asset-backed securities
|
—
|
|
|
15,934
|
|
|
15,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
79,594
|
|
|
$
|
492,257
|
|
|
$
|
571,851
|
|
The following table presents the fair value hierarchy for the Company’s assets measured at fair value on a recurring basis as of January 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Cash equivalents:
|
|
|
|
|
|
|
U.S. government and agency securities
|
$
|
—
|
|
|
$
|
32,472
|
|
|
$
|
32,472
|
|
|
Money market funds
|
21,379
|
|
|
—
|
|
|
21,379
|
|
|
Commercial paper
|
—
|
|
|
446
|
|
|
446
|
|
|
Short-term investments:
|
|
|
|
|
|
|
U.S. government securities
|
—
|
|
|
245,756
|
|
|
245,756
|
|
|
Corporate notes and bonds
|
—
|
|
|
23,674
|
|
|
23,674
|
|
|
Commercial paper
|
—
|
|
|
17,008
|
|
|
17,008
|
|
|
Certificates of deposit
|
—
|
|
|
10,899
|
|
|
10,899
|
|
|
Asset-backed securities
|
—
|
|
|
9,507
|
|
|
9,507
|
|
|
Long-term investments:
|
|
|
|
|
|
|
U.S. government and agency securities
|
—
|
|
|
14,197
|
|
|
14,197
|
|
|
Corporate notes and bonds
|
—
|
|
|
7,025
|
|
|
7,025
|
|
|
Certificates of deposit
|
—
|
|
|
1,705
|
|
|
1,705
|
|
|
Asset-backed securities
|
—
|
|
|
605
|
|
|
605
|
|
|
Total
|
$
|
21,379
|
|
|
$
|
363,294
|
|
|
$
|
384,673
|
|
The following table presents the fair value hierarchy for the Company’s assets measured at fair value on a recurring basis as of July 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
|
(unaudited)
|
|
|
|
|
|
Cash equivalents:
|
|
|
|
|
|
|
Money market funds
|
$
|
28,994
|
|
|
$
|
—
|
|
|
$
|
28,994
|
|
|
U.S. government and agency securities
|
—
|
|
|
23,700
|
|
|
23,700
|
|
|
Commercial paper
|
—
|
|
|
2,500
|
|
|
2,500
|
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government and agency securities
|
—
|
|
|
355,089
|
|
|
355,089
|
|
|
Corporate notes and bonds
|
—
|
|
|
68,722
|
|
|
68,722
|
|
|
Certificates of deposit
|
—
|
|
|
17,445
|
|
|
17,445
|
|
|
Commercial paper
|
—
|
|
|
10,720
|
|
|
10,720
|
|
|
Long-term investments:
|
|
|
|
|
|
|
U.S. government and agency securities
|
—
|
|
|
264,382
|
|
|
264,382
|
|
|
Corporate notes and bonds
|
—
|
|
|
30,270
|
|
|
30,270
|
|
|
Certificates of deposit
|
—
|
|
|
800
|
|
|
800
|
|
|
Asset-backed securities
|
—
|
|
|
492
|
|
|
492
|
|
|
Total
|
$
|
28,994
|
|
|
$
|
774,120
|
|
|
$
|
803,114
|
|
The Company determines the fair value of its security holdings based on pricing from the Company’s service providers and market prices from industry-standard independent data providers. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs), such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures.
5. Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
Computers, equipment, and software
|
$
|
1,501
|
|
|
$
|
1,998
|
|
|
$
|
2,228
|
|
|
Furniture and fixtures
|
1,639
|
|
|
1,043
|
|
|
1,602
|
|
|
Leasehold improvements
|
2,162
|
|
|
18,219
|
|
|
19,420
|
|
|
Capitalized internal-use software development costs
|
3,615
|
|
|
4,794
|
|
|
11,742
|
|
|
Construction in progress
|
2,100
|
|
|
6,014
|
|
|
15,464
|
|
|
Total property and equipment
|
11,017
|
|
|
32,068
|
|
|
50,456
|
|
|
Less: accumulated depreciation and amortization
|
(3,802)
|
|
|
(4,932)
|
|
|
(7,690)
|
|
|
Total property and equipment, net
|
$
|
7,215
|
|
|
$
|
27,136
|
|
|
$
|
42,766
|
|
Depreciation and amortization expense was $1.3 million, $2.6 million, $1.1 million, and $2.8 million for the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020 (unaudited), respectively.
6. Acquisitions, Intangible Assets and Goodwill
Acquisitions
During the fiscal year ended January 31, 2020, the Company completed acquisitions of two privately-held companies for an aggregate of $13.3 million in cash and equity. The Company has accounted for these transactions as business combinations. In allocating the aggregate purchase price based on the estimated fair values, the Company recorded a total of $5.6 million of developed technology intangible
assets (to be amortized over estimated useful lives of five years), $1.1 million of net assets acquired, $0.5 million of a deferred tax liability, $0.1 million of a customer relationships intangible asset, and $7.0 million of goodwill, which is not deductible for income tax purposes.
During the six months ended July 31, 2020 (unaudited), the Company acquired certain assets from a privately-held company for $7.1 million in cash. The Company has accounted for this transaction as a business combination. In allocating the aggregate purchase price based on the estimated fair values, the Company recorded $5.7 million as a developed technology intangible asset (to be amortized over an estimated useful life of five years), and $1.4 million as goodwill, which is deductible for income tax purposes.
The excess of purchase consideration over the fair value of net tangible and identifiable assets acquired was recorded as goodwill. The Company believes the goodwill balance associated with these acquisitions represents the synergies expected from expanded market opportunities when integrating the acquired developed technologies with the Company’s offerings. Aggregate acquisition-related costs associated with these business combinations were not material for the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020 (unaudited) and were included in general and administrative expenses in the consolidated statement of operations. The results of operations of these business combinations have been included in the Company’s consolidated financial statements from their respective acquisition dates. These business combinations, individually and in aggregate, did not have a material impact on the Company’s consolidated financial statements. Therefore, historical results of operations subsequent to the acquisition date and pro forma results of operations have not been presented.
Intangible Assets
Intangible assets, net consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
Developed technology
|
$
|
—
|
|
|
$
|
5,632
|
|
|
$
|
11,331
|
|
|
Patents
|
—
|
|
|
—
|
|
|
6,184
|
|
|
Other
|
47
|
|
|
97
|
|
|
97
|
|
|
Total intangible assets
|
47
|
|
|
5,729
|
|
|
17,612
|
|
|
Less: accumulated amortization
|
(27)
|
|
|
(934)
|
|
|
(1,917)
|
|
|
Total intangible assets, net
|
$
|
20
|
|
|
$
|
4,795
|
|
|
$
|
15,695
|
|
During the six months ended July 31, 2020 (unaudited), the Company acquired $6.2 million of patents. The weighted-average useful life for these patents was approximately five years (unaudited).
Amortization expense of intangible assets was not material for the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020 (unaudited).
As of January 31, 2020, future amortization expense is expected to be as follows (in thousands):
|
|
|
|
|
|
|
|
|
Amount
|
|
Fiscal Year Ending January 31,
|
|
|
2021
|
$
|
1,138
|
|
|
2022
|
1,126
|
|
|
2023
|
1,126
|
|
|
2024
|
1,126
|
|
|
2025
|
279
|
|
|
Total
|
$
|
4,795
|
|
As of July 31, 2020, future amortization expense is expected to be as follows (in thousands):
|
|
|
|
|
|
|
|
|
Amount
|
|
|
(unaudited)
|
|
Fiscal Year Ending January 31,
|
|
|
Remainder of 2021
|
$
|
1,752
|
|
|
2022
|
3,503
|
|
|
2023
|
3,503
|
|
|
2024
|
3,503
|
|
|
2025
|
2,654
|
|
|
Thereafter
|
780
|
|
|
Total
|
$
|
15,695
|
|
Goodwill
The changes in the carrying amount of goodwill were as follows (in thousands):
|
|
|
|
|
|
|
|
|
Amount
|
|
Balance as of February 1, 2018 and January 31, 2019
|
$
|
—
|
|
|
Additions
|
7,049
|
|
|
Balance as of January 31, 2020
|
$
|
7,049
|
|
|
Additions (unaudited)
|
1,400
|
|
|
Balance as of July 31, 2020 (unaudited)
|
$
|
8,449
|
|
7. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
Accrued compensation
|
$
|
17,416
|
|
|
$
|
40,961
|
|
|
$
|
39,596
|
|
|
Accrued third-party cloud infrastructure expenses
|
4,928
|
|
|
8,360
|
|
|
13,183
|
|
|
Accrued professional services
|
2,077
|
|
|
5,200
|
|
|
6,442
|
|
|
Accrued taxes
|
1,159
|
|
|
2,352
|
|
|
1,726
|
|
|
Accrued purchases of property and equipment
|
—
|
|
|
430
|
|
|
6,387
|
|
|
Other
|
2,930
|
|
|
5,514
|
|
|
11,823
|
|
|
Total accrued expenses and other current liabilities
|
$
|
28,510
|
|
|
$
|
62,817
|
|
|
$
|
79,157
|
|
8. Deferred Revenue and Remaining Performance Obligations
The deferred revenue balance as of February 1, 2018 was $27.4 million. The Company recognized $24.4 million and $89.1 million of revenue during the fiscal years ended January 31, 2019 and 2020, respectively, from beginning deferred revenue balances as of February 1, 2018 and January 31, 2019, respectively. The increase in deferred revenue from February 1, 2018 to January 31, 2019 and from January 31, 2019 to January 31, 2020 primarily resulted from the growth of contracts with new and existing customers.
The Company recognized $59.1 million and $166.8 million of revenue during the six months ended July 31, 2019 and 2020 (unaudited), respectively, from beginning deferred revenue balances as of January 31, 2019 and 2020, respectively.
Remaining performance obligations (RPO) represents the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. The Company’s RPO excludes
performance obligations from on-demand arrangements as there are no minimum purchase commitments associated with these arrangements, and certain time and materials contracts that are billed in arrears.
As of January 31, 2020 and July 31, 2020 (unaudited), the Company’s RPO was $426.3 million and $688.2 million, respectively. The significant increase in RPO during the six months ended July 31, 2020 (unaudited) was primarily due to a large enterprise customer entering into a multi-year capacity contract. For contracts with original terms that exceed one year, the Company’s RPO was $83.5 million and $369.5 million as of January 31, 2020 and July 31, 2020 (unaudited), respectively. The weighted-average remaining life of the Company’s long-term contracts was 2.7 years as of both January 31, 2020 and July 31, 2020 (unaudited). However, the amount and timing of revenue recognition are generally driven by customer usage, which can extend beyond the original contract term in cases where customers have the option to roll over unused capacity to future periods, generally on the purchase of additional capacity.
9. Commitments and Contingencies
Operating Leases
The Company leases its facilities for office space under non-cancelable operating leases with various expiration dates through fiscal 2033. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into the determination of lease payments.
In addition, the Company subleases certain of its unoccupied facilities to third parties with various expiration dates through fiscal 2030. Such subleases have all been classified as operating leases.
The components of lease costs and other information related to leases were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
|
2019
|
|
2020
|
|
Operating lease costs
|
$
|
3,172
|
|
|
$
|
27,711
|
|
|
Variable lease costs
|
925
|
|
|
5,002
|
|
|
Sublease income
|
—
|
|
|
(6,026)
|
|
|
Total lease costs
|
$
|
4,097
|
|
|
$
|
26,687
|
|
Sublease income was $0.5 million and $6.4 million for the six months ended July 31, 2019 and 2020 (unaudited), respectively.
There were no material short-term lease costs for the fiscal years ended January 31, 2019 and 2020.
Supplemental cash flow information and non-cash activity related to the Company’s operating leases were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
|
2019
|
|
2020
|
|
Cash payments (receipts) included in the measurement of operating lease liabilities – operating cash flows
|
$
|
2,537
|
|
|
$
|
13,458
|
|
|
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
10,737
|
|
|
$
|
194,712
|
|
Weighted-average remaining lease term and discount rate for the Company’s operating leases were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
|
2019
|
|
2020
|
|
Weighted-average remaining lease term (years)
|
4.5
|
|
|
10.1
|
|
|
Weighted-average discount rate
|
5.5
|
%
|
|
6.2
|
%
|
The total remaining lease payments under non-cancelable operating leases and lease receipts for subleases as of January 31, 2020 were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Leases
|
|
Subleases
|
|
Total
|
|
Fiscal Year Ending January 31,
|
|
|
|
|
|
|
|
2021
|
|
$
|
30,464
|
|
|
$
|
(16,316)
|
|
|
$
|
14,148
|
|
|
2022
|
|
29,589
|
|
|
(11,528)
|
|
|
18,061
|
|
|
2023
|
|
29,114
|
|
|
(11,461)
|
|
|
17,653
|
|
|
2024
|
|
28,782
|
|
|
(11,073)
|
|
|
17,709
|
|
|
2025
|
|
23,898
|
|
|
(7,702)
|
|
|
16,196
|
|
|
Thereafter
|
|
149,921
|
|
|
(30,104)
|
|
|
119,817
|
|
|
Total lease payments/receipts
|
|
$
|
291,768
|
|
|
$
|
(88,184)
|
|
|
$
|
203,584
|
|
|
Less imputed interest
|
|
(80,501)
|
|
|
|
|
|
|
Present value of operating lease liabilities
|
|
$
|
211,267
|
|
|
|
|
|
Operating lease payments presented above exclude $13.7 million of legally-binding lease commitments, net of tenant incentives expected to be received, for leases signed but not yet commenced as of January 31, 2020. These operating leases will commence between fiscal 2021 and fiscal 2022 with lease terms of one year to eight years.
Other Contractual Commitments
Other contractual commitments relate mainly to third-party cloud infrastructure agreements and subscription arrangements used to facilitate the Company’s operations at the enterprise level. Future minimum payments under the Company’s non-cancelable purchase commitments as of January 31, 2020 are presented in the table below (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
|
Fiscal Year Ending January 31,
|
|
|
|
2021
|
$
|
12,794
|
|
|
|
2022
|
71,358
|
|
|
|
2023
|
68,873
|
|
|
|
2024
|
68,653
|
|
(1)
|
|
2025
|
25,000
|
|
|
|
|
|
|
|
Total
|
$
|
246,678
|
|
|
________________
(1) Includes $50.7 million of remaining non-cancelable contractual commitments as of January 31, 2020 related to one of the Company's third-party cloud infrastructure agreements, under which the Company committed to spend an aggregate of at least $60.0 million between March 2019 and December 2023 with no minimum purchase commitment during any year. The Company had made payments totaling $9.3 million under this agreement as of January 31, 2020 . This agreement was subsequently amended in August 2020 (unaudited). Under the amended agreement, the Company has committed to spend an aggregate of at least $550.0 million, which is not included in the table above, between September 2020 and December 2025 with no minimum purchase commitment during any year. The Company is required to pay the difference if it fails to meet the minimum purchase commitment by December 2025, and such payment can be applied to qualifying expenditures for cloud infrastructure services for up to twelve months a fter December 2025 .
For the Six Months Ended July 31, 2020 (Unaudited)
The purchase commitment amounts in the table above include the remaining non-cancellable commitments of $118.8 million in aggregate related to a third-party cloud infrastructure agreement that was subsequently amended in July 2020. The table above reflects $1.8 million, $58.5 million, and $58.5 million that would have been due during the fiscal years ending January 31, 2021, 2022 and 2023, respectively, if such agreement had not been amended. Under the amended agreement, the Company has committed to spend $1.2 billion between August 2020 and July 2025 on cloud infrastructure services ($115.0 million between August 2020 and July 2021, $185.0 million between August 2021 and July 2022, $250.0 million between August 2022 and July 2023, $300.0 million between August 2023 and July 2024, and $350.0 million between August 2024 and July 2025). The Company is required to pay the difference if it fails to meet the minimum purchase commitment during any year.
401(k) Plan—The Company sponsors a 401(k) defined contribution plan covering all eligible U.S. employees. Contributions to the 401(k) plan are discretionary. The Company did not make any matching contributions to the 401(k) plan for the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2020 (unaudited).
Legal Matters—The Company is involved from time to time in various claims and legal actions arising in the ordinary course of business. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that none of its current legal proceedings will have a material adverse effect on its financial position, results of operations, or cash flows for fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020 (unaudited).
Letters of Credit—As of January 31, 2020 and July 31, 2020 (unaudited), respectively, the Company had a total of $14.8 million and $15.0 million in cash collateralized letters of credit outstanding substantially in favor of certain landlords for the Company’s leased facilities. For letters of credit outstanding as of January 31, 2020, these letters of credit renew annually and expire at various dates through fiscal 2033. For letters of credit outstanding as of July 31, 2020 (unaudited), these letters of credit renew annually and expire at various dates through fiscal 2033.
Indemnification—The Company enters into indemnification provisions under agreements with other parties in the ordinary course of business, including business partners, investors, contractors, customers, and the Company’s officers, directors, and certain employees. The Company has agreed to indemnify and defend the indemnified party claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party claims due to the Company’s activities or non-compliance with certain representations and warranties made by the Company. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. During the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020 (unaudited), losses recorded in the consolidated statements of operations in connection with the indemnification provisions were not material.
10. Redeemable Convertible Preferred Stock
Redeemable convertible preferred stock is carried at its issuance price, net of issuance costs.
During the fiscal year ended January 31, 2019, the Company issued 134,018 shares of Series E redeemable convertible preferred stock in September 2018 and 29,227,556 shares of Series F redeemable convertible preferred stock in October 2018.
During the fiscal year ended January 31, 2020, the Company issued 850,118 shares of Series F redeemable convertible preferred stock in February 2019. In August 2019, the Company's Chief Financial Officer purchased 762,112 shares of the Company's Series F redeemable convertible preferred stock at a price per share of $14.96125 for an aggregate purchase price of $11.4 million under the terms of his employment offer letter.
In February 2020, the Company issued 8,480,857 shares of Series G-1 redeemable convertible preferred stock and 3,868,970 shares of Series G-2 redeemable convertible preferred stock.
As of January 31, 2019, redeemable convertible preferred stock consisted of the following (in thousands, except share and per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Authorized
|
|
Shares Issued
and
Outstanding
|
|
Issuance
Price
Per Share
|
|
Carrying Amount
|
|
Liquidation
Preference
|
|
Seed
|
4,410,736
|
|
|
4,410,736
|
|
|
$
|
0.1719
|
|
|
$
|
758
|
|
|
$
|
758
|
|
|
Series A
|
14,240,500
|
|
|
14,240,500
|
|
|
0.3476
|
|
4,916
|
|
|
4,950
|
|
|
Series B
|
20,608,098
|
|
|
20,608,098
|
|
|
0.96805
|
|
19,900
|
|
|
19,950
|
|
|
Series C
|
34,393,170
|
|
|
34,393,170
|
|
|
2.29215
|
|
78,741
|
|
|
78,834
|
|
|
Series D
|
29,981,998
|
|
|
29,981,998
|
|
|
3.5021
|
|
104,920
|
|
|
105,000
|
|
|
Series E
|
35,446,984
|
|
|
35,446,984
|
|
|
7.4617
|
|
264,391
|
|
|
264,495
|
|
|
Series F
|
30,500,000
|
|
|
29,227,556
|
|
|
14.96125
|
|
437,227
|
|
|
437,281
|
|
|
|
169,581,486
|
|
|
168,309,042
|
|
|
|
|
$
|
910,853
|
|
|
$
|
911,268
|
|
As of January 31, 2020, redeemable convertible preferred stock consisted of the following (in thousands, except share and per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Authorized
|
|
Shares Issued
and
Outstanding
|
|
Issuance
Price
Per Share
|
|
Carrying Amount
|
|
Liquidation
Preference
|
|
Seed
|
4,410,736
|
|
|
4,410,736
|
|
|
$
|
0.1719
|
|
|
$
|
758
|
|
|
$
|
758
|
|
|
Series A
|
14,240,500
|
|
|
14,240,500
|
|
|
0.3476
|
|
4,916
|
|
|
4,950
|
|
|
Series B
|
20,608,098
|
|
|
20,608,098
|
|
|
0.96805
|
|
19,900
|
|
|
19,950
|
|
|
Series C
|
34,393,170
|
|
|
34,393,170
|
|
|
2.29215
|
|
78,741
|
|
|
78,834
|
|
|
Series D
|
29,981,998
|
|
|
29,981,998
|
|
|
3.5021
|
|
104,920
|
|
|
105,000
|
|
|
Series E
|
35,446,984
|
|
|
35,446,984
|
|
|
7.4617
|
|
264,391
|
|
|
264,495
|
|
|
Series F
|
30,839,786
|
|
|
30,839,786
|
|
|
14.96125
|
|
462,848
|
|
|
461,402
|
|
|
|
169,921,272
|
|
|
169,921,272
|
|
|
|
|
$
|
936,474
|
|
|
$
|
935,389
|
|
As of July 31, 2020, redeemable convertible preferred stock consisted of the following (in thousands, except share and per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Authorized
|
|
Shares Issued
and
Outstanding
|
|
Issuance
Price
Per Share
|
|
Carrying Amount
|
|
Liquidation
Preference
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Seed
|
4,410,736
|
|
|
4,410,736
|
|
|
$
|
0.1719
|
|
|
$
|
758
|
|
|
$
|
758
|
|
|
Series A
|
14,240,500
|
|
|
14,240,500
|
|
|
0.3476
|
|
4,916
|
|
|
4,950
|
|
|
Series B
|
20,608,098
|
|
|
20,608,098
|
|
|
0.96805
|
|
19,900
|
|
|
19,950
|
|
|
Series C
|
34,393,170
|
|
|
34,393,170
|
|
|
2.29215
|
|
78,741
|
|
|
78,834
|
|
|
Series D
|
29,981,998
|
|
|
29,981,998
|
|
|
3.5021
|
|
104,920
|
|
|
105,000
|
|
|
Series E
|
35,446,984
|
|
|
35,446,984
|
|
|
7.4617
|
|
264,391
|
|
|
264,495
|
|
|
Series F
|
30,839,786
|
|
|
30,839,786
|
|
|
14.96125
|
|
462,848
|
|
|
461,402
|
|
|
Series G-1
|
8,480,857
|
|
|
8,480,857
|
|
|
38.77
|
|
|
328,645
|
|
|
328,803
|
|
|
Series G-2
|
3,868,970
|
|
|
3,868,970
|
|
|
38.77
|
|
|
149,928
|
|
|
150,000
|
|
|
|
182,271,099
|
|
|
182,271,099
|
|
|
|
|
$
|
1,415,047
|
|
|
$
|
1,414,192
|
|
Significant rights and preferences of the above redeemable convertible preferred stock are as follows:
Conversion—Each share of redeemable convertible preferred stock is convertible, at the option of the holder, into such number of shares of Class B common stock as is determined by dividing the original issuance price for a share by the conversion price at the time in effect for such share. Each share of Series Seed, A, B, C, D, E, F, G-1, and G-2 redeemable convertible preferred stock would convert into Class B common stock on a one-for-one basis. Each share of redeemable convertible preferred stock automatically converts into the number of shares of common stock into which such shares are convertible at the then-effective conversion ratio upon (i) election by majority of the outstanding shares of redeemable convertible preferred stock voting together as a single class on an as-if-converted basis,
provided that, the automatic conversion of Series G-1 and Series G-2 redeemable convertible preferred stock requires the vote or written consent of a majority of the outstanding shares of Series G-1 and Series G-2 redeemable convertible preferred stock voting together as a single class on an as-if-converted basis, except if such conversion is in connection with the consummation of a bona fide equity financing for capital raising purposes wherein the price per share of the equity securities offered in such financing is less than the Series G-1 redeemable convertible preferred stock’s original issue price of $38.77 per share and all existing redeemable convertible preferred stock are converted into a single series of capital stock of the Company; (ii) the closing of a firmly underwritten public offering of Class A common stock with gross proceeds of at least $300.0 million (a Qualifying IPO); or (iii) the settlement of the initial trade of shares of Class A common stock on the New York Stock Exchange, Nasdaq Global Select Market, or Nasdaq Global Market (a Direct Listing).
Voting—The holders of redeemable convertible preferred stock are entitled to ten votes per share, which is the same number of votes per share as the Class B common stock into which the redeemable convertible preferred stock is convertible. The holders of redeemable convertible preferred stock vote together as one class with the holders of common stock.
As long as at least 4,000,000 shares (subject to adjustments for stock splits, reverse stock splits, or other similar events) of Series A redeemable convertible preferred stock remain outstanding, the holders of such shares are entitled to elect one member of the board of directors. As long as at least 4,000,000 shares (subject to adjustments for stock splits, reverse stock splits, or other similar events) of Series B redeemable convertible preferred stock remain outstanding, the holders of such shares are entitled to elect one member of the board of directors. The holders of outstanding common stock, voting as a separate class, are entitled to elect two members of the board of directors. The holders of common stock and redeemable convertible preferred stock, voting together as a single class on an as-if-converted basis, are entitled to elect all remaining members of the board of directors.
Dividends—Holders of redeemable convertible preferred stock shall be entitled to receive, when, as, and if declared by the Board of Directors, but only out of funds that are legally available therefor, cash dividends at the rate of eight percent of the original issue price of each redeemable convertible preferred stock series per annum. Such dividends shall be payable on a pari passu basis and only when, as, and if declared by the Board and shall be non-cumulative. No dividends on redeemable convertible preferred stock or common stock have been declared by the Board of Directors through January 31, 2020 or July 31, 2020 (unaudited).
Liquidation Preference—In the event of any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a Liquidation Event), the holders of redeemable convertible preferred stock shall be entitled, before any distribution or payment shall be made to the holders of common stock, on a pari passu basis among each other, to be paid out of the assets of the Company legally available for distribution for each share of redeemable convertible preferred stock, an amount per share of redeemable convertible preferred stock equal to the greater of (i) the original issuance price plus all declared and unpaid dividends on such redeemable convertible preferred stock; or (ii) the amount of cash, securities, or other property to which such redeemable convertible preferred stockholders would be entitled to receive if such shares had been converted to common stock immediately prior to the Liquidation Event. If, upon any such Liquidation Event, the assets of the Company shall be insufficient to make payment in full to all holders of the redeemable convertible preferred stock, then the assets shall be distributed among the holders of redeemable convertible preferred stock on a pari passu basis, in proportion to the full amounts to which they would otherwise be respectively entitled.
After the payment of the full liquidation preference to redeemable convertible preferred stock, the remaining assets of the corporation legally available for distribution to stockholders will be distributed ratably to the holders of common stock.
Classification—The convertible preferred stock is contingently redeemable upon certain deemed liquidation events such as a merger or sale of substantially all the assets of the Company. The convertible preferred stock is not mandatorily redeemable, but since a deemed liquidation event would constitute a redemption event outside of the Company’s control, all shares of redeemable convertible preferred stock have been presented outside of permanent equity in mezzanine equity on the consolidated balance sheets.
11. Equity
Common Stock—The Company has two classes of common stock: Class A common stock and Class B common stock. The shares of Class A common stock and Class B common stock are identical, except for voting rights. The Class A common stock is entitled to one vote per share and the Class B common stock is entitled to ten votes per share. Holders of common stock are entitled to receive any dividends as may be declared from time to time by the board of directors. Common stock is subordinate to the redeemable convertible preferred stock with respect to dividend rights and rights upon certain deemed liquidation events. The common stock is not redeemable at the option of the holder.
Shares of Class B common stock may be converted to Class A common stock at any time immediately following an IPO or Direct Listing at the option of the stockholder. At any time following an IPO or Direct Listing, shares of Class B common stock automatically convert to Class A common stock upon the following: (i) sale or transfer of such share of Class B common stock; (ii) the death of the Class B common stockholder (or nine months after the date of death if the stockholder is one of the Company’s founders); and (iii) on the final conversion date, defined as the earlier to occur following an IPO or Direct Listing of (a) the first trading day on or after the date on which the outstanding shares of Class B common stock represent less than 10% of the then outstanding Class A and Class B common stock; (b) the seventh anniversary of the IPO or Direct Listing; or (c) the date specified by a vote of the holders of a majority of the outstanding shares of Class B common stock, voting as a single class.
Class A and Class B common stock are referred to as common stock throughout the notes to the consolidated financial statements, unless otherwise noted.
The Company had reserved shares of common stock for future issuance as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
Redeemable convertible preferred stock
|
168,309,042
|
|
|
169,921,272
|
|
|
182,271,099
|
|
|
Common stock warrants
|
32,336
|
|
|
32,336
|
|
|
32,336
|
|
|
2012 Equity Incentive Plan:
|
|
|
|
|
|
|
Options outstanding
|
51,535,443
|
|
|
80,903,200
|
|
|
72,228,820
|
|
|
RSUs outstanding
|
—
|
|
|
—
|
|
|
4,853,231
|
|
|
Shares available for future grants
|
5,479,974
|
|
|
412,401
|
|
|
18,299,095
|
|
|
|
225,356,795
|
|
|
251,269,209
|
|
|
277,684,581
|
|
In January and November 2018, the Company’s Board of Directors approved two separate issuer tender offers which allowed eligible employees to sell shares of common stock to the Company. The issuer tender offers were completed in March 2018 and January 2019, respectively. As part of these tender offers, an aggregate of 6.0 million shares of outstanding Class B common stock were purchased from participating employees for a total consideration of $60.0 million. The common stock purchased was retired immediately thereafter. Of the $60.0 million total aggregate consideration, the fair value of the shares tendered of $29.7 million was recorded in accumulated deficit, while the amounts paid in excess of the fair value of common stock at the time of purchase of $30.3 million were recorded as stock-based compensation expense.
In February 2020, certain third parties unaffiliated with the Company commenced an offer to purchase existing outstanding shares of the Company’s Class B common stock from certain equity holders at a price of $38.77 per share. The Company was not a party to this transaction. The transaction was completed in March 2020, and an aggregate of 8.6 million shares of the Company’s Class B common stock were transferred to these third parties.
Equity Incentive Plan—In 2012, the Company’s Board of Directors approved the adoption of the 2012 Equity Incentive Plan (the Plan). The Plan provides for the grant of stock-based awards to employees, non-employee directors, and other service providers of the Company.
Stock Options—Stock options granted under the Plan generally vest based on continued service over four years and expire ten years from the date of grant. Certain employees were granted stock options under the Plan that become exercisable at any time following the date of grant and expire ten
years from the date of grant.
Stock option activity and activity regarding shares available for grant under the Plan during the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2020 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
Available for Grant
under the Plan
|
|
Number of Options Outstanding
|
|
Weighted-
Average
Exercise Price
|
|
Weighted-Average Remaining Contractual Life
(in years)
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|
Balance—February 1, 2018
|
18,692,404
|
|
|
33,242,864
|
|
|
$
|
1.03
|
|
|
8.8
|
|
|
$
|
98,314
|
|
|
Shares authorized
|
11,322,700
|
|
|
—
|
|
|
|
|
|
|
|
|
Options granted
|
(25,229,343)
|
|
|
25,229,343
|
|
|
4.41
|
|
|
|
|
|
|
Options exercised
|
—
|
|
|
(5,292,551)
|
|
|
1.14
|
|
|
|
|
|
|
Options forfeited
|
1,644,213
|
|
|
(1,644,213)
|
|
|
2.23
|
|
|
|
|
|
|
Restricted stock awards granted
|
(950,000)
|
|
|
—
|
|
|
|
|
|
|
|
|
Balance—January 31, 2019
|
5,479,974
|
|
|
51,535,443
|
|
|
2.63
|
|
|
8.8
|
|
|
287,993
|
|
|
Shares authorized
|
33,799,630
|
|
|
—
|
|
|
|
|
|
|
|
|
Options granted
|
(46,934,532)
|
|
|
46,934,532
|
|
|
9.21
|
|
|
|
|
|
|
Options exercised
|
—
|
|
|
(9,735,006)
|
|
|
3.47
|
|
|
|
|
|
|
Options forfeited
|
7,831,769
|
|
|
(7,831,769)
|
|
|
4.07
|
|
|
|
|
|
|
Repurchase of unvested common stock
|
252,260
|
|
|
—
|
|
|
|
|
|
|
|
|
Restricted stock awards granted
|
(16,700)
|
|
|
—
|
|
|
|
|
|
|
|
|
Balance—January 31, 2020
|
412,401
|
|
|
80,903,200
|
|
|
6.21
|
|
|
8.6
|
|
|
1,546,313
|
|
|
Shares authorized (unaudited)
|
20,870,187
|
|
|
—
|
|
|
|
|
|
|
|
|
Options granted (unaudited)
|
(740,961)
|
|
|
740,961
|
|
|
28.02
|
|
|
|
|
|
|
Options exercised (unaudited)
|
—
|
|
|
(6,844,642)
|
|
|
3.05
|
|
|
|
|
|
|
Options forfeited (unaudited)
|
2,570,699
|
|
|
(2,570,699)
|
|
|
6.99
|
|
|
|
|
|
|
Repurchase of unvested common stock (unaudited)
|
40,000
|
|
|
—
|
|
|
|
|
|
|
|
|
RSUs granted (unaudited)
|
(4,882,781)
|
|
|
—
|
|
|
|
|
|
|
|
|
RSUs forfeited (unaudited)
|
29,550
|
|
|
—
|
|
|
|
|
|
|
|
|
Balance—July 31, 2020 (unaudited)
|
18,299,095
|
|
|
72,228,820
|
|
|
$
|
6.70
|
|
|
8.2
|
|
|
$
|
4,500,129
|
|
|
Vested and exercisable—January 31, 2020
|
|
|
19,019,813
|
|
|
$
|
2.81
|
|
|
7.4
|
|
|
$
|
428,095
|
|
|
Vested and exercisable—July 31, 2020 (unaudited)
|
|
|
23,877,847
|
|
|
$
|
4.43
|
|
|
7.5
|
|
|
$
|
1,541,700
|
|
The weighted-average grant-date fair value of options granted during the fiscal years ended January 31, 2019 and 2020 was $3.73 and $4.41, respectively. The intrinsic value of options exercised during the fiscal years ended January 31, 2019 and 2020 was $29.3 million and $89.9 million, respectively. Aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company’s common stock. The aggregate grant-date fair value of options vested during the fiscal years ended January 31, 2019 and 2020 was $9.4 million and $53.5 million, respectively.
The weighted-average grant-date fair value of options granted during the six months ended July 31, 2019 and 2020 (unaudited) was $3.89 and $14.78, respectively. The intrinsic value of options exercised during the six months ended July 31, 2019 and 2020 (unaudited) was $18.3 million and $264.1 million, respectively. The aggregate grant-date fair value of options vested during the six months ended July 31, 2019 and 2020 (unaudited) was $21.6 million and $50.8 million, respectively.
Restricted Stock Awards—Restricted stock award activity during the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2020 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under the Plan
|
|
|
|
Out of the Plan
|
|
|
|
|
Number of Shares
|
|
Weighted-Average Grant Date
Fair Value
per Share
|
|
Number of Shares
|
|
Weighted-Average Grant Date
Fair Value
per Share
|
|
Unvested Balance—February 1, 2018
|
392,210
|
|
|
$
|
4.00
|
|
|
2,054,890
|
|
|
$
|
1.20
|
|
|
Granted
|
950,000
|
|
|
7.44
|
|
|
—
|
|
|
—
|
|
|
Vested
|
(421,830)
|
|
|
4.67
|
|
|
(402,444)
|
|
|
—
|
|
|
Unvested Balance—January 31, 2019
|
920,380
|
|
|
7.24
|
|
|
1,652,446
|
|
|
1.49
|
|
|
Granted
|
16,700
|
|
|
8.58
|
|
|
661,635
|
|
|
1.61
|
|
|
Vested
|
(920,380)
|
|
|
7.24
|
|
|
(442,222)
|
|
|
0.50
|
|
|
Repurchased
|
—
|
|
|
—
|
|
|
(268,297)
|
|
|
—
|
|
|
Unvested Balance—January 31, 2020
|
16,700
|
|
|
8.58
|
|
|
1,603,562
|
|
|
2.06
|
|
|
|
|
|
|
|
|
|
|
|
Vested (unaudited)
|
(16,700)
|
|
|
8.58
|
|
|
(680,826)
|
|
|
2.01
|
|
|
|
|
|
|
|
|
|
|
|
Unvested Balance—July 31, 2020 (unaudited)
|
—
|
|
|
$
|
—
|
|
|
922,736
|
|
|
$
|
2.11
|
|
From time to time, the Company has granted restricted stock awards under the Plan to certain third-party service providers in exchange for their services. These restricted stock awards vest upon the satisfaction of certain performance-based vesting conditions. The aggregate grant-date fair value of restricted stock awards vested under the Plan was $2.0 million, $6.7 million, $4.1 million, and $0.1 million for the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020 (unaudited), respectively.
In December 2017, the Company issued 1,250,000 shares of restricted common stock out of the Plan to an employee at $1.59 per share, payable by a promissory note. The promissory note accrued interest at the lower of 2.11% per annum or the maximum interest rate on commercial loans permissible by law and is partially secured by the underlying restricted stock. The promissory note was considered nonrecourse from an accounting standpoint, and therefore the notes are not reflected in the consolidated balance sheets and consolidated statements of stockholders’ deficit. Rather, the note issuances and the share purchases are accounted for as stock option grants, with the related stock-based compensation measured using the Black-Scholes option-pricing model and recognized over the vesting period of five years. The associated shares are legally outstanding and included in the balance of Class B common stock outstanding in the consolidated financial statements. These shares of restricted common stock were considered unvested as of January 31, 2020 because the underlying promissory notes were not repaid. In May and June 2020, the outstanding principal amount and all accrued interest under this promissory note of $2.1 million was repaid, and 625,000 shares of restricted common stock were unvested as of July 31, 2020 (unaudited).
During the fiscal year ended January 31, 2020, in connection with the acquisition of a privately-held company, the Company issued 661,635 shares of restricted common stock out of the Plan. Of the total shares issued, 215,031 shares vested on the grant date, and the remaining shares vest over four years from the grant date. The related post-acquisition stock-based compensation expense of $1.1 million is being amortized over the requisite service period of four years in the consolidated statements of operations.
Common Stock Subject to Repurchase—Common stock purchased pursuant to an early exercise of stock options is not deemed to be outstanding for accounting purposes until those shares vest. The consideration received for an exercise of an option is considered to be a deposit of the exercise price and the related dollar amount is recorded in other liabilities on the consolidated balance sheets. The shares issued upon the early exercise of these unvested stock option awards, which are reflected as exercises in the stock option activity table above, are considered to be legally issued and outstanding on the date of exercise. Upon termination of service, the Company may repurchase unvested shares acquired through the early exercise of stock options at a price equal to the price per share paid upon the exercise of such options. There were 3,441,819, 2,104,331, and 616,400 shares subject to repurchase as of January 31, 2019 and 2020 and July 31, 2020 (unaudited), respectively, as a result of early exercised options.
In January 2016, the Company issued 1,609,778 shares of common stock to an employee under a restricted stock agreement at the then-current fair value of common stock of $0.65 per share. These shares are subject to vesting over a term of four years from the grant date. Upon termination of service, the Company has the right to repurchase the unvested portion of these restricted stock at the lower of the fair value of the shares on the date of repurchase or their original issue price. The proceeds related to the unvested portion of these restricted stock are recorded in other liabilities on the consolidated balance sheets. In June 2019, the Company repurchased 268,297 shares of unvested restricted common stock under this agreement upon termination of the employment agreement.
As of January 31, 2019 and 2020 and July 31, 2020 (unaudited), the liabilities for common stock subject to repurchase were $4.5 million, $4.5 million, and $3.2 million, respectively, which were recorded as other liabilities on the consolidated balance sheets.
Modification of Early Exercised Stock Options—In connection with the termination of a former executive officer in April 2019, certain shares of his early exercised stock options were vested immediately. The remaining early exercised stock options held by him are subject to continuous vesting if he continues to provide service to the Company as an advisor through a pre-determined future date. The acceleration and continuation of vesting were accounted for as a modification of the terms of the original award. The incremental stock-based compensation expense related to this modification was $16.7 million, of which $14.0 million, $8.3 million, and $2.7 million was recognized during the fiscal year ended January 31, 2020 and the six months ended July 31, 2019 and 2020 (unaudited), respectively.
RSUs—During the six months ended July 31, 2020 (unaudited), the Company began granting more RSUs than options and issued RSUs to its employees and directors with both service-based and performance-based vesting conditions. The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter. The performance-based vesting condition is satisfied on the earlier of (i) the effective date of a registration statement of the Company filed under the Securities Act for the sale of the Company’s common stock or (ii) immediately prior to the closing of a change in control of the Company. Both events are not deemed probable until consummated, and therefore, all stock-based compensation expense related to RSUs remained unrecognized as of July 31, 2020 (unaudited).
RSU activity during the six months ended July 31, 2020 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
Weighted-Average Grant Date
Fair Value
per Share
|
|
Unvested Balance—January 31, 2020
|
—
|
|
|
$
|
—
|
|
|
Granted (unaudited)
|
4,882,781
|
|
|
47.13
|
|
|
|
|
|
|
|
Forfeited (unaudited)
|
(29,550)
|
|
|
38.77
|
|
|
Unvested Balance—July 31, 2020 (unaudited)
|
4,853,231
|
|
|
$
|
47.18
|
|
Stock-Based Compensation—The following table summarizes the weighted-average assumptions used in estimating the fair value of stock options granted to employees and non-employees during the fiscal years ended January 31, 2019 and 2020 and the six months ended July 31, 2019 and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Expected term (in years)
|
6.27
|
|
|
5.98
|
|
|
6.00
|
|
|
6.03
|
|
|
Expected volatility
|
42.9
|
%
|
|
36.9
|
%
|
|
37.1
|
%
|
|
36.9
|
%
|
|
Risk-free interest rate
|
2.9
|
%
|
|
2.0
|
%
|
|
2.2
|
%
|
|
1.2
|
%
|
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected term—For stock options considered to be “plain vanilla” options, the Company estimates the expected term based on the simplified method, which is essentially the weighted average of the vesting period and contractual term, as the Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term.
Expected volatility—The Company performed an analysis of using the average volatility of a peer group of representative public companies with sufficient trading history over the expected term to develop an expected volatility assumption.
Risk-free interest rate—Based upon quoted market yields for the United States Treasury debt securities for a term consistent with the expected life of the awards in effect at the time of grant.
Expected dividend yield—Because the Company has never paid and has no intention to pay cash dividends on common stock, the expected dividend yield is zero.
Fair value of underlying common stock—Because the Company’s common stock is not yet publicly traded, the Company must estimate the fair value of common stock. The Board of Directors considers numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards are approved. The factors considered include, but are not limited to: (i) the results of contemporaneous independent third-party valuations of the Company’s common stock; (ii) the prices, rights, preferences, and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; (vi) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions; and (vii) precedent transactions involving the Company’s shares.
Stock-based compensation expense included in the consolidated statements of operations was as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Cost of revenue
|
$
|
1,895
|
|
|
$
|
3,650
|
|
|
$
|
1,850
|
|
|
$
|
2,281
|
|
|
Sales and marketing
|
15,647
|
|
|
20,757
|
|
|
10,626
|
|
|
10,233
|
|
|
Research and development
|
28,284
|
|
|
15,743
|
|
|
6,411
|
|
|
9,818
|
|
|
General and administrative
|
6,912
|
|
|
38,249
|
|
|
15,580
|
|
|
16,317
|
|
|
Stock-based compensation, net of amounts capitalized
|
52,738
|
|
|
78,399
|
|
|
34,467
|
|
|
38,649
|
|
|
Capitalized stock-based compensation
|
577
|
|
|
1,080
|
|
|
452
|
|
|
736
|
|
|
Total stock-based compensation
|
$
|
53,315
|
|
|
$
|
79,479
|
|
|
$
|
34,919
|
|
|
$
|
39,385
|
|
As of January 31, 2020, total compensation cost related to unvested stock options and restricted stock awards not yet recognized was $227.2 million, which will be recognized over a weighted-average period of 3.2 years.
As of July 31, 2020 (unaudited), total compensation cost related to unvested stock options and restricted stock awards not yet recognized was $189.4 million, which will be recognized over a weighted-average period of 2.8 years. In addition, if the listing and public trading of the Company’s common stock had occurred on July 31, 2020 (unaudited), the Company would have recognized $29.1 million of stock-based compensation for all RSUs that had fully or partially satisfied the service-based vesting condition on that date and would have $199.8 million of unrecognized compensation cost to be recognized over a weighted-average period of 2.1 years.
12. Income Taxes
The components of income (loss) before income taxes were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
|
2019
|
|
2020
|
|
U.S.
|
$
|
(178,732)
|
|
|
$
|
(351,100)
|
|
|
Foreign
|
1,524
|
|
|
3,558
|
|
|
Loss before income taxes
|
$
|
(177,208)
|
|
|
$
|
(347,542)
|
|
The provision for income taxes consists of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
|
2019
|
|
2020
|
|
Current provision:
|
|
|
|
|
State
|
$
|
356
|
|
|
$
|
194
|
|
|
Foreign
|
477
|
|
|
1,400
|
|
|
Deferred provision (benefit):
|
|
|
|
|
Federal
|
(11)
|
|
|
(512)
|
|
|
State
|
(2)
|
|
|
(89)
|
|
|
Foreign
|
—
|
|
|
—
|
|
|
Provision for income taxes
|
$
|
820
|
|
|
$
|
993
|
|
The effective income tax rate differs from the federal statutory income tax rate applied to the loss before provision for income taxes due to the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
|
2019
|
|
2020
|
|
Income tax expense computed at federal statutory rate
|
$
|
(37,214)
|
|
|
$
|
(72,984)
|
|
|
|
|
|
|
|
State taxes, net of federal benefit
|
(6,168)
|
|
|
(12,239)
|
|
|
Research and development credits
|
(5,278)
|
|
|
(5,805)
|
|
|
Stock-based compensation
|
1,150
|
|
|
6,905
|
|
|
Change in valuation allowance
|
47,521
|
|
|
83,966
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
809
|
|
|
1,150
|
|
|
Total
|
$
|
820
|
|
|
$
|
993
|
|
A valuation allowance has been recognized to offset the Company’s deferred tax assets, as necessary, by the amount of any tax benefits that, based on evidence, are not expected to be realized. As of January 31, 2019 and 2020, the Company believes it is more likely than not that the deferred tax assets will not be fully realizable and continues to maintain a full valuation allowance against its net deferred tax assets.
Significant components of the Company’s deferred tax assets and deferred tax liabilities are shown below (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
|
2019
|
|
2020
|
|
Deferred tax assets:
|
|
|
|
|
Net operating losses carryforwards
|
$
|
83,553
|
|
|
$
|
157,995
|
|
|
Tax credit carryforwards
|
8,853
|
|
|
14,892
|
|
|
Stock-based compensation
|
—
|
|
|
4,437
|
|
|
Lease liabilities
|
4,148
|
|
|
50,624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
2,448
|
|
|
1,651
|
|
|
Total deferred tax assets
|
99,002
|
|
|
229,599
|
|
|
Less: valuation allowance
|
(84,012)
|
|
|
(165,067)
|
|
|
Net deferred tax assets
|
14,990
|
|
|
64,532
|
|
|
Deferred tax liabilities:
|
|
|
|
|
Stock-based compensation
|
(1,172)
|
|
|
—
|
|
|
Capitalized commissions
|
(9,948)
|
|
|
(17,698)
|
|
|
Operating lease right-of-use assets
|
(3,870)
|
|
|
(46,834)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax liabilities
|
(14,990)
|
|
|
(64,532)
|
|
|
Net deferred tax assets (liabilities)
|
$
|
—
|
|
|
$
|
—
|
|
The valuation allowance was $84.0 million and $165.1 million as of January 31, 2019 and 2020, respectively, primarily relating to U.S. federal and state net operating loss carryforwards and tax credit carryforwards. The valuation allowance increased $47.2 million and $81.1 million during the fiscal years ended January 31, 2019 and 2020, respectively, primarily due to increased U.S. federal and state net operating loss carryforwards and tax credit carryforwards.
As of January 31, 2020, the Company had U.S. federal and state net operating loss carryforwards of $632.4 million and $385.8 million, respectively. Of the $632.4 million U.S. federal net operating loss carryforwards, $64.0 million may be carried forward indefinitely with no limitation when utilized, and $487.6 million may be carried forward indefinitely with utilization limited to 80% of taxable income. The remaining $80.8 million will begin to expire in 2031. The state net operating loss carryforwards begin to expire in 2029. As of January 31, 2020, the Company also had federal and state tax credits of $12.3 million and $7.9 million, respectively. The federal tax credit carryforwards will expire beginning in 2031 if not utilized. The state tax credit carryforwards do not expire. Utilization of the Company’s net operating loss and tax credit carryforwards may be subject to annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss and tax credit carryforwards before utilization.
Foreign withholding taxes have not been provided for the cumulative undistributed earnings of the Company’s foreign subsidiaries as of January 31, 2020 due to the Company’s intention to permanently reinvest such earnings. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.
The following table shows the changes in the gross amount of unrecognized tax benefits (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
|
2019
|
|
2020
|
|
Beginning balance
|
$
|
933
|
|
|
$
|
2,407
|
|
|
Increases based on tax positions during the current period
|
1,474
|
|
|
1,650
|
|
|
|
|
|
|
|
Ending balance
|
$
|
2,407
|
|
|
$
|
4,057
|
|
As of January 31, 2019 and 2020, the total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was not material.
There were no interest and penalties associated with unrecognized income tax benefits for the fiscal years ended January 31, 2019 and 2020.
Although it is reasonably possible that certain unrecognized tax benefits may increase or decrease within the next 12 months due to tax examination changes, settlement activities, or the impact on recognition and measurement considerations related to the results of published tax cases or other similar activities, the Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months.
The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and in various international jurisdictions. Tax years 2012 and forward generally remain open for examination for federal and state tax purposes. Tax years 2017 and forward generally remain open for examination for foreign tax purposes. To the extent utilized in future years’ tax returns, net operating loss carryforwards at January 31, 2019 and 2020 will remain subject to examination until the respective tax year is closed.
For the Six Months Ended July 31, 2019 and 2020 (Unaudited)
The Company has an effective tax rate of (0.2)% for each of the six months ended July 31, 2019 and 2020. The Company has incurred U.S. operating losses and has minimal profits in its foreign jurisdictions.
The Company has evaluated all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and has determined that it is more likely than not that its net deferred tax assets will not be realized in the United States. Due to uncertainties surrounding the realization of the deferred tax assets, the Company maintains a full valuation allowance against its net deferred tax assets.
The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was enacted by the United States on March 27, 2020. The Company is continuing to analyze the impacts of the CARES Act. The CARES act did not have a material impact on the Company’s provision for income taxes for the six months ended July 31, 2020.
13. Net Loss per Share and Unaudited Pro Forma Net Loss per Share
The following table presents the calculation of basic and diluted net loss per share (in thousands, except share and per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders
|
$
|
(178,028)
|
|
|
$
|
(348,535)
|
|
|
$
|
(177,224)
|
|
|
$
|
(171,278)
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing net loss per share attributable to common stockholders – basic and diluted
|
38,162,228
|
|
|
44,847,442
|
|
|
41,691,615
|
|
|
56,809,625
|
|
|
Net loss per share attributable to common stockholders – basic and diluted
|
$
|
(4.67)
|
|
|
$
|
(7.77)
|
|
|
$
|
(4.25)
|
|
|
$
|
(3.01)
|
|
The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because the impact of including them would have been anti-dilutive:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Redeemable convertible preferred stock
|
168,309,042
|
|
|
169,921,272
|
|
|
169,159,160
|
|
|
182,271,099
|
|
|
Stock options
|
51,535,443
|
|
|
80,903,200
|
|
|
76,373,904
|
|
|
72,228,820
|
|
|
Common stock warrants
|
32,336
|
|
|
32,336
|
|
|
32,336
|
|
|
32,336
|
|
|
Shares subject to repurchase(1)
|
6,014,645
|
|
|
3,724,593
|
|
|
4,287,719
|
|
|
1,539,136
|
|
|
RSUs(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
4,853,231
|
|
|
Total
|
225,891,466
|
|
|
254,581,401
|
|
|
249,853,119
|
|
|
260,924,622
|
|
________________
(1)Includes 920,380, 16,700, 327,700, and zero shares of restricted stock that were subject to performance-based vesting conditions as of January 31, 2019 and 2020 and July 31, 2019 and 2020 (unaudited), respectively.
(2)These RSUs were subject to a performance-based vesting condition as of July 31, 2020. See Note 11 for details on these awards.
Unaudited Pro Forma Net Loss Per Share
The following table presents the calculation of unaudited pro forma basic and diluted net loss per share (in thousands, except share and per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31, 2020
|
|
Six Months Ended July 31, 2020
|
|
Numerator:
|
|
|
|
|
Net loss and pro forma net loss
|
$
|
(348,535)
|
|
|
$
|
(171,278)
|
|
|
Denominator:
|
|
|
|
|
Weighted-average shares used in computing basic net loss per share
|
44,847,442
|
|
|
56,809,625
|
|
|
Pro forma adjustment to reflect conversion of redeemable convertible preferred stock
|
169,479,985
|
|
|
181,559,881
|
|
|
Weighted-average shares used in computing pro forma net loss per share
|
214,327,427
|
|
|
238,369,506
|
|
|
Pro forma net loss per share attributable to common stockholders – basic and diluted
|
$
|
(1.63)
|
|
|
$
|
(0.72)
|
|
14. Geographic Information
Revenue by geographic area, based on the location of the Company’s users, was as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended January 31,
|
|
|
|
Six Months Ended July 31,
|
|
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
United States
|
$
|
90,222
|
|
|
$
|
233,828
|
|
|
$
|
94,105
|
|
|
$
|
206,465
|
|
|
Other
|
6,444
|
|
|
30,920
|
|
|
9,939
|
|
|
35,495
|
|
|
Total
|
$
|
96,666
|
|
|
$
|
264,748
|
|
|
$
|
104,044
|
|
|
$
|
241,960
|
|
Long-lived assets, comprising property and equipment, net and operating lease right-of-use assets, by geographic area were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
|
July 31,
|
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
|
|
(unaudited)
|
|
United States
|
$
|
22,756
|
|
|
$
|
212,189
|
|
|
$
|
220,785
|
|
|
Other
|
—
|
|
|
10,923
|
|
|
9,032
|
|
|
Total
|
$
|
22,756
|
|
|
$
|
223,112
|
|
|
$
|
229,817
|
|
15. Subsequent Events
The Company has evaluated subsequent events through June 7, 2020, the date on which these consolidated financial statements for the fiscal years ended January 31, 2019 and 2020 were available for issuance:
In February 2020, the Company issued approximately 8.5 million shares of Series G-1 redeemable convertible preferred stock and approximately 3.9 million shares of Series G-2 redeemable convertible preferred stock, all at $38.77 per share, for proceeds of $478.6 million, net of issuance costs.
In February 2020, certain third parties unaffiliated with the Company commenced an offer to purchase outstanding shares of the Company’s Class B common stock from certain equity holders at a price of $38.77 per share. The Company was not a party to this transaction. The transaction was completed in the first quarter of fiscal 2021, and an aggregate of 8.6 million shares of the Class B Company’s common stock were transferred to these third parties.
In March 2020, the Company issued 2,295,492 RSUs to its employees and directors with both service-based and performance-based vesting conditions. The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter. The performance-based vesting condition is satisfied on the earlier of (i) the effective date of a registration statement of the Company filed under the Securities Act for the sale of the Company’s common stock or (ii) immediately prior to the closing of a change in control of the Company. Both events are not deemed probable until consummated, and therefore, all stock-based compensation cost related to RSUs will remain unrecognized until the underlying performance condition is achieved. Upon the satisfaction of the underlying performance condition, stock-based compensation cost will be recorded based on the grant-date fair value of the RSUs using the accelerated attribution method.
16. Subsequent Events (Unaudited)
In preparing the unaudited interim consolidated financial statements for the six months ended July 31, 2019 and 2020, the Company has evaluated subsequent events through August 24, 2020, the date these unaudited interim consolidated financial statements were available for issuance.
Events Subsequent to Original Issu ance of Unaudited Interim Consolidated Financial S tatements
In Sep tember 2020, the Company issued 2,841,823 RSUs to its employees with both service-based and performance-based vesting conditions. The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter. The performance-based vesting condition is satisfied on the earlier of (i) the effective date of a registration statement of the Company filed under the Securities Act for the sale of the Company’s common stock or (ii) immediately prior to the closing of a change in control of the Company. Both events are not deemed probable until consummated, and therefore, all stock-based compensation c ost related to RSUs will remain unrecognized until the underlying performance condition is achieved. Upon the satisfaction of the underlying performance condition, stock-based compensation cost will be recorded based on the grant-date fair value of the RSUs using the accelerated attribution method.
In S eptember 2020, the Company entered into purchase agreements with Salesforce Ventures LLC and Berkshire Hathaway Inc. to each purchase $250 million of the Company ’ s Class A common stock in a private placement at a price per share equal to the initial public offering price. The purchase of the Company ’ s Class A common stock in contingent upon , and will occur immediately subsequent to , the closing of the initial public offering.
In September 2020 , the Com pany ’ s Board of Directors adopted , and its stockholders approved, the 20 20 Equity Incentive Plan (the 2020 Plan) , which will become effective in connection with the IPO . A total of 34,100,000 shares of the Co mpany ’ s Class A common stock have been reser ved for issuance under the 2020 P la n in addition to (i) a ny annual automatic evergreen increases in the number of shares of Class A common stock reserved for issuance under the 2020 Plan and (ii) upon the expiration, forfeiture, cancellation, or reacquisition of any shares of Class B common stock underlying outstanding stock awards granted under the Plan, an equal number of shares of Class A common stock, such number of shares not to exceed 78,816,888 .
In September 2020, the Company’s Board of Directors adopted , and its stockholders approved, the 2020 Employee Stock Purchase Plan (the 2020 ESPP) , which will become effective in connection with the IPO . A total of 5,700,000 shar es of the Company’s Class A common stock have been reserved for future issuance unde r the 2020 ESPP , in addition to any annual automatic evergreen increases in the number of shares of Class A common stock reserved for future issuance under the 2020 ESPP .
In Septe mber 20 20 , t he Company ’ s Board of Directors and stock holders approved , and the Company filed, a certificate of amendment to the Company ’ s amended and restated certificate of incorporation to increase the number of authorized shares of t he Class A common stock and Class B common stock to 2,500,000,000 an d 355,000,000 , respectively .
28,000,000 S h ares
Snowflake Inc.
Class A Common Stock
|
|
|
|
|
|
|
|
|
|
|
Goldman Sachs & Co. LLC
|
|
Morgan Stanley
|
|
|
|
|
|
J.P. Morgan Securities LLC
|
Allen & Company LLC
|
Citigroup
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Suisse
|
Barclays
|
Deutsche Bank Securities
|
Mizuho Securities
|
Truist Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BTIG
|
Canaccord Genuity
|
Capital One Securities
|
Cowen
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D.A. Davidson & Co.
|
JMP Securities
|
Oppenheimer & Co.
|
Piper Sandler
|
Stifel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Academy Securities
|
Loop Capital Markets
|
Ramirez & Co., Inc.
|
Siebert Williams Shank
|
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Unless otherwise indicated, all references to “Snowflake,” the “company,” “we,” “our,” “us,” or similar terms refer to Snowflake Inc. and its subsidiaries.
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses to be paid by us, other than underwriting discounts and commissions, in connection with this offering. All amounts shown are estimates except for the SEC registration fee, the FINRA filing fee, and the exchange listing fee.
|
|
|
|
|
|
|
|
SEC registration fee
|
$
|
355,263
|
|
|
FINRA filing fee
|
225,500
|
|
|
Exchange listing fee
|
295,000
|
|
|
Printing and engraving expenses
|
200,000
|
|
|
Legal fees and expenses
|
2,250,000
|
|
|
Accounting fees and expenses
|
2,320,000
|
|
|
Transfer agent and registrar fees
|
10,000
|
|
|
Miscellaneous expenses
|
144,237
|
|
|
Total
|
$
|
5,800,000
|
|
Item 14. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities, including reimbursement for expenses incurred, arising under the Securities Act. Our amended and restated certificate of incorporation that will be in effect on the closing of this offering permits indemnification of our directors, officers, employees, and other agents to the maximum extent permitted by the Delaware General Corporation Law, and our amended and restated bylaws that will be in effect on the closing of this offering provide that we will indemnify our directors and officers and permit us to indemnify our employees and other agents, in each case to the maximum extent permitted by the Delaware General Corporation Law.
We have entered into indemnification agreements with our directors and officers, whereby we have agreed to indemnify our directors and officers to the fullest extent permitted by law, including indemnification against expenses and liabilities incurred in legal proceedings to which the director or officer was, or is threatened to be made, a party by reason of the fact that such director or officer is or was a director, officer, employee, or agent of Snowflake Inc., provided that such director or officer acted in good faith and in a manner that the director or officer reasonably believed to be in, or not opposed to, the best interest of Snowflake Inc. At present, there is no pending litigation or proceeding involving a director or officer of Snowflake Inc. regarding which indemnification is sought, nor is the registrant aware of any threatened litigation that may result in claims for indemnification.
We maintain insurance policies that indemnify our directors and officers against various liabilities arising under the Securities Act and the Securities Exchange Act of 1934, as amended, that might be incurred by any director or officer in his capacity as such.
The underwriters will be obligated, under certain circumstances, under the underwriting agreement to be filed as Exhibit 1.1 hereto, to indemnify us and our officers and directors against liabilities under the Securities Act.
Item 15. Recent Sales of Unregistered Securities.
The following sets forth information regarding all unregistered securities issued by us since February 1, 2017:
Convertible Preferred Stock Issuances
1.In February 2020, we issued and sold an aggregate of 8,480,857 shares of Series G-1 convertible preferred stock and 3,868,970 shares of Series G-2 convertible preferred stock to 55 accredited investors at $38.77 per share for an aggregate consideration of approximately $478.8 million.
2.In October 2018, February 2019, and August 2019, we issued and sold an aggregate of 30,839,786 shares of Series F convertible preferred stock to 51 accredited investors at $14.96125 per share for an aggregate consideration of approximately $461.4 million.
3.In January 2018 and September 2018, we issued and sold an aggregate of 35,446,984 shares of Series E convertible preferred stock to 43 accredited investors at $7.4617 per share for an aggregate consideration of approximately $264.5 million.
4.In March 2017 and August 2017, we issued and sold an aggregate of 29,981,998 shares of Series D convertible preferred stock to 48 accredited investors at $3.5021 per share for an aggregate consideration of approximately $105.0 million.
Option, RSU, and Common Stock Issuances
5. From February 1, 2017 through the date of this registration statement, we have granted under our 2012 Plan options to purchase an aggregate of 94, 3 91,408 shares of our Class B common stock to employees, consultants, and directors having exercise prices ranging from $0.74 to $ 80.00 per share. Of these, options to purchase an aggregate of 12, 603,678 shares of our Class B common stock have been canceled without being exercised.
6. From February 1, 2017 through the date of this registration statement, an aggregate of 30,7 8 4 , 891 shares of our Class B common stock were issued to employees, consultants, and directors upon the issuance of restricted stock awards under the 2012 Plan and the exercise of stock options under our 2012 Plan at exercise prices between $0.005 and $ 13.48 per share, for aggregate proceeds of approximately $ 69. 6 million .
7. From February 1, 2017 through the date of this registration statement, we have granted an aggregate of 7 , 724 , 604 restricted stock units to employees, consultants, and directors to be settled in shares of Class B common stock under our 2012 Plan. Of these, 3 2,400 restricted stock units have been canceled prior to settlement.
8. From February 1, 2017 through the date of this registration statement, an aggregate of 1,250,000 shares of our Class B common stock were issued pursuant to a restricted stock award outside of the 2012 Plan to an employee, at a purchase price of $1.59 per share, for aggregate proceeds of approximately $2. 1 million .
Shares Issued in Connection with Acquisitions
9.In March 2019, we issued an aggregate of 661,635 shares of Class B common stock in connection with our acquisition of a company as consideration to individuals and entities who were former service providers and stockholders of such company.
None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. Unless otherwise specified above, we believe these transactions were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act (and Regulation D or Regulation S promulgated thereunder) or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or under benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed on the
share certificates issued in these transactions. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities were made without any general solicitation or advertising.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
See the Exhibit Index on the page immediately preceding the signature page for a list of exhibits filed as part of this registration statement on Form S-1, which Exhibit Index is incorporated herein by reference.
(b) Financial Statement Schedules.
All financial statement schedules are omitted because the information required to be set forth therein is not applicable or is shown in the consolidated financial statements or the notes thereto.
Item 17. Undertakings.
The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the registrant under the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1)For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
EXHIBIT INDEX
|
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
1.1†
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
3.3†
|
|
|
|
3.4
|
|
|
|
4.1
|
|
|
|
5.1
|
|
|
|
10.1
|
|
|
|
10.2†
|
|
|
|
10.3†+
|
|
|
|
10.4†+
|
|
|
|
10.5+
|
|
|
|
10.6+
|
|
|
|
10.7+
|
|
|
|
10.8+
|
|
|
|
10.9+
|
|
|
|
10.10†+
|
|
|
|
10.11†+
|
|
|
|
10.12†+
|
|
|
|
10.13†+
|
|
|
|
10.14†+
|
|
|
|
10.15†+
|
|
|
|
10.16†
|
|
|
|
10.17†+
|
|
|
|
10.18†+
|
|
|
|
10.19†+
|
|
|
|
10.20
|
|
|
|
10.21
|
|
|
|
16.1†
|
|
|
|
21.1
|
|
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23.1
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23.2
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24.1†
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_____________ ___
† Previously filed .
+ Indicates a management contract or compensatory plan.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 1 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in San Mateo, California, on September 8 , 2020.
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SNOWFLAKE INC.
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By:
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/s/ Frank Slootman
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Name:
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Frank Slootman
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Title:
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Chief Executive Officer
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Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the registration statement has been signed by the following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Frank Slootman
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Chief Executive Officer and Director
(Principal Executive Officer)
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September 8, 2020
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Frank Slootman
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/s/ Michael P. Scarpelli
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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September 8, 2020
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Michael P. Scarpelli
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*
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Director
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September 8, 2020
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Benoit Dageville
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Director
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September 8, 2020
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Teresa Briggs
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Director
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September 8, 2020
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Jeremy Burton
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Director
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September 8, 2020
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Carl M. Eschenbach
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Director
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September 8, 2020
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Mark S. Garrett
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Director
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September 8, 2020
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Kelly A. Kramer
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Director
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September 8, 2020
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John D. McMahon
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Director
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September 8, 2020
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Michael L. Speiser
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Director
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September 8, 2020
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Jayshree V. Ullal
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By:
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/s/ Michael P. Scarpelli
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Attorney-in-Fact
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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SNOWFLAKE INC.
Robert Specker hereby certifies that:
ONE: The original name of this company is Snowflake Computing, Inc. and the date of filing the original Certificate of Incorporation of this company with the Secretary of State of the State of Delaware was July 23, 2012.
TWO: He is the duly elected and acting Secretary of Snowflake Inc., a Delaware corporation.
THREE: The Certificate of Incorporation of this company is hereby amended and restated to read as follows:
I.
The name of this company is Snowflake Inc. (the “Company”).
II.
The registered office of the Company in the State of Delaware is 251 Little Falls Drive, City of Wilmington, County of New Castle, 19808 and the name of the registered agent of the Company in the State of Delaware at such address is Corporation Service Company.
III.
The purpose of the Company is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law (“DGCL”).
IV.
A.The Company is authorized to issue three classes of stock to be designated, respectively, “Class A Common Stock,” “Class B Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 536,409,099 shares, 2,000 shares of which shall be Class A Common Stock (the “Class A Common Stock”), 354,136,000 shares of which shall be Class B Common Stock (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) and 182,271,099 shares of which shall be Preferred Stock (the “Preferred Stock”). The Preferred Stock shall have a par value of $0.0001 per share and the Common Stock shall have a par value of $0.0001 per share.
B.The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares of Common Stock then outstanding) by the affirmative vote of the holders of a majority of all outstanding shares of the stock of the Company entitled to vote (voting together as a single class on an as-if-converted basis), irrespective of the provisions of Section 242(b)(2) of the DGCL.
C.Four million four hundred ten thousand seven hundred thirty-six (4,410,736) of the authorized shares of Preferred Stock are hereby designated “Series Seed Preferred Stock” (the “Series Seed Preferred”). Fourteen million two hundred forty thousand five hundred (14,240,500) of the authorized shares of Preferred Stock are hereby designated “Series A Preferred Stock” (the “Series A Preferred”). Twenty million six hundred eight thousand ninety-eight (20,608,098) of the authorized shares of Preferred Stock are hereby designated “Series B Preferred Stock” (the “Series B Preferred”). Thirty-four million three hundred ninety-three thousand one hundred seventy (34,393,170) of the authorized shares of Preferred Stock are hereby designated “Series C Preferred Stock” (the “Series C Preferred”). Twenty-nine million nine hundred eighty-one thousand nine hundred ninety-eight (29,981,998) are hereby designated “Series D Preferred Stock” (the “Series D Preferred”). Thirty-five million four hundred forty-six thousand nine hundred eighty-four (35,446,984) of the authorized shares of Preferred Stock are hereby designated “Series E Preferred Stock” (the “Series E Preferred”). Thirty million eight hundred thirty-nine thousand seven hundred eighty-six (30,839,786) of the authorized shares of Preferred Stock are hereby designated “Series F Preferred Stock” (the “Series F Preferred”). Eight million four hundred eighty thousand eight hundred fifty-seven (8,480,857) of the authorized shares of Preferred Stock are hereby designated “Series G-1 Preferred Stock” (the “Series G-1 Preferred”). Three million eight hundred sixty-eight thousand nine hundred seventy (3,868,970) of the authorized shares of Preferred Stock are hereby designated “Series G-2 Preferred Stock” (the “Series G-2 Preferred” and, together with the Series G-1 Preferred, the Series F Preferred, the Series E Preferred, the Series D Preferred, the Series C Preferred, the Series B Preferred, the Series A Preferred and the Series Seed Preferred, the “Series Preferred”).
D.The rights, preferences, privileges, restrictions and other matters relating to the Series Preferred are as follows:
1.DIVIDEND RIGHTS.
(a)Holders of Series Preferred, in preference to the holders of Common Stock, shall be entitled to receive, when, as and if declared by the Board of Directors (the “Board”), but only out of funds that are legally available therefor, cash dividends at the rate of eight percent (8%) of the Original Issue Price (as defined below) of each such series of Series Preferred per annum on each outstanding share of Series Preferred. Such dividends shall be payable on a pari passu basis and only when, as and if declared by the Board and shall be non-cumulative.
(b)The “Original Issue Price” of the Series Seed Preferred shall be $0.17190 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof). The “Original Issue Price” of the Series A Preferred shall be $0.34760 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof). The “Original Issue Price” of the Series B Preferred shall be $0.96805 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof). The “Original Issue Price” of the Series C Preferred shall be $2.29215 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof). The “Original Issue Price” of the Series D Preferred shall be $3.50210 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof). The “Original Issue Price” of the Series E Preferred shall be $7.46170 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof). The “Original Issue Price” of the Series F Preferred shall be $14.96125 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof). The “Original Issue Price” of the Series G-1 Preferred shall be $38.77 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof). The “Original Issue Price” of the Series G-2 Preferred shall be $38.77 (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof).
(c)So long as any shares of Series Preferred are outstanding, the Company shall not pay or declare any dividend, whether in cash or property, or make any other distribution on the Common Stock, or purchase, redeem or otherwise acquire for value any shares of Common Stock until all dividends as set forth in Section 1(a) above on the Series Preferred shall have been paid or declared and set apart, except for:
(i)acquisitions of Common Stock by the Company pursuant to agreements which permit the Company to repurchase such shares at cost (or the lesser of cost or fair market value) upon termination of services to the Company;
(ii)acquisitions of Common Stock in exercise of the Company’s right of first refusal to repurchase such shares; or
(iii)distributions to holders of Common Stock in accordance with Section 3 of Article IV(D).
(d)In the event dividends are paid on any share of Common Stock, the Company shall pay an additional dividend on all outstanding shares of Series Preferred in a per share amount equal (on an as-if-converted to Common Stock basis) to the amount paid or set aside for each share of Common Stock.
(e)The provisions of Sections 1(c) and 1(d) shall not apply to a dividend payable solely in Common Stock to which the provisions of Section 5(f) of Article IV(D) are applicable, or any repurchase of any outstanding securities of the Company that is approved by the Board.
(f)A distribution to the Company’s stockholders solely for purposes of Sections 1(c)(i) or (ii), or otherwise approved by the Company’s stockholders under Section 2(b)(iv), may be made without regard to the preferential dividends arrears amount or any preferential rights amount (each as determined under applicable law).
2.VOTING RIGHTS.
(a)General Rights. Each holder of shares of the Series Preferred shall be entitled to the number of votes equal to the number of votes of the shares of Common Stock into which such respective shares of Series Preferred could be converted (pursuant to Section 5 hereof) immediately after the close of business on the record date fixed for such meeting or the effective date of such written consent and shall have voting rights and powers equal to the voting rights and powers of the Common Stock and shall be entitled to notice of any stockholders’ meeting in accordance with the bylaws of the Company. Except as otherwise provided herein or as required by law, the Series Preferred shall vote together with the Common Stock at any annual or special meeting of the stockholders and not as a separate class, and may act by written consent in the same manner as the Common Stock.
(b)Separate Vote of Series Preferred. For so long as any shares of Series Preferred remain outstanding, in addition to any other vote or consent required herein or by law, the vote or written consent of the holders of a majority of the outstanding Series Preferred (voting together as a single class on an as-if-converted basis) shall be necessary for effecting or validating the following actions (whether by merger, recapitalization or otherwise):
(i)Any amendment, alteration, or repeal of any provision of the Certificate of Incorporation or the Bylaws of the Company (including any filing of a Certificate of Designation), that alters or changes the voting or other powers, preferences, or other special rights, privileges or restrictions of the Series Preferred;
(ii)Any increase or decrease in the authorized number of shares of Common Stock or Preferred Stock;
(iii)Any authorization or any designation, whether by reclassification, merger or otherwise, of any new class or series of stock or any other securities convertible into equity securities of the Company ranking on a parity with or senior to the Series Preferred in right of redemption, liquidation preference, voting or dividend rights or any increase in the authorized or designated number of any such new class or series;
(iv)Any redemption, repurchase, payment or declaration of dividends or other distributions with respect to Common Stock or Preferred Stock other than dividends payable solely in Common Stock as described in Section 1(e) of Article IV(D) (except for acquisitions of Common Stock by the Company permitted by Section 1(c)(i), (ii) and (iii) of Article IV(D)); or
(v)Any agreement by the Company or its stockholders regarding a Liquidation Event (as defined in Section 3 of Article IV(D)).
(c) Separate Vote of Series D Preferred. For so long as any shares of Series D Preferred remain outstanding, in addition to any other vote or consent required herein or by law, the vote or written consent of the holders of a majority of the outstanding Series D Preferred (voting as a separate class) shall be necessary for effecting or validating the following actions (whether by amendment, merger, consolidation, recapitalization or otherwise):
(i) Any increase in the authorized number of shares of Series D Preferred; or
(ii) Any action that alters or changes the powers, rights, preferences or privileges of Series D Preferred so as to affect the holders of Series D Preferred Stock adversely as set forth in Section 242 of the DGCL, but not so affect the other series of Series Preferred, including for the sake of clarity, any amendment, alteration, repeal, or waiver of this Section 2(c).
(d) Separate Vote of Series E Preferred. For so long as any shares of Series E Preferred remain outstanding, in addition to any other vote or consent required herein or by law, the vote or written consent of the holders of a majority of the outstanding Series E Preferred (voting as a separate class) shall be necessary for effecting or validating the following actions (whether by amendment, merger, consolidation, recapitalization or otherwise):
(i) Any increase in the authorized number of shares of Series E Preferred; or
(ii) Any action that alters or changes the powers, rights, preferences or privileges of Series E Preferred so as to affect the holders of Series E Preferred Stock adversely as set forth in Section 242 of the DGCL, but not so affect the other series of Series Preferred, including for the sake of clarity, any amendment, alteration, repeal, or waiver of this Section 2(d).
(e) Separate Vote of Series F Preferred. For so long as any shares of Series F Preferred remain outstanding, in addition to any other vote or consent required herein or by law, the vote or written consent of the holders of a majority of the outstanding Series F Preferred (voting as a separate class) shall be necessary for effecting or validating the following actions (whether by amendment, merger, consolidation, recapitalization or otherwise):
(i) Any increase in the authorized number of shares of Series F Preferred; or
(ii) Any action that alters or changes the powers, rights, preferences or privileges of Series F Preferred so as to affect the holders of Series F Preferred Stock adversely as set forth in Section 242 of the DGCL, but not so affect the other series of Series Preferred, including for the sake of clarity, any amendment, alteration, repeal, or waiver of this Section 2(e).
(f) Separate Vote of Series G-1 and G-2 Preferred. For so long as any shares of Series G-1 Preferred or Series G-2 Preferred remain outstanding, in addition to any other vote or consent required herein or by law, the vote or written consent of the holders of a majority of the outstanding Series G-1 Preferred and Series G-2 Preferred (voting together as a single class on as-converted basis) shall be necessary for effecting or validating the following actions (whether by amendment, merger, consolidation, recapitalization or otherwise):
(i) Any increase in the authorized number of shares of Series G-1 Preferred or Series G-2 Preferred; or
(ii) Any action that alters or changes the powers, rights, preferences or privileges of Series G-1 Preferred or Series G-2 Preferred so as to affect the holders of Series G-1 Preferred or Series G-2 Preferred adversely as set forth in Section 242 of the DGCL, but not so affect the other series of Series Preferred, including for the sake of clarity, any amendment, alteration, repeal, or waiver of this Section 2(f).
(g) Separate Vote of Series G-2 Preferred. For so long as any shares of Series G-2 Preferred remain outstanding, in addition to any other vote or consent required herein or by law, the vote or written consent of the holders of a majority of the outstanding Series G-2 Preferred (voting as a separate class) shall be necessary for effecting or validating the following actions (whether by amendment, merger, consolidation, recapitalization or otherwise):
(i) Any action that gives the holders of Series G-2 Preferred rights to vote for the members of the Board; or
(ii) Any amendment, alteration, repeal, or waiver of this Section 2(g).
(h) Election of Board of Directors.
(i) For so long as at least 4,000,000 shares of Series B Preferred remain outstanding (subject to adjustment for any stock split, reverse stock split or similar event affecting the Series B Preferred after the filing date hereof) the holders of Series B Preferred, voting as a separate class, shall be entitled to elect one (1) member of the Board at each meeting or pursuant to each consent of the Company’s stockholders for the election of directors, and to remove from office such directors and to fill any vacancy caused by the resignation, death or removal of such directors.
(i) For so long as at least 4,000,000 shares of Series A Preferred remain outstanding (subject to adjustment for any stock split, reverse stock split or similar event affecting the Series A Preferred after the filing date hereof) the holders of Series A Preferred, voting as a separate class, shall be entitled to elect one (1) member of the Board at each meeting or pursuant to each consent of the Company’s stockholders for the election of directors, and to remove from office such directors and to fill any vacancy caused by the resignation, death or removal of such directors.
(ii) The holders of Common Stock, voting as a separate class, shall be entitled to elect two (2) members of the Board at each meeting or pursuant to each consent of the Company’s stockholders for the election of directors, and to remove from office such directors and to fill any vacancy caused by the resignation, death or removal of such directors.
(iii) The holders of Common Stock, Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred, Series E Preferred, Series F Preferred and, commencing on the Series G-1 Additional Closing Date (as defined below), Series G-1 Preferred, voting together as a single class on an as-if-converted basis, shall be entitled to elect all remaining members of the Board at each meeting or pursuant to each consent of the Company’s stockholders for the election of directors, and to remove from office such directors and to fill any vacancy caused by the resignation, death or removal
of such directors. For the avoidance of doubt and notwithstanding anything to the contrary, (i) the holders of Series G-2 Preferred shall have no rights to vote for the members of the Board and (ii) until the Series G-1 Additional Closing Date, the holders of Series G-1 Preferred shall have no rights to vote for the members of the Board. The “Series G-1 Additional Closing Date” means the first Additional Closing (as defined in that certain Series G-1 and G-2 Preferred Stock Purchase Agreement dated on or about the filing date hereof) where Series G-1 Preferred is purchased by investors who are stockholders of the Company as of the filing date hereof.
(iv) No person entitled to vote at an election for directors may cumulate votes to which such person is entitled unless required by applicable law at the time of such election. During such time or times that applicable law requires cumulative voting, every stockholder entitled to vote at an election for directors may cumulate such stockholder’s votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which such stockholder’s shares are otherwise entitled, or distribute the stockholder’s votes on the same principle among as many candidates as such stockholder desires. No stockholder, however, shall be entitled to so cumulate such stockholder’s votes unless (A) the names of such candidate or candidates have been placed in nomination prior to the voting and (B) the stockholder has given notice at the meeting, prior to the voting, of such stockholder’s intention to cumulate such stockholder’s votes. If any stockholder has given proper notice to cumulate votes, all stockholders may cumulate their votes for any candidates who have been properly placed in nomination. Under cumulative voting, the candidates receiving the highest number of votes, up to the number of directors to be elected, are elected.
3.LIQUIDATION RIGHTS.
(a)Upon any liquidation, dissolution, or winding up of the Company (including, without limitation, an Acquisition (as defined below) or Asset Transfer (as defined below)), whether voluntary or involuntary (a “Liquidation Event”), before any distribution or payment shall be made to the holders of any Common Stock, subject to the right of any series of Preferred Stock that may from time to time come into existence, the holders of Series Preferred shall be entitled, on a pari passu basis among each other, to be paid out of the assets of the Company legally available for distribution for each share of Series Preferred held by them, an amount per share of Series Preferred equal to the greater of (i) the applicable Original Issue Price plus all declared and unpaid dividends on the Series Preferred or (ii) the amount of cash, securities or other property to which such holders would be entitled to receive in a Liquidation Event with respect to such shares if such shares had been converted to Common Stock immediately prior to such Liquidation Event. If, upon any such Liquidation Event, the assets of the Company shall be insufficient to make payment in full to all holders of Series Preferred of the liquidation preference set forth in this Section 3(a), then such assets (or consideration) shall be distributed among the holders of Series Preferred at the time outstanding, ratably, on a pari passu basis, in proportion to the full amounts to which they would otherwise be respectively entitled.
(b)After the payment of the full liquidation preference of the Series Preferred as set forth in Section 3(a) above, the remaining assets of the Company legally available for distribution, if any, shall be distributed ratably to the holders of the Common Stock.
(c)In any Liquidation Event, if the consideration to be received is securities of a private corporation or other property other than cash or cash equivalents, its value will be deemed its fair market value as determined in good faith by the Board on the date such determination is made.
(d)The treatment of any particular transaction or series of related transactions as a Liquidation Event may be waived only by the vote or written consent of the holders of a majority of the outstanding Series Preferred (voting together as a single class on an as-converted basis); provided, however, that the waiver of the treatment of any particular transaction or series of related transactions as a Liquidation Event that results in the receipt of, pursuant to Section (D)(3)(a) of this Article IV, an amount per share of Series G-1 Preferred or Series G-2 Preferred, as applicable, less than the greater of (i) the applicable Original Issue Price plus all declared and unpaid dividends on the Series
G-1 Preferred or Series G-2 Preferred (or if less, the amount determined pursuant to the last sentence of Section (D)(3)(a) of this Article IV) or (ii) the amount of cash, securities or other property to which such holders would be entitled to receive in a Liquidation Event with respect to such shares if such shares had been converted to Common Stock immediately prior to such Liquidation Event, shall require the vote or written consent of the holders of a majority of the outstanding Series G-1 Preferred and Series G-2 Preferred (voting together as a single class on an as-converted basis).
4.DEFINITIONS OF ASSET TRANSFER AND ACQUISITION.
(a)“Acquisition” means (A) any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, continue to hold a majority of the voting power of the surviving entity in substantially the same proportions (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such consolidation, merger or reorganization; or (B) any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company’s voting power is transferred; provided that an Acquisition shall not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof.
(b)“Asset Transfer” means a sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company.
5.CONVERSION RIGHTS.
The holders of the Series Preferred shall have the following rights with respect to the conversion of the Series Preferred into shares of Class B Common Stock (the “Conversion Rights”):
(a)Optional Conversion. Subject to and in compliance with the provisions of this Section 5, any shares of Series Preferred may, at the option of the holder, be converted at any time into fully-paid and nonassessable shares of Class B Common Stock. The number of shares of Class B Common Stock to which a holder of Series Preferred shall be entitled upon conversion shall be the product obtained by multiplying the applicable “Series Preferred Conversion Rate” then in effect (determined as provided in Section 5(b) below) by the number of shares of Series Preferred being converted.
(b)Series Preferred Conversion Rate. The conversion rate in effect at any time for conversion of a series of Series Preferred (the “Series Preferred Conversion Rate”) shall be the quotient obtained by dividing the applicable Original Issue Price of such series of Series Preferred by the applicable “Series Preferred Conversion Price,” calculated as provided in Section 5(c) below.
(c)Series Preferred Conversion Price. The conversion price for a series of Series Preferred shall initially be the applicable Original Issue Price of such series of Series Preferred (the “Series Preferred Conversion Price”). Such initial Series Preferred Conversion Price shall be adjusted from time to time in accordance with this Section 5. All references to the Series Preferred Conversion Price herein shall mean the applicable Series Preferred Conversion Price as so adjusted.
(d)Mechanics of Conversion. Each holder of Series Preferred who desires to convert the same into shares of Class B Common Stock pursuant to this Section 5 shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or any transfer agent for the Series Preferred, and shall give written notice to the Company at such office that such holder elects to convert the same. Such notice shall state the number of shares of Series Preferred being converted. Thereupon, the Company shall promptly issue and deliver at such office to such holder a certificate or certificates for the number of shares of Class B Common Stock to which such holder is entitled and shall
promptly pay (i) in cash or, to the extent sufficient funds are not then legally available therefor, in Class B Common Stock (at the Class B Common Stock’s fair market value determined by the Board as of the date of such conversion), any declared and unpaid dividends on the shares of Series Preferred being converted and (ii) in cash (at the Class B Common Stock’s fair market value determined by the Board as of the date of conversion) the value of any fractional share of Class B Common Stock otherwise issuable to any holder of Series Preferred. Such conversion shall be deemed to have been made at the close of business on the date of such surrender of the certificates representing the shares of Series Preferred to be converted, and the person entitled to receive the shares of Class B Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Class B Common Stock on such date.
(e)Adjustment for Stock Splits and Combinations. If at any time or from time to time on or after the date that the first share of Series G-1 Preferred is issued (the “Original Issue Date”) the Company effects a subdivision of the outstanding Class B Common Stock, the applicable Series Preferred Conversion Price in effect immediately before that subdivision shall be proportionately decreased. Conversely, if at any time or from time to time after the filing date hereof the Company combines the outstanding shares of Class B Common Stock into a smaller number of shares, the applicable Series Preferred Conversion Price in effect immediately before the combination shall be proportionately increased. Any adjustment under this Section 5(e) shall become effective at the close of business on the date the subdivision or combination becomes effective.
(f)Adjustment for Common Stock Dividends and Distributions. If at any time or from time to time on or after the Original Issue Date, the Company pays to holders of Class B Common Stock a dividend or other distribution in additional shares of Class B Common Stock, the applicable Series Preferred Conversion Price then in effect shall be decreased as of the time of such issuance, as provided below:
(i)The Series Preferred Conversion Price of such series of Series Preferred shall be adjusted by multiplying the applicable Series Preferred Conversion Price of such series of Series Preferred then in effect by a fraction equal to:
(A)the numerator of which is the total number of shares of Class B Common Stock issued and outstanding immediately prior to the time of such issuance, and
(B)the denominator of which is the total number of shares of Class B Common Stock issued and outstanding immediately prior to the time of such issuance plus the number of shares of Class B Common Stock issuable in payment of such dividend or distribution;
(ii)If the Company fixes a record date to determine which holders of Class B Common Stock are entitled to receive such dividend or other distribution, the applicable Series Preferred Conversion Price shall be fixed as of the close of business on such record date and the number of shares of Class B Common Stock shall be calculated immediately prior to the close of business on such record date; and
(iii)If such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the applicable Series Preferred Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the applicable Series Preferred Conversion Price shall be adjusted pursuant to this Section 5(f) to reflect the actual payment of such dividend or distribution.
(g)Adjustment for Reclassification, Exchange, Substitution, Reorganization, Merger or Consolidation. If at any time or from time to time on or after the Original Issue Date, the Class B Common Stock issuable upon the conversion of the Series Preferred is changed
into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification, merger, consolidation or otherwise (other than an Acquisition or Asset Transfer as defined in Section 4 of Article IV(D) or a subdivision or combination of shares or stock dividend provided for elsewhere in this Section 5), in any such event each holder of Series Preferred shall then have the right to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification, merger, consolidation or other change by holders of the maximum number of shares of Class B Common Stock into which such shares of Series Preferred could have been converted immediately prior to such recapitalization, reclassification, merger, consolidation or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 5 with respect to the rights of the holders of Series Preferred after the capital reorganization to the end that the provisions of this Section 5 (including adjustment of the applicable Series Preferred Conversion Price then in effect and the number of shares issuable upon conversion of the Series Preferred) shall be applicable after that event and be as nearly equivalent as practicable.
(h)Sale of Shares Below Series Preferred Conversion Price.
(i)If at any time or from time to time on or after the Original Issue Date the Company issues or sells, or is deemed by the express provisions of this Section 5(h) to have issued or sold, Additional Shares of Common Stock (as defined below), other than as provided in Section 5(e), 5(f) or 5(g) above, for an Effective Price (as defined below) less than the then effective Series Preferred Conversion Price (a “Qualifying Dilutive Issuance”), then and in each such case, the then existing applicable Series Preferred Conversion Price shall be reduced, as of the opening of business on the date of such issue or sale, to a price determined by multiplying the applicable Series Preferred Conversion Price in effect immediately prior to such issuance or sale by a fraction equal to:
(A)the numerator of which shall be (1) the number of shares of Common Stock deemed outstanding (as determined below) immediately prior to such issue or sale, plus (2) the number of shares of Common Stock which the Aggregate Consideration (as defined below) received or deemed received by the Company for the total number of Additional Shares of Common Stock so issued would purchase at such then-existing Series Preferred Conversion Price, and
(B)the denominator of which shall be (1) the number of shares of Common Stock deemed outstanding (as determined below) immediately prior to such issue or sale plus (2) the total number of Additional Shares of Common Stock so issued.
For the purposes of the preceding sentence, the number of shares of Common Stock deemed to be outstanding as of a given date shall be the sum of (A) the number of shares of Common Stock outstanding, (B) the number of shares of Class B Common Stock into which the then outstanding shares of Series Preferred could be converted if fully converted on the day immediately preceding the given date, and (C) the number of shares of Common Stock which are issuable upon the exercise or conversion of all other rights, options and convertible securities outstanding on the day immediately preceding the given date.
(ii)No adjustment shall be made to the applicable Series Preferred Conversion Price in an amount less than one percent (1%) of the Series Preferred Conversion Price then in effect. Any adjustment otherwise required by this Section 5(h) that is not required to be made due to the preceding sentence shall be included in any subsequent adjustment to the applicable Series Preferred Conversion Price. Any adjustment required by this Section 5(h) shall be rounded to the first decimal for which such rounding represents less than one percent (1%) of the applicable Series Preferred Conversion Price in effect after such adjustment.
(iii)For the purpose of making any adjustment required under this Section 5(h), the aggregate consideration received by the Company for any issue or sale of securities (the “Aggregate Consideration”) shall be defined as: (A) to the extent it consists of cash, be computed at the gross amount of cash received by the Company before deduction of any underwriting or similar commissions, compensation or concessions paid or allowed by the Company in connection with such issue or sale and without deduction of any expenses payable by the Company, (B) to the extent it consists of property other than cash, be computed at the fair value of that property as determined in good faith by the Board, and (C) if Additional Shares of Common Stock, Convertible Securities (as defined below) or rights or options to purchase either Additional Shares of Common Stock or Convertible Securities are issued or sold together with other stock or securities or other assets of the Company for a consideration which covers both, be computed as the portion of the consideration so received that may be reasonably determined in good faith by the Board to be allocable to such Additional Shares of Common Stock, Convertible Securities or rights or options.
(iv)For the purpose of the adjustment required under this Section 5(h), if the Company issues or sells (x) Preferred Stock or other stock, options, warrants, purchase rights or other securities convertible into, Additional Shares of Common Stock (such convertible stock or securities being herein referred to as “Convertible Securities”) or (y) rights or options for the purchase of Additional Shares of Common Stock or Convertible Securities and if the Effective Price of such Additional Shares of Common Stock is less than the Series Preferred Conversion Price, in each case the Company shall be deemed to have issued at the time of the issuance of such rights or options or Convertible Securities the maximum number of Additional Shares of Common Stock issuable upon exercise or conversion thereof and to have received as consideration for the issuance of such shares an amount equal to the total amount of the consideration, if any, received by the Company for the issuance of such rights or options or Convertible Securities plus:
(A)in the case of such rights or options, the minimum amounts of consideration, if any, payable to the Company upon the exercise of such rights or options; and
(B)in the case of Convertible Securities, the minimum amounts of consideration, if any, payable to the Company upon the conversion thereof (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities); provided that if the minimum amounts of such consideration cannot be ascertained, but are a function of antidilution or similar protective clauses, the Company shall be deemed to have received the minimum amounts of consideration without reference to such clauses.
(C)If the minimum amount of consideration payable to the Company upon the exercise or conversion of rights, options or Convertible Securities is reduced over time or on the occurrence or non-occurrence of specified events other than by reason of antidilution adjustments, the Effective Price shall be recalculated using the figure to which such minimum amount of consideration is reduced; provided further, that if the minimum amount of consideration payable to the Company upon the exercise or conversion of such rights, options or Convertible Securities is subsequently increased, the Effective Price shall be again recalculated using the increased minimum amount of consideration payable to the Company upon the exercise or conversion of such rights, options or Convertible Securities.
(D)No further adjustment of the applicable Series Preferred Conversion Price, as adjusted upon the issuance of such rights, options or Convertible Securities, shall be made as a result of the actual issuance of Additional Shares of Common Stock or the exercise of any such rights or options or the conversion of any such Convertible Securities. If any such rights or options or the conversion privilege represented by any such Convertible Securities shall expire without having been exercised, the applicable Series Preferred Conversion Price as adjusted upon the issuance of such rights, options or Convertible Securities shall be readjusted to the applicable Series Preferred Conversion Price which would have been in effect had an
adjustment been made on the basis that the only Additional Shares of Common Stock so issued were the Additional Shares of Common Stock, if any, actually issued or sold on the exercise of such rights or options or rights of conversion of such Convertible Securities, and such Additional Shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise, plus the consideration, if any, actually received by the Company for the granting of all such rights or options, whether or not exercised, plus the consideration received for issuing or selling the Convertible Securities actually converted, plus the consideration, if any, actually received by the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) on the conversion of such Convertible Securities, provided that such readjustment shall not apply to prior conversions of Series Preferred.
(v)For the purpose of making any adjustment to the Conversion Price of the Series Preferred required under this Section 5(h), “Additional Shares of Common Stock” shall mean all shares of Common Stock issued by the Company or deemed to be issued pursuant to this Section 5(h) (including shares of Common Stock subsequently reacquired or retired by the Company), other than:
(A)shares of Class B Common Stock issued upon conversion of the Series Preferred;
(B)shares of Common Stock or Convertible Securities issued after the Original Issue Date to employees, officers or directors of, or consultants or advisors to the Company or any subsidiary pursuant to stock purchase or stock option plans or other arrangements that are approved by the Board;
(C)shares of Common Stock issued pursuant to the exercise of Convertible Securities outstanding as of the Original Issue Date;
(D)shares of Common Stock or Convertible Securities issued for consideration other than cash pursuant to a merger, consolidation, acquisition, strategic alliance or similar business combination approved by the Board;
(E)shares of Common Stock or Convertible Securities issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by the Board;
(F)shares of Common Stock or Convertible Securities issued to third-party service providers in exchange for or as partial consideration for services rendered to the Company;
(G)any Common Stock or Convertible Securities issued in connection with strategic transactions involving the Company and other entities, including (i) joint ventures, manufacturing, marketing or distribution arrangements or (ii) technology transfer or development arrangements; provided that the issuance of shares therein has been approved by the Company’s Board; and
(H)shares of Common Stock issued in connection with an underwritten public offering.
References to Common Stock in the subsections of this clause (v) above shall mean all shares of Common Stock issued by the Company or deemed to be issued pursuant to this Section 5(h). The “Effective Price” of Additional Shares of Common Stock shall mean the quotient determined by dividing the total number of Additional Shares of Common Stock issued or sold, or deemed to have been issued or sold by the Company under this Section 5(h), into the Aggregate Consideration received, or
deemed to have been received by the Company for such issue under this Section 5(h), for such Additional Shares of Common Stock. In the event that the number of shares of Additional Shares of Common Stock or the Effective Price cannot be ascertained at the time of issuance, such Additional Shares of Common Stock shall be deemed issued immediately upon the occurrence of the first event that makes such number of shares or the Effective Price, as applicable, ascertainable.
(vi)In the event that the Company issues or sells, or is deemed to have issued or sold, Additional shares of Common Stock in a Qualifying Dilutive Issuance (the “First Dilutive Issuance”), then in the event that the Company issues or sells, or is deemed to have issued or sold, Additional Shares of Common Stock in a Qualifying Dilutive Issuance other than the First Dilutive Issuance as a part of the same transaction or series of related transactions as the First Dilutive Issuance (a “Subsequent Dilutive Issuance”), then and in each such case upon a Subsequent Dilutive Issuance the applicable Series Preferred Conversion Price shall be reduced to the applicable Series Preferred Conversion Price that would have been in effect had the First Dilutive Issuance and each Subsequent Dilutive Issuance all occurred on the closing date of the First Dilutive Issuance.
(vii)No adjustment in the Series Preferred Conversion Price shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Company receives written notice from the holders of a majority of the then outstanding shares of Series Preferred agreeing that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock; provided, that any such waiver of adjustment in the Series Preferred Conversion Price applicable to the Series C Preferred (including any amendment to Section 5(h)(v)) must include the holders of at least 60% of the then outstanding shares of Series C Preferred agreeing that no such adjustment shall be made to the Series Preferred Conversion Price applicable to the Series C Preferred; provided, further, that any such waiver of adjustment in the Series Preferred Conversion Price applicable to the Series D Preferred (including any amendment to Section 5(h)(v)) must include the holders of a majority of the then outstanding shares of Series D Preferred agreeing that no such adjustment shall be made to the Series Preferred Conversion Price applicable to the Series D Preferred; provided further, that any such waiver of adjustment in the Series Preferred Conversion Price applicable to the Series E Preferred (including any amendment to Section 5(h)(v)) must include the holders of a majority of the then outstanding shares of Series E Preferred agreeing that no such adjustment shall be made to the Series Preferred Conversion Price applicable to the Series E Preferred; provided further, that any such waiver of adjustment in the Series Preferred Conversion Price applicable to the Series F Preferred (including any amendment to Section 5(h)(v)) must include the holders of a majority of the then outstanding shares of Series F Preferred agreeing that no such adjustment shall be made to the Series Preferred Conversion Price applicable to the Series F Preferred; and provided further, that any such waiver of adjustment in the Series Preferred Conversion Price applicable to the Series G-1 Preferred or Series G-2 Preferred (including any amendment to Section 5(h)(v)) must include the holders of a majority of the then outstanding shares of Series G-1 Preferred and Series G-2 Preferred (voting together as a single class on an as-converted basis) agreeing that no such adjustment shall be made to the Series Preferred Conversion Price applicable to the Series G-1 Preferred or the Series G-2 Preferred.
(i)Certificate of Adjustment. In each case of an adjustment or readjustment of the applicable Series Preferred Conversion Price for the number of shares of Common Stock or other securities issuable upon conversion of the Series Preferred, if the Series Preferred is then convertible pursuant to this Section 5, the Company, at its expense, shall compute such adjustment or readjustment in accordance with the provisions hereof and shall, upon request, prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to each registered holder of Series Preferred so requesting at the holder’s address as shown in the Company’s books. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (i) the consideration received or deemed to be received by the Company for any Additional Shares of Common Stock issued or sold or deemed to have been issued or sold, (ii) the applicable Series Preferred Conversion Price at the time in effect, (iii) the number of Additional Shares of Common Stock and (iv) the type and amount, if
any, of other property which at the time would be received upon conversion of the Series Preferred. Failure to request or provide such notice shall have no effect on any such adjustment.
(j)Notices of Record Date. Upon (i) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or (ii) any Liquidation Event or other capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company, or any merger or consolidation of the Company with or into any other corporation, the Company shall mail to each holder of Series Preferred at least ten (10) days prior to (x) the record date, if any, specified therein; or (y) if no record date is specified, the date upon which such action is to take effect (or, in either case, such shorter period approved by the holders of a majority of the outstanding Series Preferred) a notice specifying (A) the date on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution, (B) the date on which any such Liquidation Event, reorganization, reclassification, recapitalization, merger or consolidation is expected to become effective, and (C) the date, if any, that is to be fixed as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such Liquidation Event, reorganization, reclassification, recapitalization, merger or consolidation.
(k)Automatic Conversion.
(i)Each share of Series Preferred shall automatically be converted into shares of Class B Common Stock, based on the then-effective applicable Series Preferred Conversion Price, (A) at any time upon the affirmative election of the holders of a majority of the outstanding shares of the Series Preferred (voting together as a single class on an as-if-converted basis); provided, that the vote or written consent of the holders of a majority of the outstanding Series G-1 Preferred and Series G-2 Preferred (voting together as a single class on as-converted basis) shall be required for the automatic conversion of the Series G-1 Preferred and Series G-2 Preferred into shares of Class B Common Stock, except if such conversion of the Series G-1 Preferred and Series G-2 Preferred pursuant to this clause (A) is in connection with the consummation of a bona fide equity financing for capital raising purposes wherein the price per share of the equity securities offered in such financing is less than the Original Issue Price of the Series G-1 Preferred and all existing Series Preferred are converted into a single series of capital stock of the Company, (B) immediately upon the closing of a firmly underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), covering the offer and sale of Class A Common Stock for the account of the Company in which the gross cash proceeds to the Company (before underwriting discounts, commissions and fees) are at least $300,000,000 and the Company’s shares have been listed for trading on the New York Stock Exchange, Nasdaq Global Select Market or Nasdaq Global Market or (C) the settlement of the initial trade of shares of Class A Common Stock on the New York Stock Exchange, Nasdaq Global Select Market or Nasdaq Global Market by means of an effective registration statement on Form S-1 under the Securities Act that registers all shares of existing capital stock of the Company for resale that are not otherwise eligible for resale pursuant to Rule 144 or other resale exemption (a “Direct Listing”). Upon such automatic conversion, any declared and unpaid dividends shall be paid in accordance with the provisions of Section 5(d) of Article IV(D).
(ii)Upon the occurrence of either of the events specified in Section 5(k)(i) of Article IV(D), the outstanding shares of Series Preferred shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Company or its transfer agent; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Class B Common Stock issuable upon such conversion unless the certificates evidencing such shares of Series Preferred are either delivered to the Company or its transfer agent as provided below, or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Series Preferred, the holders of Series Preferred
shall surrender the certificates representing such shares at the office of the Company or any transfer agent for the Series Preferred. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of Class B Common Stock into which the shares of Series Preferred surrendered were convertible on the date on which such automatic conversion occurred, and any declared and unpaid dividends shall be paid in accordance with the provisions of Section 5(d) of Article IV(D).
(l)Fractional Shares. No fractional shares of Class B Common Stock shall be issued upon conversion of Series Preferred. All shares of Class B Common Stock (including fractions thereof) issuable upon conversion of more than one share of Series Preferred by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share. If, after the aforementioned aggregation, the conversion would result in the issuance of any fractional share, the Company shall, in lieu of issuing any fractional share, pay cash equal to the product of such fraction multiplied by the fair market value of one share of Class B Common Stock (as determined by the Board) on the date of conversion.
(m)Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Class B Common Stock, solely for the purpose of effecting the conversion of the shares of the Series Preferred, such number of its shares of Class B Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series Preferred. If at any time the number of authorized but unissued shares of Class B Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series Preferred, the Company will take such corporate action as may be necessary to increase its authorized but unissued shares of Class B Common Stock to such number of shares as shall be sufficient for such purpose.
(n)Notices. Any notice required by the provisions of this Section 5 shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with verification of receipt. All notices shall be addressed to each holder of record at the address of such holder appearing on the books of the Company.
(o)Payment of Taxes. The Company will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of shares of Common Stock upon conversion of shares of Series Preferred, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Series Preferred so converted were registered.
6.NO REISSUANCE OF SERIES PREFERRED.
Any share or shares of Series Preferred redeemed, repurchased, converted or exchanged shall be cancelled and retired and shall not be reissued or transferred.
E.Except as provided above, the rights, preferences, privileges, restrictions and other matters relating to the Class A Common Stock and Class B Common Stock are as follows:
1.DEFINITIONS.
For purposes of this Article IV(E), the following definitions shall apply:
(a) “Direct Listing” shall have the meaning set forth in Section 5(k)(i) of Article IV(D).
(b) “Family Member” shall mean with respect to any Qualified Stockholder who is a natural person, the spouse, parents, grandparents, lineal descendants, siblings and lineal descendants of siblings (in each case whether by blood relation or adoption) of such Qualified Stockholder.
(c) “Final Conversion Date” means 5:00 p.m. in New York City, New York on the earlier to occur following the IPO or the Direct Listing of (i) the first trading day falling on or after the date on which the outstanding shares of Class B Common Stock represent less than ten percent (10%) of the aggregate number of shares of the then outstanding Class A Common Stock and Class B Common Stock, (ii) the seventh (7th) anniversary of the IPO or the Direct Listing or (iii) the date specified by affirmative vote of the holders of a majority of the outstanding shares of Class B Common Stock, voting as a single class.
(d) “Founder” means the following individuals: Benoit Dageville, Thierry Cruanes and any Permitted Transferee of such Founder.
(e) “IPO” means the Company’s first firmly underwritten public offering pursuant to an effective registration statement under the Securities Act covering the offer and sale of Class A Common Stock where the Class A Common Stock and Class B Common Stock are each a “covered security” as described in Section 18(b) of the Securities Act.
(f) “Permitted Entity” shall mean, with respect to a Qualified Stockholder that is not a natural person, any corporation, partnership or limited liability company in which such Qualified Stockholder directly, or indirectly through one or more Permitted Transferees, owns shares, partnership interests or membership interests, as applicable, with sufficient Voting Control in the corporation, partnership or limited liability company, as the case may be, or otherwise has legally enforceable rights, such that the Qualified Stockholder retains sole dispositive power and exclusive Voting Control with respect to all shares of Class B Common Stock held of record by such corporation, partnership or limited liability company, as the case may be.
(g) “Permitted Transfer” shall mean, and be restricted to, any Transfer of a share of Class B Common Stock:
(i) by a Qualified Stockholder that is a natural person, to the trustee of a Permitted Trust of such Qualified Stockholder;
(ii) by a Permitted Trust of a Qualified Stockholder, to the Qualified Stockholder or the trustee of any other Permitted Trust of such Qualified Stockholder;
(iii) by a Qualified Stockholder that is not a natural person to any Permitted Entity of such Qualified Stockholder;
(iv) by a Permitted Entity of a Qualified Stockholder that is not a natural person to the Qualified Stockholder or any other Permitted Entity of such Qualified Stockholder;
(v) by a Qualified Stockholder that is a natural person, to a foundation in which such Qualified Stockholder or Family Members of the Qualified Stockholder directly, or indirectly through one or more Permitted Transferees, own shares with sufficient Voting Control in the corporation, or otherwise have legally enforceable rights, such that the Qualified Stockholder or Family Members of the Qualified Stockholder retain sole dispositive power and exclusive Voting Control with respect to the shares of Class B Common Stock held by such foundation; provided that in the event the Qualified Stockholder or Family Members of the Qualified Stockholder no longer
own sufficient shares or no longer have sufficient legally enforceable rights to ensure the Qualified Stockholder or Family Members of the Qualified Stockholder to retain sole dispositive power and exclusive Voting Control with respect to the shares of Class B Common Stock held by such foundation, each such share of Class B Common Stock then held by such foundation shall automatically convert as provided in Article IV(E)(6); or
(vi) by a Qualified Stockholder that is a partnership or limited liability company that beneficially held more than one percent (1%) of the total outstanding shares of Class B Common Stock as of immediately following the closing of the IPO or the Direct Listing, to any person or entity that, upon the closing of the IPO or the Direct Listing, was a Control Person of such partnership or limited liability company, in accordance with the terms of such partnership or limited liability company and without the payment of additional consideration, and any further Transfer(s) by such Control Person that is a partnership or limited liability company to any person or entity that was upon the closing of the IPO or the Direct Listing a general partner, managing member or manager of such partnership or limited liability company in accordance with the terms of such partnership or limited liability company and without the payment of additional consideration. All shares of Class B Common Stock held by affiliated entities shall be aggregated together for the purposes of determining the satisfaction of such one percent (1%) threshold. For the purposes of the foregoing, a “Control Person” shall mean any general partner of a limited partnership and any managing member, managing director or manager of a limited liability company.
(h) “Permitted Transferee” shall mean a transferee of shares of Class B Common Stock received in a Transfer that constitutes a Permitted Transfer.
(i) “Permitted Trust” shall mean a bona fide trust for the benefit of a Qualified Stockholder or Family Members of the Qualified Stockholder, if such Transfer does not involve any payment of cash, securities, property or other consideration (other than an interest in such trust) to the Qualified Stockholder or a trust under the terms of which such Qualified Stockholder has retained a “qualified interest” within the meaning of §2702(b)(1) of the Internal Revenue Code and/or a reversionary interest, in each case so long as the Qualified Stockholder has sole dispositive power and exclusive Voting Control with respect to the shares of Class B Common Stock held by such trust.
(j) “Qualified Stockholder” shall mean (i) the registered holder of a share of Class B Common Stock immediately prior to the IPO or the Direct Listing; (ii) the initial registered holder of any shares of Class B Common Stock that are originally issued by the Company after the IPO or the Direct Listing (including, without limitation, upon conversion of the Series Preferred or upon exercise of options or warrants); and (iii) a Permitted Transferee.
(k) “Securities Act” shall mean the Securities Act of 1933, as amended.
(l) “Transfer” of a share of Class B Common Stock shall mean any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such share or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law, including, without limitation, a transfer of a share of Class B Common Stock to a broker or other nominee (regardless of whether there is a corresponding change in beneficial ownership), or the transfer of, or entering into a binding agreement with respect to, Voting Control (as defined below) over such share by proxy or otherwise; provided, however, that the following shall not be considered a “Transfer” within the meaning of this Article IV:
(i) the granting of a revocable proxy to officers or directors of the Company at the request of the Board of Directors in connection with actions to be taken at an annual or special meeting of stockholders;
(ii) entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with stockholders who are holders of Class B Common Stock that (A) is
disclosed either in a Schedule 13D filed with the Securities and Exchange Commission or in writing to the Secretary of the Company, (B) either has a term not exceeding one (1) year or is terminable by the holder of the shares subject thereto at any time and (C) does not involve any payment of cash, securities, property or other consideration to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner;
(iii) the pledge of shares of Class B Common Stock by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction for so long as such stockholder continues to exercise Voting Control over such pledged shares; provided, however, that a foreclosure on such shares or other similar action by the pledgee shall constitute a “Transfer” unless such foreclosure or similar action qualifies as a “Permitted Transfer”; or
(iv) entering into a support or similar voting agreement (with or without granting a proxy) in connection with a Liquidation Event.
A “Transfer” shall also be deemed to have occurred with respect to a share of Class B Common Stock beneficially held by (i) a Permitted Transferee on the date that such Permitted Transferee ceases to meet the qualifications to be a Permitted Transferee of the Qualified Stockholder who effected the Transfer of such shares to such Permitted Transferee or (ii) an entity that is a Qualified Stockholder, if there occurs a Transfer on a cumulative basis, from and after the IPO or the Direct Listing, of a majority of the voting power of the voting securities of such entity or any direct or indirect Parent of such entity, other than a Transfer to parties that are, as of the Effective Time, holders of voting securities of any such entity or Parent of such entity. “Parent” of an entity shall mean any entity that directly or indirectly owns or controls a majority of the voting power of the voting securities of such entity.
(m) “Voting Control” shall mean, with respect to a share of Class B Common Stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise.
2.RIGHTS RELATING TO DIVIDENDS, SUBDIVISIONS AND COMBINATIONS.
(a) Subject to the prior rights of holders of all classes and series of stock at the time outstanding having prior rights as to dividends, the holders of the Class A Common Stock and Class B Common Stock shall be entitled to receive, when, as and if declared by the Board, out of any assets of the Company legally available therefor, such dividends as may be declared from time to time by the Board. Any dividends paid to the holders of shares of Class A Common Stock and Class B Common Stock shall be paid pro rata, on an equal priority, pari passu basis, unless different treatment of the shares of each such class is approved by the affirmative vote of the holders of a majority of the outstanding shares of the applicable class of Common Stock treated adversely, voting separately as a class.
(b) The Company shall not declare or pay any dividend or make any other distribution to the holders of Class A Common Stock or Class B Common Stock payable in securities of the Company unless the same dividend or distribution with the same record date and payment date shall be declared and paid on all shares of Common Stock; provided, however, that (i) dividends or other distributions payable in shares of Class A Common Stock or rights to acquire shares of Class A Common Stock may be declared and paid to the holders of Class A Common Stock without the same dividend or distribution being declared and paid to the holders of the Class B Common Stock if, and only if, a dividend payable in shares of Class B Common Stock, or rights to acquire shares of Class B Common Stock, as applicable, are declared and paid to the holders of Class B Common Stock at the same rate and with the same record date and payment date; and (ii) dividends or other distributions payable in shares of Class B Common Stock or rights to acquire shares Class B Common Stock may be declared and paid to the holders of Class B Common Stock without the same dividend or distribution being declared and paid to the holders of the Class A Common Stock if, and only if, a dividend payable in shares of Class A Common Stock, or rights to acquire shares of Class A Common Stock, as applicable, are declared and
paid to the holders of Class A Common Stock at the same rate and with the same record date and payment date.
(c) If the Company in any manner subdivides or combines the outstanding shares of Class A Common Stock or Class B Common Stock, then the outstanding shares of all Common Stock will be subdivided or combined in the same proportion and manner.
3.VOTING RIGHTS.
(a) Class A Common Stock. Each holder of shares of Class A Common Stock shall be entitled to one (1) vote for each share thereof held.
(b) Class B Common Stock. Each holder of shares of Class B Common Stock shall be entitled to ten (10) votes for each share thereof held.
(c) Class B Common Stock Protective Provisions. Following the IPO or the Direct Listing, so long as any shares of Class B Common Stock remain outstanding, the Company shall not, without the approval by vote or written consent of the holders of a majority of the voting power of the Class B Common Stock then outstanding, voting together as a single class, directly or indirectly, or whether by amendment, or through merger, recapitalization, consolidation or otherwise:
(i) amend, alter, or repeal any provision of this Amended and Restated Certificate of Incorporation or the Bylaws of the Company (including any filing of a Certificate of Designation), that modifies the voting, conversion or other powers, preferences, or other special rights or privileges, or restrictions of the Class B Common Stock; or
(ii) reclassify any outstanding shares of Class A Common Stock of the Company into shares having rights as to dividends or liquidation that are senior to the Class B Common Stock or the right to more than one (1) vote for each share thereof.
(d) General. Except as otherwise expressly provided herein or as required by law, the holders of Preferred Stock, Class A Common Stock and Class B Common Stock shall vote together and not as separate series or classes.
4.LIQUIDATION RIGHTS.
In the event of a Liquidation Event, upon the completion of the distributions required with respect to each series of Preferred Stock that may then be outstanding, the remaining assets of the Company legally available for distribution to stockholders shall be distributed on an equal priority, pro rata basis to the holders of Class A Common Stock and Class B Common Stock, unless different treatment of the shares of each such class is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class; provided, however, for the avoidance of doubt, compensation pursuant to any employment, consulting, severance or other compensatory arrangement to be paid to or received by a person who is also a holder of Class A Common Stock or Class B Common Stock does not constitute consideration or a “distribution to stockholders” in respect of the Class A Common Stock or Class B Common Stock.
5.OPTIONAL CONVERSION.
(a) Optional Conversion of the Class B Common Stock.
(i) At the option of the holder thereof, each share of Class B Common Stock shall be convertible, at any time or from time to time following the closing of the IPO or the Direct Listing, into one fully paid and nonassessable share of Class A Common Stock as provided herein.
(ii) Each holder of Class B Common Stock who elects to convert the same into shares of Class A Common Stock shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or any transfer agent for the Class B Common Stock, and shall give written notice to the Company at such office that such holder elects to convert the same and shall state therein the number of shares of Class B Common Stock being converted. Thereupon, the Company shall promptly issue and deliver at such office to such holder a certificate or certificates for the number of shares of Class A Common Stock to which such holder is entitled upon such conversion. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the certificate or certificates representing the shares of Class B Common Stock to be converted, and the person entitled to receive the shares of Class A Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Class A Common Stock on such date. If a conversion election under this Section 5(a)(ii) is made in connection with an underwritten offering of the Company’s securities pursuant to the Securities Act, the conversion may, at the option of the holder tendering shares of Class B Common Stock for conversion, be conditioned upon the closing with the underwriters of the sale of the Company’s securities pursuant to such offering, in which event the holders making such elections who are entitled to receive Class A Common Stock upon conversion of their Class B Common Stock shall not be deemed to have converted such shares of Class B Common Stock until immediately after to the closing of such sale of the Company’s securities in the offering.
6.AUTOMATIC CONVERSION.
(a) Automatic Conversion of the Class B Common Stock. At any time following the closing of the IPO or the Direct Listing, each share of Class B Common Stock shall automatically be converted into one fully paid and nonassessable share of Class A Common Stock upon a Transfer, other than a Permitted Transfer, of such share of Class B Common Stock. Such conversion shall occur automatically without the need for any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Company or its transfer agent; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Class A Common Stock issuable upon such conversion unless the certificates evidencing such shares of Class B Common Stock are either delivered to the Company or its transfer agent as provided below, or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Class B Common Stock, the holders of Class B Common Stock so converted shall surrender the certificates representing such shares at the office of the Company or any transfer agent for the Class A Common Stock. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of Class A Common Stock into which the shares of Class B Common Stock surrendered were convertible on the date on which such automatic conversion occurred.
(b) Conversion Upon Death. At any time following the closing of the IPO or the Direct Listing, each share of Class B Common Stock held of record by a natural person, other than a Founder, shall automatically, without any further action, convert into one fully paid and nonassessable share of Class A Common Stock upon the death of such stockholder. At any time following the closing of the IPO or the Direct Listing, each share of Class B Common Stock held of record by a Founder or a Permitted Transferee of such Founder shall automatically, without any further action, convert into one fully paid and nonassessable share of Class A Common Stock nine (9) months after the date of the death of such Founder.
7.FINAL CONVERSION. On the Final Conversion Date, each one (1) issued share of Class B Common Stock shall automatically, without any further action, convert into one (1) share of Class A Common Stock. Following the Final Conversion Date, the Company may no longer issue any additional shares of Class B Common Stock.
8.RESERVATION OF STOCK ISSUABLE UPON CONVERSION.
The Company shall at all times following the closing of the IPO or the Direct Listing reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of the Class B Common Stock, as applicable, such number of its shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock; and if at any time following the closing of the IPO or the Direct Listing the number of authorized but unissued shares of Class A Common Stock shall not be sufficient to effect the conversion of all then-outstanding shares of Class B Common Stock, as applicable, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Class A Common Stock to such numbers of shares as shall be sufficient for such purpose.
V.
A.The liability of the directors of the Company for monetary damages shall be eliminated to the fullest extent under applicable law.
B.To the fullest extent permitted by applicable law, the Company is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Company (and any other persons to which applicable law permits the Company to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law. If applicable law is amended after approval by the stockholders of this Article V to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director to the Company shall be eliminated or limited to the fullest extent permitted by applicable law as so amended. Any repeal or modification of this Article V shall only be prospective and shall not affect the rights under this Article V in effect at the time of the alleged occurrence of any action or omission to act giving rise to liability.
C.In the event that a member of the Board of Directors of the Company who is also a partner or employee of an entity that is a holder of Preferred Stock and that is in the business of investing and reinvesting in other entities, or an employee of an entity that manages such an entity (each, a “Fund”) acquires knowledge of a potential transaction or other matter in such individual’s capacity as a partner or employee of the Fund or the manager or general partner of the Fund (and other than directly in connection with such individual’s service as a member of the Board of Directors of the Company) and that may be an opportunity of interest for both the Company and such Fund (a “Corporate Opportunity”), then the Company (i) renounces any expectancy that such director or Fund offer an opportunity to participate in such Corporate Opportunity to the Company and (ii) to the fullest extent permitted by law, waives any claim that such opportunity constituted a Corporate Opportunity that should have been presented by such director or Fund to the Company or any of its affiliates; provided, however, that such director acts in good faith.
VI.
For the management of the business and for the conduct of the affairs of the Company, and in further definition, limitation and regulation of the powers of the Company, of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that:
A.The management of the business and the conduct of the affairs of the Company shall be vested in its Board. The number of directors which shall constitute the whole Board shall be fixed by the Board in the manner provided in the Bylaws, subject to any restrictions which may be set forth in this Restated Certificate.
B.The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Company. The stockholders shall also have the power to adopt, amend or repeal the Bylaws of the Company; provided however, that, in addition to any vote of the holders of any class or series of stock of the Company required by law or by this Certificate of Incorporation, the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of the capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the Bylaws of the Company.
C.The directors of the Company need not be elected by written ballot unless the Bylaws so provide.
D.Unless the Company consents in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim arising under any provision of the Delaware General Corporation Law, the certificate of incorporation, or the bylaws of the Company, or (iv) any action asserting a claim governed by the internal-affairs doctrine. Any person or entity that acquires any interest in shares of capital stock of the Company will be deemed to have notice of and consented to the provisions of this section. This Article VI(D) shall not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction.
E.Unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, subject to and contingent upon a final adjudication in the State of Delaware of the enforceability of such exclusive forum provision. Any person or entity purchasing or otherwise acquiring any interest in any security of the Company shall be deemed to have notice of and consented to the provisions of this Amended and Restated Certificate of Incorporation.
* * * *
FOUR: This Amended and Restated Certificate of Incorporation has been duly approved by the Board of Directors of the Company.
FIVE: This Amended and Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of said corporation in accordance with Section 228 of the DGCL. This Amended and Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of the DGCL by the stockholders of the Company.
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IN WITNESS WHEREOF, Snowflake Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by a duly authorized officer on this 7th day of February, 2020.
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SNOWFLAKE INC.
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/s/ Robert Specker
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Robert Specker
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Secretary
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CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
SNOWFLAKE INC.
Michael P. Scarpelli hereby certifies that:
One: The original name of this company is Snowflake Computing, Inc. and the date of filing the original Certificate of Incorporation of this company with the Secretary of State of the State of Delaware was July 23, 2012.
Two: He is the duly elected and acting Chief Financial Officer of Snowflake Inc., a Delaware corporation (the “Company”).
Three: Pursuant to Section 242 of the Delaware General Corporation Law (the “DGCL”), Part A of Article IV of the Amended and Restated Certificate of Incorporation of the Company is hereby amended in its entirety to read as follows:
“The Company is authorized to issue three classes of stock to be designated, respectively, “Class A Common Stock,” “Class B Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 3,037,271,099 shares, 2,500,000,000 shares of which shall be Class A Common Stock (the “Class A Common Stock”), 355,000,000 shares of which shall be Class B Common Stock (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) and 182,271,099 shares of which shall be Preferred Stock (the “Preferred Stock”). The Preferred Stock shall have a par value of $0.0001 per share and the Common Stock shall have a par value of $0.0001 per share.”
Four: Pursuant to Section 242 of the DGCL, Part D of Article VI of the Amended and Restated Certificate of Incorporation of the Company is hereby amended in its entirety to read as follows:
“Unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom will be the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action, suit or proceeding brought on behalf of the Company, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, or other employee of the Company to the Company or the Company’s stockholders, (iii) any action, suit or proceeding asserting a claim against the Company or any current or former director, officer, or other employee of the Company arising out of or pursuant to, or seeking to enforce any right, obligation or remedy under, or to interpret, apply, enforce, or determine the validity of, any provision of the DGCL, the certificate of incorporation of the Company, or the Bylaws of the Company, (iv) any action, suit, or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, and (v) any action, suit or proceeding asserting a claim against the Company or any current or former director, officer, or other employee of the Company governed by the internal-affairs doctrine, in all cases subject to the court having personal jurisdiction over the indispensable parties named as defendants. This Article VI(D) shall not
apply to actions, suits or proceedings brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction.”
Five: Pursuant to Section 242 of the DGCL, Part E of Article VI of the Amended and Restated Certificate of Incorporation of the Company is hereby amended in its entirety to read as follows:
“Unless the Company consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.”
Six: Pursuant to Section 242 of the DGCL, a new Part F of Article VI of the Amended and Restated Certificate of Incorporation of the Company is hereby added to read in its entirety as follows:
“Any person or entity holding, owning or otherwise acquiring any interest in any security of the Company shall be deemed to have notice of and consented to the provisions of this Amended and Restated Certificate of Incorporation.”
Seven: This Certificate of Amendment of Amended and Restated Certificate of Incorporation has been duly approved by the Board of Directors and Stockholders of the Company pursuant to resolutions in accordance with Sections 141, 228 and 242 of the DGCL.
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In Witness Whereof, the Company has caused this Certificate of Amendment of Amended and Restated Certificate of Incorporation to be signed by a duly authorized officer this 8th day of September, 2020.
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Snowflake Inc.
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By:
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/s/ Michael P. Scarpelli
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Michael P. Scarpelli
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Chief Financial Officer
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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SNOWFLAKE INC.
Michael P. Scarpelli hereby certifies that:
ONE: The original name of this company is Snowflake Computing, Inc. and the date of filing the original Certificate of Incorporation of this company with the Secretary of State of the State of Delaware was July 23, 2012.
TWO: He is the duly elected and acting Chief Financial Officer of Snowflake Inc., a Delaware corporation.
THREE: The Certificate of Incorporation of this company is hereby amended and restated to read as follows:
I.
The name of this company is Snowflake Inc. (the “Company”).
II.
The address of the registered office of the Company in the State of Delaware is 251 Little Falls Drive, City of Wilmington, County of New Castle, Delaware 19808 and the name of the registered agent of the Company in the State of Delaware at such address is Corporation Service Company.
III.
The purpose of the Company is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law (“DGCL”).
IV.
A.The Company is authorized to issue three classes of stock to be designated, respectively, “Class A Common Stock,” “Class B Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 3,055,000,000 shares, 2,500,000,000 shares of which shall be Class A Common Stock (the “Class A Common Stock”), 355,000,000 shares of which shall be Class B Common Stock (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) and 200,000,000 shares of which shall be Preferred Stock (the “Preferred Stock”). The Preferred Stock shall have a par value of $0.0001 per share, and the Common Stock shall have a par value of $0.0001 per share.
B.The Preferred Stock may be issued from time to time in one or more series, the shares of each series to have such designations and powers, preferences, privileges and rights, and qualifications, limitations and restrictions thereof, as are stated and expressed herein and in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors as hereafter prescribed (a “Preferred Stock Designation”). Subject to any limitation prescribed by law and the rights of any series of the Preferred Stock then outstanding, if any, authority is hereby expressly granted to and vested in the
Board of Directors to authorize the issuance of all or any of the shares of the Preferred Stock in one or more series, and, with respect to each series of Preferred Stock, to fix the number of shares and state by the Preferred Stock Designation, the designations, powers, preferences, privileges and relative participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the DGCL. The Board of Directors is also expressly authorized to increase (but not above the authorized number of shares of Preferred Stock) or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series subsequent to the issuance of shares of that series.
C.The number of authorized shares of Preferred Stock, Class A Common Stock or Class B Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the outstanding shares of stock of the Company entitled to vote thereon, without a separate vote of the holders of the Preferred Stock, or of any series thereof, Class A Common Stock or Class B Common Stock, irrespective of the provisions of Section 242(b)(2) of the DGCL, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock Designation filed with respect to any series of Preferred Stock.
D.Except as provided above, the designations, powers, preferences, privileges and relative participating, optional, or other rights, and qualifications, limitations, or restrictions of the Class A Common Stock and Class B Common Stock are as follows:
1.DEFINITIONS.
(a)“Acquisition” means (A) any consolidation or merger of the Company with or into any other Entity, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, continue to hold a majority of the voting power of the surviving Entity in substantially the same proportions (or, if the surviving Entity is a wholly owned subsidiary of another Entity, the surviving Entity’s Parent) immediately after such consolidation, merger or reorganization; or (B) any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company’s voting power is transferred; provided that an Acquisition shall not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof.
(b)“Asset Transfer” means a sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company.
(c) “Certificate of Incorporation” means the certificate of incorporation of the Company, as amended or restated from time to time, including the terms of any Preferred Stock Designation of any series of Preferred Stock.
(d)“Entity” means any corporation, partnership, limited liability company or other legal entity.
(e)“Effective Time” means the time of the acceptance of this Amended and Restated Certificate of Incorporation for filing with the Secretary of State of the State of Delaware.
(f)“Family Member” means with respect to any natural person, the spouse, parents, grandparents, lineal descendants, siblings and lineal descendants of siblings (in each case whether by blood relation or adoption) of such person.
(g)“Final Conversion Date” means 5:00 p.m. in New York City, New York on the earlier to occur following the IPO of (i) the first trading day falling nine (9) months after the date on which the outstanding shares of Class B Common Stock represent less than ten percent (10%) of the aggregate number of shares of the then outstanding Class A Common Stock and Class B Common Stock, (ii) the seventh (7th) anniversary of the effectiveness of the registration statement in connection with the IPO or (iii) the date specified by affirmative vote of the holders of a majority of the outstanding shares of Class B Common Stock, voting as a single class.
(h)“Founder” means the following individuals: Benoit Dageville, Thierry Cruanes and any Permitted Transferee of such Founder.
(i)“IPO” means the Company’s first firmly underwritten public offering pursuant to an effective registration statement under the Securities Act covering the offer and sale of Class A Common Stock where the Class A Common Stock and Class B Common Stock are each a “covered security” as described in Section 18(b) of the Securities Act.
(j)“Liquidation Event” means (i) any Asset Transfer or Acquisition in which cash or other property is, pursuant to the express terms of the Asset Transfer or Acquisition, to be distributed to the stockholders in respect of their shares of capital stock in the Company or (ii) any liquidation, dissolution and winding up of the Company; provided, however, for the avoidance of doubt, compensation pursuant to any employment, consulting, severance or other compensatory arrangement to be paid to or received by a person who is also a holder of Class A Common Stock or Class B Common Stock does not constitute consideration or a “distribution to stockholders” in respect of the Class A Common Stock or Class B Common Stock.
(k)“Parent” of an Entity means any Entity that directly or indirectly owns or controls a majority of the voting power of the voting securities or interests of such Entity.
(l)“Permitted Entity” means, with respect to a Qualified Stockholder, any Entity in which such Qualified Stockholder directly, or indirectly through one or more Permitted Transferees, has sole dispositive power and exclusive Voting Control with respect to all shares of Class B Common Stock held of record by such Entity.
(m)“Permitted Transfer” means, and shall be restricted to, any Transfer of a share of Class B Common Stock:
(i)by a Qualified Stockholder that is a natural person (including a natural person serving in a trustee capacity with regard to a trust for the benefit of himself or herself or his or her Family Members), to the trustee of a Permitted Trust of such Qualified Stockholder or to such Qualified Stockholder in his or her individual capacity or as a trustee of a Permitted Trust;
(ii)by the trustee of a Permitted Trust of a Qualified Stockholder, to such Qualified Stockholder, the trustee of any other Permitted Trust of such Qualified Stockholder or any Permitted Entity of such Qualified Stockholder;
(iii)by a Qualified Stockholder to any Permitted Entity of such Qualified Stockholder;
(iv)by a Permitted Entity of a Qualified Stockholder to such Qualified Stockholder or any other Permitted Entity or the trustee of a Permitted Trust of such Qualified Stockholder;
(v)by a Qualified Stockholder that is a natural person, to a foundation in which such Qualified Stockholder or one or more Family Members of the Qualified Stockholder directly, or indirectly through one or more Permitted Transferees, has sole dispositive power and exclusive Voting Control with respect to the shares of Class B Common Stock held by such foundation; provided that in the event the Qualified Stockholder or Family Members of the Qualified Stockholder no longer has sole dispositive power and exclusive Voting Control with respect to the shares of Class B Common Stock held by such foundation, each such share of Class B Common Stock then held by such foundation shall automatically convert as provided in Article IV(D)(6); or
(vi)by a Qualified Stockholder that is a partnership or limited liability company that beneficially held more than one percent (1%) of the total outstanding shares of Class B Common Stock as of immediately following the closing of the IPO, to any person or Entity that, upon the closing of the IPO, was a Control Person of such partnership or limited liability company, in accordance with the terms of the documents governing such partnership or limited liability company and without the payment of additional consideration, and any further Transfer(s) by such Control Person that is a partnership or limited liability company to any person or Entity that was upon the closing of the IPO a Control Person of such partnership or limited liability company in accordance with the terms of the documents governing such partnership or limited liability company and without the payment of additional consideration. All shares of Class B Common Stock held by affiliated Entities shall be aggregated together for the purposes of determining the satisfaction of such one percent (1%) threshold. For the purposes of the foregoing, a “Control Person” means any general partner of a limited partnership and any managing member, managing director or manager of a limited liability company.
(n)“Permitted Transferee” means a transferee of shares of Class B Common Stock received in a Transfer that constitutes a Permitted Transfer.
(o)“Permitted Trust” means a validly created and existing trust the beneficiaries of which are either a Qualified Stockholder or Family Members of the Qualified Stockholder or both, or a trust under the terms of which such Qualified Stockholder has retained a “qualified interest” within the meaning of §2702(b)(1) of the Internal Revenue Code (as amended from time to time) or a reversionary interest.
(p)“Qualified Stockholder” means (i) the registered holder of a share of Class B Common Stock on the closing of the IPO; (ii) the initial registered holder of any shares of Class B Common Stock that are originally issued by the Company after the closing of the IPO (including, without limitation upon exercise of options or warrants); and (iii) a Permitted Transferee.
(q)“Securities Act” means the Securities Act of 1933, as amended.
(r)“Transfer” of a share of Class B Common Stock means any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such share or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law, including, without limitation, a transfer of a share of Class B Common Stock to a broker
or other nominee (regardless of whether there is a corresponding change in beneficial ownership), or the transfer of, or entering into a binding agreement with respect to, Voting Control (as defined below) over such share by proxy or otherwise; provided, however, that the following shall not be considered a “Transfer” within the meaning of this Article IV:
(i)the granting of a revocable proxy to officers or directors of the Company at the request of the Board of Directors in connection with actions to be taken at an annual or special meeting of stockholders;
(ii)entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with stockholders who are holders of Class B Common Stock that (A) is disclosed either in a Schedule 13D filed with the Securities and Exchange Commission or in writing to the Secretary of the Company, (B) either has a term not exceeding one (1) year or is terminable by the holder of the shares subject thereto at any time and (C) does not involve any payment of cash, securities, property or other consideration to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner;
(iii)the pledge of shares of Class B Common Stock by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction for so long as such stockholder continues to exercise exclusive Voting Control over such pledged shares; provided, however, that a foreclosure on such shares or other similar action by the pledgee shall constitute a “Transfer” unless such foreclosure or similar action qualifies as a “Permitted Transfer”; or
(iv)entering into, or reaching an agreement, arrangement or understanding regarding, a support or similar voting or tender agreement (with or without granting a proxy) in connection with a Liquidation Event, Asset Transfer or Acquisition that has been approved by the Board of Directors.
A “Transfer” shall also be deemed to have occurred with respect to a share of Class B Common Stock beneficially held by (i) a Permitted Transferee on the date that such Permitted Transferee ceases to meet the qualifications to be a Permitted Transferee of the Qualified Stockholder who effected the Transfer of such shares to such Permitted Transferee or (ii) an Entity that is a Qualified Stockholder, if there occurs a Transfer on a cumulative basis, from and after the closing of the IPO, of a majority of the voting power of the voting securities of such Entity or any Parent of such Entity, other than a Transfer to parties that are, as of the closing of the IPO, holders of voting securities of any such Entity or Parent of such Entity.
(s)“Voting Control” means, with respect to a share of Class B Common Stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise.
2.RIGHTS RELATING TO DIVIDENDS, SUBDIVISIONS AND COMBINATIONS
(a)Subject to the prior rights of holders of all classes and series of stock at the time outstanding having prior rights as to dividends, the holders of the Class A Common Stock and Class B Common Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of any assets of the Company legally available therefor, such dividends as may be declared from time to time by the Board of Directors. Except as permitted in Section 2(b) of Article IV(D), any dividends paid to the holders of shares of Class A Common Stock and Class B Common Stock shall be paid pro rata, on an equal priority, pari passu basis, unless different treatment of the shares of each such class is
approved by the affirmative vote of the holders of a majority of the outstanding shares of the applicable class of Common Stock treated adversely, voting separately as a class.
(b)The Company shall not declare or pay any dividend or make any distribution to the holders of Class A Common Stock or Class B Common Stock payable in securities of the Company unless the same dividend or distribution with the same record date and payment date shall be declared and paid on all shares of Common Stock; provided, however, that (i) dividends or other distributions payable in shares of Class A Common Stock or rights to acquire shares of Class A Common Stock may be declared and paid to the holders of Class A Common Stock without the same dividend or distribution being declared and paid to the holders of the Class B Common Stock if, and only if, a dividend payable in shares of Class B Common Stock, or rights to acquire shares of Class B Common Stock, as applicable, are declared and paid to the holders of Class B Common Stock at the same rate and with the same record date and payment date; and (ii) dividends or other distributions payable in shares of Class B Common Stock or rights to acquire shares of Class B Common Stock may be declared and paid to the holders of Class B Common Stock without the same dividend or distribution being declared and paid to the holders of the Class A Common Stock if, and only if, a dividend payable in shares of Class A Common Stock, or rights to acquire shares of Class A Common Stock, as applicable, are declared and paid to the holders of Class A Common Stock at the same rate and with the same record date and payment date.
(c)If the Company in any manner subdivides or combines the outstanding shares of Class A Common Stock or Class B Common Stock, then the outstanding shares of all Common Stock will be subdivided or combined in the same proportion and manner.
3.VOTING RIGHTS.
(a)Class A Common Stock. Each holder of shares of Class A Common Stock shall be entitled to one (1) vote for each share thereof held on all matters submitted to a vote of the stockholders of the Company.
(b)Class B Common Stock. Each holder of shares of Class B Common Stock shall be entitled to ten (10) votes for each share thereof held on all matters submitted to a vote of the stockholders of the Company.
(c)Class B Common Stock Protective Provisions. So long as any shares of Class B Common Stock remain outstanding, the Company shall not, without the approval by vote or written consent of the holders of a majority of the voting power of the Class B Common Stock then outstanding, voting together as a single class, directly or indirectly, or whether by amendment, or through merger, recapitalization, consolidation or otherwise:
(i)amend, alter, or repeal any provision of the Certificate of Incorporation or the Bylaws of the Company (the “Bylaws”), that modifies the voting, conversion or other powers, preferences, or other special rights or privileges, or restrictions of the Class B Common Stock; or
(ii)reclassify any outstanding shares of Class A Common Stock of the Company into shares having rights as to dividends or liquidation that are senior to the Class B Common Stock or the right to more than one (1) vote for each share thereof.
(d)General. Except as otherwise expressly provided herein or as required by law, the holders of Preferred Stock, Class A Common Stock and Class B Common Stock shall vote
together and not as separate series or classes on all matters submitted to a vote of the stockholders of the Company. Except as otherwise required by applicable law, holders of Class A Common Stock and Class B Common Stock, as such, shall not be entitled to vote on any amendment to the Certificate of Incorporation that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Certificate of Incorporation or applicable law.
4.LIQUIDATION RIGHTS.
In the event of a Liquidation Event, upon the completion of the distributions required with respect to each series of Preferred Stock that may then be outstanding, the remaining assets of the Company legally available for distribution to stockholders shall be distributed on an equal priority, pro rata basis to the holders of Class A Common Stock and Class B Common Stock, unless different treatment of the shares of each such class is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and a majority of the outstanding shares of Class B Common Stock, each voting separately as a class; provided, however, for the avoidance of doubt, compensation pursuant to any employment, consulting, severance or other compensatory arrangement to be paid to or received by a person who is also a holder of Class A Common Stock or Class B Common Stock does not constitute consideration or a “distribution to stockholders” in respect of the Class A Common Stock or Class B Common Stock.
5.OPTIONAL CONVERSION.
(a)Optional Conversion of the Class B Common Stock.
(i)At the option of the holder thereof, each share of Class B Common Stock shall be convertible, at any time or from time to time, into one (1) duly authorized, validly issued, fully paid and nonassessable share of Class A Common Stock as provided herein.
(ii)Each holder of Class B Common Stock who elects to convert the same into shares of Class A Common Stock shall surrender the certificate or certificates therefor (if any), duly endorsed, at the office of the Company or any transfer agent for the Class B Common Stock, and shall give written notice to the Company at such office that such holder elects to convert the same and shall state therein the number of shares of Class B Common Stock being converted. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the certificate or certificates representing the shares of Class B Common Stock to be converted, or, if the shares are uncertificated, immediately prior to the close of business on the date that the holder delivers notice of such conversion to the Company’s transfer agent, and the person entitled to receive the shares of Class A Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Class A Common Stock on such date. If a conversion election under this Section 5(a)(ii) is made in connection with an underwritten offering of the Company’s securities pursuant to the Securities Act, the conversion may, at the option of the holder tendering shares of Class B Common Stock for conversion, be conditioned upon the closing with the underwriters of the sale of the Company’s securities pursuant to such offering, in which event the holders making such elections who are entitled to receive Class A Common Stock upon conversion of their Class B Common Stock shall not be deemed to have converted such shares of Class B Common Stock until immediately after to the closing of such sale of the Company’s securities in the offering.
6.AUTOMATIC CONVERSION.
(a)Automatic Conversion of the Class B Common Stock. Each share of Class B Common Stock shall automatically be converted into one (1) duly authorized, validly issued, fully paid and nonassessable share of Class A Common Stock upon a Transfer, other than a Permitted Transfer, of such share of Class B Common Stock. Such conversion shall occur automatically without the need for any further action by the holders of such shares and whether or not the certificates representing such shares (if any) are surrendered to the Company or its transfer agent; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Class A Common Stock issuable upon such conversion unless the certificates evidencing such shares of Class B Common Stock are either delivered to the Company or its transfer agent as provided below, or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Class B Common Stock, the holders of Class B Common Stock so converted shall surrender the certificates representing such shares (if any) at the office of the Company or any transfer agent for the Class A Common Stock.
(b)Conversion Upon Death. Each share of Class B Common Stock held of record by a natural person, including a natural person serving in a trustee capacity, other than a Founder (including a Founder holding shares in a trustee capacity), shall automatically, without any further action, convert into one (1) duly authorized, validly issued, fully paid and nonassessable share of Class A Common Stock upon the death of such natural person. Each share of Class B Common Stock held of record by a Founder (including a Founder holding shares in a trustee capacity) shall automatically, without any further action, convert into one (1) duly authorized, validly issued, fully paid and nonassessable share of Class A Common Stock nine (9) months after the date of the death of such Founder.
7.FINAL CONVERSION.
(a)Final Conversion. On the Final Conversion Date, each one (1) issued share of Class B Common Stock shall automatically, without any further action, convert into one (1) duly authorized, validly issued, fully paid and nonassessable share of Class A Common Stock. Following the Final Conversion Date, the Company may no longer issue any additional shares of Class B Common Stock. Such conversion shall occur automatically without the need for any further action by the holders of such shares and whether or not the certificates representing such shares (if any) are surrendered to the Company or its transfer agent; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Class A Common Stock issuable upon such conversion unless the certificates evidencing such shares of Class B Common Stock, if any, are either delivered to the Company or its transfer agent as provided below, or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Class B Common Stock, the holders of Class B Common Stock so converted shall surrender the certificates representing such shares (if any) at the office of the Company or any transfer agent for the Class A Common Stock.
(b)Procedures. The Company may, from time to time, establish such policies and procedures relating to the conversion of Class B Common Stock to Class A Common Stock and the general administration of this dual class stock structure, including the issuance of stock
certificates (or the establishment of book-entry positions) with respect thereto, as it may deem reasonably necessary or advisable, and may from time to time request that holders of shares of Class B Common Stock furnish certifications, affidavits or other proof to the Company as it deems necessary to verify the ownership of Class B Common Stock and to confirm that a conversion to Class A Common Stock has not occurred. A determination by the Secretary of the Company as to whether a Transfer results in a conversion to Class A Common Stock shall be conclusive and binding.
(c)Immediate Effect. In the event of a conversion of shares of Class B Common Stock to shares of Class A Common Stock pursuant to this Section 7, such conversion(s) shall be deemed to have been made at the time that the Transfer of shares occurred or immediately upon the Final Conversion Date, as applicable. Upon any conversion of Class B Common Stock to Class A Common Stock, all rights of the holder of shares of Class B Common Stock shall cease and the person or persons in whose names or names the certificate or certificates (or book-entry position(s)) representing the shares of Class A Common Stock are to be issued shall be treated for all purposes as having become the record holder or holders of such shares of Class A Common Stock.
8.RESERVATION OF STOCK ISSUABLE UPON CONVERSION
The Company shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of the Class B Common Stock, as applicable, such number of its shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock; and if at any time the number of authorized but unissued shares of Class A Common Stock shall not be sufficient to effect the conversion of all then-outstanding shares of Class B Common Stock, as applicable, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Class A Common Stock to such numbers of shares as shall be sufficient for such purpose.
9.PROHIBITION ON REISSUANCE OF SHARES
Shares of Class B Common Stock that are acquired by the Company for any reason (whether by repurchase, upon conversion, or otherwise) shall be retired in the manner required by law and shall not be reissued as shares of Class B Common Stock.
V.
A.The liability of the directors of the Company for monetary damages for breach of fiduciary duty as a director shall be eliminated to the fullest extent authorized under applicable law.
B.To the fullest extent permitted by applicable law, the Company is authorized to provide indemnification of (and advancement of expenses to) directors, officers and other agents of the Company (and any other persons to which applicable law permits the Company to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law.
C.If applicable law is amended after approval by the stockholders of this Article V to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director to the Company shall be eliminated or limited to the fullest extent permitted by applicable law as so amended. Any repeal or modification of this Article V shall only be prospective and
shall not affect the rights under this Article V in effect at the time of the alleged occurrence of any action or omission to act giving rise to liability.
D.Unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom will be the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action, suit or proceeding brought on behalf of the Company, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, or other employee of the Company to the Company or the Company’s stockholders, (iii) any action, suit or proceeding asserting a claim against the Company or any current or former director, officer, or other employee of the Company arising out of or pursuant to, or seeking to enforce any right, obligation or remedy under, or to interpret, apply, or determine the validity of, any provision of the DGCL, the Certificate of Incorporation, or the Bylaws, (iv) any action, suit, or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, and (v) any action, suit or proceeding asserting a claim against the Company or any current or former director, officer, or other employee of the Company governed by the internal-affairs doctrine, in all cases subject to the court having personal jurisdiction over the indispensable parties named as defendants. This Article V(D) shall not apply to actions, suits or proceedings brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction.
E.Unless the Company consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
F.Any person or Entity holding, owning or otherwise acquiring any interest in any security of the Company shall be deemed to have notice of and consented to the provisions of this Amended and Restated Certificate of Incorporation.
VI.
For the management of the business and for the conduct of the affairs of the Company, and in further definition, limitation and regulation of the powers of the Company, of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that:
A.BOARD OF DIRECTORS.
1.GENERALLY. The management of the business and the conduct of the affairs of the Company shall be vested in the Board of Directors. The authorized number of directors which shall constitute the Board of Directors shall be fixed by the Board of Directors in the manner provided in the Bylaws.
2.ELECTION.
(a)Subject to the rights of the holders of any series of Preferred Stock to elect additional directors as specified in any Preferred Stock Designation, the directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. Each class shall consist, as
nearly as possible, of one-third of the total number of such directors. The Board of Directors is authorized to assign members of the Board of Directors already in office to such classes at the time the classification becomes effective. At the first annual meeting of stockholders following such initial classification of the Board of Directors, the initial term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following such initial classification of the Board of Directors, the initial term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following such initial classification of the Board of Directors, the initial term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.
(b)At any time that applicable law prohibits a classified board as described in Section A.2.(a) of this Article VI, all directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. The directors of the Company need not be elected by written ballot unless the Bylaws so provide.
(c)No stockholder entitled to vote at an election for directors may cumulate votes to which such stockholder is entitled unless required by applicable law at the time of such election. During such time or times that applicable law requires cumulative voting, every stockholder entitled to vote at an election for directors may cumulate such stockholder’s votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which such stockholder’s shares are otherwise entitled, or distribute the stockholder’s votes on the same principle among as many candidates as such stockholder thinks fit. No stockholder, however, shall be entitled to so cumulate such stockholder’s votes unless (i) the names of such candidate or candidates have been placed in nomination prior to the voting and (ii) the stockholder has given notice at the meeting, prior to the voting, of such stockholder’s intention to cumulate such stockholder’s votes. If any stockholder has given proper notice to cumulate votes, all stockholders may cumulate their votes for any candidates who have been properly placed in nomination. Under cumulative voting, the candidates receiving the highest number of votes, up to the number of directors to be elected, are elected.
(d)Notwithstanding the foregoing provisions of this section, each director shall serve until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
3.REMOVAL OF DIRECTORS. Subject to any limitations imposed by applicable law, removal shall be as provided in Section 141(k) of the DGCL.
4. VACANCIES. Subject to any limitations imposed by applicable law and subject to the rights of the holders of any series of Preferred Stock, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by the stockholders and except as otherwise provided by applicable law, be filled only by a majority of the directors then in office, although less than a quorum, or by the sole remaining director, and not by the stockholders. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified.
B.STOCKHOLDER ACTIONS. No action shall be taken by the stockholders of the Company except at an annual or special meeting of stockholders called in accordance with the Bylaws, and no action shall be taken by the stockholders by written consent. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Company shall be given in the manner provided in the Bylaws.
C.BYLAWS. The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws. The stockholders shall also have the power to adopt, amend or repeal the Bylaws; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Company required by law or by the Certificate of Incorporation, such action by stockholders shall require the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class.
VII.
A.The Company reserves the right to amend, alter, change or repeal any provision contained in the Certificate of Incorporation, in the manner now or hereafter prescribed by the DGCL, except as provided in paragraph B. of this Article VII, and all rights conferred upon the stockholders herein are granted subject to this reservation.
B.Notwithstanding any other provisions of the Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Company required by law or by the Certificate of Incorporation or any Preferred Stock Designation filed with respect to a series of Preferred Stock, the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend or repeal Articles V, VI, and VII.
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FOUR: This Amended and Restated Certificate of Incorporation has been duly approved by the Board of Directors of the Company.
FIVE: This Amended and Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of said corporation in accordance with Section 228 of the DGCL. This Amended and Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of the DGCL by the stockholders of the Company.
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In Witness Whereof, Snowflake Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by a duly authorized officer on this ____ day of September, 2020.
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SNOWFLAKE INC.
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Michael P. Scarpelli
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Chief Financial Officer
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AMENDED AND RESTATED BYLAWS
OF
SNOWFLAKE INC.
(A DELAWARE CORPORATION)
ARTICLE I
OFFICES
Section 1.Registered Office. The registered office of the corporation in the State of Delaware shall be as set forth in the certificate of incorporation of the corporation (the “Certificate of Incorporation”).
Section 2.Other Offices. The corporation shall also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors of the corporation (the “Board of Directors”), and may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or as may be necessary or convenient to the business of the corporation.
ARTICLE II
CORPORATE SEAL
Section 3.Corporate Seal. The Board of Directors may adopt a corporate seal. If adopted, the corporate seal shall consist of a die bearing the name of the corporation and the inscription, “Corporate Seal-Delaware.” Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE III
STOCKHOLDERS’ MEETINGS
Section 4.Place of Meetings. Meetings of the stockholders of the corporation may be held at such place (if any), either within or without the State of Delaware, as may be determined from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the Delaware General Corporation Law (“DGCL”). For the avoidance of doubt, the Board of Directors may, in its sole discretion, determine that a meeting of stockholders of the corporation may be held both in a place and by means of remote communication.
Section 5.Annual Meeting.
(a)The annual meeting of the stockholders of the corporation, for the purpose of election of directors and for such other business as may properly come before it, shall be held at such place, if any, and on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the corporation’s notice of meeting of stockholders. Nominations of persons for election to the Board of Directors and proposals of business to be considered by the stockholders may be made at an annual meeting of stockholders: (i) pursuant to the corporation’s notice of meeting of
stockholders given by or at the direction of the Board of Directors; (ii) brought specifically by or at the direction of the Board of Directors or a duly authorized committee thereof; or (iii) by any stockholder of the corporation who was a stockholder of record or beneficial owner at the time of giving the stockholder’s notice provided for in Section 5(b) below, who is entitled to vote at the meeting and who complied with the notice procedures set forth in Section 5. For the avoidance of doubt, clause (iii) above shall be the exclusive means for a stockholder to make nominations and submit other business (other than matters properly included in the corporation’s notice of meeting of stockholders and proxy statement under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the rules and regulations thereunder before an annual meeting of stockholders).
(b)At an annual meeting of the stockholders, only such business shall be conducted as is a proper matter for stockholder action under Delaware law and as shall have been properly brought before the meeting in accordance with Section 5(a) and the procedures below.
(i)For nominations for the election to the Board of Directors to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 5(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the corporation on a timely basis as set forth in Section 5(b)(iii) and must update and supplement such written notice on a timely basis as set forth in Section 5(c). Such stockholder’s notice shall set forth: (A) as to each nominee such stockholder proposes to nominate at the meeting: (1) the name, age, business address and residence address of such nominee; (2) the principal occupation or employment of such nominee; (3) the class or series and number of shares of each class or series of capital stock of the corporation that are owned beneficially and of record by such nominee; (4) the date or dates on which such shares were acquired and the investment intent of such acquisition; (5) a statement whether such nominee, if elected, intends to tender, promptly following such person’s failure to receive the required vote for election or re-election at the next meeting at which such person would face election or re-election, an irrevocable resignation effective upon acceptance of such resignation by the Board of Directors; and (6) such other information concerning such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved), or that is otherwise required to be disclosed pursuant to Section 14 of the 1934 Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the corporation’s proxy statement and associated proxy card as a nominee of the stockholder and to serving as a director if elected); and (B) the information required by Section 5(b)(iv). The corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve (i) as an independent director (as such term is used in any applicable stock exchange listing requirements or applicable law) of the corporation or (ii) on any committee or sub-committee of the Board of Directors under any applicable stock exchange listing requirements or applicable law, and that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such proposed nominee.
(ii)Other than proposals sought to be included in the corporation’s proxy materials pursuant to Rule 14a-8 under the 1934 Act, for business other than nominations for the election to the Board of Directors to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 5(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the corporation on a timely basis as set forth in Section 5(b)(iii), and must update and supplement such written notice on a timely basis as set forth in Section 5(c). Such stockholder’s notice shall set forth: (A) as to each matter such stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business
includes a proposal to amend the Bylaws of the corporation (the “Bylaws”), the language of the proposed amendment), the reasons for conducting such business at the meeting, and any material interest (including any anticipated benefit of such business to any Proponent (as defined below) other than solely as a result of its ownership of the corporation’s capital stock, that is material to any Proponent individually, or to the Proponents in the aggregate) in such business of any Proponent; and (B) the information required by Section 5(b)(iv).
(iii)To be timely, the written notice required by Section 5(b)(i) or 5(b)(ii) must be received by the Secretary at the principal executive offices of the corporation not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting (which date shall, for purposes of the corporation’s first annual meeting of stockholders after its shares of Class A Common Stock are first publicly traded, be deemed to have occurred on June 17, 2020); provided, however, that, subject to the last sentence of this Section 5(b)(iii), in the event that the date of the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so received (A) not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and (B) not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or, if later than the ninetieth (90th) day prior to such annual meeting, the tenth (10th) day following the day on which public announcement of the date of such meeting is first made. In no event shall an adjournment or a postponement of an annual meeting for which notice has been given, or the public announcement thereof has been made, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(iv)The written notice required by Section 5(b)(i) or 5(b)(ii) shall also set forth, as of the date of the notice and as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (each, a “Proponent” and collectively, the “Proponents”): (A) the name and address of each Proponent, as they appear on the corporation’s books; (B) the class or series and number of shares of each class of capital stock of the corporation that are owned of record and beneficially by each Proponent; (C) a description of any agreement, arrangement or understanding (whether oral or in writing) with respect to such nomination or proposal between or among any Proponent and any of its affiliates or associates, and any others (including their names) acting in concert, or otherwise under the agreement, arrangement or understanding, with any of the foregoing; (D) a representation that the Proponents are holders of record or beneficial owners, as the case may be, of shares of the corporation entitled to vote at the meeting and intend to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice (with respect to a notice under Section 5(b)(i)) or to propose the business that is specified in the notice (with respect to a notice under Section 5(b)(ii)); (E) a representation as to whether the Proponents intend to deliver a proxy statement and form of proxy to holders of a sufficient number of holders of the corporation’s voting shares to elect such nominee or nominees (with respect to a notice under Section 5(b)(i)) or to carry such proposal (with respect to a notice under Section 5(b)(ii)); (F) to the extent known by any Proponent, the name and address of any other stockholder supporting the proposal on the date of such stockholder’s notice; and (G) a description of all Derivative Transactions (as defined below) by each Proponent during the previous twelve (12) month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic terms of, such Derivative Transactions.
(c)A stockholder providing the written notice required by Section 5(b)(i) or 5(b)(ii) shall update and supplement such notice in writing, if necessary, so that the information provided or required to be provided in such notice is true and correct in all material respects as of (i) the record date
for the meeting and (ii) the date that is five (5) business days prior to the meeting and, in the event of any adjournment or postponement thereof, five (5) business days prior to such adjourned or postponed meeting. In the case of an update and supplement pursuant to clause (i) of this Section 5(c), such update and supplement shall be received by the Secretary at the principal executive offices of the corporation not later than five (5) business days after the record date for the meeting. In the case of an update and supplement pursuant to clause (ii) of this Section 5(c), such update and supplement shall be received by the Secretary at the principal executive offices of the corporation not later than two (2) business days prior to the date for the meeting, and, in the event of any adjournment or postponement thereof, two (2) business days prior to such adjourned or postponed meeting.
(d)Notwithstanding anything herein to the contrary, in the event that the number of directors to be elected to the Board of Directors of the corporation at the annual meeting is increased effective after the time period for which nominations would otherwise be due under Section 5(b)(iii) and there is no public announcement by the corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 5 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the corporation.
(e)A person shall not be eligible for election or re-election as a director at the annual meeting unless the person is nominated either in accordance with clause (ii) or clause (iii) of Section 5(a). Except as otherwise required by law, the chairperson of the annual meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, or the Proponent does not act in accordance with the representations in Sections 5(b)(iv)(D) and 5(b)(iv)(E), to declare that such proposal or nomination shall not be presented for stockholder action at the meeting and shall be disregarded, notwithstanding that proxies in respect of such nomination or such business may have been solicited or received.
(f)Notwithstanding the foregoing provisions of this Section 5, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholders’ meeting, a stockholder must also comply with all applicable requirements of the 1934 Act and the rules and regulations thereunder. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the 1934 Act; provided, however, that any references in these Bylaws to the 1934 Act or the rules and regulations thereunder are not intended to and shall not limit the requirements applicable to proposals and/or nominations to be considered pursuant to Section 5(a).
(g)For purposes of Sections 5 and 6,
(i)“affiliates” and “associates” shall have the meanings set forth in Rule 405 under the Securities Act of 1933, as amended (the “1933 Act”);
(ii)“Derivative Transaction” means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proponent or any of its affiliates or associates, whether record or beneficial: (A) the value of which is derived in whole or in part from the value of any class or series of shares or other securities of the corporation; (B) that otherwise provides any
direct or indirect opportunity to gain or share in any gain derived from a change in the value of securities of the corporation; (C) the effect or intent of which is to mitigate loss, manage risk or benefit of security value or price changes; or (D) that provides the right to vote or increase or decrease the voting power of, such Proponent, or any of its affiliates or associates, with respect to any securities of the corporation, which agreement, arrangement, interest or understanding may include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, stock appreciation right, short position, profit interest, hedge, right to dividends, voting agreement, performance-related fee or arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proponent in the securities of the corporation held by any general or limited partnership, or any limited liability company, of which such Proponent is, directly or indirectly, a general partner or managing member; and
(iii)“public announcement” shall mean disclosure in a press release reported by the Dow Jones Newswires, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act or by such other means reasonably designed to inform the public or security holders in general of such information including, without limitation, posting on the corporation’s investor relations website.
Section 6.Special Meetings.
(a)Special meetings of the stockholders of the corporation may be called, for any purpose as is a proper matter for stockholder action under Delaware law, by (i) the Chairperson of the Board of Directors, (ii) the Chief Executive Officer, or (iii) the Board of Directors pursuant to a resolution adopted by the Board of Directors.
(b)For a special meeting called pursuant to Section 6(a), the person(s) calling the meeting shall determine the time and place, if any, of the meeting; provided, however, that only the Board of Directors or a duly authorized committee thereof may authorize a meeting solely by means of remote communication. Upon determination of the date, time and place, if any, of the meeting, the Secretary shall cause a notice of meeting to be given to the stockholders entitled to vote, in accordance with the provisions of Section 7. No business may be transacted at a special meeting otherwise than as specified in the notice of meeting.
(c)Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected (i) by or at the direction of the Board of Directors or a duly authorized committee thereof or (ii) by any stockholder of the corporation who is a stockholder of record or beneficial owner at the time of giving notice provided for in this paragraph, who is entitled to vote at the meeting and who delivers written notice to the Secretary of the corporation setting forth the information required by Section 5(b)(i) and the information required by Section 5(b)(iv). In the event the corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder of record or beneficial owner may nominate a person or persons (as the case may be), for election to such position(s) as specified in the corporation’s notice of meeting, if written notice setting forth the information required by Section 5(b)(i) and the information required by Section 5(b)(iv) shall be received by the Secretary at the principal executive offices of the corporation not later than the close of business on the later of the ninetieth (90th) day prior to such meeting or the tenth (10th) day following the day on which the corporation first makes a public announcement of the date of the special meeting at which directors are to be elected. The stockholder shall also update and supplement such information as required under Section 5(c). In no event shall an
adjournment or a postponement of a special meeting for which notice has been given, or the public announcement thereof has been made, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(d)A person shall not be eligible for election or re-election as a director at the special meeting unless the person is nominated either in accordance with clause (i) or clause (ii) of Section 6(c). Except as otherwise required by law, the chairperson of the special meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in these Bylaws and, if any nomination or business is not in compliance with these Bylaws, to declare that such nomination shall not be presented for stockholder action at the meeting and shall be disregarded, notwithstanding that proxies in respect of such nomination may have been solicited or received.
(e)Notwithstanding the foregoing provisions of this Section 6, a stockholder must also comply with all applicable requirements of the 1934 Act and the rules and regulations thereunder with respect to matters set forth in this Section 6. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the 1934 Act; provided, however, that any references in these Bylaws to the 1934 Act or the rules and regulations thereunder are not intended to and shall not limit the requirements applicable to nominations for the election to the Board of Directors or proposals of other businesses to be considered pursuant to Section 6(c).
Section 7.Notice of Meetings. Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of stockholders shall be given not fewer than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, such notice to specify the place, if any, date and hour, in the case of special meetings, the purpose or purposes of the meeting, the record date for determining the stockholders entitled to notice of the meeting, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at any such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s mailing address as it appears on the records of the corporation. If delivered by courier service, notice is given at the earlier of when the notice is received or left at such stockholder’s address as it appears on the records of the corporation. If sent via electronic transmission, notice is given when directed to such stockholder’s electronic mail address as it appears on the records of the corporation unless the stockholder has notified the corporation in writing or by electronic transmission of an objection to receiving notice by electronic mail or such notice is prohibited by Section 232(e) of the DGCL. Notice of the time, place, if any, and purpose of any meeting of stockholders (to the extent required) may be waived in writing, signed by the person entitled to notice thereof or by electronic transmission by such person, either before or after such meeting, and will be waived by any stockholder by his or her attendance thereat in person, by remote communication, if applicable, or by proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.
Section 8.Quorum; Voting. At all meetings of stockholders, except where otherwise provided by statute or by the Certificate of Incorporation, or by these Bylaws, the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority of the voting power of the outstanding shares of stock entitled to vote at the meeting shall constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairperson of the meeting or by vote of the holders of a
majority of the voting power of the shares represented thereat and entitled to vote thereon, but no other business shall be transacted at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Except as otherwise provided by statute or by applicable stock exchange rules, or by the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of the holders of a majority of the voting power of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the subject matter shall be the act of the stockholders. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, directors shall be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the election of directors. Where a separate vote by a class or classes or series is required, except where otherwise provided by statute, by applicable stock exchange rules or by the Certificate of Incorporation or these Bylaws, a majority of the voting power of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a quorum entitled to take action with respect to that vote on that matter. Except where otherwise provided by statute, by applicable stock exchange rules or by the Certificate of Incorporation or these Bylaws, the affirmative vote of the holders of a majority (plurality, in the case of the election of directors) of voting power of such class or classes or series present in person, by remote communication, if applicable, or represented by proxy at the meeting shall be the act of such class or classes or series.
Section 9.Adjournment and Notice of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the person(s) who called the meeting or the chairperson of the meeting, or by the vote of the holders of a majority of the voting power of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote thereon. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, and means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting.
Section 10.Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date shall be entitled to vote at any meeting of stockholders. Every person entitled to vote shall have the right to do so either in person, by remote communication, if applicable, or by an agent or agents authorized by a proxy granted in accordance with Delaware law. An agent so appointed need not be a stockholder. No proxy shall be voted or acted upon after three (3) years from its date of creation unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the
corporation a revocation of the proxy or a new proxy bearing a later date. Voting at meetings of stockholders need not be by written ballot.
Section 11.Joint Owners of Stock. If shares or other securities having voting power stand of record in the names of two (2) or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two (2) or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one (1) votes, his or her act binds all; (b) if more than one (1) votes, the act of the majority so voting binds all; and (c) if more than one (1) votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or any person voting the shares, or a beneficiary, may apply to the Delaware Court of Chancery for relief as provided in DGCL Section 217(b). If the instrument filed with the Secretary shows that any such tenancy is held in unequal interests, a majority or even-split for the purpose of subsection (c) shall be a majority or even-split in interest.
Section 12.List of Stockholders. The corporation shall prepare, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders of record entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder and the number and class of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting, (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. The list shall be open to examination of any stockholder during the time of the meeting as provided by law.
Section 13.Action without Meeting. Unless otherwise provided in the Certificate of Incorporation, no action shall be taken by the stockholders of the corporation except at an annual or a special meeting of the stockholders called in accordance with these Bylaws, and no action of the stockholders of the corporation may be taken by the stockholders by written consent or electronic transmission.
Section 14.Organization.
(a)At every meeting of stockholders, the Chairperson of the Board of Directors, or, if a chairperson has not been appointed, is absent or refuses to act, the Chief Executive Officer, or, if no Chief Executive Officer is then serving, is absent or refuses to act, the President, or, if the President is absent or refuses to act, a chairperson of the meeting designated by the Board of Directors, or, if the Board of Directors does not designate such chairperson, a chairperson chosen by a majority of the voting power of the stockholders entitled to vote, present in person or by proxy duly authorized, shall act as chairperson. The Chairperson of the Board may appoint the Chief Executive Officer as chairperson of the meeting. The Secretary, or, in his or her absence, an Assistant Secretary directed to do so by the chairperson of the meeting, shall act as secretary of the meeting.
(b)The Board of Directors of the corporation shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the chairperson of the
meeting shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the corporation and their duly authorized and constituted proxies and such other persons as the chairperson shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. Unless and to the extent determined by the Board of Directors or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.
(c)The corporation shall, in advance of any meeting of stockholders, appoint one (1) or more inspectors to act at the meeting and make a written report thereof. The corporation may designate one (1) or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chairperson of the meeting shall appoint one (1) or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspectors shall: (1) ascertain the number of shares outstanding and the voting power of each; (2) determine the shares represented at a meeting and the validity of proxies and ballots; (3) count all votes and ballots; (4) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and (5) certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in accordance with Sections 211(e) or 212(c)(2) of the DGCL, or any information provided pursuant to Sections 211(a)(2)b.(i) or (iii) of the DGCL, ballots and the regular books and records of the corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification pursuant to Section 231(b)(5) of the DGCL shall specify the precise information considered by them including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors’ belief that such information is accurate and reliable.
ARTICLE IV
DIRECTORS
Section 15.Number and Term of Office. The authorized number of directors of the corporation shall be fixed exclusively from time to time by a resolution adopted by the majority of the Board of Directors. Directors need not be stockholders unless so required by the Certificate of Incorporation. If for any cause, the directors shall not have been elected at an annual meeting, they may be elected as soon thereafter as convenient at a special meeting of the stockholders called for that purpose
in the manner provided in these Bylaws, or such vacancies may be filled in accordance with Section 18 herein.
Section 16.Powers. The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by statute or by the Certificate of Incorporation.
Section 17.Classes of Directors. The directors shall be divided into classes as and to the extent provided in the Certificate of Incorporation, except as otherwise required by applicable law.
Section 18.Vacancies. Vacancies on the Board of Directors shall be filled as provided in the Certificate of Incorporation, except as otherwise required by applicable law.
Section 19.Resignation. Any director may resign at any time by delivering his or her notice in writing or by electronic transmission to the Secretary, such resignation to specify whether it will be effective at a particular time. If no such specification is made, the resignation shall be effective at the time of delivery of the resignation to the Secretary.
Section 20.Removal. Subject to the rights of holders of any series of Preferred Stock (as defined in the Certificate of Incorporation) to elect additional directors or remove such directors under specified circumstances, neither the Board of Directors nor any individual director may be removed except in the manner specified in Section 141(k) of the DGCL.
Section 21.Meetings.
(a)Regular Meetings. Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board of Directors may be held at any time or date and at any place, if any, within or without the State of Delaware which has been designated by the Board of Directors and publicized among all directors, either orally or in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means. No further notice shall be required for regular meetings of the Board of Directors.
(b)Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board of Directors may be held at any date, time and place, if any, within or without the State of Delaware whenever called by the Chairperson of the Board, the Chief Executive Officer or the Board of Directors.
(c)Meetings by Electronic Communications Equipment. Any member of the Board of Directors, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
(d)Notice of Special Meetings. Notice of the time and place of all special meetings of the Board of Directors shall be given orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least twenty-four (24) hours before the date and time of the meeting. If notice is sent by U.S. mail, it shall be sent by first class mail, postage prepaid at least three (3) days before the date of the meeting. Notice of any
special meeting may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
(e)Waiver of Notice. The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called or noticed, or wherever held, shall be as valid as though it had been transacted at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present who did not receive notice shall sign a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the corporate records or made a part of the minutes of the meeting. Notice of any meeting will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
Section 22.Quorum and Voting.
(a)Unless the Certificate of Incorporation requires a greater number, a quorum of the Board of Directors shall consist of a majority of the directors currently serving on the Board of Directors (but in no event less than one third of the total authorized number of directors); provided, however, at any meeting whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors, without notice other than by announcement at the meeting.
(b)At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Certificate of Incorporation or these Bylaws.
Section 23.Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission. The consent or consents shall be filed with the minutes of proceedings of the Board of Directors or committee, in the same paper or electronic form as the minutes are maintained.
Section 24.Fees and Compensation. Directors shall be entitled to such compensation for their services as may be approved by the Board of Directors or a committee thereof to which the Board of Directors has delegated such responsibility and authority, including, if so approved, by resolution of the Board of Directors or a committee thereof to which the Board of Directors has delegated such responsibility and authority, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board of Directors and at any meeting of a committee of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.
Section 25.Committees.
(a)Executive Committee. The Board of Directors may appoint an Executive Committee to consist of one or more members of the Board of Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any Bylaw of the corporation.
(b)Other Committees. The Board of Directors may, from time to time, appoint such other committees as may be permitted by law. Such other committees appointed by the Board of Directors shall consist of one (1) or more members of the Board of Directors and shall have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event shall any such committee have the powers denied to the Executive Committee in these Bylaws.
(c)Term. The Board of Directors, subject to any requirements of any outstanding series of Preferred Stock and the provisions of subsections (a) or (b) of this Section 25, may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his or her death or voluntary resignation from the committee or from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.
(d)Meetings. Unless the Board of Directors shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Section 25 shall be held at such times and places, if any, as are determined by the Board of Directors, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place, if any, which has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any regular or special meeting of any committee may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such regular or special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board of Directors in the resolutions authorizing the creation of the committee, a majority of the authorized number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those members of the committee present at any meeting at which a quorum is present shall be the act of such committee.
Section 26.Duties of Chairperson of the Board of Directors. The Chairperson of the Board of Directors, if appointed and when present, shall preside at all meetings of the stockholders and the Board of Directors. The Chairperson of the Board of Directors shall perform other duties commonly
incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time.
Section 27.Organization. At every meeting of the directors, the Chairperson of the Board of Directors, or, if a Chairperson has not been appointed or is absent, the Chief Executive Officer (if a director), or, if a Chief Executive Officer is absent, the President (if a director), or if the President is absent, the most senior Vice President (if a director), or, in the absence of any such person, a chairperson of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in his or her absence, any Assistant Secretary or other officer, director or other person directed to do so by the person presiding over the meeting, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 28.Officers Designated. The officers of the corporation shall include, if and when designated by the Board of Directors, the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary, the Chief Financial Officer and the Treasurer. The Board of Directors may also appoint one or more Assistant Secretaries and Assistant Treasurers and such other officers and agents with such powers and duties as it shall deem necessary. The Board of Directors may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the corporation shall be fixed in the manner required by applicable law or stock exchange rules.
Section 29.Tenure and Duties of Officers.
(a)General. All officers shall be designated by and hold office at the pleasure of the Board of Directors and until their successors shall have been duly elected and qualified, or until their earlier death, resignation, retirement, disqualification or removal from office. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors.
(b)Duties of Chief Executive Officer. The Chief Executive Officer shall preside at all meetings of the stockholders and at all meetings of the Board of Directors (if a director), unless the Chairperson of the Board of Directors has been appointed and is present. Unless an officer has been appointed Chief Executive Officer of the corporation, the President shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. To the extent that a Chief Executive Officer has been appointed and no President has been appointed, all references in these Bylaws to the President shall be deemed references to the Chief Executive Officer. The Chief Executive Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time.
(c)Duties of President. The President shall preside at all meetings of the stockholders and at all meetings of the Board of Directors (if a director), unless the Chairperson of the Board of Directors, or the Chief Executive Officer has been appointed and is present. Unless another officer has been appointed Chief Executive Officer of the corporation, the President shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The President shall perform other duties commonly incident to the office and shall also perform such other duties and
have such other powers, as the Board of Directors (or the Chief Executive Officer, if the Chief Executive Officer and President are not the same person and the Board of Directors has delegated the designation of the President’s duties to the Chief Executive Officer) shall designate from time to time.
(d)Duties of Vice Presidents. A Vice President may assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant (unless the duties of the President are being filled by the Chief Executive Officer). A Vice President shall perform other duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or, if the Chief Executive Officer has not been appointed or is absent, the President shall designate from time to time.
(e)Duties of Secretary; Assistant Secretary. The Secretary shall attend all meetings of the stockholders and of the Board of Directors and shall record all acts and proceedings thereof in the minute book of the corporation. The Secretary shall give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in these Bylaws and other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time. The Chief Executive Officer, or if no Chief Executive Officer is then serving, the President may direct any Assistant Secretary or other officer to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time.
(f)Duties of Chief Financial Officer. The Chief Financial Officer shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the corporation. The Chief Financial Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time. To the extent that a Chief Financial Officer has been appointed and no Treasurer has been appointed, all references in these Bylaws to the Treasurer shall be deemed references to the Chief Financial Officer. The Chief Executive Officer, or if no Chief Executive Officer is then serving, the President may direct the Treasurer, if any, or any Assistant Treasurer, or the controller or any assistant controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and each controller and assistant controller shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time.
(g)Duties of Treasurer; Assistant Treasurer. Unless another officer has been appointed Chief Financial Officer of the corporation, the Treasurer shall be the chief financial officer of the corporation and shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President, and, subject to the order of the Board of Directors, shall have the
custody of all funds and securities of the corporation. The Treasurer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President and Chief Financial Officer (if not Treasurer) shall designate from time to time. The Chief Executive Officer, or if no Chief Executive Officer is then serving, the President and Chief Financial Officer may direct any Assistant Treasurer or the controller or any assistant controller to assume and perform the duties of the Treasurer in the absence or disability of the Treasurer, and each Assistant Treasurer and each controller and assistant controller shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President and Chief Financial Officer shall designate from time to time.
Section 30.Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.
Section 31.Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the Chief Executive Officer, or if no Chief Executive Officer is then serving, to the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the corporation under any contract with the resigning officer.
Section 32.Removal. Any officer may be removed from office at any time, either with or without cause, by the Board of Directors, or by any committee or superior officer upon whom such power of removal may have been conferred by the Board of Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 33.Execution of Corporate Instruments. The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the corporation any corporate instrument or document, or to sign on behalf of the corporation the corporate name without limitation, or to enter into contracts on behalf of the corporation, except where otherwise provided by applicable law or these Bylaws, and such execution or signature shall be binding upon the corporation. All checks and drafts drawn on banks or other depositaries on funds to the credit of the corporation or in special accounts of the corporation shall be signed by such person or persons as the Board of Directors shall authorize so to do. Unless (i) authorized or ratified by the Board of Directors or (ii) within the agency power of an officer or any designee of any such officer (each, an “Authorized Employee”), no officer, agent or employee other than an Authorized Employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
Section 34.Voting of Securities Owned by the Corporation. All stock and other securities and interests of other corporations and entities owned or held by the corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the
person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairperson of the Board of Directors, the Chief Executive Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 35.Form and Execution of Certificates. The shares of the corporation shall be represented by certificates, or shall be uncertificated if so provided by resolution or resolutions of the Board of Directors. Certificates, if any, for the shares of stock shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock in the corporation represented by certificate shall be entitled to have a certificate signed by, or in the name of, the corporation by any two (2) authorized officers of the corporation, certifying the number of shares owned by such holder in the corporation. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if he or she were such officer, transfer agent, or registrar at the date of issue.
Section 36.Lost Certificates. A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to agree to indemnify the corporation in such manner as it shall require or to give the corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen, or destroyed.
Section 37.Transfers.
(a)Transfers of record of shares of stock of the corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and, in the case of stock represented by certificate, upon the surrender of a properly endorsed certificate or certificates for a like number of shares.
(b)The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes or series of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
Section 38.Fixing Record Dates.
(a)In order that the corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, subject to applicable law, not be more than sixty (60) nor fewer than ten (10) days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such
meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.
(b)In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
Section 39.Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 40.Execution of Other Securities. All bonds, debentures and other corporate securities of the corporation, other than stock certificates (covered in Section 35), may be signed by any executive officer (as defined in Article XI) or any other officer or person as may be authorized by the Board of Directors; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by an executive officer of the corporation or such other officer or person as may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the corporation.
ARTICLE IX
DIVIDENDS
Section 41.Declaration of Dividends. Dividends upon the outstanding capital stock of the corporation, subject to the provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board of Directors. Dividends may be paid in cash, in property, or in shares of the corporation’s capital stock, subject to the provisions of the Certificate of Incorporation and applicable law.
Section 42.Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, thinks proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board of Directors shall think conducive to the interests of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 43.Fiscal Year. The fiscal year of the corporation shall end on January 31 or on such other date as may otherwise be fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 44.Indemnification of Directors, Executive Officers, Employees and Other Agents.
(a)Directors and Executive Officers. The corporation shall indemnify its directors and executive officers (for the purposes of this Article XI, “executive officers” shall have the meaning defined in Rule 3b-7 promulgated under the 1934 Act) to the fullest extent permitted by the DGCL or any other applicable law as it presently exists or may hereafter be amended, who were or are made a party or are threatened to be made a party or are otherwise involved in proceeding, by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the corporation, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such person; provided, however, that the corporation may modify the extent of such indemnification by individual contracts with its directors and executive officers, in which case such contract shall supersede and replace the provisions hereof; and, provided, further, that the corporation shall not be required to indemnify any director or executive officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the corporation, (iii) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under the DGCL or any other applicable law or (iv) such indemnification is required to be made under subsection (d) of this Section 44.
(b)Other Officers, Employees and Other Agents. The corporation shall have the power to indemnify (including the power to advance expenses in a manner consistent with subsection (c)
of this Section 44) its other officers, employees and other agents as set forth in the DGCL or any other applicable law. The Board of Directors shall have the power to delegate the determination of whether indemnification shall be given to any such person except executive officers to such officers or other persons as the Board of Directors shall determine.
(c)Expenses. The corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or executive officer of the corporation, or is or was serving at the request of the corporation as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or executive officer in connection with such proceeding; provided, however, that if the DGCL requires, an advancement of expenses incurred by a director or executive officer in his or her capacity as a director or executive officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this section or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph (d) of this Section 44, no advance shall be made by the corporation to an executive officer of the corporation (except by reason of the fact that such executive officer is or was a director of the corporation in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by a majority vote of directors who were not parties to the proceeding, even if not a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or such directors so direct, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not reasonably believe to be in or not opposed to the best interests of the corporation.
(d)Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and executive officers under this Bylaw shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the corporation and the director or executive officer. Any right to indemnification or advances granted by this section to a director or executive officer shall be enforceable by or on behalf of the person holding such right in the Court of Chancery of the State of Delaware if (i) the claim for indemnification or advances is denied by the Board of Directors, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. To the extent permitted by law, the claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting the claim to the fullest extent permitted by law. In connection with any claim for indemnification, the corporation shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible under the DGCL or any other applicable law for the corporation to indemnify the claimant for the amount claimed. In connection with any claim by an executive officer of the corporation (except in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such executive officer is or was a director of the corporation) for advances, the corporation shall be entitled to raise a defense as to any such action clear and convincing evidence that such person acted in bad faith or in a manner that such person did not
reasonably believe to be in or not opposed to the best interests of the corporation, or with respect to any criminal action or proceeding that such person acted without reasonable cause to believe that his or her conduct was lawful. Neither the failure of the corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL or any other applicable law, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by a director or executive officer to enforce a right to indemnification or to an advancement of expenses hereunder, the burden of proving that the director or executive officer is not entitled to be indemnified, or to such advancement of expenses, under this section or otherwise shall be on the corporation.
(e)Non-Exclusivity of Rights. The rights conferred on any person by this Bylaw shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL, or by any other applicable law.
(f)Survival of Rights. The rights conferred on any person by this Bylaw shall continue as to a person who has ceased to be a director or executive officer or officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(g)Insurance. To the fullest extent permitted by the DGCL or any other applicable law, the corporation, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this section.
(h)Amendments. Any amendment, repeal or modification of this section shall only be prospective and shall not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the corporation.
(i)Saving Clause. If this Bylaw or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director and executive officer to the full extent not prohibited by any applicable portion of this section that shall not have been invalidated, or by any other applicable law. If this section shall be invalid due to the application of the indemnification provisions of another jurisdiction, then the corporation shall indemnify each director and executive officer to the full extent under any other applicable law.
(j)Certain Definitions. For the purposes of this Bylaw, the following definitions shall apply:
(i)The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.
(ii)The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.
(iii)The term the “corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.
(iv)References to a “director,” “executive officer,” “officer,” “employee,” or “agent” of the corporation shall include, without limitation, situations where such person is serving at the request of the corporation as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.
(v)References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
ARTICLE XII
NOTICES
Section 45.Notices.
(a)Notice to Stockholders. Notice to stockholders of stockholder meetings shall be given as provided in Section 7 herein. Without limiting the manner by which notice may otherwise be given effectively to stockholders, including under any agreement or contract with such stockholder, subject to Section 232(e) of the DGCL, any notice to stockholders given by the corporation under any provision of the DGCL, the Certificate of Incorporation or the Bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice or electronic transmission to the corporation. Notice shall be deemed given pursuant to this Section 45, (1) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice; (2) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (a) such posting, and (b) the giving of such separate notice; and (3) if by any other form of electronic transmission, when directed to the stockholder. For purposes of these Bylaws, (1) “Electronic transmission” means any form of communication, not directly involving the physical transmission of paper, including the use of, or participation in, one or more electronic networks or databases (including one or more distributed electronic networks or databases), that creates a record
that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process; (2) “Electronic mail” means an electronic transmission directed to a unique electronic mail address (which electronic mail shall be deemed to include any files attached thereto and any information hyperlinked to a website if such electronic mail includes the contact information of an officer or agent of the corporation who is available to assist with accessing such files and information); and (3) “Electronic mail address” means a destination, commonly expressed as a string of characters, consisting of a unique user name or mailbox (commonly referred to as the “local part” of the address) and a reference to an internet domain (commonly referred to as the “domain part” of the address), whether or not displayed, to which electronic mail can be sent or delivered.
(b)Notice to Directors. Any notice required to be given to any director may be given by the method stated in subsection (a) or as otherwise provided in these Bylaws, with notice other than one which is delivered personally to be sent to such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known address of such director.
(c)Affidavit of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the corporation or its transfer agent appointed with respect to the class of stock affected or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.
(d)Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.
(e)Notice to Person with Whom Communication is Unlawful. Whenever notice is required to be given, under any provision of law or of the Certificate of Incorporation or Bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
(f)Notice to Stockholders Sharing an Address. Except as otherwise prohibited under the DGCL, any notice given under the provisions of the DGCL, the Certificate of Incorporation or the Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed to have been given if such stockholder fails to object in writing to the corporation within sixty (60) days of having been given notice by the corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice to the corporation.
ARTICLE XIII
AMENDMENTS
Section 46.Amendments. Subject to the limitations set forth in Section 44(h) of these Bylaws or the provisions of the Certificate of Incorporation, the Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws. Any adoption, amendment or repeal of the Bylaws by the Board of Directors shall require the approval of a majority of the authorized number of directors. The stockholders also shall have power to adopt, amend or repeal the Bylaws; provided, however, that, in addition to any vote of the holders of any class or series of stock of the corporation required by law or by the Certificate of Incorporation, such action by stockholders shall require the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class.
ARTICLE XIV
LOANS TO OFFICERS
Section 47.Loans to Officers. Except as otherwise prohibited by applicable law, the corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiaries, including any officer or employee who is a director of the corporation or its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the corporation. The loan, guarantee or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in these Bylaws shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.
ARTICLE XV
BOOKS AND RECORDS
Section 48.The books and records of the corporation may be kept within or outside the State of Delaware at such place or places as may from time to time be designated by the Board of Directors. Any books or records maintained by the corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method; provided, however, that the books and records so kept can be converted into clearly legible paper form within a reasonable time. The corporation shall so convert any books or records so kept upon the request of any person entitled to inspect such records pursuant to the Certificate of Incorporation, these Bylaws or the DGCL.
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ZQ|CERT#|COY|CLS|RGSTRY|ACCT#|TRANSTYPE|RUN#|TRANS# CLASS A COMMON STOCK CLASS A COMMON STOCK PO BOX 505006, Louisville, KY 40233-5006 ADD 4 ADD 3 ADD 2 ADD 1 DESIGNATION (IF ANY) MR ASAMPLE PAR VALUE $0.0001 Certificate Shares Number **000000****************** ***000000***************** ZQ00000000 ****000000**************** SNOWFLAKE INC. *****000000*************** ******000000************** INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE ** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample SEE REVERSE FOR CERTAIN DEFINITIONS **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David THIS CERTIFIES THAT Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David SampleMR. **** Mr. Alexander SAMPLE David Sample **** Mr. Alexander & David MRS. Sample **** Mr. Alexander SAMPLE David Sample **** Mr. Alexander & David Sample **** CUSIP 833445 10 9 Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. AlexanderMR. David SampleSAMPLE **** Mr. Alexander David Sample& MRS.**** Mr. Alexander DavidSAMPLE Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Sample **** Mr. Sample **000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares*** is the owner of *000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares**** 000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****0 THIS CERTIFICATE IS TRANSFERABLE IN 00000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****00 0000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000***ZERO HUNDRED THOUSAND000**Shares****000 CITIES DESIGNATED BY THE TRANSFER 000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****0000 00**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****00000 AGENT, AVAILABLE ONLINE AT 0**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000ZERO HUNDRED AND ZERO*****Shares****000000 www.computershare.com **Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000* *Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000** Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**S FULLY-PAID AND NON-ASSESSABLE SHARES OF CLASS A COMMON STOCK OF Snowflake Inc. (hereinafter called the “Company”) DTC Number of Shares Insurance Value Holder ID CUSIP/IDENTIFIER , transferable on the books of the Company in person or Total Transaction 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 Certificate Numbers by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the Certificate of Incorporation, as amended, and the Bylaws, as amended, of the Company (copies of which are on file with the Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar. Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers. 12345678 123456789012345 Num/No. DATED DD-MMM-YYYY 6 5 4 3 2 1 LAK WF E COUNTERSIGNED AND REGISTERED: O IN RPORA C N O TE COMPUTERSHARE TRUST COMPANY, N.A. S C . Denom. Chief Financial Officer TRANSFER AGENT AND REGISTRAR, XXXXXXXXXX XXXXXX XX X 1,000,000.00 6 5 4 3 2 1 July 23, 2012 123456 Total D E E L AWA R 7 6 5 4 3 2 1 By General Counsel and Secretary AUTHORIZED SIGNATURE
. SNOWFLAKE INC. THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE FIXED BY THE CERTIFICATE OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT -............................................Custodian ................................................ (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act ........................................................ (State) JT TEN - as joint tenants with right of survivorship UNIF TRF MIN ACT -............................................Custodian (until age ................................) and not as tenants in common (Cust) .............................under Uniform Transfers to Minors Act ................... (Minor) (State) Additional abbreviations may also be used though not in the above list. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE For value received, ____________________________hereby sell, assign and transfer unto ________________________________________________________________________________________________________________________________ (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) ________________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________ Shares of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint _______________________________________________________________________________________________________________________ Attorney to transfer the said stock on the books of the within-named Company with full power of substitution in the premises. Dated: __________________________________________20__________________ Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. Signature: ____________________________________________________________ Signature: ____________________________________________________________ Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. The IRS requires that the named transfer agent (“we”) report the cost basis of certain shares or units acquired after January 1, 2011. If your shares or units are covered by the legislation, and you requested to sell or transfer the shares or units using a specific cost basis calculation method, then we have processed as you requested. If you did not specify a cost basis calculation method, then we have defaulted to the first in, first out (FIFO) method. Please consult your tax advisor if you need additional information about cost basis. If you do not keep in contact with the issuer or do not have any activity in your account for the time period specified by state law, your property may become subject to state unclaimed property laws and transferred to the appropriate state.
Seth J. Gottlieb
T: +1 650 843 5864
sgottlieb@cooley.com
September 8, 2020
Snowflake Inc.
450 Concar Drive
San Mateo, CA 94402
Ladies and Gentlemen:
We have acted as counsel to Snowflake Inc., a Delaware corporation (the “Company”), in connection with the filing by the Company of a Registration Statement (No. 333-248280) on Form S-1 (as amended, the “Registration Statement”) with the Securities and Exchange Commission, including a related prospectus filed with the Registration Statement (the “Prospectus”), covering an underwritten public offering of up to 32,200,000 shares of the Company’s Class A common stock, par value $0.0001 (“Shares”) (including up to 4,200,000 Shares that may be sold by the Company upon exercise of an option to purchase additional shares to be granted to the underwriters).
In connection with this opinion, we have (i) examined and relied upon (a) the Registration Statement and the Prospectus, (b) the Company’s Amended and Restated Certificate of Incorporation, as amended, and Amended and Restated Bylaws, each as currently in effect, (c) the forms of the Company’s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws filed as Exhibits 3.2 and 3.4, to the Registration Statement, respectively, each of which is to be in effect upon the closing of the offering contemplated by the Registration Statement and (d) originals or copies certified to our satisfaction of such records, documents, certificates, memoranda and other instruments as in our judgment are necessary or appropriate to enable us to render the opinion expressed below and (ii) assumed that the Shares will be sold at a price established by the Board of Directors of the Company or a duly authorized committee thereof.
We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as copies, the accuracy, completeness and authenticity of certificates of public officials and the due authorization, execution and delivery by all persons other than the Company of all documents where authorization, execution and delivery are prerequisites to the effectiveness thereof. As to certain factual matters, we have relied upon a certificate of an officer of the Company and have not independently verified such matters.
Our opinion is expressed only with respect to the General Corporation Law of the State of Delaware. We express no opinion to the extent that any other laws are applicable to the subject matter hereof and express no opinion and provide no assurance as to compliance with any federal or state securities law, rule or regulation.
On the basis of the foregoing, and in reliance thereon, we are of the opinion that the Shares, when sold and issued against payment therefor as described in the Registration Statement and the Prospectus, will be validly issued, fully paid and non-assessable.
We consent to the reference to our firm under the caption “Legal Matters” in the Prospectus included in the Registration Statement and to the filing of this opinion as an exhibit to the Registration Statement.
Cooley LLP 3175 Hanover Street, Palo Alto, CA 94304-1130
t: (650) 843-5000 f: (650) 849-7400 cooley.com
Snowflake Inc.
September 8, 2020
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Cooley LLP
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By:
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Seth J. Gottlieb
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Cooley LLP 3175 Hanover Street, Palo Alto, CA 94304-1130
t: (650) 843-5000 f: (650) 849-7400 cooley.com
SNOWFLAKE INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SNOWFLAKE INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the “Agreement”) is entered into as of the 7th day of February, 2020, by and among Snowflake Inc., a Delaware corporation (the “Company”), the Holders (as defined below) and the investors listed on Exhibit A hereto, referred to hereinafter as the “Investors” and each individually as an “Investor.”
RECITALS
WHEREAS, certain of the Investors are purchasing shares of the Company’s Series G-1 Preferred Stock (the “Series G-1 Preferred”) and Series G-2 Preferred Stock (the “Series G-2 Preferred”), pursuant to that certain Series G-1 and G-2 Preferred Stock Purchase Agreement (the “Purchase Agreement”) of even date herewith (the “Financing”);
WHEREAS, the obligations in the Purchase Agreement are conditioned upon the execution and delivery of this Agreement;
WHEREAS, certain of the Investors (the “Prior Investors”) are holders of the Company’s Series F Preferred Stock (the “Series F Preferred”), Series E Preferred Stock (the “Series E Preferred”), Series D Preferred Stock (the “Series D Preferred”), Series C Preferred Stock (the “Series C Preferred”), Series B Preferred Stock (the “Series B Preferred”), Series A Preferred Stock (the “Series A Preferred”) and Series Seed Preferred Stock (the “Series Seed Preferred,” the Series G-2 Preferred, the Series G-1 Preferred, the Series F Preferred, the Series E Preferred, the Series D Preferred, the Series C Preferred, the Series B Preferred, the Series A Preferred and the Series Seed Preferred shall be referred to herein collectively as the “Preferred Stock”);
WHEREAS, the Prior Investors and the Company are parties to an Amended and Restated Investor Rights Agreement dated October 9, 2018, as amended (the “Prior Agreement”);
WHEREAS, the parties to the Prior Agreement desire to amend and restate the Prior Agreement and accept the rights and covenants hereof in lieu of their rights and covenants under the Prior Agreement; and
WHEREAS, in connection with the consummation of the Financing, the Company and the Investors have agreed to the registration rights, information rights, and other rights as set forth below.
NOW, THEREFORE, in consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. GENERAL.
1.1 Amendment and Restatement of Prior Agreement. The Prior Agreement is hereby amended in its entirety and restated herein. Such amendment and restatement is effective upon the execution of this Agreement by the Company and the holders of a majority of the Registrable Securities (as defined in the Prior Agreement) outstanding as of the date of this Agreement. Upon such execution, all provisions of, rights granted and covenants made in the Prior Agreement are hereby waived, released and superseded in their entirety and shall have no further force or effect, including, without limitation, all rights of first refusal and any notice period associated therewith otherwise applicable to the transactions contemplated by the Purchase Agreement.
1.2 Definitions. As used in this Agreement the following terms shall have the following respective meanings:
(a) “Common Stock” means the Company’s Class A Common Stock and Class B Common Stock.
(b) “Direct Listing” means the settlement of the initial trade of shares of the Company’s Class A Common Stock on the New York Stock Exchange, Nasdaq Global Select Market or Nasdaq Global Market by means of an effective registration statement on Form S-1 filed by the Company with the SEC that registers all shares of existing capital stock of the Company for resale that are not otherwise eligible for resale pursuant to Rule 144 or other resale exemption. For the avoidance of doubt, a Direct Listing shall not be deemed to be an underwritten offering and shall not involve any underwriting services. Any and all mentions of an underwritten offering or underwriters contained herein shall not apply to a Direct Listing.
(c) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(d) “Form S-3” means such form under the Securities Act as in effect on the date hereof or any successor or similar registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.
(e) “Holder” means any person owning of record Registrable Securities that have not been sold to the public or any assignee of record of such Registrable Securities in accordance with Section 2.9 hereof.
(f) “Initial Offering” means the Company’s first firm commitment underwritten public offering of its Common Stock registered under the Securities Act.
(g) “Register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.
(h) “Registrable Securities” means (a) Common Stock of the Company issuable or issued upon conversion of the Shares, (b) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities and (c) the Tender Offer Registrable Securities; provided, however, that such Tender Offer Registrable Securities shall not be deemed Registrable Securities and the Tender Offer Holders shall not be deemed to be Holders with respect to such Tender Offer Registrable Securities for the purposes of Sections 2.2 (and any other applicable sections of this Agreement with respect to registrations under Section 2.2), 2.4 (and any other applicable sections of this Agreement with respect to registrations under Section 2.4), 2.6, 3.1, 3.2, 3.6 and 4 of this Agreement. Notwithstanding the foregoing, Registrable Securities shall not include any securities (i) sold by a person to the public either pursuant to a registration statement or Rule 144 or (ii) sold in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not assigned.
(i) “Registrable Securities then outstanding” shall be the number of shares of the Company’s Common Stock that are Registrable Securities and either (a) are then issued and outstanding or (b) are issuable pursuant to then exercisable or convertible securities.
(j) “Registration Expenses” shall mean all expenses incurred by the Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements not to exceed thirty thousand dollars ($30,000) of a single special counsel for the Holders,
blue sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company).
(k) “SEC” or “Commission” means the Securities and Exchange Commission.
(l) “Securities Act” shall mean the Securities Act of 1933, as amended.
(m) “Selling Expenses” shall mean all underwriting discounts and selling commissions applicable to the sale.
(n) “Shares” shall mean the Company’s Series G-1 Preferred and Series G-2 Preferred issued pursuant to the Purchase Agreement, the Series F Preferred, the Series E Preferred, the Series D Preferred, the Series C Preferred, the Series B Preferred, the Series A Preferred, the Series Seed Preferred and shares of the Company’s Preferred Stock held from time to time by the Investors listed on Exhibit A hereto and their permitted assigns.
(o) “Special Registration Statement” shall mean (i) a registration statement relating to any employee benefit plan or (ii) with respect to any corporate reorganization or transaction under Rule 145 of the Securities Act, any registration statements related to the issuance or resale of securities issued in such a transaction or (iii) a registration related to stock issued upon conversion of debt securities.
(p) “Tender Offer” shall mean any third-party sponsored tender offer for outstanding shares of vested Common Stock of the Company launched on or prior to the date that is the 60th day following the date of this Agreement, provided that such tender offer is pursuant to a binding Information, Depository and Paying Agent Agreement (or other similar form of paying agent agreement) acceptable to the Company.
(q) “Tender Offer Holders” shall mean any Holder of Tender Offer Registrable Securities.
(r) “Tender Offer Registrable Securities” shall mean any Common Stock of the Company acquired pursuant to any Tender Offer.
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.
2.1 Restrictions on Transfer.
(a) Each Holder agrees not to make any disposition of all or any portion of the Shares or Registrable Securities unless and until:
(i) there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or
(ii) (A) The transferee has agreed in writing to be bound by the terms of this Agreement, (B) such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (C) if reasonably requested by the Company, such Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such shares under the Securities Act. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144, except in unusual circumstances. After its Initial Offering or Direct Listing, the Company will not require any transferee pursuant to Rule
144 to be bound by the terms of this Agreement if the shares so transferred do not remain Registrable Securities hereunder following such transfer.
(b) Notwithstanding the provisions of subsection (a) above, no such restriction shall apply to a transfer by a Holder that is (A) a partnership transferring to its partners or former partners in accordance with partnership interests, (B) a corporation transferring to a wholly-owned subsidiary or a parent corporation that owns all of the capital stock of the Holder, (C) a limited liability company transferring to its members or former members in accordance with their interest in the limited liability company, (D) an individual transferring to the Holder’s family member or trust for the benefit of an individual Holder or (E) transfers to any other entity that is a stockholder of the Company or an affiliate of a stockholder of the Company; provided that in each case the transferee will agree in writing to be subject to the terms of this Agreement to the same extent as if he were an original Holder hereunder. For the avoidance of doubt, a customary arrangement in connection with the deposit of Registrable Securities in a non-margin custodial account shall not be deemed a sale, transfer or pledge for purposes of this Agreement so long as such registrable securities are in certificated form (it being understood that the Company may require the exchange of any such certificated securities for book-entry shares upon the Initial Offering or Direct Listing).
(c) Each certificate representing Shares or Registrable Securities shall be stamped or otherwise imprinted with legends substantially similar to the following (in addition to any legend required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN INVESTOR RIGHTS AGREEMENT BY AND BETWEEN THE STOCKHOLDER AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
(d) The Company shall be obligated to promptly reissue unlegended certificates at the request of any Holder thereof if the Company has completed its Initial Offering or Direct Listing and the Holder shall have obtained an opinion of counsel (which counsel may be counsel to the Company) reasonably acceptable to the Company to the effect that the securities proposed to be disposed of may lawfully be so disposed of without registration, qualification and legend, provided that the second legend listed above shall be removed only at such time as the Holder of such certificate is no longer subject to any restrictions hereunder.
(e) Any legend endorsed on an instrument pursuant to applicable state securities laws and the stop-transfer instructions with respect to such securities shall be removed upon receipt by the Company of an order of the appropriate blue sky authority authorizing such removal.
2.2 Demand Registration.
(a) Subject to the conditions of this Section 2.2, if the Company shall receive a written request from the Holders of a majority of the Registrable Securities (the “Initiating Holders”) that the Company file a registration statement under the Securities Act covering the registration, then the
Company shall, within thirty (30) days of the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this Section 2.2, effect, as expeditiously as reasonably possible, the registration under the Securities Act of all Registrable Securities that all Holders request to be registered.
(b) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.2 or any request pursuant to Section 2.4 and the Company shall include such information in the written notice referred to in Section 2.2(a) or Section 2.4(a), as applicable. In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Holders of a majority of the Registrable Securities held by all Initiating Holders (which underwriter or underwriters shall be reasonably acceptable to the Company). Notwithstanding any other provision of this Section 2.2 or Section 2.4, if the underwriter advises the Company that marketing factors require a limitation of the number of securities to be underwritten (including Registrable Securities) then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of Registrable Securities held by all such Holders (including the Initiating Holders); provided, however, that the number of shares of Registrable Securities to be included in such underwriting and registration shall not be reduced unless all other securities of the Company are first entirely excluded from the underwriting and registration. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.
(c) The Company shall not be required to effect a registration pursuant to this Section 2.2:
(i) prior to the earliest of (A) the third anniversary of the date of this Agreement, (B) the expiration of the restrictions on transfer set forth in Section 2.11 following the Initial Offering or (C) of the expiration of the restrictions on transfer set forth in Section 2.11 following a Direct Listing;
(ii) after the Company has effected two (2) registrations pursuant to this Section 2.2, and such registrations have been declared or ordered effective;
(iii) during the period starting with the date of filing of, and ending on the date one hundred eighty (180) days following, the effective date of the registration statement pertaining to the Initial Offering or a Direct Listing, whichever occurs earlier (or such longer period as may be determined pursuant to Section 2.11 hereof); provided that the Company makes reasonable good faith efforts to cause such registration statement to become effective;
(iv) if within thirty (30) days of receipt of a written request from Initiating Holders pursuant to Section 2.2(a), the Company gives notice to the Holders of the Company’s intention to file a registration statement for its Initial Offering or Direct Listing within ninety (90) days;
(v) if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 2.2 a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board of Directors of the Company (the “Board”), it would be seriously detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided that such right to delay a request shall be exercised by the Company not more than once in any twelve (12) month period;
(vi) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.4 below; or
(vii) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.
2.3 Piggyback Registrations. The Company shall notify all Holders of Registrable Securities in writing at least fifteen (15) days prior to the filing of any registration statement under the Securities Act for purposes of a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding Special Registration Statements) and will afford each such Holder an opportunity to include in such registration statement all or part of such Registrable Securities held by such Holder. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by it shall, within fifteen (15) days after the above-described notice from the Company, so notify the Company in writing. Such notice shall state the intended method of disposition of the Registrable Securities by such Holder. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.
(a) Underwriting. If the registration statement of which the Company gives notice under this Section 2.3 is for an underwritten offering, the Company shall so advise the Holders of Registrable Securities. In such event, the right of any such Holder to include Registrable Securities in a registration pursuant to this Section 2.3 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any other provision of this Agreement, if the underwriter determines in good faith that marketing factors require a limitation of the number of shares to be underwritten, the number of shares that may be included in the underwriting shall be allocated, first, to the Company; second, to the Holders on a pro rata basis based on the total number of Registrable Securities held by the Holders; and third, to any stockholder of the Company (other than a Holder) on a pro rata basis; provided, however, that no such reduction shall reduce the amount of securities of the selling Holders included in the registration below thirty percent (30%) of the total amount of securities included in such registration, unless such offering is the Initial Offering and such registration does not include shares of any other selling stockholders, in which event any or all of the Registrable Securities of the Holders may be excluded in accordance with the immediately preceding clause. In no event will shares of any other selling stockholder be included in such registration that would reduce the number of shares which may be included by Holders without the written consent of Holders of not less than a majority of the Registrable Securities proposed to be sold in the offering. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least ten (10) business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration. For any Holder which is a partnership, limited liability company or corporation, the partners, retired partners, members, retired members and stockholders of such Holder, or the estates and family members of any such partners, retired partners, members and retired members and any trusts for the benefit of any of the foregoing person shall be deemed to be a single “Holder,” and any pro rata reduction with respect to such “Holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “Holder,” as defined in this sentence.
(b) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.3 whether or not any Holder has elected to include securities in such registration, and shall promptly notify any Holder that has elected to include shares in such registration of such termination or withdrawal. The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.5 hereof.
2.4 Form S-3 Registration. In case the Company shall receive from any Holder or Holders of Registrable Securities a written request or requests that the Company effect a registration on Form S-3 (or any successor to Form S-3) or any similar short-form registration statement and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders of Registrable Securities; and
(b) as soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 2.4:
(i) if Form S-3 is not available for such offering by the Holders, or
(ii) if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than one million dollars ($1,000,000), or
(iii) if within thirty (30) days of receipt of a written request from any Holder or Holders pursuant to this Section 2.4, the Company gives notice to such Holder or Holders of the Company’s intention to make a public offering within ninety (90) days, other than pursuant to a Special Registration Statement;
(iv) if the Company shall furnish to the Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board, it would be seriously detrimental to the Company and its stockholders for such Form S-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than ninety (90) days after receipt of the request of the Holder or Holders under this Section 2.4; provided, that such right to delay a request shall be exercised by the Company not more than twice in any twelve (12) month period, or
(v) if the Company has, within the twelve (12) month period preceding the date of such request, already effected two (2) registrations on Form S-3 for the Holders pursuant to this Section 2.4, or
(vi) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a Form S-3 registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the requests of the Holders. Registrations effected pursuant to this Section 2.4 shall not be counted as demands for registration or registrations effected pursuant to Section 2.2. All Registration Expenses incurred in connection with registrations requested pursuant to this Section 2.4
after the first two (2) registrations shall be paid by the selling Holders pro rata in proportion to the number of shares to be sold by each such Holder in any such registration.
2.5 Expenses of Registration. Except as specifically provided herein, all Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Section 2.2, 2.3 or 2.4 herein and all expenses incurred by the Company in connection with a Direct Listing shall be borne by the Company. All Selling Expenses incurred in connection with any registrations hereunder, shall be borne by the holders of the securities so registered pro rata on the basis of the number of shares so registered. The Company shall not, however, be required to pay for expenses of any registration proceeding begun pursuant to Section 2.2 or 2.4, the request of which has been subsequently withdrawn by the Initiating Holders, unless (a) the withdrawal is based upon material adverse information concerning the Company of which the Initiating Holders were not aware at the time of such request or (b) the Holders of a majority of Registrable Securities agree to deem such registration to have been effected as of the date of such withdrawal for purposes of determining whether the Company shall be obligated pursuant to Section 2.2(c) or 2.4(b)(5), as applicable, to undertake any subsequent registration, in which event such right shall be forfeited by all Holders). If the Holders are required to pay the Registration Expenses, such expenses shall be borne by the holders of securities (including Registrable Securities) requesting such registration in proportion to the number of shares for which registration was requested. If the Company is required to pay the Registration Expenses of a withdrawn offering pursuant to clause (a) above, then such registration shall not be deemed to have been effected for purposes of determining whether the Company shall be obligated pursuant to Section 2.2(c) or 2.4(b)(5), as applicable, to undertake any subsequent registration.
2.6 Obligations of the Company. Whenever required to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use all reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to thirty (30) days or, if earlier, until the Holder or Holders have completed the distribution related thereto; provided, however, that at any time, upon written notice to the participating Holders and for a period not to exceed sixty (60) days thereafter (the “Suspension Period”), the Company may delay the filing or effectiveness of any registration statement or suspend the use or effectiveness of any registration statement (and the Initiating Holders hereby agree not to offer or sell any Registrable Securities pursuant to such registration statement during the Suspension Period) if the Company reasonably believes that there is or may be in existence material nonpublic information or events involving the Company, the failure of which to be disclosed in the prospectus included in the registration statement could result in a Violation (as defined below). In the event that the Company shall exercise its right to delay or suspend the filing or effectiveness of a registration hereunder, the applicable time period during which the registration statement is to remain effective shall be extended by a period of time equal to the duration of the Suspension Period. The Company may extend the Suspension Period for an additional consecutive sixty (60) days with the consent of the holders of a majority of the Registrable Securities registered under the applicable registration statement, which consent shall not be unreasonably withheld. In no event shall any Suspension Period, when taken together with all prior Suspension Periods, exceed 120 days in the aggregate. If so directed by the Company, all Holders registering shares under such registration statement shall (i) not offer to sell any Registrable Securities pursuant to the registration statement during the period in which the delay or suspension is in effect after receiving notice of such delay or suspension; and (ii) use their best efforts to deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holders’ possession, of the prospectus relating to such Registrable Securities current at the time of receipt of such notice. Notwithstanding the foregoing, the Company shall not be required to file, cause to become effective or maintain the effectiveness of any registration statement other than a registration statement on Form S-3 that contemplates a distribution of securities on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.
(b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a) above.
(c) Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use its reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. The Company will use reasonable efforts to amend or supplement such prospectus in order to cause such prospectus not to include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.
(g) Use its reasonable efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering addressed to the underwriters.
2.7 Delay of Registration; Furnishing Information.
(a) No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 2.2, 2.3 or 2.4 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be required to effect the registration of their Registrable Securities.
(c) The Company shall have no obligation with respect to any registration requested pursuant to Section 2.2 or Section 2.4 if the number of shares or the anticipated aggregate offering price of the Registrable Securities to be included in the registration does not equal or exceed the number of
shares or the anticipated aggregate offering price required to originally trigger the Company’s obligation to initiate such registration as specified in Section 2.2 or Section 2.4, whichever is applicable.
2.8 Indemnification. In the event any Registrable Securities are included in a registration statement under Sections 2.2, 2.3 or 2.4 or in connection with a Direct Listing:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, members, officers and directors of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”) by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement; and the Company will reimburse each such Holder, partner, member, officer, director, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, member, officer, director, underwriter or controlling person of such Holder.
(b) To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its directors, its officers and each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, directors or officers or any person who controls such Holder, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, or partner, director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any of the following statements: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act (collectively, a “Holder Violation”), in each case to the extent (and only to the extent) that such Holder Violation occurs in reliance upon and in conformity with written information furnished by such Holder under an instrument duly executed by such Holder and stated to be specifically for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, or partner, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a Holder Violation; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided further, that in no event shall any indemnity under this Section 2.8 exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses thereof to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8 to the extent, and only to the extent, prejudicial to its ability to defend such action, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.
(d) If the indemnification provided for in this Section 2.8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) or Holder Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a Holder hereunder exceed the net proceeds from the offering received by such Holder.
(e) The obligations of the Company and Holders under this Section 2.8 shall survive completion of any offering of Registrable Securities in a registration statement and, with respect to liability arising from an offering to which this Section 2.8 would apply that is covered by a registration filed before termination of this Agreement, such termination. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.
2.9 Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or assignee of Registrable Securities (for so long as such shares remain Registrable Securities) that (a) is a subsidiary, parent, general partner, limited partner, retired partner, member or retired/former member, affiliated fund or stockholder of a Holder that is a corporation, partnership or limited liability company, (b) is a Holder’s family member or trust for the benefit of such person or an individual Holder, or (c) acquires at least one million (1,000,000) shares of Registrable Securities (as adjusted for stock splits and combinations); or (d) is an entity affiliated by common control (or other related entity) with such Holder; provided, however, (i) the transferor shall, within ten (10) days after such transfer, furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration
rights are being assigned and (ii) such transferee shall agree to be subject to all restrictions set forth in this Agreement.
2.10 Limitation on Subsequent Registration Rights. Other than as provided in Section 5.10, after the date of this Agreement, the Company shall not enter into any agreement with any holder or prospective holder of any securities of the Company that would grant such holder rights to demand the registration of shares of the Company’s capital stock, or to include such shares in a registration statement that would reduce the number of shares includable by the Holders.
2.11 “Market Stand-Off” Agreement. Each Holder hereby agrees that such Holder shall not sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration) during the 180-day period following the effective date of the Initial Offering (or such longer period as the underwriters or the Company shall request in order to facilitate compliance with applicable FINRA rules, any successor provisions or amendments thereto, or any successor or similar rule or regulation), as the underwriters or the Company shall request in order to facilitate compliance with applicable FINRA rules, any successor provisions or amendments thereto, or any successor or similar rule or regulation); provided, that all officers and directors of the Company and holders of at least one percent (1%) of the Company’s voting securities are bound by and have entered into similar agreements. The obligations described in this Section 2.11 shall not apply to a Direct Listing and shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future.
2.12 Agreement to Furnish Information. Each Holder agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter that are consistent with the Holder’s obligations under Section 2.11 or that are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, each Holder shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations described in Section 2.11 and this Section 2.12 shall not apply to a Special Registration Statement. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said day period. Each Holder agrees that any transferee of any shares of Registrable Securities shall be bound by Sections 2.11 and 2.12. The underwriters of the Company’s stock are intended third party beneficiaries of Sections 2.11 and 2.12 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.
2.13 Rule 144 Reporting. With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are understood and defined in SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of the first registration filed by the Company for an offering of its securities to the general public;
(b) File with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request: a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 of the Securities Act, and of the Exchange Act (at any time after it has
become subject to such reporting requirements); a copy of the most recent annual or quarterly report of the Company filed with the Commission; and such other reports and documents as a Holder may reasonably request in connection with availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration.
2.14 Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Section 2.2, Section 2.3, or Section 2.4 hereof shall terminate upon the earliest of: (i) the date three (3) years following an initial public offering that results in the conversion of all outstanding shares of Preferred Stock; (ii) the date three (3) years following a Direct Listing that results in the conversion of all outstanding shares of Preferred Stock; or (iii) such time as such Holder holds less than 1% of the Company’s outstanding Common Stock (treating all shares of Preferred Stock on an as converted basis), the Company has completed its Initial Offering or Direct Listing and all Registrable Securities of the Company issuable or issued upon conversion of the Shares held by and issuable to such Holder (and its affiliates) may be sold pursuant to Rule 144 during any ninety (90) day period. Upon such termination, such shares shall cease to be “Registrable Securities” hereunder for all purposes.
SECTION 3. COVENANTS OF THE COMPANY.
3.1 Basic Financial Information and Reporting.
(a) The Company will maintain true books and records of account in which full and correct entries will be made of all its business transactions pursuant to a system of accounting established and administered in accordance with generally accepted accounting principles consistently applied (except as noted therein), and will set aside on its books all such proper accruals and reserves as shall be required under generally accepted accounting principles consistently applied.
(b) To the extent requested by an Investor, as soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) days thereafter, the Company will furnish such Investor a balance sheet of the Company, as at the end of such fiscal year, and a statement of income and a statement of cash flows of the Company, for such year, all prepared in accordance with generally accepted accounting principles consistently applied (except as noted therein) and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail. Such financial statements shall be accompanied by a report and opinion thereon by independent public accountants selected by the Board.
(c) So long as an Investor (with its affiliates) shall own not less than five hundred eighty-one thousand seven hundred thirty (581,730) shares of Registrable Securities (as adjusted for stock splits and combinations) (a “Major Investor”), the Company will furnish each such Major Investor: (i) at least thirty (30) days prior to the beginning of each fiscal year an annual budget and operating plans for such fiscal year (and as soon as available, any subsequent written revisions thereto); and (ii) as soon as practicable after the end of each quarter of each fiscal year of the Company, and in any event within forty-five (45) days thereafter, a balance sheet of the Company as of the end of each such quarter, and a statement of income and a statement of cash flows of the Company for such quarter, prepared in accordance with generally accepted accounting principles consistently applied (except as noted thereon), with the exception that no notes need be attached to such statements and year-end audit adjustments may not have been made.
3.2 Inspection Rights. Each Major Investor shall have the right to visit and inspect any of the properties of the Company or any of its subsidiaries, and to discuss the affairs, finances and accounts of the Company or any of its subsidiaries with its officers, and to review such information as is reasonably requested all at such reasonable times and as often as may be reasonably requested; provided, however, that the Company shall not be obligated under this Section 3.2 with respect to a competitor of the Company (including if any operating company affiliated with a Major Investor is a competitor of the Company) or with respect to information which the Board determines in good faith is confidential or
attorney-client privileged and should not, therefore, be disclosed. For the avoidance of doubt, a Major Investor that is an investment fund shall not be deemed to be a competitor of the Company because it (i) has a portfolio company that is a competitor of the Company (other than an operating company affiliated with such investment fund) or (ii) manages its investment with respect to such portfolio company (including, without limitation, designating its employees or agents to serve on (or observe) the board of such portfolio company) (other than an operating company affiliated with such investment fund).
3.3 Confidentiality of Records. Each Holder agrees to use the same degree of care as such Holder uses to protect its own confidential information to keep confidential any information furnished to such Holder hereof that the Company identifies as being confidential or proprietary (so long as such information is not in the public domain) and shall not use any such proprietary or confidential information for any purpose other than to monitor such Holder’s investment in the Company, except that such Holder may disclose such proprietary or confidential information (i) to any partner, subsidiary or parent of such Holder as long as such partner, subsidiary or parent is advised of and agrees or has agreed to be bound by the confidentiality provisions of this Section 3.3 or comparable restrictions; (ii) at such time as it enters the public domain through no fault of such Holder; (iii) that is communicated to it free of any obligation of confidentiality; (iv) that is developed by Holder or its agents independently of and without reference to any confidential information communicated by the Company; or (v) as required by applicable law. Notwithstanding the foregoing, each Holder that is a limited partnership or limited liability company may disclose such proprietary or confidential information to any former partners or members who retained an economic interest in such Holder, current or prospective partner of the partnership or any subsequent partnership under common investment management, limited partner, general partner, member or management company of such Holder (or any employee or representative of any of the foregoing) or legal counsel, accountants or representatives for such Holder, in each case subject to the recipient’s obligation to keep such information confidential.
3.4 Reservation of Common Stock. The Company will at all times reserve and keep available, solely for issuance and delivery upon the conversion of the Preferred Stock, all Common Stock issuable from time to time upon such conversion.
3.5 Proprietary Information and Inventions Agreement. The Company shall require all employees and consultants to execute and deliver a Proprietary Information and Inventions Agreement substantially in a form approved by the Company's counsel or the Board.
3.6 Assignment of Right of First Refusal. In the event the Company elects not to exercise any right of first refusal or right of first offer the Company may have on a proposed transfer of any of the Company’s outstanding capital stock pursuant to the Company’s charter documents, by contract or otherwise, the Company shall, to the extent it may do so, assign such right of first refusal or right of first offer to each Major Investor that is not a competitor of the Company. For the avoidance of doubt, a Major Investor that is an investment fund shall not be deemed to be a competitor of the Company because it (i) has a portfolio company that is a competitor of the Company or (ii) manages its investment with respect to such portfolio company (including, without limitation, designating its employees or agents to serve on (or observe) the board of such portfolio company). In the event of such assignment, each Major Investor shall have a right to purchase its pro rata portion of the capital stock proposed to be transferred. Each Major Investor’s pro rata portion shall be equal to the product obtained by multiplying (i) the aggregate number of shares proposed to be transferred by (ii) a fraction, the numerator of which is the number of shares of Registrable Securities held by such Major Investor at the time of the proposed transfer and the denominator of which is the total number of Registrable Securities owned by all Major Investors at the time of such proposed transfer.
3.7 FCPA. The Company represents that it shall not—and shall not permit any of its subsidiaries or affiliates or any of its or their respective directors, officers, managers, employees, independent contractors, representatives or agents to—promise, authorize or make any payment to, or otherwise contribute any item of value, directly or indirectly, to any third party, including any Non-U.S. Official, in each case, in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery
or anti-corruption law. The Company further represents that it shall—and shall cause each of its subsidiaries and affiliates to use commercially reasonable efforts to—cease all of its or their respective activities, as well as remediate any actions taken by the Company, its subsidiaries or affiliates, or any of their respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company further represents that it shall—and shall cause each of its subsidiaries and affiliates to use commercially reasonable efforts to—maintain systems of internal controls (including, but not limited to, accounting systems, purchasing systems and billing systems) to ensure compliance with the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law.
3.8 USRPHC. The Company shall notify the Investors and Tender Offer Holders promptly after becoming aware that the Company is, or is reasonably likely to be, a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Internal Revenue Code (the “Code”). In addition, at any time upon an Investor or Tender Offer Holder’s reasonable request, the Company shall issue a statement to the Investor or Tender Offer Holder, in form and substance as described in Treasury Regulations sections 1.897-2(h)(1) and 1.1445-2(c) (or any successor regulations) and signed under penalties of perjury, regarding whether any interest in the Company constitutes a “U.S. real property interest” within the meaning of Section 897(c) of the Code, together with an executed notice to the IRS described in Treasury Regulations section 1.897-2(h)(2) (or any successor regulation). Such statement shall be delivered within ten (10) days of the Investor or Tender Offer Holder’s written request therefor.
3.9 Termination of Covenants. All covenants of the Company contained in Section 3 of this Agreement (other than the provisions of Section 3.3) shall expire and terminate as to each Investor and Holder upon the earliest of (i) the effective date of the registration statement pertaining to an Initial Offering, (ii) the effective date of the registration statement pertaining to a Direct Listing or (iii) upon an “Acquisition” as defined in the Company’s Certificate of Incorporation as in effect as of the date hereof.
SECTION 4. RIGHTS OF FIRST REFUSAL.
4.1 Subsequent Offerings. Subject to applicable securities laws, each Major Investor shall have a right of first refusal to purchase its pro rata share of all Equity Securities, as defined below, that the Company may, from time to time, propose to sell and issue after the date of this Agreement, other than the Equity Securities excluded by Section 4.7 hereof. Each Investor’s pro rata share is equal to the ratio of (a) the number of shares of the Company’s Common Stock (including all shares of Common Stock issuable or issued upon conversion of the Shares or upon the exercise of outstanding warrants or options) of which such Investor is deemed to be a holder immediately prior to the issuance of such Equity Securities to (b) the total number of shares of the Company’s outstanding Common Stock (including all shares of Common Stock issued or issuable upon conversion of the Shares or upon the exercise of any outstanding warrants or options) immediately prior to the issuance of the Equity Securities. The term “Equity Securities” shall mean (i) any Common Stock, Preferred Stock or other security of the Company, (ii) any security convertible into or exercisable or exchangeable for, with or without consideration, any Common Stock, Preferred Stock or other security (including any option to purchase such a convertible security), (iii) any security carrying any warrant or right to subscribe to or purchase any Common Stock, Preferred Stock or other security or (iv) any such warrant or right.
4.2 Exercise of Rights. If the Company proposes to issue any Equity Securities, it shall give each Major Investor written notice of its intention, describing the Equity Securities, the price and the terms and conditions upon which the Company proposes to issue the same. Each Major Investor shall have fifteen (15) days from the giving of such notice to agree to purchase its pro rata share of the Equity Securities for the price and upon the terms and conditions specified in the notice by giving written notice to the Company and stating therein the quantity of Equity Securities to be purchased. Notwithstanding the foregoing, the Company shall not be required to offer or sell such Equity Securities to any Major Investor who would cause the Company to be in violation of applicable federal securities laws by virtue of such offer or sale.
4.3 Issuance of Equity Securities to Other Persons. If not all of the Major Investors elect to purchase their pro rata share of the Equity Securities, then the Company shall promptly notify in writing the Major Investors who do so elect and shall offer such Major Investors the right to acquire such unsubscribed shares on a pro rata basis. The Major Investors shall have five (5) days after receipt of such notice to notify the Company of its election to purchase all or a portion thereof of the unsubscribed shares. The Company shall have ninety (90) days thereafter to sell the Equity Securities in respect of which the Major Investor’s rights were not exercised, at a price not lower and upon general terms and conditions not materially more favorable to the purchasers thereof than specified in the Company’s notice to the Major Investors pursuant to Section 4.2 hereof. If the Company has not sold such Equity Securities within ninety (90) days of the notice provided pursuant to Section 4.2, the Company shall not thereafter issue or sell any Equity Securities, without first offering such securities to the Major Investors in the manner provided above.
4.4 Sale Without Notice. In lieu of giving notice to the Major Investors prior to the issuance of Equity Securities as provided in Section 4.2, the Company may elect to give notice to the Major Investors within thirty (30) days after the issuance of Equity Securities. Such notice shall describe the type, price and terms of the Equity Securities. Each Major Investor shall have twenty (20) days from the date of receipt of such notice to elect to purchase up to the number of shares that would, if purchased by such Major Investor, maintain such Major Investor’s pro rata share (as set forth in Section 4.1) of the Company’s equity securities after giving effect to all such purchases. The closing of such sale shall occur within sixty (60) days of the date of notice to the Major Investors.
4.5 Termination and Waiver of Rights of First Refusal. The rights of first refusal established by this Section 4 shall not apply to, and shall terminate upon the earliest of (i) the effective date of the registration statement pertaining to the Company’s Initial Offering, (ii) the effective date of the registration statement pertaining to the Company’s Direct Listing or (iii) an Acquisition. Notwithstanding Section 5.5 hereof, the rights of first refusal established by this Section 4 may be amended, or any provision waived with and only with the written consent of the Company and the Major Investors holding a majority of the Registrable Securities held by all Major Investors, or as permitted by Section 5.5 (it being understood that any such amendment or waiver must apply in the same manner to all Major Investors).
4.6 Assignment of Rights of First Refusal. The rights of first refusal of each Major Investor under this Section 4 may be assigned to the same parties, subject to the same restrictions, as any transfer of registration rights pursuant to Section 2.9.
4.7 Excluded Securities. The rights of first refusal established by this Section 4 shall have no application to any of the following Equity Securities:
(a) shares of Common Stock issued upon conversion of the Preferred Stock;
(b) shares of Common Stock and/or options, warrants or other Common Stock purchase rights and the Common Stock issued pursuant to such options, warrants or other rights issued or to be issued after the date hereof to employees, officers or directors of, or consultants or advisors to the Company or any subsidiary, pursuant to stock purchase or stock option plans or other arrangements that are approved by the Board;
(c) stock issued or issuable pursuant to any rights or agreements, options, warrants or convertible securities outstanding as of the date of this Agreement; and stock issued pursuant to any such rights or agreements granted after the date of this Agreement, so long as the rights of first refusal established by this Section 4 were complied with, waived, or were inapplicable pursuant to any provision of this Section 4.7 with respect to the initial sale or grant by the Company of such rights or agreements;
(d) any Equity Securities issued for consideration other than cash pursuant to a merger, consolidation, acquisition, strategic alliance or similar business combination approved by the Board;
(e) any Equity Securities issued in connection with any stock split, stock dividend or recapitalization by the Company;
(f) any Equity Securities issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement, or debt financing from a bank or similar financial or lending institution approved by the Board;
(g) any Equity Securities issued to third-party service providers in exchange for or as partial consideration for services rendered to the Company;
(h) any Equity Securities that are issued by the Company pursuant to a registration statement filed under the Securities Act;
(i) any Equity Securities issued in connection with strategic transactions involving the Company and other entities, including, without limitation (i) joint ventures, manufacturing, marketing or distribution arrangements or (ii) technology transfer or development arrangements; provided that the issuance of shares therein has been approved by the Board;
(j) any Equity Securities issued by the Company pursuant to the terms of Section 2.3 of the Purchase Agreement.
SECTION 5. MISCELLANEOUS.
5.1 Governing Law. This Agreement shall be governed by and construed under the laws of the State of California in all respects as such laws are applied to agreements among California residents entered into and to be performed entirely within California, without reference to conflicts of laws or principles thereof. The parties agree that any action brought by either party under or in relation to this Agreement, including without limitation to interpret or enforce any provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the County of Santa Clara, California.
5.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors, assigns, heirs, executors, and administrators and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; provided, however, that prior to the receipt by the Company of adequate written notice of the transfer of any Registrable Securities specifying the full name and address of the transferee, the Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price.
5.3 Entire Agreement. This Agreement, the Exhibits and Schedules hereto, the Purchase Agreement and the other documents delivered pursuant thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other in any manner by any oral or written representations, warranties, covenants and agreements except as specifically set forth herein and therein. Each party expressly represents and warrants that it is not relying on any oral or written representations, warranties, covenants or agreements outside of this Agreement.
5.4 Severability. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
5.5 Amendment and Waiver.
(a) Except as otherwise expressly provided, this Agreement may be amended or modified, and the obligations of the Company and the rights of the Holders under this Agreement may be waived, only upon the written consent of the Company and the holders of a majority of the then-outstanding Registrable Securities. Notwithstanding the foregoing, any amendment to this Agreement which on its face expressly treats one Investor (or group of Investors) differently from all other Investors (or groups of Investors) would require the consent of the Investor (or the holders of a majority of the then-outstanding Registrable Securities held by such group of Investors) being treated differently. For the avoidance of doubt, an amendment that might impact one Investor (or group of Investors) differently, including as it relates to the number and class or series of shares held by such Investor (or group of Investors), than all others but does not on its face expressly provide for different treatment shall not require the consent of such Investor (or group of Investors).
(b) For the purposes of determining the number of Holders or Investors entitled to vote or exercise any rights hereunder, the Company shall be entitled to rely solely on the list of record holders of its stock as maintained by or on behalf of the Company.
5.6 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power, or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent, or approval of any kind or character on any party’s part of any breach, default or noncompliance under the Agreement or any waiver on such party’s part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law, or otherwise afforded to any party, shall be cumulative and not alternative.
5.7 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the party to be notified at the address as set forth on the signature pages hereof or Exhibit A hereto or at such other address as such party may designate by ten (10) days advance written notice to the other parties hereto.
5.8 Attorneys’ Fees. In the event that any suit or action is instituted under or in relation to this Agreement, including without limitation to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.
5.9 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
5.10 Additional Parties. Notwithstanding anything to the contrary contained herein, if the Company shall issue additional shares of its Preferred Stock pursuant to the Purchase Agreement, any purchaser of such shares of Preferred Stock shall become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement and shall be deemed an “Investor,”
a “Holder” and a party hereunder. Notwithstanding anything to the contrary contained herein, (a) if the Company shall issue Equity Securities in accordance with Section 4.7 (c), (e) or (h) of this Agreement, any purchaser of such Equity Securities may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement and shall be deemed an “Investor,” a “Holder” and a party hereunder and (b) any purchaser of Tender Offer Registrable Securities pursuant to any Tender Offer may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement and shall be deemed a “Holder” and a party hereunder.
5.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
5.12 Aggregation of Stock. All shares of Registrable Securities held or acquired by affiliated entities or persons or persons or entities under common management or control shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.
5.13 Pronouns. All pronouns contained herein, and any variations thereof, shall be deemed to refer to the masculine, feminine or neutral, singular or plural, as to the identity of the parties hereto may require.
5.14 Termination. This Agreement shall terminate and be of no further force or effect upon the earliest of (i) an Acquisition; (ii) the date three (3) years following the Closing of the Initial Offering; or (iii) the date three (3) years following the Closing of a Direct Listing.
5.15 Waiver of Rights of First Refusal under the Prior Agreement. Pursuant to Section 4.5 of the Prior Agreement, the Company and the Major Investors holding a majority of the Registrable Securities held by the Major Investors (the “Requisite Holders”) hereby waive their rights of first refusal and any related notice rights pursuant to Section 4.5 of the Prior Agreement with respect to the Company’s issuance and sale of the shares of Series G-1 Preferred Stock and Series G-2 Preferred Stock pursuant to the Purchase Agreement and the shares of Common Stock issued upon conversion of Preferred Stock. Effective and contingent upon the execution of this Agreement by the Company and the Requisite Holders, this Agreement shall constitute the entire agreement between the parties and shall supersede any prior understandings or agreements concerning the subject matter hereof, including the Prior Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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COMPANY:
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SNOWFLAKE INC.
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By:
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/s/ Frank Slootman
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Frank Slootman
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Chief Executive Officer
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Address: 450 Concar Drive
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San Mateo, CA 94402
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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SALESFORCE VENTURES LLC
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By:
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/s/ John Somorjai
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Name: John Somorjai
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Title: President
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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SNOWMAN DF HOLDINGS, LP
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By:
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/s/ Pat Robertson
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Name:
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Pat Robertson
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Title:
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Authorized Signatory
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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SEQUOIA CAPITAL U.S. GROWTH FUND VII, L.P.
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SEQUOIA CAPITAL U.S. GROWTH VII PRINCIPALS FUND, L.P.
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Each a Cayman Islands exempted limited partnership
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By:
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SC U.S. GROWTH VII MANAGEMENT, L.P., a Cayman Islands exempted limited partnership General Partner of Each
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By:
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SC US (TTGP), LTD., a Cayman Islands exempted company, its General Partner
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By:
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/s/ Carl Eschenbach
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Name: Carl Eschenbach
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Title: Authorized Signatory
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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SEQUOIA CAPITAL GLOBAL GROWTH FUND III – ENDURANCE PARTNERS, L.P.,
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for itself and as nominee
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By: SCGGF III – Endurance Partners
Management, L.P., a Cayman Islands exempted limited partnership, its General Partner
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By: SC US (TTGP), LTD., a Cayman Islands exempted company, its General Partner
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By:
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/s/ Carl Eschenbach
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Name: Carl Eschenbach
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Title: Authorized Signatory
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SEQUOIA CAPITAL GROWTH FUND III, L.P.
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By:
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SCGF III Management, LLC
A Delaware Limited Liability Company
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Its General Partner
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By:
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/s/ Carl Eschenbach
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Name: Carl Eschenbach
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Title: Authorized Signatory
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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ICONIQ STRATEGIC PARTNERS III, L.P.,
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a Cayman Islands exempted limited partnership
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By: ICONIQ Strategic Partners III GP, L.P., a Cayman Islands exempted limited partnership
Its: General Partner
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By: ICONIQ Strategic Partners III TT GP, Ltd., a Cayman Islands exempted company
Its: General Partner
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By:
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/s/ Kevin Foster
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Name:
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Kevin Foster
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Title:
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Authorized Signatory
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ICONIQ STRATEGIC PARTNERS III-B, L.P.,
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a Cayman Islands exempted limited partnership
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By: ICONIQ Strategic Partners III GP, L.P., a Cayman Islands exempted limited partnership
Its: General Partner
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By: ICONIQ Strategic Partners III TT GP, Ltd., a Cayman Islands exempted company
Its: General Partner
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By:
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/s/ Kevin Foster
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Name:
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Kevin Foster
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Title:
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Authorized Signatory
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ICONIQ STRATEGIC PARTNERS III CO-INVEST, L.P., SERIES SF
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By: ICONIQ Strategic Partners III GP, L.P., a Cayman Islands exempted limited partnership
Its: General Partner
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By: ICONIQ Strategic Partners III TT GP, Ltd., a Cayman Islands exempted company
Its: General Partner
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By:
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/s/ Kevin Foster
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Name:
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Kevin Foster
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Title:
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Authorized Signatory
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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ALTIMETER PARTNERS FUND, L.P.
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By:
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Altimeter Private General Partner, LLC
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Its:
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General Partner
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By:
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/s/ John J. Kiernan III
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Name:
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John J. Kiernan III
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Title:
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Member
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ALTIMETER PRIVATE PARTNERS FUND I, L.P.
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By:
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Altimeter Private General Partner, LLC
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Its:
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General Partner
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By:
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/s/ John J. Kiernan III
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Name:
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John J. Kiernan III
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Title:
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Member
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ALTIMETER PRIVATE PARTNERS FUND II, L.P.
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By:
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Altimeter Private General Partner, LLC
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Its:
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General Partner
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By:
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/s/ John J. Kiernan III
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Name:
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John J. Kiernan III
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Title:
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Member
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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ALTIMETER GROWTH PARTNERS FUND III, L.P.
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By:
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Altimeter Private General Partner, LLC
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Its:
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General Partner
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By:
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/s/ John J. Kiernan III
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Name:
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John J. Kiernan III
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Title:
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Member
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ALTIMETER GROWTH SIERRA FUND, L.P.
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By:
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Altimeter Sierra General Partner LLC
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Its:
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General Partner
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By:
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/s/ John J. Kiernan III
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Name:
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John J. Kiernan III
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Title:
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Authorized Person
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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SUTTER HILL VENTURES,
A CALIFORNIA LIMITED PARTNERSHIP
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By:
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Sutter Hill Ventures, L.L.C.
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Its:
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General Partner
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By:
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/s/ Michael L. Speiser
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Name:
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Michael L. Speiser
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Title:
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Managing Director
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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ANDREW T. SHEEHAN AND NICOLE J. SHEEHAN AS TRUSTEES OF SHEEHAN 2003 TRUST
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By:
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/s/ Robert Yin, Under Power of Attorney
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Andrew T. Sheehan, Trustee
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ANVEST, L.P.
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By:
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/s/ Robert Yin, Under Power of Attorney
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David L. Anderson, Trustee of The Anderson Living Trust U/A/D 1/22/98, General Partner
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DOUGLAS T. MOHR AND BETH Z. MOHR, CO‑TRUSTEES OF THE MOHR FAMILY TRUST
U/A/D 2/17/15
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By:
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/s/ Robert Yin, Under Power of Attorney
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Douglas T. Mohr, Trustee
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JAMES C. GAITHER, TRUSTEE OF THE GAITHER REVOCABLE TRUST U/A/D 9/28/2000
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By:
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/s/ Robert Yin, Under Power of Attorney
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James C. Gaither, Trustee
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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MICHAEL L. SPEISER AND MARY ELIZABETH SPEISER, CO-TRUSTEES OF SPEISER TRUST
U/A/D 7/19/06
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By:
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/s/ Robert Yin, Under Power of Attorney
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Michael L. Speiser, Trustee
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NESTEGG HOLDINGS, LP
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By:
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/s/ Robert Yin, Under Power of Attorney
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Jeffrey W. Bird, Trustee of Jeffrey W. and Christina R. Bird Trust U/A/D 10/31/00, General Partner
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SAMUEL J. PULLARA III AND LUCIA CHOI PULLARA, CO-TRUSTEES OF THE PULLARA REVOCABLE TRUST U/A/D 08/21/2013
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By:
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/s/ Robert Yin, Under Power of Attorney
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Samuel J. Pullara III, Trustee
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SAUNDERS HOLDINGS, L.P.
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By:
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/s/ Robert Yin, Under Power of Attorney
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G. Leonard Baker, Jr., Trustee of The Baker Revocable Trust U/A/D 2/3/03, General Partner
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STEFAN A. DYCKERHOFF AND WENDY G. DYCKERHOFF-JANSSEN, OR THEIR SUCCESSOR(S) AS TRUSTEES UNDER THE DYCKERHOFF 2001 REVOCABLE TRUST AGREEMENT DATED AUGUST 30, 2001
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By:
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/s/ Robert Yin, Under Power of Attorney
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Stefan A. Dyckerhoff, Trustee
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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TALLACK PARTNERS, L.P.
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By:
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/s/ Robert Yin, Under Power of Attorney
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James C. Gaither, Trustee of The Gaither Revocable Trust U/A/D 9/28/2000, General Partner
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YOVEST, L.P.
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By:
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/s/ Robert Yin, Under Power of Attorney
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William H. Younger, Jr., Trustee of The William H. Younger, Jr. Revocable Trust U/A/D 8/5/09, General Partner
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ROOSTER PARTNERS, LP
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By:
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/s/ Robert Yin, Under Power of Attorney
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Tench Coxe, Trustee of the Coxe Revocable Trust U/A/D 4/23/98, General Partner
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ROSETIME PARTNERS L.P.
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By:
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/s/ Robert Yin, Under Power of Attorney
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James N. White, Trustee of The White Revocable Trust U/A/D 4/3/97, General Partner
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JEFFREY W. BIRD AND CHRISTINA R. BIRD, CO-TRUSTEES OF JEFFREY W. AND CHRISTINA R. BIRD TRUST U/A/D 10/31/00
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By:
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/s/ Robert Yin, Under Power of Attorney
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|
|
Jeffrey W. Bird, Trustee
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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BARBARA NISS, TRUSTEE BARBARA NISS 2013 REVOCABLE TRUST DATED DECEMBER 18, 2013
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By:
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/s/ Robert Yin, Under Power of Attorney
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Barbara Niss, Trustee
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BRENT E. WELLING AND NANCY A. WELLING
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By:
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/s/ Robert Yin, Under Power of Attorney
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Brent E. Welling
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By:
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/s/ Robert Yin, Under Power of Attorney
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Nancy A. Welling
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CHATTER PEAK PARTNERS, L.P.
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By:
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/s/ Robert Yin, Under Power of Attorney
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Michael L. Speiser, Trustee of Speiser Trust
U/A/D 7/19/06, General Partner
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DAVID E. SWEET AND ROBIN T. SWEET, AS TRUSTEES OF THE DAVID AND ROBIN SWEET LIVING TRUST, DATED 7/6/04
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By:
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/s/ Robert Yin, Under Power of Attorney
|
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|
|
|
David E. Sweet, Trustee
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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G. LEONARD BAKER, JR. AND MARY ANNE BAKER, CO-TRUSTEES OF THE BAKER REVOCABLE TRUST, U/A/D 2/3/03
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By:
|
/s/ Robert Yin, Under Power of Attorney
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|
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G. Leonard Barker Jr., Trustee
|
|
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|
|
JAMES N. WHITE AND PATRICIA A. O'BRIEN,
CO-TRUSTEES OF THE WHITE REVOCABLE TRUST U/A/D 4/3/97
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By:
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/s/ Robert Yin, Under Power of Attorney
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|
|
James N. White, Trustee
|
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|
|
JAMES N. WHITE, TRUSTEE OF SIERRA TRUST U/A/D 12/16/1997
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By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
James N. White, Trustee
|
|
|
|
|
|
BRADLEY LUTON
|
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|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
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|
|
MICHAEL I. NAAR AND DIANE J. NAAR AS TRUSTEES OF NAAR FAMILY TRUST U/A/D 12/22/94
|
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By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Michael I. Naar, Trustee
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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|
|
INVESTOR:
|
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PATRICK ANDREW CHEN AND YU-YING CHIU CHEN AS TRUSTEES OF PATRICK AND YING CHEN 2001 LIVING TRUST DATED 3/17/01
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|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Patrick Andrew Chen, Trustee
|
|
|
|
|
|
ROOSTER PARTNERS, L.P. - FUND NO. 2
|
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|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Tench Coxe, Trustee of the Coxe Revocable Trust U/A/D 4/23/98, General Partner
|
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|
STARFISH HOLDINGS, L.P.
|
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By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
David L. Anderson, Trustee of The Anderson Living Trust U/A/D 1/22/98, General Partner
|
|
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|
|
TENCH COXE AND SIMONE OTUS COXE, CO-TRUSTEES OF THE COXE REVOCABLE TRUST U/A/D 4/23/98
|
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|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Tench Coxe, Trustee
|
|
|
|
|
|
THE ALEKSANDR DAVID OTUS 2015 IRREVOCABLE TRUST
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
THE ALEYNA ELIZABETH LACROIX 2015 IRREVOCABLE TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
THE FRANCES HELEN CANINE 2015 IRREVOCABLE TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
THE FRANCESCO BERKE OTUS 2015 IRREVOCABLE TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
THE HELOISE KALLA OTUS 2015 IRREVOCABLE TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
|
|
THE JOSEPH DAVID LACROIX 2015 IRREVOCABLE TRUST
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
THE WILL COXE CANINE 2015 IRREVOCABLE TRUST
|
|
|
|
|
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|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
PATRICIA TOM, TRUSTEE OF PATRICIA TOM
LIVING TRUST DATED APRIL 15, 2019
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Patricia Tom, Trustee
|
|
|
|
|
|
WILLIAM H. YOUNGER, JR. TRUSTEE OF THE WILLIAM H. YOUNGER, JR. REVOCABLE TRUST U/A/D 8/5/2009
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
William H. Younger, Jr., Trustee
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
|
|
DOUGLAS T. MOHR, TRUSTEE OF THE DOUGLAS T. MOHR REVOCABLE TRUST DATED OCTOBER 5, 2018
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Douglas T. Morh, Trustee
|
|
|
|
|
|
SAMUEL J. PULLARA III AND LUCIA CHOI PULLARA, CO-TRUSTEES OF THE PULLARA 2019 CHILDREN’S TRUST U/A/D 10/21/2019
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Samuel J. Pullara III, Trustee
|
|
|
|
|
|
JANICE PEGI MORGAN
|
|
|
|
|
|
|
|
|
/s/ Janice Pegi Morgan
|
|
|
|
|
|
|
STEPHEN CRAWFORD SMART
|
|
|
|
|
/s/ Steve Smart
|
|
|
|
|
|
|
SUITEVEST, LP
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
THE 2018 FRANKLIN S. BIRD TRUST
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
THE 2018 JOHN W. BIRD TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
THE 2018 PETER R. BIRD TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
THE BIRD 2011 IRREVOCABLE CHILDREN’S TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
THE ALEXANDER JACKSON SHEEHAN 2019 IRREVOCABLE TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
THE JULIAN BLAINE COVINGTON SHEEHAN 2019 IRREVOCABLE TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
THE JUSTIN HUNTINGTON PETERS 2019 IRREVOCABLE TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
THE LAYNE ANDREWS TAFT SHEEHAN 2019 IRREVOCABLE TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
THE COXE 2006 IRREVOCABLE CHILDREN TRUST F/B/O EZEKIEL OTUS COXE
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
THE COXE 2006 IRREVOCABLE CHILDREN TRUST F/B/O ISABEL MARBURY COXE
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
THE COXE 2006 IRREVOCABLE CHILDREN TRUST F/B/O TENCH MAHMUT COXE
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
THE EMERALD EXEMPT TRUST
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
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THE OPAL EXEMPT TRUST
|
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By:
|
/s/ Robert Yin, Under Power of Attorney
|
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Name:
|
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|
|
|
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Title:
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
|
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THE SAPPHIRE EXEMPT TRUST
|
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By:
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/s/ Robert Yin, Under Power of Attorney
|
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Name:
|
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Title:
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THE TOPAZ EXEMPT TRUST
|
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By:
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/s/ Robert Yin, Under Power of Attorney
|
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Name:
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Title:
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THE WHITE 2011 IRREVOCABLE CHILDREN’S TRUST
|
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By:
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/s/ Robert Yin, Under Power of Attorney
|
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Name:
|
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Title:
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THE YOUNGER 2006 IRREVOCABLE CHILDREN’S TRUST F/B/O JULIE Y. ALEMAN
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By:
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/s/ Robert Yin, Under Power of Attorney
|
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|
|
|
Name:
|
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|
|
|
|
Title:
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
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THE YOUNGER 2006 IRREVOCABLE CHILDREN’S TRUST F/B/O KELLY L. YOUNGER
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By:
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/s/ Robert Yin, Under Power of Attorney
|
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Name:
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Title:
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THE YOUNGER 2006 IRREVOCABLE CHILDREN’S TRUST F/B/O MARK W. YOUNGER
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By:
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/s/ Robert Yin, Under Power of Attorney
|
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|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
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INVESTOR:
|
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|
WELLS FARGO BANK, N.A. FBO
DAVID E. SWEET ROTH IRA
|
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By:
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/s/ India Jones
|
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Name:
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India Jones
|
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Title:
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AVP
|
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|
WELLS FARGO BANK, N.A. FBO
DIANE J. NAAR ROTH IRA
|
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By:
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/s/ India Jones
|
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|
Name:
|
India Jones
|
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|
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Title:
|
AVP
|
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|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO PATRICIA TOM (ROLLOVER)
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By:
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/s/ India Jones
|
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|
Name:
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India Jones
|
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|
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Title:
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AVP
|
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|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO ROBERT YIN
|
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By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
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INVESTOR:
|
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
G. LEONARD BAKER, JR. ROTH IRA
|
|
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By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
TENCH COXE ROTH IRA
|
|
|
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|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
ANDREW T. SHEEHAN ROTH IRA
|
|
|
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|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
STEFAN A. DYCKERHOFF ROTH IRA
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
YU-YING CHEN ROTH IRA
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO YU-YING CHEN (ROLLOVER)
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO BARBARA NISS
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
BARBARA NISS ROTH IRA
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
BARBARA NISS IRA
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
JAMES N. WHITE ROTH IRA
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO
ANDREW T. SHEEHAN
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO
ANDREW T. SHEEHAN (ROLLOVER)
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO
DAVID E. SWEET (ROLLOVER)
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO DIANE J. NAAR
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO JAMES N. WHITE
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
MICHAEL SPEISER ROTH IRA
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO YU-YING CHEN
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A., CUSTODIAN FOR
ANDREW T. SHEEHAN ROTH IRA
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
|
|
|
|
WELLS FARGO BANK, N.A., CUSTODIAN FOR
YU-YING CHEN ROTH IRA
|
|
|
|
|
|
By:
|
/s/ India Jones
|
|
|
|
|
Name:
|
India Jones
|
|
|
|
|
Title:
|
AVP
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
|
|
REDPOINT VENTURES V, L.P., by its General Partner Redpoint Ventures V, LLC
|
|
|
|
|
|
|
|
REDPOINT ASSOCIATES V, LLC, as nominee
|
|
|
|
|
|
|
|
By:
|
/s/ John L. Walecka
|
|
|
|
|
John L. Walecka, Managing Director
|
|
|
|
|
|
REDPOINT OMEGA III, LP, by its General Partner
Redpoint Omega III, LLC
|
|
|
|
|
|
|
|
REDPOINT OMEGA ASSOCIATES III, LLC, as nominee
|
|
|
|
|
|
|
|
By:
|
/s/ John L. Walecka
|
|
|
|
|
John E. Walecka, Manager
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
GARRETT FAMILY INVESTMENT PARTNERSHIP, L.P.
|
|
|
|
|
|
By:
|
/s/ Mark Garett
|
|
|
|
|
Name:
|
Mark Garret
|
|
|
|
|
Title:
|
Board Member
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
JOHN MCMAHON 1995 FAMILY TRUST
|
|
|
|
|
|
By:
|
/s/ John McMahon
|
|
|
|
|
Name:
|
John McMahon
|
|
|
|
|
Title:
|
Board Member
|
|
|
|
|
THE JOHN MCMAHON SOFTWARE IRREVOCABLE TRUST
|
|
|
|
|
|
By:
|
/s/ John McMahon
|
|
|
|
|
Name:
|
John McMahon
|
|
|
|
|
Title:
|
Board Member
|
|
|
|
|
JOHN MCMAHON
|
|
|
|
/s/ John McMahon
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
|
|
MICHAEL P. SCARPELLI 2019 GRANTOR
|
|
|
|
RETAINED ANNUITY TRUST
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Christopher J. Biles
|
|
|
|
|
|
|
Print Name:
|
|
Christopher J. Biles
|
|
|
|
|
|
Title:
|
Trustee
|
|
|
|
|
|
|
SCARPELLI FAMILY TRUST
|
|
|
|
|
|
|
|
By:
|
/s/ Michael P. Scarpelli
|
|
|
|
|
|
|
Print Name:
|
|
Michael P. Scarpelli
|
|
|
|
|
|
Title:
|
Trustee
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
ALAMEDA ALPHA, LLC
|
|
|
|
|
|
By:
|
/s/ James Peter Wagner
|
|
|
|
|
Name: James Peter Wagner
|
|
|
Title: Member
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of February 19, 2020.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
ALTIMETER GROWTH PARTNERS FUND IV, L.P.
|
|
|
|
|
|
By: Altimeter Growth General Partner IV, LLC
|
|
|
Its: General Partner
|
|
|
|
|
|
By:
|
/s/ John J. Kiernan III
|
|
|
|
|
Name: John J. Kiernan III
|
|
|
Title: Authorized Person
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
|
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
|
|
GC&H INVESTMENTS, LLC
|
|
|
|
|
|
|
|
By:
|
/s/ Mark Tanoury
|
|
|
|
|
Mark Tanoury, Manager
|
|
|
|
|
|
GC&H INVESTMENTS
|
|
|
|
|
|
|
|
By:
|
/s/ Mark Tanoury
|
|
|
|
|
Mark Tanoury, Manager
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof
|
|
|
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
|
|
H. BARTON CO-INVEST FUND II, LLC
|
|
|
|
|
|
|
|
By: H. Barton Asset Management, LLC
|
|
|
|
Its: Managing Member
|
|
|
|
|
|
|
|
By:
|
/s/ Harris Barton
|
|
|
|
|
Harris Barton
|
|
|
|
Managing Member
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of February 19, 2020.
|
|
|
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
|
|
HBAM SF, LLC
|
|
|
|
|
|
|
|
By: H. Barton Asset Management, LLC
|
|
|
|
Its: Managing Member
|
|
|
|
|
|
|
|
By:
|
/s/ Harris Barton
|
|
|
Name:
|
|
Harris Barton
|
|
Title:
|
|
Managing Member
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of February 19, 2020.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
ICONIQ STRATEGIC PARTNERS IV, L.P.,
a Cayman Islands exempted limited partnership
|
|
|
|
|
|
By:
|
ICONIQ Strategic Partners IV GP, L.P.,
a Cayman Islands exempted limited partnership
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
ICONIQ Strategic Partners IV TT GP, Ltd.,
a Cayman Islands exempted company
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Kevin Foster
|
|
Name:
|
Kevin Foster
|
|
Title:
|
Authorized Signatory
|
|
|
|
|
ICONIQ STRATEGIC PARTNERS IV-B, L.P.,
a Cayman Islands exempted limited partnership
|
|
|
|
|
|
By:
|
ICONIQ Strategic Partners IV GP, L.P.,
a Cayman Islands exempted limited partnership
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
ICONIQ Strategic Partners IV TT GP, Ltd.,
a Cayman Islands exempted company
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Kevin Foster
|
|
Name:
|
Kevin Foster
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
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|
INVESTOR:
|
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|
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MADRONA VENTURE FUND VI, LP
|
|
|
|
|
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|
|
By: Madrona Investment Partners VI, LP,
|
|
|
|
its General Partner
|
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|
|
By: Madrona VI General Partner, LLC,
|
|
|
|
its General Partner
|
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|
|
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|
|
|
By:
|
/s/ Sivaramakichenane Somasegar
|
|
|
|
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|
|
Name:
|
|
Sivaramakichenane Somasegar
|
|
Title:
|
|
Managing Director
|
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|
|
MADRONA VENTURE FUND VI-A, LP
|
|
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|
By: Madrona Investment Partners VI, LP,
|
|
|
|
its General Partner
|
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|
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By: Madrona VI General Partner, LLC,
|
|
|
|
its General Partner
|
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|
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|
|
By:
|
/s/ Sivaramakichenane Somasegar
|
|
|
|
|
|
|
Name:
|
|
Sivaramakichenane Somasegar
|
|
Title:
|
|
Managing Director
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
|
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|
|
INVESTOR:
|
|
|
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|
|
MERITECH CAPITAL PARTNERS VI L.P.
|
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|
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|
|
By:
|
Meritech Capital Associates VI L.L.C.
|
|
|
its General Partner
|
|
|
|
|
By:
|
/s/ Rob Ward
|
|
|
Rob Ward, a managing member
|
|
|
|
|
MERITECH CAPITAL AFFILIATES VI L.P.
|
|
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|
By:
|
Meritech Capital Associates VI L.L.C.
|
|
|
its General Partner
|
|
|
|
|
By:
|
/s/ Rob Ward
|
|
|
Rob Ward, a managing member
|
|
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|
|
MERITECH CAPITAL ENTREPRENEURS VI L.P.
|
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By:
|
Meritech Capital Associates VI L.L.C.
|
|
|
its General Partner
|
|
|
|
|
By:
|
/s/ Rob Ward
|
|
|
Rob Ward, a managing member
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of February 19, 2020.
|
|
|
|
|
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|
|
INVESTOR:
|
|
|
|
|
|
MICHAEL P. SCARPELLI
|
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|
|
/s/ Michael P. Scarpelli
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
|
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|
|
INVESTOR:
|
|
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|
|
OAKSTONE VENTURES, INC.
|
|
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|
|
By:
|
/s/ Jaidev Sheigill
|
|
|
|
|
Name:
|
Jaidev Sheigill
|
|
Title:
|
Senior Vice President
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of February 19, 2020.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
REDPOINT VENTURES IV, L.P., by its General
Partner Redpoint Ventures IV, LLC
|
|
|
|
|
|
REDPOINT ASSOCIATES IV, L.L.C., as nominee
|
|
|
|
|
|
By:
|
/s/ John L. Walecka
|
|
|
John L. Walecka, Managing Director
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT February 19, 2020.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
SEQUOIA CAPITAL U.S. GROWTH FUND VI, L.P.
|
|
|
SEQUOIA CAPITAL U.S. GROWTH VI
|
|
|
PRINCIPALS FUND, L.P.
|
|
|
Each a Cayman Islands exempted limited partnership
|
|
|
|
|
|
By:
|
SC U.S. GROWTH VI MANAGEMENT, L.P.,
a Cayman Islands exempted limited partnership General Partner of Each
|
|
|
|
|
By:
|
SC US (TTGP), LTD.,
a Cayman Island exempted company, its General Partner
|
|
|
|
|
By:
|
/s/ Carl Eschenbach
|
|
Name:
|
Carl Eschenbach
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of February 19, 2020.
|
|
|
|
|
|
|
|
|
|
|
INVESTORS:
|
|
|
|
|
|
|
|
BETH Z. MOHR, TRUSTEE OF BETH Z. MOHR
TRUST DATED 1/23/2019
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Beth Z. Mohr, Trusttee
|
|
|
|
|
|
CHRISTOPHER J. BASSO AND JULIE BASSO,
TRUSTEES OF CHRISTOPHER AND JULIE BASSO
REVOCABLE LIVING TRUST U/A/D 1/9/2015
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Christopher J. Bassp, Trustee
|
|
|
|
|
|
WILLIAM E. BULL
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
|
|
DlVANNY ISSATIU LAMAS
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
|
|
BRIAN J. BLOND AND JUDY BLOND, TRUSTEES OF
THE BLOND 2007 RECOVABLE TRUST DATED
JULY 10, 2007
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Brian J. Blond, Co-Trustee
|
|
|
|
|
|
ROBERT YIN AND LILY YIN AS TRUSTEES OF YIN
FAMILY TRUST DATED MARCH 1, 1997
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
Robert Yin, Trustee
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of February 19, 2020.
|
|
|
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
|
|
DAVID A. WEIPER, TRUSTEE OF DAVID A.
WEIPER TRUST
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Yin, Under Power of Attorney
|
|
|
|
|
David A. Weiper, Trustee
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of February 19, 2020.
|
|
|
|
|
|
|
|
INVESTOR:
|
|
|
|
|
|
WELLS FARGO BANK, N.A.
SHV PROFIT SHARING PLAN FBO
CHRISTOPHER J. BASSO
|
|
|
|
|
|
By:
|
/s/ Todd Noetzelman
|
|
|
|
|
Name:
|
Todd Noetzelman
|
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
WELLS FARGO BANK, N.A.
SHV PROFIT SHARING PLAN FBO
DIVANNY ISSATIU LAMAS
|
|
|
|
|
|
By:
|
/s/ Todd Noetzelman
|
|
|
|
|
Name:
|
Todd Noetzelman
|
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
WELLS FARGO BANK, N.A.
SHV PROFIT SHARING PLAN FBO
PATRICIA TOM (POST)
|
|
|
|
|
|
By:
|
/s/ Todd Noetzelman
|
|
|
|
|
Name:
|
Todd Noetzelman
|
|
|
|
|
Title:
|
Vice President
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
COATUE US 19 LLC
|
|
|
|
|
|
By:
|
Coatue Management, L.L.C., its Investment Manager
|
|
|
|
|
By:
|
/s/ Zachary Feingold
|
|
|
Name: Zachary Feingold
|
|
|
Title: Authorized Signatory
|
|
|
|
|
Address: [Intentionally Omitted.]
|
|
|
|
|
|
With a copy (which shall not constitute notice) to:
|
|
|
|
|
Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP
|
|
|
|
|
|
Address: [Intentionally Omitted.]
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
SANDS CAPITAL GLOBAL INNOVATION FUND-SNW,
L.P.
|
|
|
|
|
|
By: Sands Capital Global Innovation Fund C-1-GP,
|
|
|
L.P., its general partner
|
|
|
|
|
|
By: Sands Capital Global Innovation Fund C-1-GP, LLC,
|
|
|
its general partner
|
|
|
|
|
|
By:
|
/s/ Jonathan Goodman
|
|
Name:
|
Jonathan Goodman
|
|
Title:
|
General Counsel
|
|
|
|
|
SANDS CAPITAL GLOBAL INNOVATION FUND, LLC
|
|
|
|
|
|
By:
|
/s/ Jonathan Goodman
|
|
Name:
|
Jonathan Goodman
|
|
Title:
|
General Counsel
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
|
|
TIGER GLOBAL PIP 11 HOLDINGS-2 LLC
|
|
|
|
|
|
|
|
By:
|
/s/ Steven Boyd
|
|
|
Name:
|
Steven Boyd
|
|
|
Title:
|
Manager
|
|
|
|
|
|
|
Address: [Intentionally Omitted.]
|
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
|
|
LONE CYPRESS, LTD.
|
|
|
|
|
|
|
|
By:
|
/s/ Kerry A. Tyler
|
|
|
Name: Kerry A. Tyler
|
|
|
|
Title: Authorized Signatory
|
|
|
|
|
|
|
|
LONE MONTEREY MASTER FUND, LTD.
|
|
|
|
|
|
|
|
By:
|
/s/ Kerry A. Tyler
|
|
|
Name: Kerry A. Tyler
|
|
|
|
Title: Authorized Signatory
|
|
|
|
|
|
|
|
LONE SPRUCE, L.P.
|
|
|
|
By:
|
Lone Pine Associates LLC, its general partner
|
|
|
|
|
|
|
By:
|
/s/ Kerry A. Tyler
|
|
|
Name: Kerry A. Tyler
|
|
|
|
Title: Authorized Signatory
|
|
|
|
|
|
|
|
LONE SIERRA, L.P.
|
|
|
|
By:
|
Lone Pine Members LLC, its general partner
|
|
|
|
|
|
|
By:
|
/s/ Kerry A. Tyler
|
|
|
Name: Kerry A. Tyler
|
|
|
|
Title: Authorized Signatory
|
|
|
|
|
|
|
|
LONE CASCADE, L.P.
|
|
|
|
By:
|
Lone Pine Members LLC, its general partner
|
|
|
|
|
|
|
By:
|
/s/ Kerry A. Tyler
|
|
|
Name: Kerry A. Tyler
|
|
|
|
Title: Authorized Signatory
|
|
|
|
|
|
|
|
Address:
|
|
[Intentionally Omitted.]
|
|
|
|
|
|
Email:
|
|
[Intentionally Omitted.]
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
THE NEW ECONOMY FUND
|
|
|
By:
|
Capital Research and Management Company, for
and on behalf of The New Economy Fund
|
|
|
|
|
By:
|
/s/ Donald H. Rolfe
|
|
Name: Donald H. Rolfe
|
|
|
Title: Authorized Signatory
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
CAPITAL GROUP NEW ECONOMY TRUST (US)
|
|
|
|
|
|
By:
|
Capital Research and Management Company,
For and on behalf of Capital Group New
Economy Trust
|
|
|
|
|
By:
|
/s/ Walter R. Burkley
|
|
Name: Walter R. Burkley
|
|
|
Title: Authorized Signatory
|
|
|
|
|
|
Address: [Intentionally Omitted.]
|
|
|
|
|
|
Email: [Intentionally Omitted.]
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
|
|
DURABLE CAPITAL MASTER FUND LP
|
|
|
|
By: Durable Capital Associates LLC, its general partner
|
|
|
|
|
|
|
|
By:
|
/s/ Michael Blandino
|
|
|
Name: Michael Blandino
|
|
|
|
Title: Authorized Person
|
|
|
|
|
|
|
|
Address:
|
|
[Intentionally Omitted.]
|
|
|
|
|
|
Email:
|
|
[Intentionally Omitted.]
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
D1 CAPITAL PARTNERS MASTER LP
|
|
|
By: D1 Capital Partners GP Sub LLC, its General Partner
|
|
|
|
|
|
By:
|
/s/ Dan Sundheim
|
|
Name: Dan Sundheim
|
|
|
Title: Founder & Chief Investment Officer
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
|
|
CPP INVESTMENT BOARD PMI-1 INC.
|
|
|
|
|
|
|
|
By:
|
/s/ Leon Pedersen
|
|
|
Name: Leon Pedersen
|
|
|
|
Title: Authorized Signatory
|
|
|
|
|
|
|
|
By:
|
/s/ Daniel Fetter
|
|
|
Name: Daniel Fetter
|
|
|
|
Title: Authorized Signatory
|
|
|
|
|
|
|
|
Address:
|
|
[Intentionally Omitted.]
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
ONSET INVESTMENT PTE. LTD.
|
|
|
|
|
|
By:
|
/s/ Lihan Chen
|
|
Name: Lihan Chen
|
|
|
Title: Authorized Signatory
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
SCGE FUND, L.P., a Cayman Islands limited partnership
|
|
|
|
|
|
By:
|
SCGE (LTGP), L.P., A Cayman Islands limited
partnership
|
|
Its:
|
General Partner
|
|
|
|
|
By:
|
/s/ Kimberly Summe
|
|
Name: Kimberly Summe
|
|
|
Title: Chief Operating Officer and General Counsel
|
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
ARANDA INVESTMENTS PTE. LTD.
|
|
|
|
|
|
By:
|
/s/ Chia Song Hwee
|
|
Name: Chia Song Hwee
|
|
|
Title: Authorized Signatory
|
|
|
|
|
|
Address:
|
[Intentionally Omitted.]
|
|
|
|
|
Email:
|
[Intentionally Omitted.]
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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FIDELITY MT. VERNON STREET TRUST:
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FIDELITY SERIES GROWTH COMPANY FUND
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By:
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/s/ Jonathan Davis
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Name:
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Jonathan Davis
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Title:
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Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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FIDELITY MT. VERNON STREET TRUST:
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FIDELITY GROWTH COMPANY FUND
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By:
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/s/ Jonathan Davis
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Name:
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Jonathan Davis
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|
|
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Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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FIDELITY GROWTH COMPANY COMMINGLED POOL
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BY: FIDELITY MANAGEMENT TRUST COMPANY,
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AS TRUSTEE
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By:
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/s/ Jonathan Davis
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Name:
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Jonathan Davis
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|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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FIDELITY MT. VERNON STREET TRUST:
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FIDELITY GROWTH COMPANY K6 FUND
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By:
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/s/ Jonathan Davis
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Name:
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Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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FIDELITY SECURITIES FUND
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FIDELITY BLUE CHIP GROWTH FUND
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By:
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/s/ Jonathan Davis
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Name:
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Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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FIDELITY BLUE CHIP GROWTH COMMINGLED POOL
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BY: FIDELITY MANAGEMENT TRUST COMPANY,
AS TRUSTEE
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By:
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/s/ Jonathan Davis
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Name:
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Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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FIDELITY SECURITES FUND:
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FIDELISTY FLEX LARGE CAP GROWTH FUND
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By:
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/s/ Jonathan Davis
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|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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FIDELITY SECURITIES FUND:
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FIDELITY BLUE CHIP GROWTH K6 FUND
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By:
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/s/ Jonathan Davis
|
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|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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FIDELITY BLUE CHIP GROTH INSTITUTIONAL TRUST
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BY ITS MANAGER FIDELITY INVETMENTS
CANADA ULC
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By:
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/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
|
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|
FIDELITY SECURITIES FUND:
|
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|
FIDELITY SERIES BLUE CHIP GROWTH FUND
|
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By:
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/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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FIAM TARGET DATE BLUE CHIP GROWTH COMMINGLED POOL
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BY: FIDELITY INSTITUTIONAL ASSET MANAGEMENT TRUST COMPANY AS TRUSTEE
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By:
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/s/ Jonathan Davis
|
|
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|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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VARIBLE INSURANCE PRODUCTS FUND III:
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|
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GROWTH OPPORTUNITIES PORTFOLIO
|
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By:
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/s/ Jonathan Davis
|
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|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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|
|
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|
TENDER OFFER HOLDER:
|
|
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|
|
|
FIDELITY ADVISOR SERIES I:
|
|
|
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND
|
|
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|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
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|
TENDER OFFER HOLDER:
|
|
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|
|
FIDELITY ADVISOR SERIES I: FIDELITY ADVISOR
|
|
|
SERIES GROWTH OPPORTUNITIES FUND
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
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|
TENDER OFFER HOLDER:
|
|
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|
FIDELITY ADVISOR SERIES VII:
|
|
|
FIDELITY ADVISOR TECHNOLOGY FUND
|
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|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
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|
|
TENDER OFFER HOLDER:
|
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|
|
|
FIDELITY SELECT PORTFOLIOS:
|
|
|
TECHNOLOGY PORTOLIO
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
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|
|
|
VARIABLE INSURANCE PRODUCTS FUND IV:
|
|
|
TECHNOLOGY PORTFOLIO
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
FIDELITY CONTRAFUND: FIDELITY CONTRAFUND
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
FIDELITY CONTRAFUND COMMINGLED POOL
|
|
|
BY: FIDELITY MANAGEMENT TRUST COMPANY,
AS TRUSTEE
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
FIDELITY CONTRAFUND:
|
|
|
FIDELITY CONTRAFUND K6
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
FIDELITY CONTRAFUND:
|
|
|
FIDELITY ADVISOR NEW INSIGHTS FUND - SUB A
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
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|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
FIDELITY INSIGHTS INVESTMENT TRUST
|
|
|
BY ITS MANAGER FIDELITY INVESTMENTS
CANADA ULC
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
FIDELITY CONTRAFUND:
|
|
|
FIDELITY FLEX OPPORTUNISTIC INSIGHTS FUND
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
FIDELITY CONTRAFUND:
|
|
|
FIDELITY SERIES OPPORTUNISTIC INSIGHTS FUND
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
VARIABLE INSURANCE PRODUCTS FUND II:
|
|
|
CONTRAFUND PORTFOLIO
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
VARIABLE INSURANCE PRODUCTS FUND III:
|
|
|
BALANCED PORTFOLIO
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
FIDELITY PURITAN TRUST:
|
|
|
FIDELITY BALANCED FUND
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
FIDELITY ADVISOR SERIES I:
|
|
|
FIDELITY ADVISOR BALANCED FUND
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
FIDELITY PURITAN TRUST:
|
|
|
FIDELITY BALANCED K6 FUND
|
|
|
|
|
|
By:
|
/s/ Jonathan Davis
|
|
|
|
|
Name:
|
Jonathan Davis
|
|
|
|
|
Title:
|
Authorized Signatory
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TENDER OFFER HOLDER:
|
|
|
|
|
|
|
|
|
|
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
|
|
|
|
|
|
|
|
|
|
By:
|
Baillie Gifford & Co, as agent
|
|
|
|
|
|
|
|
|
By:
|
/s/ Tom Slater
|
|
|
|
Name: Tom Slater
|
|
|
|
|
Title: Partner
|
|
|
|
|
|
|
|
|
|
Address:
|
|
|
[Intentionally Omitted.]
|
|
|
|
|
|
|
Email:
|
|
|
[Intentionally Omitted.]
|
|
|
|
|
|
|
BAILLIE GIFFORD US GROWTH TRUST PLC
|
|
|
|
|
|
|
|
|
|
By:
|
Baillie Gifford & Co, as agent
|
|
|
|
|
|
|
|
|
By:
|
/s/ Tom Slater
|
|
|
|
Name: Tom Slater
|
|
|
|
|
Title: Partner
|
|
|
|
|
|
|
|
|
|
Address:
|
|
|
[Intentionally Omitted.]
|
|
|
|
|
|
|
Email:
|
|
|
[Intentionally Omitted.]
|
SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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PORT-AUX-CHOIX PRIVATE INVESTMENTS INC.
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By:
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/s/ Patrick Daignault
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Name: Patrick Daignault
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Title: Authorized Signatory
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By:
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/s/ Taha Mubashir
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Name: Taha Mubashir
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Title: Authorized Signatory
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Address:
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[Intentionally Omitted.]
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Email:
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[Intentionally Omitted.]
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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GFNCI LLC
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By:
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/s/ Gerald A. Beeson
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Name: Gerald A. Beeson
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Title: Authorized Signatory
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Address:
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[Intentionally Omitted.]
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Email:
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[Intentionally Omitted.]
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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BLACKSTONE GLOBAL MASTER FUND ICAV
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acting solely on behalf of its sub-fund
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BLACKSTONE AQUA MASTER SUB-FUND
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By:
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/s/ Peter Koffler
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Name: Peter Koffler
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Title: Authorized Signatory
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Address:
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[Intentionally Omitted.]
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Email:
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[Intentionally Omitted.]
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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BSOF PARALLEL MASTER FUND L.P.
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By: Blackstone Strategic Opportunity Associates L.L.C.,
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its general partner
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By:
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/s/ Peter Koffler
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Name: Peter Koffler
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Title: Authorized Signatory
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Address:
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[Intentionally Omitted.]
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Email:
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[Intentionally Omitted.]
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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T. ROWE PRICE INSTITUTIONAL LARGE-CAP GROWTH FUND
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PRINCIPAL FUNDS, INC. - LARGECAP GROWTH FUND I
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PRINCIPAL VARIABLE CONTRACTS FUNDS, INC. - LARGECAP GROWTH ACCOUNT I
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T. ROWE PRICE U.S. EQUITIES TRUST
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THE KP FUNDS - KP LARGE CAP EQUITY FUND
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PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY
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T. ROWE PRICE LARGE-CAP GROWTH TRUST
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T. ROWE PRICE LARGE-CAP GROWTH TRUST I
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Each account, severally not jointly
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By: T. Rowe Price Associates, Inc., Investment Adviser
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or Subadviser, as applicable
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By:
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/s/ Todd Skacan
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Name: Todd Skacan
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Title: Vice President
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Address: [Intentionally Omitted.]
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Phone: [Intentionally Omitted.]
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Email: [Intentionally Omitted.]
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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T. ROWE PRICE GROWTH STOCK FUND, INC.
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SEASONS SERIES TRUST - SA T. ROWE PRICE GROWTH STOCK PORTFOLIO
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VOYA PARTNERS, INC. - VY T. ROWE PRICE GROWTH EQUITY PORTFOLIO
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BRIGHTHOUSE FUNDS TRUST II - T. ROWE PRICE LARGE CAP GROWTH PORTFOLIO
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LINCOLN VARIABLE INSURANCE PRODUCTS TRUST - LVIP T. ROWE PRICE GROWTH STOCK FUND
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PENN SERIES FUNDS, INC. - LARGE GROWTH STOCK FUND
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T. ROWE PRICE GROWTH STOCK TRUST
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BRINKER CAPITAL DESTINATIONS TRUST - DESTINATIONS LARGE CAP EQUITY FUND
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MASSMUTUAL SELECT FUNDS - MASSMUTUAL SELECT T. ROWE PRICE LARGE CAP BLEND FUND
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Each account, severally not jointly
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By: T. Rowe Price Associates, Inc., Investment Adviser
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or Subadviser, as applicable
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By:
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/s/ Todd Skacan
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Name: Todd Skacan
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Title: Vice President
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Address: [Intentionally Omitted.]
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Phone: [Intentionally Omitted.]
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Email: [Intentionally Omitted.]
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.
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TD MUTUAL FUNDS - TD SCIENCE & TECHNOLOGY FUND
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Each account, severally not jointly
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By: T. Rowe Price Associates, Inc., Investment Adviser
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or Subadviser, as applicable
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By:
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/s/ Todd Skacan
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Name: Todd Skacan
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Title: Vice President
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Address: [Intentionally Omitted.]
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Phone: [Intentionally Omitted.]
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Email: [Intentionally Omitted.]
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of March 19, 2020.
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TENDER OFFER HOLDER:
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T. ROWE PRICE COMMUNICATIONS & TECHNOLOGY FUND, INC.
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TD MUTUAL FUNDS - TD GLOBAL ENTERTAINMENT & COMMUNICATIONS FUND
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Each account, severally not jointly
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By: T. Rowe Price Associates, Inc., Investment Adviser
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or Subadviser, as applicable
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By:
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/s/ Todd Skacan
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Name: Todd Skacan
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Title: Vice President
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Address: [Intentionally Omitted.]
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Phone: [Intentionally Omitted.]
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Email: [Intentionally Omitted.]
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of May 13, 2020.
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INVESTOR:
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SANDS CAPITAL GLOBAL INNOVATION FUND, LLC
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By:
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/s/ Jonathan Goodman
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Name:
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Jonathan Goodman
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Title:
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General Counsel
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SNOWFLAKE INC.
SERIES G PREFERRED STOCK FINANCING
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SCHEDULE OF INVESTORS
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SNOWMAN DF HOLDINGS, LP
[Intentionally omitted.]
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SALESFORCE VENTURES LLC
[Intentionally omitted.]
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SEQUOIA CAPITAL U.S. GROWTH FUND VII, L.P.
[Intentionally omitted.]
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SEQUOIA CAPITAL U.S. GROWTH VII PRINCIPALS FUND, L.P.
[Intentionally omitted.]
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SEQUOIA CAPITAL GLOBAL GROWTH FUND III – ENDURANCE PARTNERS, L.P.
[Intentionally omitted.]
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SEQUOIA CAPITAL GROWTH FUND III, L.P.
[Intentionally omitted.]
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SEQUOIA CAPITAL U.S. GROWTH FUND VI, L.P.
[Intentionally omitted.]
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SEQUOIA CAPITAL U.S. GROWTH VI PRINCIPALS FUND, L.P.
[Intentionally omitted.]
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MERITECH CAPITAL PARTNERS VI L.P.
[Intentionally omitted.]
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MERITECH CAPITAL AFFILIATES VI L.P.
[Intentionally omitted.]
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MERITECH CAPITAL ENTREPRENEURS VI L.P.
[Intentionally omitted.]
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ICONIQ STRATEGIC PARTNERS III, L.P.
[Intentionally Omitted.]
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ICONIQ STRATEGIC PARTNERS III-B, L.P.
[Intentionally Omitted.]
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ICONIQ STRATEGIC PARTNERS III CO-INVEST, L.P., SERIES SF
[Intentionally Omitted.]
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ICONIQ STRATEGIC PARTNERS IV, L.P.
[Intentionally Omitted.]
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ICONIQ STRATEGIC PARTNERS IV-B, L.P.
[Intentionally Omitted.]
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MADRONA VENTURE FUND VI, LP
[Intentionally Omitted.]
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MADRONA VENTURE FUND VI-A, LP
[Intentionally Omitted.]
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ALTIMETER PARTNERS FUND, L.P.
[Intentionally Omitted.]
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ALTIMETER PRIVATE PARTNERS FUND I, L.P.
[Intentionally Omitted.]
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ALTIMETER PRIVATE PARTNERS FUND II, L.P.
[Intentionally Omitted.]
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ALTIMETER GROWTH PARTNERS FUND III, L.P.
[Intentionally Omitted.]
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ALTIMETER GROWTH SIERRA FUND, L.P.
[Intentionally Omitted.]
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ALTIMETER GROWTH PARTNERS FUND IV, L.P.
[Intentionally Omitted.]
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REDPOINT VENTURES V, L.P.
[Intentionally Omitted.]
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REDPOINT ASSOCIATES V, LLC
[Intentionally Omitted.]
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REDPOINT OMEGA III, LP
[Intentionally Omitted.]
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REDPOINT OMEGA ASSOCIATES III, LLC
[Intentionally Omitted.]
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REDPOINT VENTURES IV, L.P.
[Intentionally Omitted.]
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REDPOINT ASSOCIATES IV, L.L.C.
[Intentionally Omitted.]
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SUTTER HILL VENTURES, A CALIFORNIA LIMITED PARTNERSHIP
[Intentionally Omitted.]
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ANDREW T. SHEEHAN AND NICOLE J. SHEEHAN AS TRUSTEES OF
SHEEHAN 2003 TRUST
[Intentionally Omitted.]
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ANVEST, L.P.
[Intentionally Omitted.]
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BARBARA NISS, TRUSTEE
BARBARA NISS 2013 REVOCABLE TRUST DATED DECEMBER 18, 2013
[Intentionally Omitted.]
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CHATTER PEAK PARTNERS, L.P.
[Intentionally Omitted.]
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DAVID E. SWEET AND ROBIN T. SWEET, AS TRUSTEES OF
THE DAVID AND ROBIN SWEET LIVING TRUST, DATED 7/6/04
[Intentionally Omitted.]
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DOUGLAS T. MOHR AND BETH Z. MOHR, CO-TRUSTEES OF
THE MOHR FAMILY TRUST U/A/D 2/17/15
[Intentionally Omitted.]
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DOUGLAS T. MOHR, TRUSTEE OF THE DOUGLAS T. MOHR REVOCABLE TRUST DATED OCTOBER 5, 2018
[Intentionally Omitted.]
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G. LEONARD BAKER, JR. AND MARY ANNE BAKER, CO-TRUSTEES OF
THE BAKER REVOCABLE TRUST, U/A/D 2/3/03
[Intentionally Omitted.]
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JAMES C. GAITHER, TRUSTEE OF
THE GAITHER REVOCABLE TRUST U/A/D 9/28/2000
[Intentionally Omitted.]
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JAMES N. WHITE, TRUSTEE
SIERRA TRUST U/A/D 12/16/1997
[Intentionally Omitted.]
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JAMES N. WHITE AND PATRICIA O’BRIEN, CO-TRUSTEES OF
THE WHITE REVOCABLE TRUST U/A/D 4/3/97
[Intentionally Omitted.]
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JEFFREY W. BIRD AND CHRISTINA R. BIRD, CO-TRUSTEES OF
JEFFREY W. AND CHRISTINA R. BIRD TRUST U/A/D 10/31/00
[Intentionally Omitted.]
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MICHAEL I. NAAR AND DIANE J. NAAR AS TRUSTEES OF
NAAR FAMILY TRUST U/A/D 12/22/94
[Intentionally Omitted.]
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MICHAEL L. SPEISER AND MARY ELIZABETH SPEISER, CO-TRUSTEES OF
SPEISER TRUST U/A/D 7/19/06
[Intentionally Omitted.]
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NESTEGG HOLDINGS, LP
[Intentionally Omitted.]
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PATRICK ANDREW CHEN AND YU-YING CHIU CHEN AS TRUSTEES OF
PATRICK AND YING CHEN 2001 LIVING TRUST DATED 3/17/01
[Intentionally Omitted.]
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ROOSTER PARTNERS, LP
[Intentionally Omitted.]
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ROOSTER PARTNERS, LP – FUND NO. 2
[Intentionally Omitted.]
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ROSETIME PARTNERS L.P.
[Intentionally Omitted.]
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SAMUEL J. PULLARA III AND LUCIA CHOI PULLARA, CO-TRUSTEES OF
THE PULLARA REVOCABLE TRUST U/A/D 8/21/2013
[Intentionally Omitted.]
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SAMUEL J. PULLARA III AND LUCIA CHOI PULLARA, CO-TRUSTEES OF
THE PULLARA 2019 CHILDREN’S TRUST U/A/D 10/21/2019
[Intentionally Omitted.]
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SAUNDERS HOLDINGS, L.P.
[Intentionally Omitted.]
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STARFISH HOLDINGS, LP
[Intentionally Omitted.]
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STEFAN A. DYCKERHOFF AND WENDY G. DYCKERHOFF-JANSSEN, OR THEIR SUCCESSOR(S) AS TRUSTEES UNDER THE DYCKERHOFF 2001 REVOCABLE TRUST AGREEMENT DATED AUGUST 30, 2001
[Intentionally Omitted.]
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TALLACK PARTNERS, L.P.
[Intentionally Omitted.]
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TENCH COXE AND SIMONE OTUS COXE, CO-TRUSTEES OF
THE COXE REVOCABLE TRUST U/A/D 4/23/98
[Intentionally Omitted.]
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THE ALEKSANDR DAVID OTUS 2015 IRREVOCABLE TRUST
[Intentionally Omitted.]
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THE ALEYNA ELIZABETH LACROIX 2015 IRREVOCABLE TRUST
[Intentionally Omitted.]
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THE FRANCES HELEN CANINE 2015 IRREVOCABLE TRUST
[Intentionally Omitted.]
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THE FRANCESCO BERKE OTUS 2015 IRREVOCABLE TRUST
[Intentionally Omitted.]
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THE HELOISE KALLA OTUS 2015 IRREVOCABLE TRUST
[Intentionally Omitted.]
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THE JOSEPH DAVID LACROIX 2015 IRREVOCABLE TRUST
[Intentionally Omitted.]
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THE WILL COXE CANINE 2015 IRREVOCABLE TRUST
[Intentionally Omitted.]
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PATRICIA TOM, TRUSTEE OF PATRICIA TOM LIVING TRUST DATED APRIL 15, 2019
[Intentionally Omitted.]
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WILLIAM H. YOUNGER, JR. TRUSTEE OF
THE WILLIAM H. YOUNGER, JR. REVOCABLE TRUST U/A/D 8/5/2009
[Intentionally Omitted.]
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YOVEST, L.P.
[Intentionally Omitted.]
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BRADLEY LUTON
[Intentionally Omitted.]
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BRENT E. WELLING AND NANCY A. WELLING
[Intentionally Omitted.]
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JANICE PEGI MORGAN
[Intentionally Omitted.]
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STEPHEN CRAWFORD SMART
[Intentionally Omitted.]
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SUITEVEST, LP
[Intentionally Omitted.]
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THE 2018 FRANKLIN S. BIRD TRUST
[Intentionally Omitted.]
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THE 2018 JOHN W. BIRD TRUST
[Intentionally Omitted.]
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THE 2018 PETER R. BIRD TRUST
[Intentionally Omitted.]
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THE BIRD 2011 IRREVOCABLE CHILDREN’S TRUST
[Intentionally Omitted.]
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THE ALEXANDER JACKSON SHEEHAN 2019 IRREVOCABLE TRUST
[Intentionally Omitted.]
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THE JULIAN BLAINE COVINGTON SHEEHAN 2019 IRREVOCABLE TRUST
[Intentionally Omitted.]
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THE JUSTIN HUNTINGTON PETERS 2019 IRREVOCABLE TRUST
[Intentionally Omitted.]
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THE LAYNE ANDREWS TAFT SHEEHAN 2019 IRREVOCABLE TRUST
[Intentionally Omitted.]
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THE COXE 2006 IRREVOCABLE CHILDREN’S TRUST F/B/O EZEKIEL OTUS COXE
[Intentionally Omitted.]
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THE COXE 2006 IRREVOCABLE CHILDREN’S TRUST F/B/O ISABEL MARBURY COXE
[Intentionally Omitted.]
|
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THE COXE 2006 IRREVOCABLE CHILDREN’S TRUST F/B/O TENCH MAHMUT COXE
[Intentionally Omitted.]
|
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THE EMERALD EXEMPT TRUST
[Intentionally Omitted.]
|
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THE OPAL EXEMPT TRUST
[Intentionally Omitted.]
|
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THE SAPPHIRE EXEMPT TRUST
[Intentionally Omitted.]
|
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THE TOPAZ EXEMPT TRUST
[Intentionally Omitted.]
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THE WHITE 2011 IRREVOCABLE CHILDREN’S TRUST
[Intentionally Omitted.]
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THE YOUNGER 2006 IRREVOCABLE CHILDREN’S TRUST F/B/O JULIE Y. ALEMAN
[Intentionally Omitted.]
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THE YOUNGER 2006 IRREVOCABLE CHILDREN’S TRUST F/B/O KELLY L. YOUNGER
[Intentionally Omitted.]
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THE YOUNGER 2006 IRREVOCABLE CHILDREN’S TRUST F/B/O MARK W. YOUNGER
[Intentionally Omitted.]
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|
|
BETH Z. MOHR, TRUSTEE OF BETH Z. MOHR TRUST DATED 1/23/2019
[Intentionally Omitted.]
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|
CHRISTOPHER J. BASSO AND JULIE BASSO, TRUSTEES OF
CHRISTOPHER AND JULIE BASSO REVOCABLE LIVING TRUST U/A/D 1/9/2015
[Intentionally Omitted.]
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WILLIAM E. BULL
[Intentionally Omitted.]
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DIVANNY ISSATIU LAMAS
[Intentionally Omitted.]
|
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|
BRIAN J. BLOND AND JUDY BLOND, TRUSTEES OF
THE BLOND 2007 REVOCABLE TRUST DATED JULY 10, 2007
[Intentionally Omitted.]
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|
ROBERT YIN AND LILY YIN AS TRUSTEES OF YIN FAMILY TRUST
DATED MARCH 1, 1997
[Intentionally Omitted.]
|
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|
|
DAVID A. WEIPER, TRUSTEE OF DAVID A. WEIPER TRUST
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
BARBARA NISS IRA
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
BARBARA NISS ROTH IRA
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
DAVID E. SWEET ROTH IRA
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
DIANE J. NAAR ROTH IRA
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
JAMES N. WHITE ROTH IRA
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
TENCH COXE ROTH IRA
[Intentionally Omitted.]
|
|
|
|
|
|
|
|
WELLS FARGO BANK, N.A., CUSTODIAN FOR
ANDREW T. SHEEHAN ROTH IRA
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A., CUSTODIAN FOR
YU-YING CHEN ROTH IRA
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO ANDREW T. SHEEHAN
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO BARBARA NISS
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO DAVID E. SWEET (ROLLOVER)
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO DIANE J. NAAR
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
MICHAEL SPEISER ROTH IRA
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO PATRICIA TOM (ROLLOVER)
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO ROBERT YIN
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO YU-YING CHEN
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO JAMES N. WHITE
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
ANDREW T. SHEEHAN ROTH IRA
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO ANDREW T. SHEEHAN (ROLLOVER)
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
STEFAN A. DYCKERHOFF ROTH IRA
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
YU-YING CHEN ROTH IRA
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO YU-YING CHEN (ROLLOVER)
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
G. LEONARD BAKER, JR. ROTH IRA
[Intentionally Omitted.]
|
|
|
|
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO CHRISTOPHER J. BASSO
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO DIVANNY ISSATIU LAMAS
[Intentionally Omitted.]
|
|
|
|
WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO PATRICIA TOM (POST)
[Intentionally Omitted.]
|
|
|
|
ALAMEDA ALPHA, LLC
[Intentionally Omitted.]
|
|
|
|
DELREY TECHNOLOGY INVESTORS, G.P.
[Intentionally Omitted.]
|
|
|
|
H. BARTON CO-INVEST FUND II, LLC
[Intentionally Omitted.]
|
|
|
|
HBAM SF, LLC
[Intentionally Omitted.]
|
|
|
|
HILARY HAUSMAN
[Intentionally Omitted.]
|
|
|
|
KENNETH L. HAUSMAN
[Intentionally Omitted.]
|
|
|
|
SAM HAUSMAN
[Intentionally Omitted.]
|
|
|
|
SARAH HAUSMAN
[Intentionally Omitted.]
|
|
|
|
GC&H INVESTMENTS
[Intentionally Omitted.]
|
|
|
|
GC&H INVESTMENTS, LLC
[Intentionally Omitted.]
|
|
|
|
JOHN MCMAHON
[Intentionally Omitted.]
|
|
|
|
JOHN MCMAHON, TRUSTEE
JOHN MCMAHON 1995 FAMILY TRUST
[Intentionally Omitted.]
|
|
|
|
THE JOHN MCMAHON SOFTWARE IRREVOCABLE TRUST
[Intentionally Omitted.]
|
|
|
|
ROBERT MUGLIA
[Intentionally Omitted.]
|
|
|
|
THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY
(DAPER I)
[Intentionally Omitted.]
|
|
|
|
THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (SBST)
[Intentionally Omitted.]
|
|
|
|
OAKSTONE VENTURES, INC.
[Intentionally Omitted.]
|
|
|
|
TCM I, L.P.
[Intentionally Omitted.]
|
|
|
|
|
|
|
|
GARRETT FAMILY INVESTMENT PARTNERSHIP, L.P.
[Intentionally Omitted.]
|
|
|
|
AME CLOUD VENTURES FUND I LLC
[Intentionally Omitted.]
|
|
|
|
MICHAEL P. SCARPELLI 2019 GRANTOR RETAINED ANNUITY TRUST
[Intentionally Omitted.]
|
|
|
|
SCARPELLI FAMILY TRUST
[Intentionally Omitted.]
|
|
|
|
MICHAEL P. SCARPELLI
[Intentionally Omitted.]
|
|
|
|
SANDS CAPITAL GLOBAL INNOVATION FUND, LLC
[Intentionally Omitted.]
|
SCHEDULE OF TENDER OFFER HOLDERS
|
|
|
|
|
COATUE US 19 LLC
[Intentionally Omitted.]
|
|
|
|
SANDS CAPITAL GLOBAL INNOVATION FUND, LLC
[Intentionally Omitted.]
|
|
|
|
SANDS CAPITAL GLOBAL INNOVATION FUND-SNW, L.P.
[Intentionally Omitted.]
|
|
|
|
TIGER GLOBAL PIP 11 HOLDINGS-2 LLC
[Intentionally Omitted.]
|
|
|
|
LONE CYPRESS, LTD.
[Intentionally Omitted.]
|
|
|
|
LONE MONTEREY MASTER FUND, LTD.
[Intentionally Omitted.]
|
|
|
|
LONE SPRUCE, L.P.
[Intentionally Omitted.]
|
|
|
|
LONE SIERRA, L.P.
[Intentionally Omitted.]
|
|
|
|
LONE CASCADE, L.P.
[Intentionally Omitted.]
|
|
|
|
THE NEW ECONOMY FUND
[Intentionally Omitted.]
|
|
|
|
CAPITAL GROUP NEW ECONOMY TRUST (US)
[Intentionally Omitted.]
|
|
|
|
DURABLE CAPITAL MASTER FUND LP
[Intentionally Omitted.]
|
|
|
|
D1 CAPITAL PARTNERS MASTER LP
[Intentionally Omitted.]
|
|
|
|
CPP INVESTMENT BOARD PMI-1 INC.
[Intentionally Omitted.]
|
|
|
|
ONSET INVESTMENT PTE. LTD.
[Intentionally Omitted.]
|
|
|
|
SCGE FUND, L.P., A CAYMAN ISLANDS LIMITED PARTNERSHIP
[Intentionally Omitted.]
|
|
|
|
ARANDA INVESTMENTS PTE. LTD.
[Intentionally Omitted.]
|
|
|
|
FIDELITY MT. VERNON STREET TRUST: FIDELITY SERIES GROWTH COMPANY FUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY MT. VERNON STREET TRUST: FIDELITY GROWTH COMPANY FUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY GROWTH COMPANY COMMINGLED POOL BY: FIDELITY MANAGEMENT TRUST COMPANY, AS TRUSTEE
[Intentionally Omitted.]
|
|
|
|
FIDELITY MT. VERNON STREET TRUST : FIDELITY GROWTH COMPANY K6 FUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY SECURITIES FUND: FIDELITY BLUE CHIP GROWTH FUND
[Intentionally Omitted.]
|
|
|
SCHEDULE OF TENDER OFFER HOLDERS
|
|
|
|
|
FIDELITY BLUE CHIP GROWTH COMMINGLED POOL BY: FIDELITY MANAGEMENT TRUST COMPANY, AS TRUSTEE
[Intentionally Omitted.]
|
|
|
|
FIDELITY SECURITIES FUND: FIDELITY FLEX LARGE CAP GROWTH FUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY SECURITIES FUND: FIDELITY BLUE CHIP GROWTH K6 FUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY BLUE CHIP GROWTH INSTITUTIONAL TRUST BY ITS MANAGER FIDELITY INVESTMENTS CANADA ULC
[Intentionally Omitted.]
|
|
|
|
FIDELITY SECURITIES FUND: FIDELITY SERIES BLUE CHIP GROWTH FUND
[Intentionally Omitted.]
|
|
|
|
FIAM TARGET DATE BLUE CHIP GROWTH COMMINGLED POOL BY: FIDELITY INSTITUTIONAL ASSET MANAGEMENT TRUST COMPANY AS TRUSTEE
[Intentionally Omitted.]
|
|
|
|
VARIABLE INSURANCE PRODUCTS FUND III: GROWTH OPPORTUNITIES PORTFOLIO
[Intentionally Omitted.]
|
|
|
|
FIDELITY ADVISOR SERIES I: FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY ADVISOR SERIES I: FIDELITY ADVISOR SERIES GROWTH OPPORTUNITIES FUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY ADVISOR SERIES VII: FIDELITY ADVISOR TECHNOLOGY FUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY SELECT PORTFOLIOS: TECHNOLOGY PORTFOLIO
[Intentionally Omitted.]
|
|
|
|
VARIABLE INSURANCE PRODUCTS FUND IV: TECHNOLOGY PORTFOLIO
[Intentionally Omitted.]
|
|
|
|
FIDELITY CONTRAFUND: FIDELITY CONTRAFUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY CONTRAFUND COMMINGLED POOL BY: FIDELITY MANAGEMENT TRUST COMPANY, AS TRUSTEE
[Intentionally Omitted.]
|
|
|
|
FIDELITY CONTRAFUND: FIDELITY CONTRAFUND K6
[Intentionally Omitted.]
|
|
|
|
FIDELITY CONTRAFUND: FIDELITY ADVISOR NEW INSIGHTS FUND - SUB A
[Intentionally Omitted.]
|
|
|
|
FIDELITY INSIGHTS INVESTMENT TRUST BY ITS MANAGER FIDELITY INVESTMENTS CANADA ULC
[Intentionally Omitted.]
|
|
|
|
FIDELITY CONTRAFUND: FIDELITY FLEX OPPORTUNISTIC INSIGHTS FUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY CONTRAFUND: FIDELITY SERIES OPPORTUNISTIC INSIGHTS FUND
[Intentionally Omitted.]
|
|
|
|
VARIABLE INSURANCE PRODUCTS FUND II: CONTRAFUND PORTFOLIO
[Intentionally Omitted.]
|
|
|
|
VARIABLE INSURANCE PRODUCTS FUND III: BALANCED PORTFOLIO
[Intentionally Omitted.]
|
|
|
SCHEDULE OF TENDER OFFER HOLDERS
|
|
|
|
|
FIDELITY PURITAN TRUST: FIDELITY BALANCED FUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY ADVISOR SERIES I: FIDELITY ADVISOR BALANCED FUND
[Intentionally Omitted.]
|
|
|
|
FIDELITY PURITAN TRUST: FIDELITY BALANCED K6 FUND
[Intentionally Omitted.]
|
|
|
|
SCOTTISH MORTGAGE INVESTMENT TRUST PLC
[Intentionally Omitted.]
|
|
|
|
BAILLIE GIFFORD US GROWTH TRUST PLC
[Intentionally Omitted.]
|
|
|
|
PORT-AUX-CHOIX PRIVATE INVESTMENTS INC.
[Intentionally Omitted.]
|
|
|
|
GFNCI LLC
[Intentionally Omitted.]
|
|
|
|
BSOF PARALLEL MASTER FUND L.P.
[Intentionally Omitted.]
|
|
|
|
BLACKSTONE GLOBAL MASTER FUND ICAV, ACTING SOLELY FOR AND ON BEHALF OF ITS SUBFUND,
BLACKSTONE AQUA MASTER SUB-FUND
[Intentionally Omitted.]
|
|
|
|
T. ROWE PRICE INSTITUTIONAL LARGE-CAP GROWTH FUND
[Intentionally Omitted.]
|
|
|
|
PRINCIPAL FUNDS, INC. - LARGECAP GROWTH FUND I
[Intentionally Omitted.]
|
|
|
|
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC. – LARGECAP GROWTH ACCOUNT I
[Intentionally Omitted.]
|
|
|
|
T. ROWE PRICE U.S. EQUITIES TRUST
[Intentionally Omitted.]
|
|
|
|
THE KP FUNDS - KP LARGE CAP EQUITY FUND
[Intentionally Omitted.]
|
|
|
|
PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY
[Intentionally Omitted.]
|
|
|
|
T. ROWE PRICE LARGE-CAP GROWTH TRUST
[Intentionally Omitted.]
|
|
|
|
T. ROWE PRICE LARGE-CAP GROWTH TRUST I
[Intentionally Omitted.]
|
|
|
|
T. ROWE PRICE GROWTH STOCK FUND, INC.
[Intentionally Omitted.]
|
|
|
|
SEASONS SERIES TRUST - SA T. ROWE PRICE GROWTH STOCK PORTFOLIO
[Intentionally Omitted.]
|
|
|
|
VOYA PARTNERS, INC. - VY T. ROWE PRICE GROWTH EQUITY PORTFOLIO
[Intentionally Omitted.]
|
|
|
|
BRIGHTHOUSE FUNDS TRUST II - T. ROWE PRICE LARGE CAP GROWTH PORTFOLIO
[Intentionally Omitted.]
|
|
|
|
LINCOLN VARIABLE INSURANCE PRODUCTS TRUST - LVIP T. ROWE PRICE GROWTH STOCK FUND
[Intentionally Omitted.]
|
|
|
SCHEDULE OF TENDER OFFER HOLDERS
|
|
|
|
|
PENN SERIES FUNDS, INC. - LARGE GROWTH STOCK FUND
[Intentionally Omitted.]
|
|
|
|
T. ROWE PRICE GROWTH STOCK TRUST
[Intentionally Omitted.]
|
|
|
|
BRINKER CAPITAL DESTINATIONS TRUST - DESTINATIONS LARGE CAP EQUITY FUND
[Intentionally Omitted.]
|
|
|
|
MASSMUTUAL SELECT FUNDS - MASSMUTUAL SELECT T. ROWE PRICE LARGE CAP BLEND FUND
[Intentionally Omitted.]
|
|
|
|
T. ROWE PRICE GLOBAL TECHNOLOGY FUND, INC.
[Intentionally Omitted.]
|
|
|
|
TD MUTUAL FUNDS – TD SCIENCE & TECHNOLOGY FUND
[Intentionally Omitted.]
|
|
|
|
T. ROWE PRICE COMMUNICATIONS & TECHNOLOGY FUND, INC.
[Intentionally Omitted.]
|
|
|
|
TD MUTUAL FUNDS – TD GLOBAL ENTERTAINMENT & COMMUNICATIONS FUND
[Intentionally Omitted.]
|
SCHEDULE OF TENDER OFFER HOLDERS
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
SECTION 1.
|
GENERAL
|
1
|
|
1.1
|
Amendment and Restatement of Prior Agreement
|
1
|
|
1.2
|
Definitions
|
2
|
|
SECTION 2.
|
REGISTRATION; RESTRICTIONS ON TRANSFER
|
3
|
|
2.1
|
Restrictions on Transfer
|
3
|
|
2.2
|
Demand Registration
|
5
|
|
2.3
|
Piggyback Registrations
|
6
|
|
2.1
|
Form S-3 Registration
|
7
|
|
2.5
|
Expenses of Registration
|
8
|
|
2.6
|
Obligations of the Company
|
9
|
|
2.7
|
Delay of Registration; Furnishing Information
|
10
|
|
2.8
|
Indemnification
|
11
|
|
2.9
|
Assignment of Registration Rights
|
13
|
|
2.10
|
Limitation on Subsequent Registration Rights
|
13
|
|
2.11
|
Market Stand-Off” Agreement
|
13
|
|
2.12
|
Agreement to Furnish Information
|
13
|
|
2.13
|
Rule 144 Reporting
|
14
|
|
2.14
|
Termination of Registration Rights
|
14
|
|
SECTION 3.
|
COVENANTS OF THE COMPANY
|
14
|
|
3.1
|
Basic Financial Information and Reporting
|
14
|
|
3.2
|
Inspection Rights
|
15
|
|
3.3
|
Confidentiality of Records
|
15
|
|
3.4
|
Reservation of Common Stock
|
15
|
|
3.5
|
Proprietary Information and Inventions Agreement
|
16
|
|
3.6
|
Assignment of Right of First Refusal
|
16
|
|
3.7
|
FCPA
|
16
|
|
3.8
|
Termination of Covenants
|
16
|
|
SECTION 4.
|
RIGHTS OF FIRST REFUSAL
|
17
|
|
4.1
|
Subsequent Offerings
|
17
|
|
4.2
|
Exercise of Rights
|
17
|
|
4.3
|
Issuance of Equity Securities to Other Persons
|
17
|
|
4.4
|
Sale Without Notice
|
17
|
|
4.5
|
Termination and Waiver of Rights of First Refusal
|
18
|
|
4.6
|
Assignment of Rights of First Refusal
|
18
|
|
4.7
|
Excluded Securities
|
18
|
|
SECTION 5.
|
MISCELLANEOUS
|
19
|
|
5.1
|
Governing Law
|
19
|
|
5.2
|
Successors and Assigns
|
19
|
|
5.3
|
Entire Agreement
|
19
|
|
5.4
|
Severability
|
19
|
|
5.5
|
Amendment and Waiver
|
19
|
|
5.6
|
Delays or Omissions
|
20
|
|
5.7
|
Notices
|
20
|
|
5.8
|
Attorneys’ Fees
|
20
|
|
5.9
|
Titles and Subtitles
|
20
|
|
5.10
|
Additional Investors
|
20
|
|
|
|
|
|
|
|
|
|
|
|
5.11
|
Counterparts
|
21
|
|
5.12
|
Aggregation of Stock
|
21
|
|
5.13
|
Pronouns
|
21
|
|
5.14
|
Termination
|
21
|
|
5.15
|
Waiver of Rights of First Refusal under the Prior Agreement
|
21
|
SNOWFLAKE INC.
AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS AMENDMENT TO THE AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this “Amendment”), is made as of September 7, 2020, by and among Snowflake Inc., a Delaware corporation (the “Company”) and each of those persons and entities whose names are set forth on the signature pages hereto. Capitalized terms used but not herein defined shall have the meanings ascribed to them in that certain Amended and Restated Investor Rights Agreement, by and among the Company, the Investors and the Holders, dated as of February 7, 2020 (the “Existing Rights Agreement”).
RECITALS
WHEREAS, the Company has entered into that certain Common Stock Purchase Agreement, dated September 5, 2020, with Salesforce Ventures LLC, a Delaware limited liability company (“Salesforce”) and salesforce.com, inc., a Delaware corporation (the “Salesforce Purchase Agreement”), pursuant to which Salesforce will purchase shares of the Company’s Class A Common Stock (the “Salesforce Shares”), immediately subsequent to the closing of the Qualified IPO (as defined in the Salesforce Purchase Agreement).
WHEREAS, the Company has entered into that certain Common Stock Purchase Agreement, dated September 7, 2020, with Berkshire Hathaway Inc., a Delaware corporation (“Berkshire Hathaway”) (such agreement, the “Berkshire Hathaway Purchase Agreement”), pursuant to which Berkshire Hathaway will purchase shares of the Company’s Class A Common Stock (the “Berkshire Hathaway Shares”), immediately subsequent to the closing of the Qualified IPO (as defined in the Berkshire Hathaway Purchase Agreement).
WHEREAS, the Company and the undersigned parties desire to amend the terms of the Existing Rights Agreement for the limited purpose of providing Salesforce and Berkshire Hathaway with certain registration rights under Section 2.2 of the Existing Rights Agreement with respect to the Salesforce Shares, the Berkshire Hathaway Shares and the Secondary Sale Shares (as defined in the Berkshire Hathaway Purchase Agreement), respectively.
WHEREAS, pursuant to Section 5.5 of the Existing Rights Agreement, the Existing Rights Agreement may be amended only upon the written consent of the Company and holders of a majority of the then-outstanding Registrable Securities (collectively, the “Requisite Consent”).
WHEREAS, the undersigned parties constitute the Requisite Consent and consent to this Amendment.
AGREEMENT
NOW, THEREFORE, the undersigned parties hereby agree as follows:
1.Amendment to Section 1.2(h) of the Existing Rights Agreement. Section 1.2(h) of the Existing Rights Agreement is hereby amended and restated in its entirety to read as follows:
“(h) “Registrable Securities” means (a) Common Stock of the Company issuable or issued upon conversion of the Shares, (b) any Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities, (c) the shares of Common Stock issuable pursuant to that certain Common Stock Purchase Agreement, dated as of September 5, 2020, by and among the Company, Salesforce Ventures LLC, and salesforce.com, inc. (Salesforce Ventures LLC and salesforce.com, inc. collectively, with their affiliates, donees, and partners, “Salesforce” and such shares of Common Stock, the “Salesforce Registrable Securities”), (d) the shares of Common Stock issuable pursuant to that certain Common Stock Purchase Agreement, dated as of September 7, 2020 (the “Berkshire Hathaway Purchase Agreement”), by and between the Company and Berkshire Hathaway Inc. (Berkshire Hathaway Inc. collectively, with its affiliates, donees, and partners, “Berkshire Hathaway”) and the Secondary Sale Shares (as defined in the Berkshire Hathaway Purchase Agreement) (the shares of Common Stock issuable pursuant to the Berkshire Hathaway Purchase Agreement and the Secondary Sale Shares, collectively, the “Berkshire Hathaway Registrable Securities”), and (e) the Tender Offer Registrable Securities; provided, however, that (i) such Salesforce Registrable Securities shall not be deemed Registrable Securities and Salesforce shall not be deemed to be a Holder with respect to such Salesforce Registrable Securities for the purposes of Sections 2.2 (and any other applicable sections of this Agreement with respect to registrations under Section 2.2), 2.4 (and any other applicable sections of this Agreement with respect to registrations under Section 2.4), 2.6, 3.1, 3.2, 3.6 and 4 of this Agreement, (ii) such Berkshire Hathaway Registrable Securities shall not be deemed Registrable Securities and Berkshire Hathaway shall not be deemed to be a Holder with respect to such Berkshire Hathaway Registrable Securities for the purposes of Sections 2.2 (and any other applicable sections of this Agreement with respect to registrations under Section 2.2), 2.4 (and any other applicable sections of this Agreement with respect to registrations under Section 2.4), 2.6, 3.1, 3.2, 3.6 and 5.15 of this Agreement, and (iii) such Tender Offer Registrable Securities shall not be deemed Registrable Securities and the Tender Offer Holders shall not be deemed to be Holders with respect to such Tender Offer Registrable Securities for the purposes of Sections 2.2 (and any other applicable sections of this Agreement with respect to registrations under Section 2.2), 2.4 (and any other applicable sections of this Agreement with respect to registrations under Section 2.4), 2.6, 3.1, 3.2, 3.6 and 4 of this Agreement. Notwithstanding the foregoing, Registrable Securities shall not include any securities (x) sold by a person to the public either pursuant to a registration statement or Rule 144 or (y) sold in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not assigned.”
2.Full Force and Effect. Except as expressly modified by this Amendment, the terms of the Existing Rights Agreement shall remain in full force and effect.
3.Governing Law. This Amendment shall be governed by and construed under the laws of the State of California in all respects as such laws are applied to agreements among California residents entered into and to be performed entirely within California, without reference to conflicts of laws or principles thereof. The parties agree that any action brought by either party under or in relation to this Amendment, including without limitation to interpret or enforce any provision of this Amendment, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the County of Santa Clara, California.
4.Integration. This Amendment and the Existing Rights Agreement, and the documents referred to herein and therein and the exhibits and schedules thereto, constitute the entire agreement among the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing between the parties hereto are expressly canceled.
5.Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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SNOWFLAKE INC.
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By:
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/s/ Michael P. Scarpelli
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Name:
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Michael P. Scarpelli
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Title:
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Chief Financial Officer
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Address:
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450 Concar Drive
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San Mateo, CA 94402
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTOR:
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SALESFORCE VENTURES LLC
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By:
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/s/ John Somorjai
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Name:
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John Somorjai
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Title:
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President
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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ALTIMETER PARTNERS FUND, L.P.
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By:
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Altimeter Private General Partner, LLC
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Its:
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General Partner
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By:
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/s/ John J. Kiernan III
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Name:
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John J. Kiernan III
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Title:
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Member
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ALTIMETER PRIVATE PARTNERS FUND I, L.P.
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By:
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Altimeter Private General Partner, LLC
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Its:
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General Partner
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By:
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/s/ John J. Kiernan III
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Name:
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John J. Kiernan III
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Title:
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Member
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ALTIMETER PRIVATE PARTNERS FUND II, L.P.
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By:
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Altimeter Private General Partner, LLC
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Its:
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General Partner
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By:
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/s/ John J. Kiernan III
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Name:
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John J. Kiernan III
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Title:
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Member
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ALTIMETER GROWTH PARTNERS FUND III, L.P.
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By:
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Altimeter Private General Partner, LLC
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Its:
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General Partner
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By:
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/s/ John J. Kiernan III
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Name:
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John J. Kiernan III
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Title:
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Member
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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ALTIMETER GROWTH SIERRA FUND, L.P.
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By:
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Altimeter Sierra General Partner LLC
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Its:
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General Partner
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By:
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/s/ John J. Kiernan III
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Name:
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John J. Kiernan III
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Title:
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Authorized Person
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ALTIMETER GROWTH PARTNERS FUND IV, L.P.
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By:
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Altimeter Growth General Partner IV, LLC
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Its:
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General Partner
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By:
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/s/ John J. Kiernan III
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Name:
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John J. Kiernan III
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Title:
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Authorized Person
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTOR:
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GARRETT FAMILY INVESTMENT PARTNERSHIP, L.P.
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By:
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/s/ Mark Garrett
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Name:
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Mark Garrett
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Title:
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General Partner
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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JOHN MCMAHON 1995 FAMILY TRUST
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By:
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/s/ John McMahon
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Name:
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John McMahon
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Title:
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Board Member
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THE JOHN MCMAHON SOFTWARE IRREVOCABLE TRUST
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By:
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/s/ John McMahon
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Name:
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John McMahon
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Title:
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Board Member
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JOHN MCMAHON
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/s/ John McMahon
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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REDPOINT VENTURES V, L.P.
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By:
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Redpoint Ventures V, LLC
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Its:
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General Partner
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REDPOINT ASSOCIATES V, LLC, as nominee
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By:
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/s/ John L. Walecka
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John L. Walecka, Managing Director
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REDPOINT VENTURES V, L.P.
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By:
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Redpoint Omega III, LLC
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Its:
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General Partner
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REDPOINT OMEGA ASSOCIATES III, LLC, as nominee
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By:
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/s/ John L. Walecka
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John L. Walecka, Manager
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REDPOINT VENTURES IV, L.P.
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By:
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Redpoint Ventures IV, LLC
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Its:
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General Partner
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By:
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/s/ John L. Walecka
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John L. Walecka, Managing Director
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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SEQUOIA CAPITAL U.S. GROWTH FUND VI, L.P.
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SEQUOIA CAPITAL U.S. GROWTH VI PRINCIPALS FUND, L.P.
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Each a Cayman Islands exempted limited partnership
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By:
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SC U.S. GROWTH VI MANAGEMENT, L.P.,
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a Cayman Islands exempted limited partnership
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General Partner of Each
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By:
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SC US (TTGP), LTD.,
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a Cayman Island exempted company, its General Partner
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By:
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/s/ Carl Eschenbach
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Name:
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Carl Eschenbach
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Title:
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Authorized Signatory
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SEQUOIA CAPITAL U.S. GROWTH FUND VII, L.P.
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SEQUOIA CAPITAL U.S. GROWTH VII PRINCIPALS FUND, L.P.
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Each a Cayman Islands exempted limited partnership
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By:
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SC U.S. GROWTH VII MANAGEMENT, L.P.,
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a Cayman Islands exempted limited partnership
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General Partner of Each
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By:
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SC US (TTGP), LTD.,
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a Cayman Islands exempted company, its General Partner
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By:
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/s/ Carl Eschenbach
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Name:
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Carl Eschenbach
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Title:
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Authorized Signatory
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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SEQUOIA CAPITAL GLOBAL GROWTH FUND III –
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ENDURANCE PARTNERS, L.P.,
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for itself and as nominee
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By:
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SCGGF III – Endurance Partners
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Management, L.P., a Cayman Islands exempted limited partnership,
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its General Partner
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By:
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SC US (TTGP), LTD., a Cayman Islands exempted company, its General Partner
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By:
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/s/ Carl Eschenbach
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Name:
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Carl Eschenbach
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Title:
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Authorized Signatory
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SEQUOIA CAPITAL GROWTH FUND III, L.P.
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By:
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SCGF III Management, LLC
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A Delaware Limited Liability Company
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Its General Partner
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By:
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/s/ Carl Eschenbach
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Name:
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Carl Eschenbach
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Title:
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Authorized Signatory
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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ICONIQ STRATEGIC PARTNERS III, L.P.,
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a Cayman Islands exempted limited partnership
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By:
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ICONIQ Strategic Partners III GP, L.P.,
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a Cayman Islands exempted limited partnership
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Its:
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General Partner
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By:
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ICONIQ Strategic Partners III TT GP, Ltd.,
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a Cayman Islands exempted company
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Its:
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General Partner
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By:
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/s/ Kevin Foster
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Name:
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Kevin Foster
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Title:
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Authorized Signatory
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ICONIQ STRATEGIC PARTNERS IV, L.P.,
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a Cayman Islands exempted limited partnership
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By:
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ICONIQ Strategic Partners IV GP, L.P.,
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a Cayman Islands exempted limited partnership
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Its:
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General Partner
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By:
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ICONIQ Strategic Partners IV TT GP, Ltd.,
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a Cayman Islands exempted company
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Its:
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General Partner
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By:
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/s/ Kevin Foster
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Name:
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Kevin Foster
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Title:
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Authorized Signatory
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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ICONIQ STRATEGIC PARTNERS III CO-INVEST, L.P., SERIES SF
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By:
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ICONIQ Strategic Partners III GP, L.P.,
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a Cayman Islands exempted limited partnership
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Its:
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General Partner
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By:
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ICONIQ Strategic Partners III TT GP, Ltd.,
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a Cayman Islands exempted company
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Its:
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General Partner
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By:
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/s/ Kevin Foster
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Name:
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Kevin Foster
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Title:
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Authorized Signatory
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ICONIQ STRATEGIC PARTNERS III-B, L.P.,
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a Cayman Islands exempted limited partnership
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By:
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ICONIQ Strategic Partners IV GP, L.P.,
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a Cayman Islands exempted limited partnership
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Its:
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General Partner
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By:
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ICONIQ Strategic Partners IV TT GP, Ltd.,
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a Cayman Islands exempted company
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Its:
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General Partner
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By:
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/s/ Kevin Foster
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Name:
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Kevin Foster
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Title:
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Authorized Signatory
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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ICONIQ Strategic Partners IV-B, L.P.,
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a Cayman Islands exempted limited partnership
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By:
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ICONIQ Strategic Partners IV GP, L.P.,
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a Cayman Islands exempted limited partnership
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Its:
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General Partner
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By:
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ICONIQ Strategic Partners IV TT GP, Ltd.,
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a Cayman Islands exempted company
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Its:
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General Partner
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By:
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/s/ Kevin Foster
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Name:
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Kevin Foster
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Title:
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Authorized Signatory
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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MICHAEL P. SCARPELLI 2019 GRANTOR RETAINED ANNUITY TRUST
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By:
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/s/ Christopher J. Biles
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Name:
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Christopher J. Biles
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Title:
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Trustee
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SCARPELLI FAMILY TRUST
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By:
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/s/ Michael P. Scarpelli
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Name:
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Michael P. Scarpelli
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Title:
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Trustee
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MICHAEL P. SCARPELLI
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/s/ Michael P. Scarpelli
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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SUTTER HILL VENTURES,
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A CALIFORNIA LIMITED PARTNERSHIP
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By:
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Sutter Hill Ventures, L.L.C.
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Its:
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General Partner
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By:
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/s/ Michael L. Speiser
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Name:
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Michael L. Speiser
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Title:
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Managing Director
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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ANDREW T. SHEEHAN AND NICOLE J. SHEEHAN
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AS TRUSTEES OF SHEEHAN 2003 TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Andrew T. Sheehan, Trustee
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ANVEST, L.P.
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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David L. Anderson, Trustee of The
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Anderson Living Trust U/A/D 1/22/98,
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General Partner
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BARBARA NISS, TRUSTEE BARBARA NISS 2013
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REVOCABLE TRUST DATED DECEMBER 18, 2013
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Barbara Niss, Trustee
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BETH Z. MOHR, TRUSTEE OF
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REVOCABLE TRUST DATED DECEMBER 18, 2013
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Beth Z. Mohr, Trustee
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BRIAN J. BLOND AND JUDY BLOND, TRUSTEES OF
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THE BLOND 2007 REVOCABLE TRUST DATED JULY 10, 2007
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Brian J. Blond, Co-Trustee
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WILLIAM E. BULL
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/s/ Kanwalpreet Kalra Under Power of Attorney
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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CHATTER PEAK PARTNERS, L.P.
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Michael L. Speiser, Trustee of Speiser Trust
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U/A/D 7/19/06, General Partner
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CHRISTOPHER J. BASSO AND JULIE BASSO,
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TRUSTEES OF CHRISTOPHER AND JULIE BASSO
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REVOCABLE LIVING TRUST U/A/D 1/9/2015
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Christopher J. Basso, Trustee
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DAVID A. WEIPER, TRUSTEE OF
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DAVID A. WEIPER TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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David A.Weiper, Trustee
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DAVID E. SWEET AND ROBIN T. SWEET, AS TRUSTEES
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OF THE DAVID AND ROBIN SWEET LIVING TRUST, DATED 7/6/04
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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David E. Sweet, Trustee
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DOUGLAS T. MOHR AND BETH Z. MOHR,
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CO TRUSTEES OF THE MOHR FAMILY TRUST
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U/A/D 2/17/15
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Douglas T. Mohr, Trustee
|
SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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DOUGLAS T. MOHR, TRUSTEE OF THE DOUGLAS T.
|
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MOHR REVOCABLE TRUST DATED OCTOBER 5, 2018
|
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
|
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Douglas T. Mohr, Trustee
|
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G. LEONARD BAKER, JR. AND MARY ANNE BAKER,
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CO-TRUSTEES OF THE BAKER REVOCABLE TRUST, U/A/D 2/3/03
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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G. Leonard Barker Jr., Trustee
|
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JAMES C. GAITHER, TRUSTEE OF
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|
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THE GAITHER REVOCABLE TRUST U/A/D 9/28/2000
|
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
|
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James C. Gaither, Trustee
|
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JAMES N. WHITE AND PATRICIA A. O'BRIEN,
|
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CO-TRUSTEES OF THE WHITE REVOCABLE TRUST U/A/D 4/3/97
|
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By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
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James N. White, Trustee
|
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JAMES N. WHITE, TRUSTEE OF SIERRA TRUST U/A/D 12/16/1997
|
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
|
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James N. White, Trustee
|
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JEFFREY W. BIRD AND CHRISTINA R. BIRD,
|
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|
|
CO-TRUSTEES OF THE JEFFREY W. AND CHRISTINE R. BIRD
|
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|
|
TRUST U/A/D 10/31/00
|
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By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
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|
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|
|
Jeffrey W. Bird, Trustee
|
|
SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
|
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|
INVESTORS:
|
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|
DIVANNY ISSATIU LAMAS
|
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|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
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|
MICHAEL I. NAAR AND DIANE J NAAR
AS TRUSTEES OF NAAR FAMILY TRUST U/A/D 12/22/94
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By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
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|
Diane J. Naar, Trustee
|
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|
MICHAEL L. SPEISER AND MARY ELIZABETH SPEISER,
CO- TRUSTEES OF SPEISER TRUST U/A/D 7/19/06
|
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By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
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|
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|
Michael L. Speiser, Trustee
|
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|
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|
NESTEGG HOLDINGS, LP
|
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By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
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|
Jeffrey W. Bird, Trustee of Jeffrey W. and
Christina R. Bird Trust U/A/D 10/31/00,
General Partner
|
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|
PATRICIA TOM, TRUSTEE OF PATRICIA TOM
LIVING TRUST DATED APRIL 15, 2019
|
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|
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By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
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|
Patricia Tom, Trustee
|
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|
PATRICK ANDREW CHEN AND YU-YING CHIU CHEN
AS TRUSTEES OF PATRICK AND YING CHEN
2001 LIVING TRUST DATED 3/17/01
|
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|
By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
|
|
|
|
|
Yu-Ying Chen, Trustee
|
|
SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
|
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|
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|
|
INVESTORS:
|
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|
ROBERT YIN AND LILY YIN AS TRUSTEES OF
YIN FAMILY TRUST DATED MARCH 1, 1997
|
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By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
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|
|
Robert Yin, Trustee
|
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ROOSTER PARTNERS, LP
|
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By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
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|
|
Tench Coxe, Trustee of the Coxe Revocable
|
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|
|
Trust U/A/D 4/23/98, General Partner
|
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|
|
ROOSTER PARTNERS, L.P. - FUND NO. 2
|
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By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
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|
|
Tench Coxe, Trustee of the Coxe Revocable Trust
|
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|
|
U/A/D 4/23/98, General Partner
|
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|
|
ROSETIME PARTNERS L.P.
|
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By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
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|
|
James N. White, Trustee of The White
|
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|
|
Revocable Trust U/A/D 4/3/97, General Partner
|
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|
SAMUEL J. PULLARA III AND LUCIA CHOI PULLARA,
|
|
|
|
CO-TRUSTEES OF THE PULLARA 2019 CHILDREN’S TRUST
|
|
|
|
FBO ANNA PULLARA
|
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By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
|
|
|
Samuel J. Pullara III, Trustee
|
|
SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
|
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|
|
INVESTORS:
|
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|
|
SAMUEL J. PULLARA III AND LUCIA CHOI PULLARA,
CO-TRUSTEES OF THE PULLARA 2019 CHILDREN’S TRUST
FBO JOSHUA PULLARA
|
|
|
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|
|
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|
By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
|
|
|
|
|
Samuel J. Pullara III, Trustee
|
|
|
|
|
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|
|
SAMUEL J. PULLARA III AND LUCIA CHOI PULLARA,
CO-TRUSTEES OF THE PULLARA 2019 CHILDREN’S TRUST
FBO MAYA PULLARA
|
|
|
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|
|
|
|
|
|
By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
|
|
|
|
|
Samuel J. Pullara III, Trustee
|
|
|
|
|
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|
|
|
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|
|
SAMUEL J. PULLARA III AND LUCIA CHOI PULLARA,
CO-TRUSTEES OF THE PULLARA 2019 CHILDREN’S TRUST II
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
|
|
|
|
|
Samuel J. Pullara III, Trustee
|
|
|
|
|
|
|
|
|
|
|
|
|
SAMUEL J. PULLARA III AND LUCIA CHOI PULLARA,
CO-TRUSTEES OF THE PULLARA REVOCABLE TRUST
U/A/D 08/21/2013
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
|
|
|
|
|
Samuel J. Pullara III, Trustee
|
|
|
|
|
|
|
|
|
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|
|
SAUNDERS HOLDINGS, L.P.
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
|
|
|
|
|
G. Leonard Baker, Jr., Trustee of
The Baker Revocable Trust U/A/D 2/3/03,
General Partner
|
|
SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTORS:
|
|
|
|
|
|
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|
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|
|
STARFISH HOLDINGS, L.P.
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
|
|
|
|
|
David L. Anderson, Trustee of The Anderson
|
|
|
|
|
Living Trust U/A/D 1/22/98, General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
STEFAN A. DYCKERHOFF AND WENDY G. DYCKERHODD- JANSSEN,
OR THEIR SUCCESSOR(S) AS TRUSTEES UNDER THE DYCKERHOFF
2011 REVOCABLE TRUST AGREEMENT DATED AUGUST 30, 2001
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
|
|
|
|
|
Stefan A. Dyckerhoff, Trustee
|
|
|
|
|
|
|
|
|
|
|
|
|
SUITEVEST, LP
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TALLACK PARTNERS, L.P.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kanwalpreet Kalra Under Power of Attorney
|
|
|
|
|
|
James C. Gaither, Trustee of The Gaither
Revocable Trust U/A/D 9/28/2000,
General Partner
|
|
|
|
|
|
|
|
|
|
|
|
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TENCH COXE AND SIMONE OTUS COXE
CO-TRUSTEES OF THE COXE REVOCABLE TRUST
U/A/D 4/23/98
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Tench Coxe, Trustee
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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THE ALEKSANDR DAVID OTUS 2015 IRREVOCABLE TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE ALEYNA ELIZABETH LACRIOUS 2015 IRREVOCABLE TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE FRANCES HELEN CANINE 2015 IRREVOCABLE TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE FRANCESCO BERKE OTUS 2015 IRREVOCABLE TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE HELOISE KALLA OTUS 2015 IRREVOCABLE TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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THE JOSEPH DAVID LACROIX 2015 IRREVOCABLE TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE WILL COXE CANINE 2015 IRREVOCABLE TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE 2018 FRANKLIN S. BIRD TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE 2018 JOHN W. BIRD TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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THE 2018 PETER R. BIRD TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE BIRD 2011 IRREVOCABLE CHILDREN'S TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE ALEXANDER JACKSON SHEEHAN 2019 IRREVOCABLE TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE JULIE BLAINE COVINGTON SHEEHAN 2019 IRREVOCABLE TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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THE JUSTIN HUNTINGTON PETERS 2019 IRREVOCABLE TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE LAYNE ANDREWS TAFT SHEEHAN 2019 IRREVOCABLE TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE CORE 2006 IRREVOCABLE CHILDREN'S TRUST
F/B/O/ EZEKIAL OTUS COXE
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE CORE 2006 IRREVOCABLE CHILDREN'S TRUST
F/B/O/ ISABEL MARBURY COXE
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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THE CORE 2006 IRREVOCABLE CHILDREN'S TRUST
F/B/O/TENCH MAHMUT COXE
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE EMERALD EXEMPT TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE OPAL EXEMPT TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE SAPPHIRE EXEMPT TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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THE TOPAZ EXEMPT TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE WHITE 2011 IRREVOCABLE CHILDREN'S TRUST
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE YOUNGER 2006 IRREVOCABLE CHILDREN'S TRUST F/B/O/ JULIE Y. ALEMAN
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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THE YOUNGER 2006 IRREVOCABLE CHILDREN'S TRUST F/B/O/ KELLY L. YOUNGER
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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THE YOUNGER 2006 IRREVOCABLE CHILDREN'S TRUST F/B/O/ MARK W. YOUNGER
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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Name:
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Title:
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WILLIAM H. YOUNGER, JR. TRUSTEE OF THE WILLIAM H. YOUNGER, JR. REVOCABLE TRUST
U/A/D 8/5/2009
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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William H. Younger, Jr., Trustee
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YOVEST, L.P.
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By:
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/s/ Kanwalpreet Kalra Under Power of Attorney
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William H. Younger, Jr., Trustee
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The William H. Younger, Jr. Revocable Trust
U/A/D 8/5/09, General Partner
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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BRADLEY LUTON
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/s/ Bradley Luton
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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BRENT E. WELLING AND NANCY A. WELLING
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/s/ Brent E. Welling
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Brent E. Welling
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/s/ Nancy A. Welling
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Nancy A. Welling
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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JANICE PEGI MORGAN
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/s/ Janice Pegi Morgan
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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STEPHEN CRAWFORD SMART
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/s/ Stephen Crawford Smart
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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WELLS FARGO BANK, N.A. FBO
ANDREW T. SHEEHAN ROTH IRA
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
BARBARA NISS IRA
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
BARBARA NISS IRA
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
DAVID E. SWEET ROTH IRA
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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WELLS FARGO BANK, N.A. FBO
DIANE J. NAAR ROTH IRA
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
G. LEONARD BAKER, JR. ROTH IRA
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
JAMES N. WHITE ROTH IRA
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
MICHAEL SPEISER ROTH IRA
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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WELLS FARGO BANK, N.A. FBO
SHV PROFIT AND SHARING PLAN FBO ANDREW T. SHEEHAN
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
SHV PROFIT AND SHARING PLAN FBO ANDREW T. SHEEHAN (ROLLOVER)
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
SHV PROFIT AND SHARING PLAN FBO BARBARA NISS
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
SHV PROFIT AND SHARING PLAN FBO CHRISTOHER J. BASSO
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO DIANE J. NAAR
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A.
SHV PROFIT SHARING PLAN FBO DIVANNY ISSATIU LAMAS
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO JAMES N. WHITE
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO PATRICIA TOM (POST)
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO PATRICIA TOM (ROLLOVER
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO ROBERT YIN
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO YU-YING CHEN
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
SHV PROFIT SHARING PLAN FBO YU-YING CHEN (ROLLOVER)
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Amendment to the Amended and Restated Investor Rights Agreement as of the date first above written.
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INVESTORS:
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WELLS FARGO BANK, N.A. FBO
STEFAN A DYCKERHOFF ROTH IRA
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
TENCH COXE ROTH IRA
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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WELLS FARGO BANK, N.A. FBO
YU-YING CHEN ROTH IRA
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By:
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/s/ Todd Noetzleman
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Name:
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Todd Noetzleman
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Title:
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Vice President
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SNOWFLAKE INC.
SIGNATURE PAGE TO AMENDMENT TO THE
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SNOWFLAKE INC.
RESTRICTED STOCK UNIT GRANT NOTICE
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
Snowflake Inc. (the “Company”), pursuant to its Amended and Restated 2012 Equity Incentive Plan (the “Plan”), has granted to Participant (as of the date indicated below) a Restricted Stock Unit Award for the number of shares of the Company’s Common Stock (“RSUs”) set forth below (the “Award”). The Award is subject to all of the terms and conditions as set forth herein and in the Plan and the Restricted Stock Unit Agreement, both of which are attached hereto and incorporated herein in their entirety. Capitalized terms not otherwise defined herein will have the meanings set forth in the Plan or the Restricted Stock Unit Agreement. In the event of any conflict between the terms in the Award and the Plan, the terms of the Plan will control.
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Participant:
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Date of Grant:
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First Vest Date:
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Liquidity Event Deadline:
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Number of RSUs:
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Expiration Date: The Expiration Date for an RSU depends on whether the Service-Based Requirement (as defined below) has been satisfied with respect to that particular RSU. Where the Service-Based Requirement for a particular RSU has not been satisfied, the Expiration Date is the earlier of: (1) the Liquidity Event Deadline or (2) the date of termination of Participant’s Continuous Service. Where the Service-Based Requirement for a particular RSU has been satisfied in whole or in part, the Expiration Date is the Liquidity Event Deadline.
Vesting: Participant will receive a benefit with respect to an RSU only if it vests. Except as explicitly set forth below, two vesting requirements must be satisfied on or before the applicable Expiration Date specified above in order for an RSU to vest — a time and service-based requirement (the “Service-Based Requirement”) and the “Liquidity Event Requirement” (each described below). An RSU will vest (and therefore becomes a “Vested RSU”) on the first date upon which both the Service-Based Requirement and the Liquidity Event Requirement are satisfied with respect to that particular RSU (the “Vesting Date”). All RSUs that do not become Vested RSUs on or before the applicable Expiration Date will be immediately forfeited to the Company upon expiration at no cost to the Company.
Requirement: The Service-Based Requirement will be satisfied as to [Standard Grants: 25% of the RSUs on the First Vest Date, and 6.25% of the RSUs on each Quarterly Date thereafter (in each case rounding down to the nearest whole RSU), subject to Participant’s Continuous Service through each such date.] For the avoidance of doubt, upon termination of Participant’s Continuous Service, any RSUs that have yet to satisfy the Service-Based Requirement will be forfeited at no cost to the Company and Participant will have no further right, title or interest in or to such RSUs or the shares of Common Stock underlying them. However, Participant will retain any RSUs that have met the Service-Based Requirement as of the date that Participant’s Continuous Service ends until such RSUs either vest or expire.
“Quarterly Date” means each of March 15, June 15, September 15 and December 15.
Liquidity Event
Requirement: The Liquidity Event Requirement will be satisfied as to any then-outstanding RSUs on the earliest of the following: (1) the effective date of a registration statement of the Company filed under the Securities Act for the sale of the Company’s Common Stock or (2) immediately prior to the closing of a Change in Control.
Settlement: If an RSU vests as provided for above, the Company will issue one share of Common Stock for each Vested RSU. The shares will be issued in accordance with the issuance schedule set forth in Section 5 of the Restricted Stock Unit Agreement.
Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Restricted Stock Unit Grant Notice, the Restricted Stock Unit Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this Restricted Stock Unit Grant Notice, the Restricted Stock Unit Agreement and the Plan set forth the entire understanding between Participant and the Company regarding this Award and supersede all prior oral and written agreements, offer letters, promises and/or representations on that subject with the exception of (i) equity awards previously granted and delivered to Participant, (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law and (iii) any written employment or severance arrangement that would provide for vesting acceleration of this Award upon the terms and conditions set forth therein (provided that if there is any conflict in the vesting and/or acceleration terms, those contained in this Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement will control).
By accepting the Award, Participant acknowledges having received and read the Restricted Stock Unit Grant Notice, the Restricted Stock Unit Agreement and the Plan (the “Grant Documents”) and agrees to all of the terms and conditions set forth in these documents. Furthermore, by accepting the Award, Participant consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
Notwithstanding the above, if Participant has not actively accepted the Award within 90 days of the Date of Grant set forth in this Restricted Stock Unit Grant Notice, Participant is deemed to have accepted the Award, subject to all of the terms and conditions of the Grant Documents.
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SNOWFLAKE INC.
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PARTICIPANT:
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By:
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Signature
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Signature
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Name & Title:
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Date:
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Date:
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ATTACHMENTS:
•Attachment I: Restricted Stock Unit Agreement
•Attachment II: Data Privacy Appendix to Restricted Stock Unit Agreement
•Attachment III: Country-Specific Appendix to Restricted Stock Unit Agreement
•Attachment IV: Amended and Restated 2012 Equity Incentive Plan
ATTACHMENT I
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
Pursuant to the Restricted Stock Unit Grant Notice (the “Grant Notice”) and this Restricted Stock Unit Agreement (the “Agreement”), Snowflake Inc. (the “Company”) has granted to you a Restricted Stock Unit Award for the number of shares of the Company’s Common Stock (“RSUs”) indicated in the Grant Notice (the “Award”) under its Amended and Restated 2012 Equity Incentive Plan (the “Plan”). The Award is granted to you effective as of the Date of Grant set forth in the Grant Notice for this Award. Capitalized terms not explicitly defined in this Agreement will have the same meanings given to them in the Plan and Grant Notice. The terms and conditions of the Award, in addition to those set forth in the Grant Notice and the Plan, are as follows.
1. NATURE OF THE AWARD. The Award represents the right to be issued on a future date the number of shares of the Company’s Common Stock as indicated in the Grant Notice upon the satisfaction of the terms set forth in this Agreement. Except as otherwise provided herein, you will not be required to make any payment to the Company with respect to your receipt of the Award, the vesting of the RSUs or the issuance of the underlying shares of Common Stock.
2. VESTING. Subject to the limitations contained herein, the Award will vest in accordance with the vesting schedule provided in the Grant Notice. Upon termination of your Continuous Service, any RSUs that have yet to satisfy any time and service-based requirement, including the Service-Based Requirement, will be forfeited at no cost to the Company and you will have no further right, title or interest in or to such RSUs or the shares of Common Stock covered thereby.
3. NUMBER OF SHARES.
(a) The number of RSUs subject to the Award may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan.
(b) Any additional RSUs, shares, cash or other property that become subject to the Award pursuant to this Section 3 if any, will be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of issuance as applicable to the other shares covered by the Award.
(c) Notwithstanding the provisions of this Section 3, no fractional shares or rights for fractional shares of Common Stock will be created pursuant to this Section 3. The Board will, in its discretion, determine an equivalent benefit for any fractional shares or fractional shares that might be created by the adjustments referred to in this Section 3.
4. SECURITIES LAW AND OTHER COMPLIANCE. You may not be issued any shares under the Award unless either (a) the shares are registered under the Securities Act; or (b) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. The Award also must comply with other applicable laws and regulations governing the Award, and you will not receive such shares if the Company determines that such receipt would not be in material compliance with such laws and regulations.
5. DATE OF ISSUANCE.
(a) Subject to the satisfaction of the Tax-Related Items set forth in Section 13 of this Agreement, in the event one or more RSUs vest, the Company will issue to you one (1) share of Common Stock for each RSU that vests on the applicable Vesting Date (subject to any adjustment under Section 3 above) (such date, the “Original Issuance Date”).
(b) If the Original Issuance Date falls on a date that is not a business day, issuance will instead occur on the next following business day. In addition, to the extent applicable at a Vesting Date when the Common Stock is registered under the Securities Act, if:
(i) the Original Issuance Date does not occur (1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you are otherwise permitted to sell shares of Common Stock on an established stock exchange or stock market (including but not limited to under a previously established written trading plan that meets the requirements of Rule 10b5-1 under the Exchange Act and was entered into in compliance with the Company’s policies (a “10b5-1 Arrangement”)), and
(ii) either (1) no Tax-Related Items apply, or (2) the Company decides, prior to the Original Issuance Date, (A) not to satisfy the Tax-Related Items by withholding shares of Common Stock from the shares of Common Stock otherwise due, on the Original Issuance Date, to you under this Award, and (B) not to permit you to enter into a “same day sale” commitment with a broker-dealer pursuant to Section 13 of this Agreement (including but not limited to a commitment under a 10b5-1 Arrangement) and (C) not to permit you to pay the Tax-Related Items in cash,
then the shares of Common Stock that would otherwise be issued to you on the Original Issuance Date will not be issued on such Original Issuance Date and will instead be issued on the first business day when you are not prohibited from selling shares of Common Stock in the open public market, but in no event later than (a) December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), or (b) if and only if permitted in a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the year immediately following the year in which the shares of Common Stock covered by this Award are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).
(c) The form of such issuance (e.g., a stock certificate or electronic entry evidencing such shares of Common Stock) will be determined by the Company. In all cases, the issuance of shares under this Award is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner.
6. DIVIDENDS. You will receive no benefit or adjustment to your RSUs with respect to any cash dividend, stock dividend or other distribution except as provided in the Plan with respect to a Capitalization Adjustment.
7. LOCK-UP PERIOD. By acquiring shares of Common Stock under your Award, you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you, for a period of 180 days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company request or as necessary to permit compliance with FINRA Rule 2241 and similar or successor regulatory rules and regulations (the “Lock-Up Period”); provided, however, that nothing contained in this Section 7 will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. You also agree that any transferee of any shares of Common Stock (or other securities of the Company held by you) will be bound by this Section 7. To enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such period. The underwriters of the Company’s stock are intended third party beneficiaries of this Section 7 and will have the right, power and authority to enforce the provisions of this Section 7 as though they were a party to this Agreement.
8. TRANSFER RESTRICTIONS. Shares of Common Stock that you acquire upon vesting and settlement of your Award are subject to any restrictions on transfer and/or right of first refusal that may be described in the Company’s bylaws in effect at such time the Company elects to exercise its right. In addition to any other limitation on transfer created by applicable securities laws, you will not sell, assign, hypothecate, donate, encumber or otherwise dispose of all or any part of the shares subject to your Award or any interest in such shares, whether voluntarily or by operation of law, by gift, by entering into a contract that requires shares to be issued at a future date, or otherwise, except in compliance with this Agreement, the Company’s bylaws and applicable securities law.
9. RESTRICTIVE LEGENDS. The shares of Common Stock issued in respect of your Award will be endorsed with appropriate legends as determined by the Company.
10. AWARD NOT AN EMPLOYMENT OR SERVICE CONTRACT.
(a) Subject to applicable law, your employment or other service with the Company or any Affiliate is not for any specified term and may be terminated by you or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice. Nothing in this Agreement (including, but not limited to, the vesting of the Award pursuant to Section 2 or the issuance of the shares subject to the Award), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan will: (i) confer upon you any right to continue in the employ of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company or an Affiliate of the right to terminate your employment or engagement at will (subject to applicable law) and without regard to any future vesting opportunity that you may have.
(b) By accepting this Award, you acknowledge and agree that the right to continue vesting in the Award pursuant to Section 2 and the schedule set forth in the Grant Notice is earned only by continuing as an employee, director or consultant at the will of the Company or an Affiliate (not through the act of being hired, being granted this Award or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems appropriate (a “reorganization”). You further acknowledge and agree that such reorganization could result in the termination of your Continuous Service, or the termination of Affiliate status of your employer and the loss of benefits available to you under this Agreement, including but not limited to, the termination of the right to continue vesting in the Award.
11. RESPONSIBILITY FOR TAXES.
(a) You acknowledge that, regardless of any action taken by the Company, the ultimate liability for all income tax (including U.S. federal, state, and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you or deemed by the Company in its discretion to be an appropriate charge to you even if legally applicable to the Company (“Tax-Related Items”) is and remains your responsibility and may exceed the amount actually withheld by the Company.
(b) Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to the Company and/or your employer (if not the Company) to satisfy all Tax-Related Items. In this regard, you authorize the Company or its agent to satisfy their withholding obligations with regard to all Tax-Related Items, if any, by any of the following means or by a combination of such means: (i) withholding from any compensation otherwise payable to you by the Company or your employer; (ii) causing you to tender a cash payment; (iii) entering on your behalf (pursuant to this authorization without further consent) into a “same day sale” commitment with a broker
dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a portion of the shares to be issued under the Award to satisfy the Tax-Related Items and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Tax-Related Items directly to the Company and/or its Affiliates; (iv) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with the Award with a Fair Market Value (measured as of the date shares of Common Stock are issued to you or, if and as determined by the Company, the date on which the Tax-Related Items are required to be calculated) equal to the amount of such Tax-Related Items; or (v) any other method of withholding determined by the Company and permitted by applicable law. The Company will use commercially reasonable efforts (as determined by the Company) to facilitate the satisfaction of Tax-Related Items by you using one of the methods described in clauses (iii) and (iv) of the preceding sentence or by permitting you to sell shares of Common Stock in any initial public offering by the Company. However, the Company does not guarantee that you will be able to satisfy any Tax-Related Items through any of the methods described in the preceding sentence and in all circumstances you remain responsible for timely and fully satisfying the Tax-Related Items. Depending on the withholding method employed, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including up to the maximum applicable rate in your jurisdiction to the extent permitted under the Plan, in which case you may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in shares of Common Stock. In the event any under-withholding results from the application of minimum statutory or other withholding rates, you may be required to pay additional amounts to the tax authorities. If the obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, you are deemed to have been issued the full number of shares of Common Stock subject to the vested portion of the Award, notwithstanding that a number of the shares of Common Stock are held back solely for the purpose of paying the Tax‑Related Items.
(c) Finally, you agree to pay to the Company or your employer any amount of Tax-Related Items that the Company or your employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by any of the means previously described. Notwithstanding any contrary provision of the Plan, the Grant Notice or of this Agreement, if you fail to make satisfactory arrangements for the payment of any Tax‑Related Items when due, you permanently will forfeit the RSUs on which the Tax-Related Items were not satisfied and will also permanently forfeit any right to receive shares of Common Stock thereunder. In that case, the RSUs will be returned to the Company at no cost to the Company.
12. INVESTMENT REPRESENTATIONS. In connection with your acquisition of the Award and the Common Stock under your Award, you represent to the Company the following:
(a) You are aware of the Company’s business affairs and financial condition and have acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Common Stock. You are acquiring the Common Stock for investment for your own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act.
(b) You understand that the Common Stock has not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of your investment intent as expressed in this Agreement.
(c) You further acknowledge and understand that the Common Stock must be held indefinitely unless the Common Stock is subsequently registered under the Securities Act or an exemption from such registration is available. You further acknowledge and understand that the Company is under no obligation to register the Common Stock. You understand that the certificate evidencing the Common Stock will be imprinted with a legend that prohibits the transfer of the Common Stock unless the Common Stock is registered or such registration is not required in the opinion of counsel for the Company.
(d) You are familiar with the provisions of Rules 144 and 701 under the Securities Act, as in effect from time to time, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of issuance of the securities, such issuance will be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the securities exempt under Rule 701 may be sold by you 90 days thereafter, subject to the satisfaction of certain of the conditions specified by Rule 144 and the Lock-Up Period agreement described in Section 7.
(e) In the event that the sale of the Common Stock does not qualify under Rule 701 at the time of issuance, then the Common Stock may be resold by you in certain limited circumstances subject to the provisions of Rule 144, which requires, among other things: (i) the availability of certain public information about the Company; and (ii) the resale occurring following the required holding period under Rule 144 after you have purchased, and made full payment of (within the meaning of Rule 144), the securities to be sold.
(f) You further understand that at the time you wish to sell the Common Stock there may be no public market upon which to make such a sale, and that, even if such a public market then exists, the Company may not be satisfying the current public information requirements of Rule 144 or 701, and that, in such event, you would be precluded from selling the Common Stock under Rule 144 or 701 even if the minimum holding period requirement had been satisfied.
13. NO OBLIGATION TO MINIMIZE TAXES. You acknowledge that the Company is not making representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including, but not limited to, the grant, vesting or settlement of the Award, the subsequent sale of shares of Common Stock acquired pursuant to such settlement and the receipt of any dividends and/or any dividend equivalent payments. Further, you acknowledge that the Company does not have any duty or obligation to minimize your liability for Tax-Related Items arising from the Award or to achieve any particular tax result and will not be liable to you for any Tax-Related Items arising in connection with the Award. If you become subject to taxation in more than one jurisdiction, the Company and/or your employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
14. NO ADVICE REGARDING GRANT. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Common Stock. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the Tax-Related Items arising in connection with the Award and by accepting the Award, you have agreed that you have done so or knowingly and voluntarily declined to do so.
15. UNSECURED OBLIGATION. The Award is unfunded, and as a holder of a vested Award, you will be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares pursuant to this Agreement. You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this Agreement until such shares are issued to you pursuant to Section 5 of this Agreement. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.
16. DATA PRIVACY. In order for the Company to administer the Award and your participation in the Plan, the Company must collect, process and transfer certain of your personal data, as further described in Appendix A to this Agreement. Appendix A constitutes part of this Agreement.
17. NOTICES. Any notices provided for in the Grant Notice, this Agreement or the Plan will be given in writing and will be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
18. MISCELLANEOUS.
(a) As a condition to the grant of your Award or to the Company’s issuance of any shares of Common Stock under this Agreement, the Company may require you to execute certain customary agreements entered into with the holders of capital stock of the Company, including without limitation, a right of first refusal and co-sale agreement and a stockholders agreement.
(b) The rights and obligations of the Company under the Award will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by, the Company’s successors and assigns. Your rights and obligations under the Award may only be assigned with the prior written consent of the Company.
(c) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of the Award.
(d) You acknowledge and agree that you have reviewed the documents provided to you in relation to the Award in their entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting the Award, and fully understand all provisions of such documents.
(e) This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
(f) All obligations of the Company under the Plan and this Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
(g) The Company reserves the right to impose other requirements on your participation in this Agreement, on the RSUs and on any shares of Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
19. GOVERNING PLAN DOCUMENT. The Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of the Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Except as expressly provided herein, in the event of any conflict between the provisions of the Award and those of the Plan, the provisions of the Plan will control.
20. SEVERABILITY. If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be
construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
21. GOVERNING LAW AND VENUE. The interpretation, performance and enforcement of this Agreement will be governed by the law of the state of Delaware without regard to such state’s conflict of laws rules. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of San Mateo County, California, or the United States federal courts for the Northern District of California, and no other courts, where this grant is made and/or to be performed.
22. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of the Award subject to this Agreement will not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.
23. AMENDMENT. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Agreement may be amended solely by the Board by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that, except as otherwise expressly provided in the Plan, no such amendment adversely affecting your rights hereunder may be made without your written consent. Without limiting the foregoing, the Board reserves the right to change, by written notice to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change will be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.
24. COMPLIANCE WITH SECTION 409A OF THE CODE. This Award is intended to comply with the “short-term deferral” rule set forth in Treasury Regulations Section 1.409A-1(b)(4). Notwithstanding the foregoing, if it is determined that the Award fails to satisfy the requirements of the short-term deferral rule and is otherwise deferred compensation subject to Section 409A, and if you are a “Specified Employee” (within the meaning set forth Section 409A(a)(2)(B)(i) of the Code) as of the date of your separation from service (within the meaning of Treasury Regulations Section 1.409A-1(h)), then the issuance of any shares that would otherwise be made upon the date of the separation from service or within the first six months thereafter will not be made on the originally scheduled date(s) and will instead be issued in a lump sum on the date that is six months and one day after the date of the separation from service, with the balance of the shares issued thereafter in accordance with the original vesting and issuance schedule set forth above, but if and only if such delay in the issuance of the shares is necessary to avoid the imposition of taxation on you in respect of the shares under Section 409A of the Code. Each installment of shares that vests is intended to constitute a “separate payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2). Notwithstanding any contrary provision of the Plan, the Grant Notice, or of this Agreement, under no circumstances will the Company reimburse you for any taxes or other costs under Section 409A or any other tax law or rule. All such taxes and costs are solely your responsibility.
25. COUNTRY-SPECIFIC PROVISIONS. The RSUs will be subject to any special terms and conditions set forth in the disclosure set forth for your country in Appendix B to this Agreement. Moreover, if you relocate to one of the countries included in Appendix B, the special terms and conditions for such country will apply to you to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendix B constitutes part of this Agreement.
* * *
This Agreement will be deemed to be accepted by you upon the signing (which may be electronic) by you of the Restricted Stock Unit Grant Notice to which it is attached or by the deemed acceptance of this Agreement, as described in the Restricted Stock Unit Grant Notice.
ATTACHMENT II
APPENDIX A TO
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
This Appendix forms part of the Agreement. Capitalized terms used but not defined in this Appendix have the meanings set forth in the Plan and/or in the Agreement.
DATA PRIVACY. To participate in the Plan, you need to review the information provided in (a) through (f) below and, where applicable, consent to the processing of Personal Data (as defined below) by the Company and the third parties according to (g) below.
If you are based in the European Union (“EU”), the European Economic Area (“EEA”), Switzerland or the United Kingdom (collectively, “EEA+”), Snowflake Inc., with its registered address at 450 Concar Drive, San Mateo, CA 94402, USA is the controller responsible for the processing of your Personal Data in connection with the Agreement and the Plan. The Company’s representative in the EU is Snowflake Computing Netherlands B.V. with its primary office located at FOZ Building, Gustav Mahleraan 300-314, 1082 ME Amsterdam, Netherlands.
(a) Data Collection and Usage. The Company collects, processes and uses Personal Data about you, including your name, home address, email address and telephone number, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of all RSUs over shares of Common Stock or any other entitlement to shares of Common Stock awarded, canceled, exercised, purchased, vested, unvested or outstanding in your favor, which the Company receives from you or your employer (“Personal Data”). In order for you to participate in the Plan, the Company will collect Personal Data for purposes of allocating shares of Common Stock and implementing, administering and managing the Plan.
If you are based in the EEA+, the Company’s legal basis for the processing of Personal Data is the necessity of the processing for the Company’s performance of its obligations under the Agreement and the Company’s legitimate interest of complying with statutory obligations to which it is subject.
If you are based in any other jurisdiction, the Company relies on your consent to the processing of Personal Data, as further described below.
(b) Stock Plan Administration and Service Provides. The Company may transfer Personal Data to Cooley LLP, Fidelity Stock Plan Services LLC, and/or Solium Plan Managers LLC (each, an “administrator”), each of which is an independent service provider based in the U.S., which is assisting the Company with the implementation, administration and management of the Plan. Administrators may open an account for you to receive and, when applicable, trade shares of Common Stock. You may be asked to acknowledge, or agree to, separate terms and data processing practices with any administrator, with such acknowledgement or agreement being a condition to your ability to participate in the Plan.
(c) International Data Transfers. Personal Data will be transferred from your country to the U.S., where the Company and its service providers are based. You understand and acknowledge that the U.S. has enacted data privacy laws that are different from those applicable in your country of residence. The EU Commission has issued a limited adequacy finding with respect to the U.S. that applies if and to the extent companies self-certify and remain self‑certified under the EU/U.S. Privacy Shield program. In the absence of such certification, an appropriate level of protection can be achieved by implementing safeguards such as the Standard Contractual Clauses adopted by the EU Commission.
If you are based in the EEA+, Personal Data will be transferred from the EEA+ to the Company based on the Company’s certification under the EU-U.S. Privacy Shield program. The onward transfer of your Personal Data by the Company to the administrators will be based on other safeguards such as a data processing agreement or the EU Standard Contractual Clauses. You may request a copy of such appropriate safeguards at privacy@snowflake.com.
If you are based in any other jurisdiction, the Company relies on your consent to the transfer of Personal Data to the U.S., as further described below.
(d) Data Retention. The Company will use Personal Data only as long as necessary to implement, administer and manage my participation in the Plan or as required to comply with legal or regulatory obligations, including, without limitation, under tax and securities laws. When the Company no longer needs Personal Data for any of the above purposes, which will generally be seven (7) years after you participate in the Plan, the Company will cease to use Personal Data and remove it from its systems. If the Company keeps Personal Data longer, it would be to satisfy legal or regulatory obligations and the Company’s legal basis would be relevant laws or regulations (if you are in the EEA+) and/or your consent (if you are outside the EEA+).
(e) Data Subject Rights. You understand that you may have a number of rights under data privacy laws in your jurisdiction. Subject to the conditions set out in the applicable law and depending on where you are based, such rights may include the right to (i) request access to, or copies of, Personal Data processed by the Company, (ii) rectification of incorrect Personal Data, (iii) deletion of Personal Data, (iv) restrictions on the processing of Personal Data, (v) object to the processing of Personal Data for legitimate interests, (vi) portability of Personal Data, (vii) lodge complaints with competent authorities in my jurisdiction, and/or to (viii) receive a list with the names and addresses of any potential recipients of Personal Data. To receive clarification regarding these rights or to exercise these rights, you can contact privacy@snowflake.com.
(f) Necessary Disclosure of Personal Data. You understand that providing the Company with Personal Data is necessary for the performance of the Agreement and that your refusal to provide Personal Data or, where applicable, consent to process and transfer Personal Data would make it impossible for the Company to perform its contractual obligations and may affect your ability to participate in the Plan.
(g) Data Privacy Consent. If you are located in a jurisdiction outside the EEA+, you hereby unambiguously consent to the collection, use and transfer, in electronic or other form, of Personal Data, as described above and in any other Award materials, by and among, as applicable, the Company, your employer and any Affiliate for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that you may, at any time, refuse or withdraw the consents herein, in any case without cost, by contacting in writing privacy@snowflake.com. If you do not consent or later seek to revoke your consent, your employment status or service with your employer will not be affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant the RSUs or other equity awards to you or administer or maintain such awards. Therefore, you understand that refusing or withdrawing consent may affect your ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, you should contact privacy@snowflake.com.
ATTACHMENT III
APPENDIX B TO
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
Terms and Conditions
This Appendix forms part of the Agreement and includes special terms and conditions that govern the Award granted to you under the Plan if you reside or work in one of the jurisdictions listed below. Capitalized terms used but not defined in this Appendix have the meanings set forth in the Plan and/or in the Agreement.
If you are a citizen or resident (or are considered as such for local law purposes) of a country other than the country in which you are currently residing and/or working, or if you relocate to another country after the grant of the Award, the Company shall, in its discretion, determine to what extent the special terms and conditions contained herein shall be applicable to you.
Notifications
This Appendix may also include information regarding exchange controls and certain other issues of which you should be aware with respect to participation in the Plan. The information is based on the securities, exchange control, and other laws in effect in the respective countries as of March 2020. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information in this Appendix as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at the time you vest in the RSUs, acquire shares of Common Stock, or sell shares of Common Stock acquired under the Plan.
In addition, the information contained below is general in nature and may not apply to your particular situation. You are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.
ALL COUNTRIES OUTSIDE THE UNITED STATES
NATURE OF GRANT. This provision supplements Section 10 (“Award Not An Employment or Service Contract”) and Section 22 (“Effect on Other Employee Benefit Plans”) of the Agreement:
By accepting this Award, you acknowledge, understand and agree that:
(a) the Plan is established voluntarily by the Company, it is discretionary in nature, and may be amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b) the grant of the Award is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs or other equity awards or benefits in lieu of equity awards, even if equity awards have been granted in the past;
(c) all decisions with respect to future grants of RSUs or other equity awards, if any, will be at the sole discretion of the Company;
(d) you are voluntarily participating in the Plan;
(e) the Award and any shares of Common Stock acquired under the Plan, and the income from and value of same, are not intended to replace any pension rights or compensation;
(f) the Award and any shares of Common Stock acquired under the Plan, and the income from and value of same, are not part of normal or expected compensation for any purpose, including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, holiday pay, bonuses, long-service awards, pension or retirement or welfare benefits or similar mandatory payments;
(g) the future value of the underlying shares of Common Stock is unknown, indeterminable, and cannot be predicted with certainty;
(h) no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from your termination of Continuous Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any);
(i) for purposes of the RSUs, your Continuous Service will be considered terminated as of the date you are no longer actively providing services to the Company or an Affiliate (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any) and, unless otherwise expressly provided in the Agreement or determined by the Company, your right to vest in the RSUs under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., your period of Continuous Service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any);
(j) the Board or the chief executive of the Company (or a designee thereof) shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the RSUs (including whether you may still be considered to be providing services while on a leave of absence);
(k) unless otherwise agreed with the Company in writing (which may be electronic), the Award and any shares of Common Stock acquired under the Plan, and the income from and value of same, are not granted as consideration for, or in connection with, any service you may provide as a director of an Affiliate; and
(l) neither the Company nor any Affiliate shall be liable for any foreign exchange rate fluctuation between your local currency and the U.S. Dollar that may affect the value of the Award or of any amounts due to you pursuant to the settlement of the RSUs or the subsequent sale of any shares of Common Stock acquired upon settlement.
LANGUAGE. You acknowledge that you are sufficiently proficient in the English language, or have consulted with an advisor who is sufficiently proficient in English, so as to allow you to understand the terms and conditions of this Agreement. If you have received this Agreement or any other documents related to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.
FOREIGN ASSET/ACCOUNT, EXCHANGE CONTROL AND TAX REPORTING. You acknowledge that, depending on your country, there may be certain foreign asset and/or account reporting requirements or exchange control restrictions which may affect your ability to acquire or hold the Award or the shares of Common Stock or cash received from participating in the Plan (including proceeds from the sale of shares and dividends paid on shares) in a brokerage or bank account outside your country. You may be required to report such accounts, assets or related transactions to the tax or other authorities in your country. You also may be required to repatriate sale proceeds or other funds received as a result of participating in the Plan to your country through a designated bank or broker and/or within a certain time after receipt. You acknowledge that you are responsible for ensuring compliance with any
applicable foreign asset/account, exchange control and tax reporting requirements and should consult your personal legal and tax advisors on this matter.
INSIDER TRADING RESTRICTIONS/MARKET ABUSE LAWS. You may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including but not limited to the United States and your country, which may affect your ability to accept, acquire, sell or otherwise dispose of shares of Common Stock, rights to shares of Common Stock (e.g., RSUs) or rights linked to the value of shares of Common Stock during such times as you are considered to have “inside information” regarding the Company (as defined by the laws in applicable jurisdictions). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company. You acknowledge that it is your responsibility to comply with any applicable restrictions and you should speak with your personal legal advisor on this matter.
AUSTRALIA
TAX INFORMATION. It is intended that Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies to the Award granted under the Plan, such that the Award will be subject to deferred taxation.
SECURITIES LAW INFORMATION. There are legal consequences associated with participating in the Plan. You should ensure that you understand these consequences before participating in the Plan. Any information given by or on behalf of the Company is general information only. You should obtain your own financial product advice from an independent person who is licensed by the Australian Securities and Investments Commission (“ASIC”) to give advice about participating in the Plan.
The grant of RSUs under the terms of the Plan and the Agreement does not require disclosure under the Corporations Act 2001 (Cth) (the “Corporations Act”). No document provided to you in connection with your participation in the Plan (including the Agreement):
•is a prospectus for purposes of the Corporations Act; or
•has been filed or reviewed by a regulator in Australia (including ASIC).
You should not rely on any oral statements made in connection with your participation in the Plan. You should rely only upon the statements contained in the Agreement and the Plan when considering whether to participate in the Plan.
In the event that shares of Common Stock are issued to you under the Plan, the value of such shares will be affected by the Australian / U.S. dollar exchange rate, in addition to fluctuations in value caused by the fortunes of the Company.
If you offer any shares for sale to a person or entity resident in Australia, the offer may be subject to disclosure requirements under Australian law (in addition to any requirements under the Plan and this Agreement). You should consult your personal legal advisor prior to making any such offer to ensure compliance with the applicable requirements.
CANADA
TERMINATION OF CONTINUOUS SERVICE. This provision replaces subsection (i) of the Nature of Grant provision of this Appendix:
For purposes of the RSUs, your Continuous Service will be considered terminated as of the earliest of: (a) the date your employment or service relationship with the Company or any of its Affiliates is terminated; (b) the date you receive notice of termination of your employment or service relationship with
the Company or an Affiliate, regardless of any notice period or period of pay in lieu of such notice required under applicable employment law in the jurisdiction where you are employed or providing services or the terms of your employment agreement, if any; and (c) the date you are no longer actively providing services to the Company and its Affiliates; in the event the date you are no longer providing active service cannot be reasonable determined under the terms of this Agreement and/or the Plan, the Board or the chief executive of the Company (or a designee thereof) shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the RSUs (including whether you may still be considered to be providing services while on a leave of absence).
DATA PRIVACY. This provision supplements the Data Privacy provision of Appendix A:
You hereby authorize the Company or any Affiliate, including the employer, and any agents or representatives to (i) discuss with and obtain all relevant information from all personnel, professional or non-professional, involved in the administration and operation of the Plan, and (ii) disclose and discuss any and all information relevant to the Plan with their advisors. You further authorize the Company or any Affiliate, including the employer, and any agents or representatives to record such information and to keep such information in your employee file.
SECURITIES LAW INFORMATION. The sale or other disposal of the shares of Common Stock acquired under the Plan may not take place within Canada. If the Common Stock is registered under the Securities Act, you will be permitted to sell shares of Common Stock acquired under the Plan through the designated broker appointed under the Plan, provided the resale of shares of Common Stock takes place outside Canada through the facilities of the exchange on which the shares of Common Stock are then listed. You should consult your personal legal advisor prior to selling shares of Common Stock to ensure compliance with any applicable requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You are required to report foreign property on form T1135 (Foreign Income Verification Statement) if the total cost of the foreign property exceeds C$100,000 at any time in the year. Foreign property includes shares of Common Stock acquired under the Plan and may include the RSUs. The RSUs must be reported--generally at a nil cost--if the C$100,000 cost threshold is exceeded because of other foreign property held. If shares of Common Stock are acquired, their cost generally is the adjusted cost base (“ACB”) of the shares. The ACB ordinarily would equal the fair market value of the shares at the time of acquisition, but if other shares of Common Stock are owned, this ACB may need to be averaged with the ACB of the other shares. The form T1135 generally must be filed by April 30 of the following year. You should consult your personal tax advisor to ensure compliance with the applicable reporting requirements.
The following provisions apply only if you reside in Quebec:
LANGUAGE CONSENT. The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.
CONSENTEMENT RELATIF À LA LANGUE UTILISÉE. Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention («Agreement»), ainsi que de tous documents, avis et procédures judiciaires, exécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à, la présente convention.
DENMARK
DANISH STOCK OPTION ACT. By accepting this Award, you acknowledge that you have received an Employer Statement, translated into Danish, which is provided to comply with the Danish Stock Option Act, as amended with effect from January 1, 2019.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. If you establish an account holding shares of Common Stock or cash outside of Denmark, you must report the account and deposits on your annual tax return in the section on foreign affairs and income. You should consult your personal tax advisor to ensure compliance with the applicable reporting requirements.
FINLAND
There are no country-specific provisions.
FRANCE
NATURE OF THE AWARD. This provision supplements Section 1 of the Agreement:
The RSUs granted under this Agreement are not intended to qualify for special tax and social security treatment pursuant to Sections L. 225-197-1 to L. 225-197-6 of the French Commercial Code, as amended.
LANGUAGE CONSENT. You confirm having read and understood the documents relating to the Plan, including the Agreement, with all terms and conditions included therein, which were provided in the English language. You accept the terms of those documents accordingly.
CONSENTEMENT RELATIF À LA LANGUE UTILISÉE. Vous confirmez avoir lu et compris le Plan et cette convention («Agreement»), incluant tous leurs terms et conditions, qui ont été transmis en langue anglaise. Vouz acceptez les dispositions de ces documents en connaissance de cause.
FOREIGN ASSET / ACCOUNT REPORTING INFORMATION. If you maintain a foreign bank account, you must report such account to the French tax authorities when filing your annual tax return. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
GERMANY
EXCHANGE CONTROL INFORMATION. Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank (Bundesbank). In case of payments in connection with securities (including proceeds realized upon the sale of shares of Common Stock or the receipt of dividends), the report must be made by the 5th day of the month following the month in which the payment was received. The report must be filed electronically and the form of report (“Allgemeine Meldeportal Statistik”) can be accessed via the Bundesbank’s website (www.bundesbank.de) in both German and English. You should consult your personal legal advisor to ensure compliance with the applicable reporting requirements.
INDIA
EXCHANGE CONTROL INFORMATION. You must repatriate any funds received from participation in the Plan (e.g., proceeds from the sale of shares of Common Stock) within such time as prescribed under applicable Indian exchange control laws, which may be amended from time to time. You should obtain a foreign inward remittance certificate (“FIRC”) from the bank where you deposit the foreign currency and maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Company or your employer requests proof of repatriation. You should consult your personal legal advisor to ensure compliance with the applicable requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You must declare the following items in your annual tax return: (i) any foreign assets held (including shares of Common Stock acquired under the Plan), and (ii) any foreign bank accounts for which you have signing authority. You should consult your personal tax advisor to ensure compliance with the applicable requirements.
IRELAND
There are no country-specific provisions.
ITALY
ACKNOWLEDGEMENT OF SPECIFIC PROVISIONS. You acknowledge that you have read and specifically and expressly approve the following sections of the Agreement: Vesting; Lock-Up Period; Transfer Restrictions; Restriction on Transfer and Right of First Refusal; Right of Repurchase; Responsibility for Taxes; Investment Representations; Miscellaneous; Governing Law and Venue.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. If, at any time during the fiscal year, you hold foreign financial assets (including RSUs and shares of Common Stock) which may generate income taxable in Italy, you are required to report these assets on your annual tax return (UNICO Form, RW Schedule) for the year during which the assets are held (or on a special form if no tax return is due). These reporting obligations will also apply to Italian residents who are the beneficial owners of foreign financial assets under Italian money laundering provisions. You should consult your personal tax advisor to ensure compliance with the applicable requirements.
JAPAN
EXCHANGE CONTROL INFORMATION. If you acquire shares of Common Stock valued at more than JPY 100,000,000 in a single transaction, you must file a Securities Acquisition Report with the Ministry of Finance through the Bank of Japan within twenty (20) days of the acquisition of the shares. You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You are required to report details of any assets held outside Japan as of December 31st (including shares of Common Stock acquired under the Plan), to the extent such assets have a total net fair market value exceeding JPY 50,000,000. Such report is due by March 15th each year. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
NETHERLANDS
There are no country-specific provisions.
NEW ZEALAND
SECURITIES LAW INFORMATION. WARNING: You are being offered RSUs which, upon vesting in accordance with the terms of the Agreement and the Plan, will enable you to acquire shares of Company Stock. The shares of Common Stock, if issued, will give you a stake in the ownership of the Company. You may receive a return if dividends are paid.
If the Company runs into financial difficulties and is wound up, you will be paid only after all creditors and holders of preference shares (if any) have been paid. You may lose some or all of your investment, if any.
New Zealand law normally requires people who offer financial products to give information to investors before they invest. This information is designed to help investors to make an informed decision. The usual rules do not apply to this offer because it is a small offer. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.
You should ask questions, read all documents carefully, and seek independent financial advice before committing yourself.
POLAND
EXCHANGE CONTROL INFORMATION. Polish residents holding foreign securities (e.g., shares of Common Stock) and/or maintaining accounts abroad must report information to the National Bank of Poland on transactions and balances of the securities and cash deposited in such accounts if the value of such securities and cash (when combined with all other assets possessed abroad) exceeds PLN 7 million. If required, the reports must be filed on a quarterly basis on special forms that are available on the website of the National Bank of Poland. Further, if you transfer funds in excess of EUR 15,000 into or out of Poland, the funds must be transferred via a bank account. You are required to retain the documents connected with a foreign exchange transaction for a period of five years, as measured from the end of the year in which such transaction occurred. You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
SINGAPORE
SECURITIES LAW INFORMATION. The Award is granted pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”) under which it is exempt from the prospectus and registration requirements and is not made with a view to the underlying shares of Common Stock being subsequently offered for sale to any other party. The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that the RSUs are subject to section 257 of the SFA and that you will not be able to make any offer or subsequent sale of the shares of Common Stock in Singapore, unless such offer or sale is made (1) after six (6) months from the Date of Grant or (2) pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA.
DIRECTOR REPORTING INFORMATION. If you are a director, associate director or shadow director of an Affiliate in Singapore, you are subject to certain notification requirements under the Singapore Companies Act. Among these requirements is an obligation to notify the Singapore Affiliate in writing within two business days of any of the following events: (i) acquiring or disposing of an interest in the Company (e.g., RSUs or shares of Common Stock) or in any Affiliate, (ii) any change in a previously-disclosed interest (e.g., upon vesting of the RSUs), or (iii) becoming a director, associate director or shadow director of an Affiliate in Singapore, if you hold such an interest at that time.
SLOVAK REPUBLIC
There are no country-specific provisions.
SPAIN
NATURE OF GRANT. This provision supplements the Nature of Grant provision of this Appendix:
By accepting the Award, you consent to participation in the Plan and acknowledge that you have received a copy of the Plan.
You understand that the Company has unilaterally, gratuitously and in its sole discretion decided to grant Awards under the Plan to individuals who may be employees of the Company or one of its Affiliates throughout the world. The decision is limited and entered into based upon the express assumption and condition that any Award will not economically or otherwise bind the Company or any Affiliate, including your employer, on an ongoing basis, other than as expressly set forth in the Agreement. Consequently, you understand that the Award is given on the assumption and condition that the Award shall not become part of any employment or other service contract (whether with the Company or any Affiliate, including your employer) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever. Furthermore, you understand and freely accept that there is no guarantee that any benefit whatsoever shall arise from the Award, which
is gratuitous and discretionary, since the future value of the Award and the underlying shares of Common Stock is unknown, indeterminable, and unpredictable.
Further, your participation in the Plan is expressly conditioned on your continued and active rendering of service, such that, unless otherwise set forth in the Plan, if your Continuous Service terminates for any reason, your participation in the Plan will cease immediately. This will be the case, for example, even if (a) you are considered to be unfairly dismissed without good cause (i.e., subject to a “despido improcedente”); (b) you are dismissed for disciplinary or objective reasons or due to a collective dismissal; (c) your Continuous Service ceases due to a change of work location, duties or any other employment or contractual condition; (d) your Continuous Service ceases due to a unilateral breach of contract by the Company or any of its Affiliates; or (e) your Continuous Service terminates for any other reason whatsoever. Consequently, upon termination of your Continuous Service for any of the above reasons, you automatically lose any right to participate in the Plan on the date of your termination of Continuous Service, as described in the Plan and the Agreement.
SECURITIES LAW INFORMATION. The grant of the RSUs and the shares of Common Stock issued pursuant to the vesting of the RSUs are considered a private placement outside the scope of Spanish laws on public offerings and issuances of securities. Neither the Plan nor this Agreement have been registered with the Comisión National del Mercado de Valores and do not constitute a public offering prospectus.
EXCHANGE CONTROL INFORMATION. The acquisition, ownership and disposition of shares must be declared for statistical purposes to the Dirección General de Comercio e Inversiones (the “DGCI”), which is a department of the Ministry of Economy and Competitiveness. If you acquire shares through the use of a Spanish financial institution, that institution will automatically make the declaration to the DGCI for the you; otherwise, you will be required make the declaration by filing the appropriate form with the DGCI. Generally, the declaration must be made in January for shares owned as of December 31 of) the prior year; however, if the value of shares acquired or sold exceeds certain thresholds, the declaration must be filed within one (1) month of the acquisition or sale, as applicable.
Further, you are required to electronically declare to the Bank of Spain any foreign accounts (including brokerage accounts held abroad), any foreign instruments (including shares acquired under the Plan), and any transactions with non-Spanish residents (including any payments of cash or shares made to the Grantee under the Plan) depending on the balances in such accounts together with the value of such instruments as of December 31 of the relevant year, or the volume of transactions with non-Spanish residents during the relevant year.
You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. To the extent you hold rights or assets outside of Spain with a value in excess of EUR 50,000 per type of right or asset (e.g., shares, cash, etc.) as of December 31 each year, you will be required to report information on such rights and assets on your annual tax return for such year. After such rights and assets are initially reported, the reporting obligation will apply for subsequent years only if the value of any previously-reported rights or assets increases by more than EUR 20,000. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
SWEDEN
AUTHORIZATION TO WITHHOLD. The following provision supplements Section 11 (“Responsibility for Taxes”) of the Agreement:
Without limiting the Company’s and your employer’s authority to satisfy their withholding obligations for Tax-Related Items as set forth in Section 11 of the Agreement, in accepting the Award, you authorize the Company to withhold shares of Common Stock or to sell shares of Common Stock otherwise issuable
to you upon vesting/settlement to satisfy Tax-Related Items, regardless of whether the Company and/or your employer have an obligation to withhold such Tax-Related Items.
SWITZERLAND
SECURITIES LAW INFORMATION. Neither this document nor any other materials relating to the Award (i) constitute a prospectus according to articles 35 et seq. of the Swiss Federal Act on Financial Services (“FinSA”), (ii) may be publicly distributed nor otherwise made publicly available in Switzerland to any person other than an employee of the Company or his or her employer or (iii) has been or will be filed with, approved or supervised by any Swiss reviewing body according to article 51 FinSA or any Swiss regulatory authority, including the Swiss Financial Market Supervisory Authority (FINMA).
UNITED KINGDOM
RESPONSIBILITY FOR TAXES. The following supplements Section 11 (“Responsibility for Taxes”) of the Agreement:
(a) Without limitation to Section 11 of the Agreement, you agree that you are liable for all Tax-Related Items and you hereby covenant to pay all such Tax-Related Items, as and when requested by the Company and/or your employer or by Her Majesty’s Revenue & Customs (“HMRC”) (or any other tax authority or any other relevant authority). You also agree to indemnify and keep indemnified the Company and/or your employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on your behalf.
(b) As a condition of the vesting of, or the receipt of any benefit pursuant to, the RSUs, you agree to accept any liability for secondary Class 1 National Insurance contributions which may be payable by the Company and/or the Employer in connection with the RSUs and any event giving rise to Tax-Related Items (the “Employer NICs”). Without prejudice to the foregoing, by accepting the Award, you agree to enter into a joint election with the Company or the Employer, the form of such joint election being formally approved by HMRC (the “NIC Joint Election”), a copy of which is attached to this Appendix A and any other required consent or election. You further agree to execute such other joint elections as may be required between you and any successor to the Company and/or the Employer. You further agree that the Company and/or the Employer may collect the Employer NICs from you by any of the means set forth in Section 11 of the Agreement.
(c) As a condition of the vesting of, or the receipt of any benefit pursuant to, the RSUs, you agree to enter into a joint election within Section 431 of the U.K. Income Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”) in respect of computing any tax charge on the acquisition of “restricted securities” (as defined in Section 423 and 424 of ITEPA 2003) (the “Section 431 Election”), a copy of which is attached to this Appendix, and that you will not revoke such election at any time. The Section 431 Election will be to treat the shares acquired pursuant to the RSUs as if such shares were not restricted securities (for U.K. tax purposes only). You further agree to execute the Section 431 Election in hard copy even if you have executed the Section 431 Election by virtue of accepting the Agreement through the Company’s online acceptance procedures.
(d) As a condition of the vesting of, or the receipt of any benefit pursuant to, the RSUs, you agree to sign, promptly, all documents required by the Company to effect the terms of the foregoing provisions.
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
IMPORTANT NOTE ON THE JOINT ELECTION FOR TRANSFER OF LIABILITY FOR EMPLOYER NATIONAL INSURANCE CONTRIBUTIONS TO THE EMPLOYEE
As a condition of the vesting of, or the receipt of any benefit pursuant to, your restricted stock units (“RSUs”) granted under the Snowflake Inc. 2012 Equity Incentive Plan, as amended from time to time (the “Plan”), you are required to enter into a joint election to transfer to you any liability for employer National Insurance contributions (the “Employer NICs”) that may arise in connection with the RSUs and in connection with future RSUs, if any, that may be granted to you under the Plan (the “NIC Joint Election”).
By entering into the Joint Election:
•you agree that any liability for Employer NICs that may arise in connection with or pursuant to the vesting of the RSUs and the acquisition of shares of common stock of Snowflake Inc. (the “Company”) or other taxable events in connection with the RSUs will be transferred to you; and
•you authorize the Company and/or your employer to recover an amount sufficient to cover this liability by any method set forth in the Agreement and/or the NIC Joint Election.
To enter into the NIC Joint Election, please indicate your agreement where indicated on the acceptance screen. Please note that your acceptance indicates your agreement to be bound by all of the terms of the NIC Joint Election.
Please note that even if you have indicated your acceptance of this NIC Joint Election electronically, you may still be required to sign a paper copy of this NIC Joint Election (or a substantially similar form) if the Company determines such is necessary to give effect to the NIC Joint Election.
Please read the terms of the NIC Joint Election carefully before accepting the Agreement and the NIC Joint Election. You should print and keep a copy of this NIC Joint Election for your records.
NIC JOINT ELECTION
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
ELECTION TO TRANSFER THE EMPLOYER’S LIABILITY FOR
NATIONAL INSURANCE LIABILITY TO THE EMPLOYEE
(UK EMPLOYEES)
1. PARTIES
This Election is between:
(A) The individual who has gained authorized access to this Election (the “Employee”), who is employed by one of the employing companies listed in the attached schedule (the “Employer”) and who is eligible to receive restricted stock units (“RSUs”) pursuant to the terms and conditions of the Snowflake Inc. 2012 Equity Incentive Plan, as amended from time to time (the “Plan”), and
(B) Snowflake Inc. of 450 Concar Drive, San Mateo, CA 94402, USA (the “Company”), which may grant RSUs under the Plan and is entering into this Election on behalf of the Employer.
2. PURPOSE OF ELECTION
2.1 This Election relates to all RSUs granted to Employee under the Plan up to the termination date of the Plan.
2.2 In this Election the following words and phrases have the following meanings:
“Taxable Event” means any event giving rise to Relevant Employment Income.
“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003.
“Relevant Employment Income” from RSUs on which Employer’s National Insurance Contributions becomes due is defined as:
(i) an amount that counts as employment income of the earner under section 426 ITEPA (restricted securities: charge on certain post-acquisition events);
(ii) an amount that counts as employment income of the earner under section 438 of ITEPA (convertible securities: charge on certain post-acquisition events); or
(iii) any gain that is treated as remuneration derived from the earner’s employment by virtue of section 4(4)(a) SSCBA, including without limitation:
(A) the acquisition of securities pursuant to the RSUs (within the meaning of section 477(3)(a) of ITEPA);
(B) the assignment (if applicable) or release of the RSUs in return for consideration (within the meaning of section 477(3)(b) of ITEPA);
(C) the receipt of a benefit in connection with the RSUs, other than a benefit within (i) or (ii) above (within the meaning of section 477(3)(c) of ITEPA).
“SSCBA” means the Social Security Contributions and Benefits Act 1992.
2.3 This Election relates to the Employer’s secondary Class 1 National Insurance Contributions (the “Employer’s Liability”) which may arise in respect of Relevant Employment Income in respect of the RSUs pursuant to section 4(4)(a) and/or paragraph 3B(1A) of Schedule 1 of the SSCBA.
2.4 This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the SSCBA or the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
2.5 This Election does not apply to the extent that it relates to relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part VII of ITEPA (employment income: securities with artificially depressed market value).
2.6 Any reference to the Company and/or the Employer shall include that entity’s successors in title and assigns as permitted in accordance with the terms of the Plan and the Agreement. This Election will have effect in respect of the RSUs and any awards which replace or replaced the RSUs following their grant in circumstances where section 483 of ITEPA applies.
3. ELECTION
The Employee and the Company jointly elect that the entire liability of the Employer to pay the Employer’s Liability that arises on any Relevant Employment Income is hereby transferred to the Employee. The Employee understands that by accepting the RSU (by signing the related Restricted Stock Unit Grant Notice (the “Grant Notice”) in hard copy or by electronically accepting such Grant Notice), he or she will become personally liable for the Employer’s Liability covered by this Election. This Election is made in accordance with paragraph 3B(1) of Schedule 1 to SSCBA.
4. PAYMENT OF THE EMPLOYER’S LIABILITY
4.1 The Employee hereby authorizes the Company and/or the Employer to collect the Employer’s Liability in respect of any Relevant Employment Income from the Employee at any time after the Taxable Event:
(i) by deduction from salary or any other payment payable to the Employee at any time on or after the date of the Taxable Event; and/or
(ii) directly from the Employee by payment in cash or cleared funds; and/or
(iii) by arranging, on behalf of the Employee, for the sale of some of the securities which the Employee is entitled to receive in respect of the RSUs; and/or
(iv) where the proceeds of the gain are to be paid through a third party, by that party withholding an amount from the payment or selling some of the securities which the Employee is entitled to receive in respect of the RSUs; and/or
(v) by any other means specified in the applicable restricted stock unit agreement.
4.2 The Company hereby reserves for itself and the Employer the right to withhold the transfer of any securities in respect of the RSUs to the Employee until full payment of the Employer’s Liability is received.
4.3 The Company agrees to procure the remittance by the Employer of the Employer’s Liability to HM Revenue and Customs on behalf of the Employee within 14 days after the end of the UK tax
month during which the Taxable Event occurs (or within 17 days after the end of the UK tax month during which the Taxable Event occurs, if payments are made electronically).
5. DURATION OF ELECTION
5.1 The Employee and the Company agree to be bound by the terms of this Election regardless of whether the Employee is transferred abroad or is not employed by the Employer on the date on which the Employer’s Liability becomes due.
5.2 This Election will continue in effect until the earliest of the following:
(i) the Employee and the Company agree in writing that it should cease to have effect;
(ii) on the date the Company serves written notice on the Employee terminating its effect;
(iii) on the date HM Revenue and Customs withdraws approval of this Election; or
(iv) after due payment of the Employer’s Liability in respect of the entirety of the RSUs to which this Election relates or could relate, such that the Election ceases to have effect in accordance with its terms.
5.3 This Election will continue in full force regardless of whether the Employee ceases to be an employee of the Employer.
Acceptance by the Employee
The Employee acknowledges that, by accepting the RSUs (by signing the related Restricted Stock Unit Grant Notice in hard copy or by electronically accepting such Grant Notice) or by signing or electronically accepting this Election, the Employee agrees to be bound by the terms of this Election.
Acceptance by the Company
The Company acknowledges that, by arranging for the signature of an authorized representative to appear on this Election, the Company agrees to be bound by the terms of this Election.
SCHEDULE OF EMPLOYER COMPANIES
The following Employer(s) shall be covered by the Joint Election:
Snowflake Computing U.K. Limited
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Address:
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c/o Fieldfisher
Riverbank House, 2 Swan Lane
London, United Kingdom EC4R 3TT
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Corporation Tax Number:
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[Corporation Tax Number Intentionally Omitted]
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Company Registration Number
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10611715
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PAYE Reference
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[PAYE Reference Intentionally Omitted]
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SECTION 431 ELECTION
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
JOINT ELECTION UNDER S431 ITEPA 2003
FOR FULL DISAPPLICATION OF CHAPTER 2 INCOME TAX (EARNINGS AND PENSIONS) ACT 2003
(UK EMPLOYEES)
1. Two Part Election
Between
the Employee
who has obtained authorized access to the joint election
and
the Company (who is the Employee’s employer) Snowflake Computing U.K. Limited
of Company Registration Number 10611715
2. Purpose of Election
This joint election is made pursuant to section 431(1) Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”) and applies where employment-related securities, which are restricted securities by reason of section 423 ITEPA, are acquired.
The effect of an election under section 431(1) is that, for the purposes of income tax and National Insurance contributions (“NICs”), the employment-related securities and their market value will be treated as if they were not restricted securities and that sections 425 to 430 ITEPA do not apply. Additional income tax will be payable as a result of this election (with PAYE withholding and NICs being applicable where the securities are Readily Convertible Assets).
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Should the value of the securities fall following the acquisition, it is possible that income tax/NICs that would have arisen because of any future chargeable event (in the absence of an election) would have been less than the income tax/NICs due by reason of this election. Should this be the case, there is no income tax/NICs relief available under Part 7 of ITEPA 2003; nor is it available if the securities acquired are subsequently transferred, forfeited or revert to the original owner.
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3. Application
This joint election is made not later than 14 days after the date of acquisition of the securities by the employee and applies to:
Number of securities All securities
Description of securities Shares of common stock
Name of issuer of securities Snowflake Inc.
To be acquired by the Employee on or after the date of this Election under the terms of the Snowflake, Inc. 2012 Equity Incentive Plan.
4. Extent of Application
This election disapplies S.431(1) ITEPA: All restrictions attaching to the securities.
5. Declaration
This election will become irrevocable upon the later of its electronic acceptance or the acquisition (and each subsequent acquisition) of employment-related securities to which this election applies.
By accepting the RSUs (by signing the related Restricted Stock Unit Grant Notice (the “Grant Notice”) in hard copy or by electronically accepting such Grant Notice), you hereby agree (inter alia) to be bound by the terms of this Section 431 Election as set out herein.
Note: Where the election is in respect of multiple acquisitions, prior to the date of any subsequent acquisition of a security it may be revoked by agreement between the employee and employer in respect of that and any later acquisition.
ATTACHMENT IV
AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN
SNOWFLAKE INC.
RESTRICTED STOCK UNIT GRANT NOTICE
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
Snowflake Inc. (the “Company”), pursuant to its Amended and Restated 2012 Equity Incentive Plan (the “Plan”), has granted to Participant (as of the date indicated below) a Restricted Stock Unit Award for the number of shares of the Company’s Common Stock (“RSUs”) set forth below (the “Award”). The Award is subject to all of the terms and conditions as set forth herein and in the Plan and the Restricted Stock Unit Agreement, both of which are attached hereto and incorporated herein in their entirety. Capitalized terms not otherwise defined herein will have the meanings set forth in the Plan or the Restricted Stock Unit Agreement. In the event of any conflict between the terms in the Award and the Plan, the terms of the Plan will control.
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Participant:
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Date of Grant:
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First Vest Date:
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Liquidity Event Deadline:
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Number of RSUs:
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Expiration Date: The Expiration Date for an RSU is the earlier of: (1) Liquidity Event Deadline or (2) the date of termination of Participant’s Continuous Service.
Vesting: Participant will receive a benefit with respect to an RSU only if it vests. Except as explicitly set forth below, two vesting requirements must be satisfied on or before the applicable Expiration Date specified above in order for an RSU to vest — a time and service-based requirement (the “Service-Based Requirement”) and the “Liquidity Event Requirement” (each described below). An RSU will vest (and therefore becomes a “Vested RSU”) on the first date upon which both the Service-Based Requirement and the Liquidity Event Requirement are satisfied with respect to that particular RSU (the “Vesting Date”). All RSUs that do not become Vested RSUs on or before the applicable Expiration Date will be immediately forfeited to the Company upon expiration at no cost to the Company.
Service-Based
Requirement: The Service-Based Requirement will be satisfied as to [25% of the RSUs on the First Vest Date, and 6.25% of the RSUs on each Quarterly Date thereafter (in each case rounding down to the nearest whole RSU), subject to Participant’s Continuous Service through each such date.] For the avoidance of doubt, upon termination of Participant’s Continuous Service, any unvested RSUs, including RSUs that have met the Service-Based Requirement, will be forfeited at no cost to the Company and Participant will have no further right, title or interest in or to such RSUs or the shares of Common Stock underlying them.
“Quarterly Date” means each of March 15, June 15, September 15 and December 15.
Liquidity Event
Requirement: The Liquidity Event Requirement will be satisfied as to any then-outstanding RSUs on the earliest of the following: (1) the effective date of a registration statement of the
Company filed under the Securities Act for the sale of the Company’s Common Stock or (2) immediately prior to the closing of a Change in Control.
Settlement: If an RSU vests as provided for above, the Company will issue one share of Common Stock for each Vested RSU. The shares will be issued in accordance with the issuance schedule set forth in Section 5 of the Restricted Stock Unit Agreement.
Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Restricted Stock Unit Grant Notice, the Restricted Stock Unit Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this Restricted Stock Unit Grant Notice, the Restricted Stock Unit Agreement and the Plan set forth the entire understanding between Participant and the Company regarding this Award and supersede all prior oral and written agreements, offer letters, promises and/or representations on that subject with the exception of (i) equity awards previously granted and delivered to Participant, (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law and (iii) any written employment or severance arrangement that would provide for vesting acceleration of this Award upon the terms and conditions set forth therein (provided that if there is any conflict in the vesting and/or acceleration terms, those contained in this Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement will control).
By accepting the Award, Participant acknowledges having received and read the Restricted Stock Unit Grant Notice, the Restricted Stock Unit Agreement and the Plan (the “Grant Documents”) and agrees to all of the terms and conditions set forth in these documents. Furthermore, by accepting the Award, Participant consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
Notwithstanding the above, if Participant has not actively accepted the Award within 90 days of the Date of Grant set forth in this Restricted Stock Unit Grant Notice, Participant is deemed to have accepted the Award, subject to all of the terms and conditions of the Grant Documents.
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SNOWFLAKE INC.
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PARTICIPANT:
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By:
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Signature
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Signature
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Name & Title:
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Date:
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Date:
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ATTACHMENTS:
•Attachment I: Restricted Stock Unit Agreement
•Attachment II: Data Privacy Appendix to Restricted Stock Unit Agreement
•Attachment III: Country-Specific Appendix to Restricted Stock Unit Agreement
•Attachment IV: Amended and Restated 2012 Equity Incentive Plan
ATTACHMENT I
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
Pursuant to the Restricted Stock Unit Grant Notice (the “Grant Notice”) and this Restricted Stock Unit Agreement (the “Agreement”), Snowflake Inc. (the “Company”) has granted to you a Restricted Stock Unit Award for the number of shares of the Company’s Common Stock (“RSUs”) indicated in the Grant Notice (the “Award”) under its Amended and Restated 2012 Equity Incentive Plan (the “Plan”). The Award is granted to you effective as of the Date of Grant set forth in the Grant Notice for this Award. Capitalized terms not explicitly defined in this Agreement will have the same meanings given to them in the Plan and Grant Notice. The terms and conditions of the Award, in addition to those set forth in the Grant Notice and the Plan, are as follows.
1.NATURE OF THE AWARD. The Award represents the right to be issued on a future date the number of shares of the Company’s Common Stock as indicated in the Grant Notice upon the satisfaction of the terms set forth in this Agreement. Except as otherwise provided herein, you will not be required to make any payment to the Company with respect to your receipt of the Award, the vesting of the RSUs or the issuance of the underlying shares of Common Stock.
2.VESTING. Subject to the limitations contained herein, the Award will vest in accordance with the vesting schedule provided in the Grant Notice. Upon termination of your Continuous Service, any unvested RSUs, including RSUs that have met the Service-Based Requirement, will be forfeited at no cost to the Company and you will have no further right, title or interest in or to such RSUs or the shares of Common Stock covered thereby.
3.NUMBER OF SHARES.
(a)The number of RSUs subject to the Award may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan.
(b)Any additional RSUs, shares, cash or other property that become subject to the Award pursuant to this Section 3 if any, will be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of issuance as applicable to the other shares covered by the Award.
(c)Notwithstanding the provisions of this Section 3, no fractional shares or rights for fractional shares of Common Stock will be created pursuant to this Section 3. The Board will, in its discretion, determine an equivalent benefit for any fractional shares or fractional shares that might be created by the adjustments referred to in this Section 3.
4.SECURITIES LAW AND OTHER COMPLIANCE. You may not be issued any shares under the Award unless either (a) the shares are registered under the Securities Act; or (b) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. The Award also must comply with other applicable laws and regulations governing the Award, and you will not receive such shares if the Company determines that such receipt would not be in material compliance with such laws and regulations. If the Company determines in its sole discretion that the Award does not comply with applicable laws and regulations, the Company may cancel the Award (or
otherwise cause the Award to be forfeited) and no claim or entitlement to compensation or damages shall arise from such cancellation or forfeiture.
5.DATE OF ISSUANCE.
(a)Subject to the satisfaction of the Tax-Related Items set forth in Section 13 of this Agreement, in the event one or more RSUs vest, the Company will issue to you one (1) share of Common Stock for each RSU that vests on the applicable Vesting Date (subject to any adjustment under Section 3 above) (such date, the “Original Issuance Date”).
(b)If the Original Issuance Date falls on a date that is not a business day, issuance will instead occur on the next following business day. In addition, to the extent applicable at a Vesting Date when the Common Stock is registered under the Securities Act, if:
(i)the Original Issuance Date does not occur (1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you are otherwise permitted to sell shares of Common Stock on an established stock exchange or stock market (including but not limited to under a previously established written trading plan that meets the requirements of Rule 10b5-1 under the Exchange Act and was entered into in compliance with the Company’s policies (a “10b5-1 Arrangement”)), and
(ii)either (1) no Tax-Related Items apply, or (2) the Company decides, prior to the Original Issuance Date, (A) not to satisfy the Tax-Related Items by withholding shares of Common Stock from the shares of Common Stock otherwise due, on the Original Issuance Date, to you under this Award, and (B) not to permit you to enter into a “same day sale” commitment with a broker-dealer pursuant to Section 13 of this Agreement (including but not limited to a commitment under a 10b5-1 Arrangement) and (C) not to permit you to pay the Tax-Related Items in cash,
then the shares of Common Stock that would otherwise be issued to you on the Original Issuance Date will not be issued on such Original Issuance Date and will instead be issued on the first business day when you are not prohibited from selling shares of Common Stock in the open public market, but in no event later than (a) December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), or (b) if and only if permitted in a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the year immediately following the year in which the shares of Common Stock covered by this Award are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).
(c)The form of such issuance (e.g., a stock certificate or electronic entry evidencing such shares of Common Stock) will be determined by the Company. In all cases, the issuance of shares under this Award is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner.
6.DIVIDENDS. You will receive no benefit or adjustment to your RSUs with respect to any cash dividend, stock dividend or other distribution except as provided in the Plan with respect to a Capitalization Adjustment.
7.LOCK-UP PERIOD. By acquiring shares of Common Stock under your Award, you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase
of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you, for a period of 180 days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company request or as necessary to permit compliance with FINRA Rule 2241 and similar or successor regulatory rules and regulations (the “Lock-Up Period”); provided, however, that nothing contained in this Section 7 will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. You also agree that any transferee of any shares of Common Stock (or other securities of the Company held by you) will be bound by this Section 7. To enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such period. The underwriters of the Company’s stock are intended third party beneficiaries of this Section 7 and will have the right, power and authority to enforce the provisions of this Section 7 as though they were a party to this Agreement.
8.TRANSFER RESTRICTIONS. Shares of Common Stock that you acquire upon vesting and settlement of your Award are subject to any restrictions on transfer and/or right of first refusal that may be described in the Company’s bylaws in effect at such time the Company elects to exercise its right. In addition to any other limitation on transfer created by applicable securities laws, you will not sell, assign, hypothecate, donate, encumber or otherwise dispose of all or any part of the shares subject to your Award or any interest in such shares, whether voluntarily or by operation of law, by gift, by entering into a contract that requires shares to be issued at a future date, or otherwise, except in compliance with this Agreement, the Company’s bylaws and applicable securities law.
9.RESTRICTIVE LEGENDS. The shares of Common Stock issued in respect of your Award will be endorsed with appropriate legends as determined by the Company.
10.AWARD NOT AN EMPLOYMENT OF SERVICE CONTRACT.
(a)Subject to applicable law, your employment or other service with the Company or any Affiliate is not for any specified term and may be terminated by you or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice. Nothing in this Agreement (including, but not limited to, the vesting of the Award pursuant to Section 2 or the issuance of the shares subject to the Award), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan will: (i) confer upon you any right to continue in the employ of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company or an Affiliate of the right to terminate your employment or engagement at will (subject to applicable law) and without regard to any future vesting opportunity that you may have.
(b)By accepting this Award, you acknowledge and agree that the right to continue vesting in the Award pursuant to Section 2 and the schedule set forth in the Grant Notice is earned only by continuing as an employee, director or consultant at the will of the Company or an Affiliate (not through the act of being hired, being granted this Award or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems appropriate (a “reorganization”). You further
acknowledge and agree that such reorganization could result in the termination of your Continuous Service, or the termination of Affiliate status of your employer and the loss of benefits available to you under this Agreement, including but not limited to, the termination of the right to continue vesting in the Award.
11.RESPONSIBILITY FOR TAXES.
(a)You acknowledge that, regardless of any action taken by the Company, the ultimate liability for all income tax (including U.S. federal, state, and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you or deemed by the Company in its discretion to be an appropriate charge to you even if legally applicable to the Company (“Tax-Related Items”) is and remains your responsibility and may exceed the amount actually withheld by the Company.
(b)Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to the Company and/or your employer (if not the Company) to satisfy all Tax-Related Items. In this regard, you authorize the Company or its agent to satisfy their withholding obligations with regard to all Tax-Related Items, if any, by any of the following means or by a combination of such means: (i) withholding from any compensation otherwise payable to you by the Company or your employer; (ii) causing you to tender a cash payment; (iii) entering on your behalf (pursuant to this authorization without further consent) into a “same day sale” commitment with a broker dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a portion of the shares to be issued under the Award to satisfy the Tax-Related Items and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Tax-Related Items directly to the Company and/or its Affiliates; (iv) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with the Award with a Fair Market Value (measured as of the date shares of Common Stock are issued to you or, if and as determined by the Company, the date on which the Tax-Related Items are required to be calculated) equal to the amount of such Tax-Related Items; or (v) any other method of withholding determined by the Company and permitted by applicable law. The Company will use commercially reasonable efforts (as determined by the Company) to facilitate the satisfaction of Tax-Related Items by you using one of the methods described in clauses (iii) and (iv) of the preceding sentence or by permitting you to sell shares of Common Stock in any initial public offering by the Company. However, the Company does not guarantee that you will be able to satisfy any Tax-Related Items through any of the methods described in the preceding sentence and in all circumstances you remain responsible for timely and fully satisfying the Tax-Related Items. Depending on the withholding method employed, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including up to the maximum applicable rate in your jurisdiction to the extent permitted under the Plan, in which case you may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in shares of Common Stock. In the event any under-withholding results from the application of minimum statutory or other withholding rates, you may be required to pay additional amounts to the tax authorities. If the obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, you are deemed to have been issued the full number of shares of Common Stock subject to the vested portion of the Award, notwithstanding that a number of the shares of Common Stock are held back solely for the purpose of paying the Tax-Related Items.
(c)Finally, you agree to pay to the Company or your employer any amount of Tax-Related Items that the Company or your employer may be required to withhold or account for as a result
of your participation in the Plan that cannot be satisfied by any of the means previously described. Notwithstanding any contrary provision of the Plan, the Grant Notice or of this Agreement, if you fail to make satisfactory arrangements for the payment of any Tax-Related Items when due, you permanently will forfeit the RSUs on which the Tax-Related Items were not satisfied and will also permanently forfeit any right to receive shares of Common Stock thereunder. In that case, the RSUs will be returned to the Company at no cost to the Company.
12.INVESTMENT REPRESENTATIONS. In connection with your acquisition of the Award and the Common Stock under your Award, you represent to the Company the following:
(a)You are aware of the Company’s business affairs and financial condition and have acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Common Stock. You are acquiring the Common Stock for investment for your own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act.
(b)You understand that the Common Stock has not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of your investment intent as expressed in this Agreement.
(c)You further acknowledge and understand that the Common Stock must be held indefinitely unless the Common Stock is subsequently registered under the Securities Act or an exemption from such registration is available. You further acknowledge and understand that the Company is under no obligation to register the Common Stock. You understand that the certificate evidencing the Common Stock will be imprinted with a legend that prohibits the transfer of the Common Stock unless the Common Stock is registered or such registration is not required in the opinion of counsel for the Company.
(d)You are familiar with the provisions of Rules 144 and 701 under the Securities Act, as in effect from time to time, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of issuance of the securities, such issuance will be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the securities exempt under Rule 701 may be sold by you 90 days thereafter, subject to the satisfaction of certain of the conditions specified by Rule 144 and the Lock-Up Period agreement described in Section 7.
(e)In the event that the sale of the Common Stock does not qualify under Rule 701 at the time of issuance, then the Common Stock may be resold by you in certain limited circumstances subject to the provisions of Rule 144, which requires, among other things: (i) the availability of certain public information about the Company; and (ii) the resale occurring following the required holding period under Rule 144 after you have purchased, and made full payment of (within the meaning of Rule 144), the securities to be sold.
(f)You further understand that at the time you wish to sell the Common Stock there may be no public market upon which to make such a sale, and that, even if such a public market then exists, the Company may not be satisfying the current public information requirements of Rule 144 or
701, and that, in such event, you would be precluded from selling the Common Stock under Rule 144 or 701 even if the minimum holding period requirement had been satisfied.
13.NO OBLIGATION TO MINIMIZE TAXES. You acknowledge that the Company is not making representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including, but not limited to, the grant, vesting or settlement of the Award, the subsequent sale of shares of Common Stock acquired pursuant to such settlement and the receipt of any dividends and/or any dividend equivalent payments. Further, you acknowledge that the Company does not have any duty or obligation to minimize your liability for Tax-Related Items arising from the Award or to achieve any particular tax result and will not be liable to you for any Tax-Related Items arising in connection with the Award. If you become subject to taxation in more than one jurisdiction, the Company and/or your employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
14.NO ADVICE REGARDING GRANT. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Common Stock. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the Tax-Related Items arising in connection with the Award and by accepting the Award, you have agreed that you have done so or knowingly and voluntarily declined to do so.
15.UNSECURED OBLIGATION. The Award is unfunded, and as a holder of a vested Award, you will be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares pursuant to this Agreement. You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this Agreement until such shares are issued to you pursuant to Section 5 of this Agreement. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.
16.DATA PRIVACY. In order for the Company to administer the Award and your participation in the Plan, the Company must collect, process and transfer certain of your personal data, as further described in Appendix A to this Agreement. Appendix A constitutes part of this Agreement.
17.NOTICES. Any notices provided for in the Grant Notice, this Agreement or the Plan will be given in writing and will be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
18.MISCELLANEOUS.
(a)As a condition to the grant of your Award or to the Company’s issuance of any shares of Common Stock under this Agreement, the Company may require you to execute certain
customary agreements entered into with the holders of capital stock of the Company, including without limitation, a right of first refusal and co-sale agreement and a stockholders agreement.
(b)The rights and obligations of the Company under the Award will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by, the Company’s successors and assigns. Your rights and obligations under the Award may only be assigned with the prior written consent of the Company.
(c)You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of the Award.
(d)You acknowledge and agree that you have reviewed the documents provided to you in relation to the Award in their entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting the Award, and fully understand all provisions of such documents.
(e)This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
(f)All obligations of the Company under the Plan and this Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
(g)The Company reserves the right to impose other requirements on your participation in this Agreement, on the RSUs and on any shares of Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
19.GOVERNING LAW AND VENUE. The Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of the Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Except as expressly provided herein, in the event of any conflict between the provisions of the Award and those of the Plan, the provisions of the Plan will control.
20.SEVERABILITY. If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
21.GOVERNING LAW AND VENUE. The interpretation, performance and enforcement of this Agreement will be governed by the law of the state of Delaware without regard to such state’s conflict of laws rules. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of San Mateo County, California, or the United States federal courts for the Northern District of California, and no other courts, where this grant is made and/or to be performed.
22.EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of the Award subject to this Agreement will not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.
23.AMENDMENT. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Agreement may be amended solely by the Board by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that, except as otherwise expressly provided in the Plan, no such amendment adversely affecting your rights hereunder may be made without your written consent. Without limiting the foregoing, the Board reserves the right to change, by written notice to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change will be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.
24.COMPLIANCE WITH SECTION 409A OF THE CODE. This Award is intended to comply with the “short-term deferral” rule set forth in Treasury Regulations Section 1.409A-1(b)(4). Notwithstanding the foregoing, if it is determined that the Award fails to satisfy the requirements of the short-term deferral rule and is otherwise deferred compensation subject to Section 409A, and if you are a “Specified Employee” (within the meaning set forth Section 409A(a)(2)(B)(i) of the Code) as of the date of your separation from service (within the meaning of Treasury Regulations Section 1.409A-1(h)), then the issuance of any shares that would otherwise be made upon the date of the separation from service or within the first six months thereafter will not be made on the originally scheduled date(s) and will instead be issued in a lump sum on the date that is six months and one day after the date of the separation from service, with the balance of the shares issued thereafter in accordance with the original vesting and issuance schedule set forth above, but if and only if such delay in the issuance of the shares is necessary to avoid the imposition of taxation on you in respect of the shares under Section 409A of the Code. Each installment of shares that vests is intended to constitute a “separate payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2). Notwithstanding any contrary provision of the Plan, the Grant Notice, or of this Agreement, under no circumstances will the Company reimburse you for any taxes or other costs under Section 409A or any other tax law or rule. All such taxes and costs are solely your responsibility.
25.COUNTRY-SPECIFIC PROVISIONS. The RSUs will be subject to any special terms and conditions set forth in the disclosure set forth for your country in Appendix B to this Agreement. Moreover, if you relocate to one of the countries included in Appendix B, the special terms and conditions for such country will apply to you to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendix B constitutes part of this Agreement.
* * *
This Agreement will be deemed to be accepted by you upon the signing (which may be electronic) by you of the Restricted Stock Unit Grant Notice to which it is attached or by the deemed acceptance of this Agreement, as described in the Restricted Stock Unit Grant Notice.
ATTACHMENT II
APPENDIX A TO
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
This Appendix forms part of the Agreement. Capitalized terms used but not defined in this Appendix have the meanings set forth in the Plan and/or in the Agreement.
DATA PRIVACY. To participate in the Plan, you need to review the information provided in (a) through (f) below and, where applicable, consent to the processing of Personal Data (as defined below) by the Company and the third parties according to (g) below.
If you are based in the European Union (“EU”), the European Economic Area (“EEA”), Switzerland or the United Kingdom (collectively, “EEA+”), Snowflake Inc., with its registered address at 450 Concar Drive, San Mateo, CA 94402, USA is the controller responsible for the processing of your Personal Data in connection with the Agreement and the Plan. The Company's representative in the EU is Snowflake Computing Netherlands B.V. with its primary office located at FOZ Building, Gustav Mahleraan 300-314, 1082 ME Amsterdam, Netherlands.
(a)Data Collection and Usage. The Company collects, processes and uses Personal Data about you, including your name, home address, email address and telephone number, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of all RSUs over shares of Common Stock or any other entitlement to shares of Common Stock awarded, canceled, exercised, purchased, vested, unvested or outstanding in your favor, which the Company receives from you or your employer (“Personal Data”). In order for you to participate in the Plan, the Company will collect Personal Data for purposes of allocating shares of Common Stock and implementing, administering and managing the Plan.
If you are based in the EEA+, the Company’s legal basis for the processing of Personal Data is the necessity of the processing for the Company's performance of its obligations under the Agreement and the Company’s legitimate interest of complying with statutory obligations to which it is subject.
If you are based in any other jurisdiction, the Company relies on your consent to the processing of Personal Data, as further described below.
(b) Stock Plan Administration and Service Provides. The Company may transfer Personal Data to Cooley LLP, Fidelity Stock Plan Services LLC, Computershare Trust Company, N.A., and/or Solium Plan Managers LLC (each, an “administrator”), each of which is an independent service provider based in the U.S., which is assisting the Company with the implementation, administration and management of the Plan. Administrators may open an account for you to receive and, when applicable, trade shares of Common Stock. You may be asked to acknowledge, or agree to, separate terms and data processing practices with any administrator, with such acknowledgement or agreement being a condition to your ability to participate in the Plan.
(c)International Data Transfers. Personal Data will be transferred from your country to the U.S., where the Company and its service providers are based. You understand and acknowledge that the U.S. has enacted data privacy laws that are different from those applicable in your country of residence. An
appropriate level of protection of Personal Data can be achieved by implementing safeguards such as the Standard Contractual Clauses adopted by the EU Commission.
If you are based in the EEA+, Personal Data will be transferred from the EEA+ to the Company and onward from the Company to the administrators based on safeguards such as a data processing agreement or the EU Standard Contractual Clauses. You may request a copy of such appropriate safeguards at privacy@snowflake.com.
If you are based in any other jurisdiction, the Company relies on your consent to the transfer of Personal Data to the U.S., as further described below.
(d)Data Retention. The Company will use Personal Data only as long as necessary to implement, administer and manage my participation in the Plan or as required to comply with legal or regulatory obligations, including, without limitation, under tax and securities laws. When the Company no longer needs Personal Data for any of the above purposes, which will generally be seven (7) years after you participate in the Plan, the Company will cease to use Personal Data and remove it from its systems. If the Company keeps Personal Data longer, it would be to satisfy legal or regulatory obligations and the Company’s legal basis would be relevant laws or regulations (if you are in the EEA+) and/or your consent (if you are outside the EEA+).
(e)Data Subject Rights. You understand that you may have a number of rights under data privacy laws in your jurisdiction. Subject to the conditions set out in the applicable law and depending on where you are based, such rights may include the right to (i) request access to, or copies of, Personal Data processed by the Company, (ii) rectification of incorrect Personal Data, (iii) deletion of Personal Data, (iv) restrictions on the processing of Personal Data, (v) object to the processing of Personal Data for legitimate interests, (vi) portability of Personal Data, (vii) lodge complaints with competent authorities in my jurisdiction, and/or to (viii) receive a list with the names and addresses of any potential recipients of Personal Data. To receive clarification regarding these rights or to exercise these rights, you can contact privacy@snowflake.com.
(f)Necessary Disclosure of Personal Data. You understand that providing the Company with Personal Data is necessary for the performance of the Agreement and that your refusal to provide Personal Data or, where applicable, consent to process and transfer Personal Data would make it impossible for the Company to perform its contractual obligations and may affect your ability to participate in the Plan.
(g)Data Privacy Consent. If you are located in a jurisdiction outside the EEA+, you hereby unambiguously consent to the collection, use and transfer, in electronic or other form, of Personal Data, as described above and in any other Award materials, by and among, as applicable, the Company, your employer and any Affiliate for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that you may, at any time, refuse or withdraw the consents herein, in any case without cost, by contacting in writing privacy@snowflake.com. If you do not consent or later seek to revoke your consent, your employment status or service with your employer will not be affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant the RSUs or other equity awards to you or administer or maintain such awards. Therefore, you understand that refusing or withdrawing consent may affect your ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, you should contact privacy@snowflake.com.
ATTACHMENT III
APPENDIX B TO
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
Terms and Conditions
This Appendix forms part of the Agreement and includes special terms and conditions that govern the Award granted to you under the Plan if you reside or work in one of the jurisdictions listed below. Capitalized terms used but not defined in this Appendix have the meanings set forth in the Plan and/or in the Agreement.
If you are a citizen or resident (or are considered as such for local law purposes) of a country other than the country in which you are currently residing and/or working, or if you relocate to another country after the grant of the Award, the Company shall, in its discretion, determine to what extent the special terms and conditions contained herein shall be applicable to you.
Notifications
This Appendix may also include information regarding exchange controls and certain other issues of which you should be aware with respect to participation in the Plan. The information is based on the securities, exchange control, and other laws in effect in the respective countries as of August 2020. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information in this Appendix as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at the time you vest in the RSUs, acquire shares of Common Stock, or sell shares of Common Stock acquired under the Plan.
In addition, the information contained below is general in nature and may not apply to your particular situation. You are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.
ALL COUNTRIES OUTSIDE THE UNITED STATES
NATURE OF GRANT. This provision supplements Section 10 ("Award Not An Employment or Service Contract") and Section 22 ("Effect on Other Employee Benefit Plans") of the Agreement:
By accepting this Award, you acknowledge, understand and agree that:
(a)the Plan is established voluntarily by the Company, it is discretionary in nature, and may be amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b)the grant of the Award is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs or other equity awards or benefits in lieu of equity awards, even if equity awards have been granted in the past;
(c)all decisions with respect to future grants of RSUs or other equity awards, if any, will be at the sole discretion of the Company;
(d)you are voluntarily participating in the Plan;
(e)the Award and any shares of Common Stock acquired under the Plan, and the income from and value of same, are not intended to replace any pension rights or compensation;
(f)the Award and any shares of Common Stock acquired under the Plan, and the income from and value of same, are not part of normal or expected compensation for any purpose, including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, holiday pay, bonuses, long-service awards, pension or retirement or welfare benefits or similar mandatory payments;
(g)the future value of the underlying shares of Common Stock is unknown, indeterminable, and cannot be predicted with certainty;
(h)no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from your termination of Continuous Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any);
(i)for purposes of the RSUs, your Continuous Service will be considered terminated as of the date you are no longer actively providing services to the Company or an Affiliate (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any) and, unless otherwise expressly provided in the Agreement or determined by the Company, your right to vest in the RSUs under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., your period of Continuous Service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any);
(j)the Board or the chief executive of the Company (or a designee thereof) shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the RSUs (including whether you may still be considered to be providing services while on a leave of absence);
(k)unless otherwise agreed with the Company in writing (which may be electronic), the Award and any shares of Common Stock acquired under the Plan, and the income from and value of same, are not granted as consideration for, or in connection with, any service you may provide as a director of an Affiliate; and
(l)neither the Company nor any Affiliate shall be liable for any foreign exchange rate fluctuation between your local currency and the U.S. Dollar that may affect the value of the Award or of any amounts due to you pursuant to the settlement of the RSUs or the subsequent sale of any shares of Common Stock acquired upon settlement.
LANGUAGE. You acknowledge that you are sufficiently proficient in the English language, or have consulted with an advisor who is sufficiently proficient in English, so as to allow you to understand the terms and conditions of this Agreement. If you have received this Agreement or any other documents
related to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.
FOREIGN ASSET/ACCOUNT, EXCHANGE CONTROL AND TAX REPORTING. You acknowledge that, depending on your country, there may be certain foreign asset and/or account reporting requirements or exchange control restrictions which may affect your ability to acquire or hold the Award or the shares of Common Stock or cash received from participating in the Plan (including proceeds from the sale of shares and dividends paid on shares) in a brokerage or bank account outside your country. You may be required to report such accounts, assets or related transactions to the tax or other authorities in your country. You also may be required to repatriate sale proceeds or other funds received as a result of participating in the Plan to your country through a designated bank or broker and/or within a certain time after receipt. You acknowledge that you are responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements and should consult your personal legal and tax advisors on this matter.
INSIDER TRADING RESTRICTIONS/MARKET ABUSE LAWS. You may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including but not limited to the United States and your country, which may affect your ability to accept, acquire, sell or otherwise dispose of shares of Common Stock, rights to shares of Common Stock (e.g., RSUs) or rights linked to the value of shares of Common Stock during such times as you are considered to have “inside information” regarding the Company (as defined by the laws in applicable jurisdictions). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company. You acknowledge that it is your responsibility to comply with any applicable restrictions and you should speak with your personal legal advisor on this matter.
AUSTRALIA
TAX INFORMATION. It is intended that Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies to the Award granted under the Plan, such that the Award will be subject to deferred taxation.
SECURITIES LAW INFORMATION. There are legal consequences associated with participating in the Plan. You should ensure that you understand these consequences before participating in the Plan. Any information given by or on behalf of the Company is general information only. You should obtain your own financial product advice from an independent person who is licensed by the Australian Securities and Investments Commission (“ASIC”) to give advice about participating in the Plan.
The grant of RSUs under the terms of the Plan and the Agreement does not require disclosure under the Corporations Act 2001 (Cth) (the “Corporations Act”). No document provided to you in connection with your participation in the Plan (including the Agreement):
•is a prospectus for purposes of the Corporations Act; or
•has been filed or reviewed by a regulator in Australia (including ASIC).
You should not rely on any oral statements made in connection with your participation in the Plan. You should rely only upon the statements contained in the Agreement and the Plan when considering whether to participate in the Plan.
In the event that shares of Common Stock are issued to you under the Plan, the value of such shares will be affected by the Australian / U.S. dollar exchange rate, in addition to fluctuations in value caused by the fortunes of the Company.
If you offer any shares for sale to a person or entity resident in Australia, the offer may be subject to disclosure requirements under Australian law (in addition to any requirements under the Plan and this Agreement). You should consult your personal legal advisor prior to making any such offer to ensure compliance with the applicable requirements.
CANADA
TERMINATION OF CONTINUOUS SERVICE. This provision replaces subsections (i) and (j) of the Nature of Grant provision of this Appendix:
For purposes of the RSUs, your Continuous Service will be considered terminated, and the right (if any) to vest in the RSUs will terminate effective, as of the date that is the earliest of: (a) the date your employment or service relationship with the Company or any of its Affiliates is terminated, (b) the date you receive notice of termination of your employment or service relationship with the Company or an Affiliate, and (c) the date you are no longer actively providing services to the Company and its Affiliates, in any case regardless of any notice period or period of pay in lieu of such notice required under applicable employment law in the jurisdiction where you are employed or providing services or the terms of your employment agreement, if any; in the event the date you are no longer providing active service cannot be reasonably determined under the terms of this Agreement and/or the Plan, the Board or the chief executive of the Company (or a designee thereof) shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the RSUs (including whether you may still be considered to be providing services while on a leave of absence). You will not earn or be entitled to any pro-rated vesting for that portion of time before the date on which your right to vest terminates (as determined under this provision) nor will you be entitled to any compensation for lost vesting. Notwithstanding the foregoing, if applicable employment standards legislation explicitly requires continued entitlement to vesting during a statutory notice period, your right to vest in the RSUs under the Plan, if any, will terminate effective as of the last day of your minimum statutory notice period.
DATA PRIVACY. This provision supplements the Data Privacy provision of Appendix A:
You hereby authorize the Company or any Affiliate, including the employer, and any agents or representatives to (i) discuss with and obtain all relevant information from all personnel, professional or non-professional, involved in the administration and operation of the Plan, and (ii) disclose and discuss any and all information relevant to the Plan with their advisors. You further authorize the Company or any Affiliate, including the employer, and any agents or representatives to record such information and to keep such information in your employee file.
SECURITIES LAW INFORMATION. The sale or other disposal of the shares of Common Stock acquired under the Plan may not take place within Canada. If the Common Stock is registered under the Securities Act, you will be permitted to sell shares of Common Stock acquired under the Plan through the designated broker appointed under the Plan, provided the resale of shares of Common Stock takes place outside Canada through the facilities of the exchange on which the shares of Common Stock are then listed. You should consult your personal legal advisor prior to selling shares of Common Stock to ensure compliance with any applicable requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You are required to report foreign property on form T1135 (Foreign Income Verification Statement) if the total cost of the foreign property exceeds C$100,000 at any time in the year. Foreign property includes shares of Common Stock acquired under the Plan and may include the RSUs. The RSUs must be reported--generally at a nil cost--if the C$100,000 cost threshold is exceeded because of other foreign property held. If shares of Common Stock are acquired, their cost generally is the adjusted cost base (“ACB”) of the shares. The ACB ordinarily would equal the fair market value of the shares at the time of acquisition, but if other shares of Common Stock are owned, this ACB may need to be averaged with the ACB of the other shares. The form T1135 generally must be filed by April 30 of the following year. You should consult your personal tax advisor to ensure compliance with the applicable reporting requirements.
The following provisions apply only if you reside in Quebec:
LANGUAGE CONSENT. The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.
CONSENTEMENT RELATIF À LA LANGUE UTILISÉE. Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention («Agreement»), ainsi que de tous documents, avis et procédures judiciaires, exécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à, la présente convention.
DENMARK
DANISH STOCK OPTION ACT. By accepting this Award, you acknowledge that you have received an Employer Statement, if you are entitled to receive one, translated into Danish, which is provided to comply with the Danish Stock Option Act, as amended with effect from January 1, 2019.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. If you establish an account holding shares of Common Stock or cash outside of Denmark, you must report the account and deposits on your annual tax return in the section on foreign affairs and income. You should consult your personal tax advisor to ensure compliance with the applicable reporting requirements.
FINLAND
There are no country-specific provisions.
FRANCE
NATURE OF THE AWARD This provision supplements Section 1 of the Agreement:
The RSUs granted under this Agreement are not intended to qualify for special tax and social security treatment pursuant to Sections L. 225-197-1 to L. 225-197-6 of the French Commercial Code, as amended.
LANGUAGE CONSENT. You confirm having read and understood the documents relating to the Plan, including the Agreement, with all terms and conditions included therein, which were provided in the English language. You accept the terms of those documents accordingly.
CONSENTEMENT RELATIF À LA LANGUE UTILISÉE. Vous confirmez avoir lu et compris le Plan et cette convention («Agreement»), incluant tous leurs terms et conditions, qui ont été transmis en langue anglaise. Vouz acceptez les dispositions de ces documents en connaissance de cause.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. If you maintain a foreign bank account, you must report such account to the French tax authorities when filing your annual tax return. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
GERMANY
EXCHANGE CONTROL INFORMATION. Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank (Bundesbank). In case of payments in connection with securities (including proceeds realized upon the sale of shares of Common Stock or the receipt of dividends), the report must be made by the 5th day of the month following the month in which the payment was received. The report must be filed electronically and the form of report (“Allgemeine Meldeportal Statistik”) can be accessed via the Bundesbank’s website (www.bundesbank.de) in both German and English. You should consult your personal legal advisor to ensure compliance with the applicable reporting requirements.
INDIA
EXCHANGE CONTROL INFORMATION. You must repatriate any funds received from participation in the Plan (e.g., proceeds from the sale of shares of Common Stock) within such time as prescribed under applicable Indian exchange control laws, which may be amended from time to time. You should obtain a foreign inward remittance certificate (“FIRC”) from the bank where you deposit the foreign currency and maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Company or your employer requests proof of repatriation. You should consult your personal legal advisor to ensure compliance with the applicable requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You must declare the following items in your annual tax return: (i) any foreign assets held (including shares of Common Stock acquired under the Plan), and (ii) any foreign bank accounts for which you have signing authority. You should consult your personal tax advisor to ensure compliance with the applicable requirements.
IRELAND
There are no country-specific provisions.
ITALY
ACKNOWLEDGEMENT OF SPECIFIC PROVISIONS You acknowledge that you have read and specifically and expressly approve the following sections of the Agreement: Vesting; Lock-Up Period; Transfer Restrictions; Restriction on Transfer and Right of First Refusal; Right of Repurchase; Responsibility for Taxes; Investment Representations; Miscellaneous; Governing Law and Venue.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. If, at any time during the fiscal year, you hold foreign financial assets (including RSUs and shares of Common Stock) which may generate income taxable in Italy, you are required to report these assets on your annual tax return (UNICO Form, RW Schedule) for the year during which the assets are held (or on a special form if no tax return is
due). These reporting obligations will also apply to Italian residents who are the beneficial owners of foreign financial assets under Italian money laundering provisions. You should consult your personal tax advisor to ensure compliance with the applicable requirements.
JAPAN
EXCHANGE CONTROL INFORMATION. If you acquire shares of Common Stock valued at more than JPY 100,000,000 in a single transaction, you must file a Securities Acquisition Report with the Ministry of Finance through the Bank of Japan within twenty (20) days of the acquisition of the shares. You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You are required to report details of any assets held outside Japan as of December 31st (including shares of Common Stock acquired under the Plan), to the extent such assets have a total net fair market value exceeding JPY 50,000,000. Such report is due by March 15th each year. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
NETHERLANDS
There are no country-specific provisions.
NEW ZEALAND
SECURITIES LAW INFORMATION. WARNING: You are being offered RSUs which, upon vesting in accordance with the terms of the Agreement and the Plan, will enable you to acquire shares of Company Stock. The shares of Common Stock, if issued, will give you a stake in the ownership of the Company. You may receive a return if dividends are paid.
If the Company runs into financial difficulties and is wound up, you will be paid only after all creditors and holders of preference shares (if any) have been paid. You may lose some or all of your investment, if any.
New Zealand law normally requires people who offer financial products to give information to investors before they invest. This information is designed to help investors to make an informed decision. The usual rules do not apply to this offer because it is a small offer. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.
You should ask questions, read all documents carefully, and seek independent financial advice before committing yourself.
POLAND
EXCHANGE CONTROL INFORMATION. Polish residents holding foreign securities (e.g., shares of Common Stock) and/or maintaining accounts abroad must report information to the National Bank of Poland on transactions and balances of the securities and cash deposited in such accounts if the value of such securities and cash (when combined with all other assets possessed abroad) exceeds PLN 7 million. If required, the reports must be filed on a quarterly basis on special forms that are available on the website of the National Bank of Poland. Further, if you transfer funds in excess of EUR 15,000 into or out of Poland, the funds must be transferred via a bank account. You are required to retain the documents
connected with a foreign exchange transaction for a period of five years, as measured from the end of the year in which such transaction occurred. You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
SINGAPORE
SECURITIES LAW INFORMATION. The Award is granted pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”) under which it is exempt from the prospectus and registration requirements and is not made with a view to the underlying shares of Common Stock being subsequently offered for sale to any other party. The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that the RSUs are subject to section 257 of the SFA and that you will not be able to make any offer or subsequent sale of the shares of Common Stock in Singapore, unless such offer or sale is made (1) after six (6) months from the Date of Grant or (2) pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA.
DIRECTOR REPORTING INFORMATION If you are a director, associate director or shadow director of an Affiliate in Singapore, you may be subject to certain notification requirements under the Singapore Companies Act, regardless of whether you are a Singapore resident or employed in Singapore. These requirements include an obligation to notify the Singapore Affiliate in writing of an interest in the Company (e.g., RSUs or shares of Common Stock) or in any Affiliate within two days of (i) its acquisition or disposal, (ii) any change in a previously-disclosed interest (e.g., upon vesting of the RSUs), or (iii) becoming a director, associate director or shadow director of an Affiliate in Singapore, if such an interest exists at that time. If you are the chief executive officer (“CEO”) of an Affiliate in Singapore and the above notification requirements are determined to apply to the CEO of an Affiliate in Singapore, the above notification requirements also may apply.
SLOVAK REPUBLIC
There are no country-specific provisions.
SPAIN
NATURE OF GRANT. This provision supplements the Nature of Grant provision of this Appendix:
By accepting the Award, you consent to participation in the Plan and acknowledge that you have received a copy of the Plan.
You understand that the Company has unilaterally, gratuitously and in its sole discretion decided to grant Awards under the Plan to individuals who may be employees of the Company or one of its Affiliates throughout the world. The decision is limited and entered into based upon the express assumption and condition that any Award will not economically or otherwise bind the Company or any Affiliate, including your employer, on an ongoing basis, other than as expressly set forth in the Agreement. Consequently, you understand that the Award is given on the assumption and condition that the Award shall not become part of any employment or other service contract (whether with the Company or any Affiliate, including your employer) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever. Furthermore, you understand and freely accept that there is no guarantee that any benefit whatsoever shall arise from the Award, which is gratuitous and discretionary, since the future value of the Award and the underlying shares of Common Stock is unknown, indeterminable, and unpredictable.
Further, your participation in the Plan is expressly conditioned on your continued and active rendering of service, such that, unless otherwise set forth in the Plan, if your Continuous Service terminates for any reason, your participation in the Plan will cease immediately. This will be the case, for example, even if (a) you are considered to be unfairly dismissed without good cause (i.e., subject to a “despido improcedente”); (b) you are dismissed for disciplinary or objective reasons or due to a collective dismissal; (c) your Continuous Service ceases due to a change of work location, duties or any other employment or contractual condition; (d) your Continuous Service ceases due to a unilateral breach of contract by the Company or any of its Affiliates; or (e) your Continuous Service terminates for any other reason whatsoever. Consequently, upon termination of your Continuous Service for any of the above reasons, you automatically lose any right to participate in the Plan on the date of your termination of Continuous Service, as described in the Plan and the Agreement.
SECURITIES LAW INFORMATION. The grant of the RSUs and the shares of Common Stock issued pursuant to the vesting of the RSUs are considered a private placement outside the scope of Spanish laws on public offerings and issuances of securities. Neither the Plan nor this Agreement have been registered with the Comisión National del Mercado de Valores and do not constitute a public offering prospectus.
EXCHANGE CONTROL INFORMATION. The acquisition, ownership and disposition of shares must be declared for statistical purposes to the Dirección General de Comercio e Inversiones (the “DGCI”), which is a department of the Ministry of Economy and Competitiveness. If you acquire shares through the use of a Spanish financial institution, that institution will automatically make the declaration to the DGCI for the you; otherwise, you will be required make the declaration by filing the appropriate form with the DGCI. Generally, the declaration must be made in January for shares owned as of December 31 of) the prior year; however, if the value of shares acquired or sold exceeds certain thresholds, the declaration must be filed within one (1) month of the acquisition or sale, as applicable.
Further, you are required to electronically declare to the Bank of Spain any foreign accounts (including brokerage accounts held abroad), any foreign instruments (including shares acquired under the Plan), and any transactions with non-Spanish residents (including any payments of cash or shares made to the Grantee under the Plan) depending on the balances in such accounts together with the value of such instruments as of December 31 of the relevant year, or the volume of transactions with non-Spanish residents during the relevant year.
You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. To the extent you hold rights or assets outside of Spain with a value in excess of EUR 50,000 per type of right or asset (e.g., shares, cash, etc.) as of December 31 each year, you will be required to report information on such rights and assets on your annual tax return for such year. After such rights and assets are initially reported, the reporting obligation will apply for subsequent years only if the value of any previously-reported rights or assets increases by more than EUR 20,000. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
SWEDEN
AUTHORIZATION TO WITHHOLD. The following provision supplements Section 11 ("Responsibility for Taxes") of the Agreement:
Without limiting the Company’s and your employer’s authority to satisfy their withholding obligations for Tax-Related Items as set forth in Section 11 of the Agreement, in accepting the Award, you authorize the Company to withhold shares of Common Stock or to sell shares of Common Stock otherwise issuable to you upon vesting/settlement to satisfy Tax-Related Items, regardless of whether the Company and/or your employer have an obligation to withhold such Tax-Related Items.
SWITZERLAND
SECURITIES LAW INFORMATION. Neither this document nor any other materials relating to the Award (i) constitute a prospectus according to articles 35 et seq. of the Swiss Federal Act on Financial Services (“FinSA”), (ii) may be publicly distributed nor otherwise made publicly available in Switzerland to any person other than an employee of the Company or his or her employer or (iii) has been or will be filed with, approved or supervised by any Swiss reviewing body according to article 51 FinSA or any Swiss regulatory authority, including the Swiss Financial Market Supervisory Authority (FINMA).
UNITED KINGDOM
RESPONSIBILITY FOR TAXES. The following supplements Section 11 ("Responsibility for Taxes") of the Agreement:
(a)Without limitation to Section 11 of the Agreement, you agree that you are liable for all Tax-Related Items and you hereby covenant to pay all such Tax-Related Items, as and when requested by the Company and/or your employer or by Her Majesty’s Revenue & Customs (“HMRC”) (or any other tax authority or any other relevant authority). You also agree to indemnify and keep indemnified the Company and/or your employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on your behalf.
(b)As a condition of the vesting of, or the receipt of any benefit pursuant to, the RSUs, you agree to accept any liability for secondary Class 1 National Insurance contributions which may be payable by the Company and/or the Employer in connection with the RSUs and any event giving rise to Tax-Related Items (the “Employer NICs”). Without prejudice to the foregoing, by accepting the Award, you agree to enter into a joint election with the Company or the Employer, the form of such joint election being formally approved by HMRC (the “NIC Joint Election”), a copy of which is attached to this Appendix A and any other required consent or election. You further agree to execute such other joint elections as may be required between you and any successor to the Company and/or the Employer. You further agree that the Company and/or the Employer may collect the Employer NICs from you by any of the means set forth in Section 11 of the Agreement.
(c)As a condition of the vesting of, or the receipt of any benefit pursuant to, the RSUs, you agree to enter into a joint election within Section 431 of the U.K. Income Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”) in respect of computing any tax charge on the acquisition of “restricted securities” (as defined in Section 423 and 424 of ITEPA 2003) (the “Section 431 Election”), a copy of which is attached to this Appendix, and that you will not
revoke such election at any time. The Section 431 Election will be to treat the shares acquired pursuant to the RSUs as if such shares were not restricted securities (for U.K. tax purposes only). You further agree to execute the Section 431 Election in hard copy even if you have executed the Section 431 Election by virtue of accepting the Agreement through the Company's online acceptance procedures.
(d)As a condition of the vesting of, or the receipt of any benefit pursuant to, the RSUs, you agree to sign, promptly, all documents required by the Company to effect the terms of the foregoing provisions.
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
IMPORTANT NOTE ON THE JOINT ELECTION FOR TRANSFER OF LIABILITY FOR EMPLOYER NATIONAL INSURANCE CONTRIBUTIONS TO THE EMPLOYEE
As a condition of the vesting of, or the receipt of any benefit pursuant to, your restricted stock units (“RSUs”) granted under the Snowflake Inc. 2012 Equity Incentive Plan, as amended from time to time (the “Plan”), you are required to enter into a joint election to transfer to you any liability for employer National Insurance contributions (the “Employer NICs”) that may arise in connection with the RSUs and in connection with future RSUs, if any, that may be granted to you under the Plan (the “NIC Joint Election”).
By entering into the Joint Election:
•you agree that any liability for Employer NICs that may arise in connection with or pursuant to the vesting of the RSUs and the acquisition of shares of common stock of Snowflake Inc. (the “Company”) or other taxable events in connection with the RSUs will be transferred to you; and
•you authorize the Company and/or your employer to recover an amount sufficient to cover this liability by any method set forth in the Agreement and/or the NIC Joint Election.
To enter into the NIC Joint Election, please indicate your agreement where indicated on the acceptance screen. Please note that your acceptance indicates your agreement to be bound by all of the terms of the NIC Joint Election.
Please note that even if you have indicated your acceptance of this NIC Joint Election electronically, you may still be required to sign a paper copy of this NIC Joint Election (or a substantially similar form) if the Company determines such is necessary to give effect to the NIC Joint Election.
Please read the terms of the NIC Joint Election carefully before accepting the Agreement and the NIC Joint Election. You should print and keep a copy of this NIC Joint Election for your records.
NIC Joint Election
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
ELECTION TO TRANSFER THE EMPLOYER’S LIABILITY FOR
NATIONAL INSURANCE LIABILITY TO THE EMPLOYEE
(UK EMPLOYEES)
1.PARTIES
This Election is between:
(A)The individual who has gained authorized access to this Election (the “Employee”), who is employed by one of the employing companies listed in the attached schedule (the “Employer”) and who is eligible to receive restricted stock units (“RSUs”) pursuant to the terms and conditions of the Snowflake Inc. 2012 Equity Incentive Plan, as amended from time to time (the “Plan”), and
(B)Snowflake Inc. of 450 Concar Drive, San Mateo, CA 94402, USA (the “Company”), which may grant RSUs under the Plan and is entering into this Election on behalf of the Employer.
2.PURPOSE OF ELECTION
2.1This Election relates to all RSUs granted to Employee under the Plan up to the termination date of the Plan.
2.2In this Election the following words and phrases have the following meanings:
“Taxable Event” means any event giving rise to Relevant Employment Income.
“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003.
“Relevant Employment Income” from RSUs on which Employer’s National Insurance Contributions becomes due is defined as:
(i)an amount that counts as employment income of the earner under section 426 ITEPA (restricted securities: charge on certain post-acquisition events);
(ii)an amount that counts as employment income of the earner under section 438 of ITEPA (convertible securities: charge on certain post-acquisition events); or
(iii)any gain that is treated as remuneration derived from the earner's employment by virtue of section 4(4)(a) SSCBA, including without limitation:
(A)the acquisition of securities pursuant to the RSUs (within the meaning of section 477(3)(a) of ITEPA);
(B)the assignment (if applicable) or release of the RSUs in return for consideration (within the meaning of section 477(3)(b) of ITEPA);
(C)the receipt of a benefit in connection with the RSUs, other than a benefit within (i) or (ii) above (within the meaning of section 477(3)(c) of ITEPA).
“SSCBA” means the Social Security Contributions and Benefits Act 1992.
2.3This Election relates to the Employer’s secondary Class 1 National Insurance Contributions (the “Employer’s Liability”) which may arise in respect of Relevant Employment Income in respect of the RSUs pursuant to section 4(4)(a) and/or paragraph 3B(1A) of Schedule 1 of the SSCBA.
2.4This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the SSCBA or the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
2.5This Election does not apply to the extent that it relates to relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part VII of ITEPA (employment income: securities with artificially depressed market value).
2.6Any reference to the Company and/or the Employer shall include that entity’s successors in title and assigns as permitted in accordance with the terms of the Plan and the Agreement. This Election will have effect in respect of the RSUs and any awards which replace or replaced the RSUs following their grant in circumstances where section 483 of ITEPA applies.
3.ELECTION
The Employee and the Company jointly elect that the entire liability of the Employer to pay the Employer’s Liability that arises on any Relevant Employment Income is hereby transferred to the Employee. The Employee understands that by accepting the RSU (by signing the related Restricted Stock Unit Grant Notice (the “Grant Notice”) in hard copy or by electronically accepting such Grant Notice), he or she will become personally liable for the Employer’s Liability covered by this Election. This Election is made in accordance with paragraph 3B(1) of Schedule 1 to SSCBA.
4.PAYMENT OF THE EMPLOYER’S LIABILITY
4.1The Employee hereby authorizes the Company and/or the Employer to collect the Employer’s Liability in respect of any Relevant Employment Income from the Employee at any time after the Taxable Event:
(i)by deduction from salary or any other payment payable to the Employee at any time on or after the date of the Taxable Event; and/or
(ii)directly from the Employee by payment in cash or cleared funds; and/or
(iii)by arranging, on behalf of the Employee, for the sale of some of the securities which the Employee is entitled to receive in respect of the RSUs; and/or
(iv)where the proceeds of the gain are to be paid through a third party, by that party withholding an amount from the payment or selling some of the securities which the Employee is entitled to receive in respect of the RSUs; and/or
(v)by any other means specified in the applicable restricted stock unit agreement.
4.2The Company hereby reserves for itself and the Employer the right to withhold the transfer of any securities in respect of the RSUs to the Employee until full payment of the Employer’s Liability is received.
4.3The Company agrees to procure the remittance by the Employer of the Employer’s Liability to HM Revenue and Customs on behalf of the Employee within 14 days after the end of the UK tax month during which the Taxable Event occurs (or within 17 days after the end of the UK tax month during which the Taxable Event occurs, if payments are made electronically).
5.DURATION OF ELECTION
5.1The Employee and the Company agree to be bound by the terms of this Election regardless of whether the Employee is transferred abroad or is not employed by the Employer on the date on which the Employer’s Liability becomes due.
5.2This Election will continue in effect until the earliest of the following:
(i)the Employee and the Company agree in writing that it should cease to have effect;
(ii)on the date the Company serves written notice on the Employee terminating its effect;
(iii)on the date HM Revenue and Customs withdraws approval of this Election; or
(iv)after due payment of the Employer’s Liability in respect of the entirety of the RSUs to which this Election relates or could relate, such that the Election ceases to have effect in accordance with its terms.
5.3This Election will continue in full force regardless of whether the Employee ceases to be an employee of the Employer.
Acceptance by the Employee
The Employee acknowledges that, by accepting the RSUs (by signing the related Restricted Stock Unit Grant Notice in hard copy or by electronically accepting such Grant Notice) or by signing or electronically accepting this Election, the Employee agrees to be bound by the terms of this Election.
Acceptance by the Company
The Company acknowledges that, by arranging for the signature of an authorized representative to appear on this Election, the Company agrees to be bound by the terms of this Election.
By:
SCHEDULE OF EMPLOYER COMPANIES
The following Employer(s) shall be covered by the Joint Election:
Snowflake Computing U.K. Limited
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Address:
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c/o Fieldfisher
Riverbank House, 2 Swan Lane
London, United Kingdom EC4R 3TT
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Corporation Tax Number:
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[Corporation Tax Number Intentionally Omitted]
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Company Registration Number
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10611715
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PAYE Reference
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[PAYE Reference Intentionally Omitted]
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SECTION 431 ELECTION
SNOWFLAKE INC.
RESTRICTED STOCK UNIT AGREEMENT
(AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN)
JOINT ELECTION UNDER s431 ITEPA 2003
FOR FULL DISAPPLICATION OF CHAPTER 2 INCOME TAX (EARNINGS AND PENSIONS) ACT 2003
(UK EMPLOYEES)
1.Two Part Election
Between
the Employee
who has obtained authorized access to the joint election
and
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the Company (who is the Employee’s employer)
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Snowflake Computing U.K. Limited
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of Company Registration Number
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10611715
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2.Purpose of Election
This joint election is made pursuant to section 431(1) Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”) and applies where employment-related securities, which are restricted securities by reason of section 423 ITEPA, are acquired.
The effect of an election under section 431(1) is that, for the purposes of income tax and National Insurance contributions (“NICs”), the employment-related securities and their market value will be treated as if they were not restricted securities and that sections 425 to 430 ITEPA do not apply. Additional income tax will be payable as a result of this election (with PAYE withholding and NICs being applicable where the securities are Readily Convertible Assets).
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Should the value of the securities fall following the acquisition, it is possible that income tax/NICs that would have arisen because of any future chargeable event (in the absence of an election) would have been less than the income tax/NICs due by reason of this election. Should this be the case, there is no income tax/NICs relief available under Part 7 of ITEPA 2003; nor is it available if the securities acquired are subsequently transferred, forfeited or revert to the original owner.
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3.Application
This joint election is made not later than 14 days after the date of acquisition of the securities by the employee and applies to:
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Number of securities
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All securities
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Description of securities
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Shares of common stock
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Name of issuer of securities
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Snowflake Inc.
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To be acquired by the Employee on or after the date of this Election under the terms of the Snowflake, Inc. 2012 Equity Incentive Plan.
4.Extent of Application
This election disapplies S.431(1) ITEPA: All restrictions attaching to the securities.
5.Declaration
This election will become irrevocable upon the later of its electronic acceptance or the acquisition (and each subsequent acquisition) of employment-related securities to which this election applies.
By accepting the RSUs (by signing the related Restricted Stock Unit Grant Notice (the “Grant Notice”) in hard copy or by electronically accepting such Grant Notice), you hereby agree (inter alia) to be bound by the terms of this Section 431 Election as set out herein.
Note: Where the election is in respect of multiple acquisitions, prior to the date of any subsequent acquisition of a security it may be revoked by agreement between the employee and employer in respect of that and any later acquisition.
ATTACHMENT IV
AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN
SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
ADOPTED BY THE BOARD OF DIRECTORS: SEPTEMBER 4, 2020
APPROVED BY THE STOCKHOLDERS: SEPTEMBER 5, 2020
1.GENERAL.
(a)Purpose. The Company, by means of the Plan, seeks to secure and retain the services of Employees, Directors, and Consultants, to provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and to provide a means by which such persons may be given an opportunity to benefit from increases in value of the Class A Common Stock through the granting of Awards. Capitalized terms not defined in the text are defined in Section 13 below.
(b)Successor to Prior Plan. The Plan is the successor to the Prior Plan. As of the Effective Date, (i) no additional awards may be granted under the Prior Plan; (ii) Returning Shares will become available for issuance pursuant to Awards granted under this Plan (provided, however, that any such shares that are shares of Class B Common Stock shall instead be added to the Share Reserve as shares of Class A Common Stock as described in Section 3(a)); and (iii) all outstanding awards granted under the Prior Plan will remain subject to the terms of the Prior Plan (except to the extent such outstanding awards result in Returning Shares that become available for issuance pursuant to Awards granted under this Plan). All Awards granted under this Plan will be subject to the terms of this Plan.
(c)Available Awards. The Plan provides for the grant of the following Awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) SARs; (iv) Restricted Stock Awards; (v) RSU Awards; (vi) Performance Awards; and (vii) Other Awards.
(d)Adoption Date; Effective Date. The Plan will come into existence on the Adoption Date, but no Award may be granted prior to the Effective Date. In addition, no Award will be exercised (or, in the case of a Restricted Stock Award, RSU Award, Performance Stock Award, or Other Award, will be granted) and no Performance Cash Award will be settled unless and until the Plan has been approved by the stockholders of the Company, which approval will be within 12 months after the Adoption Date.
2.ADMINISTRATION.
(a)Administration by Board. The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in subsection (c) below.
(b)Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i)To determine from time to time: (1) which of the persons eligible under the Plan will be granted Awards; (2) when and how each Award will be granted; (3) what type or combination of types of Award will be granted; (4) the provisions of each Award granted (which need not be identical), including the time or times when a person will be permitted to receive an issuance of Class A Common Stock or other payment pursuant to an Award; (5) the number of shares of Class A Common Stock or cash equivalent with respect to which an Award will be granted to each such person; (6) the Fair Market Value applicable to an Award; and (7) the terms of any Performance Award that is not valued in whole or
in part by reference to, or otherwise based on, the Class A Common Stock, including the amount of cash payment or other property that may be earned and the timing of payment.
(ii)To construe and interpret the Plan and Awards granted under it, and to establish, amend, and revoke rules and regulations for its administration. The Board, in the exercise of these powers, may correct any defect, omission, or inconsistency in the Plan or in any Award Agreement, in a manner and to the extent it deems necessary or expedient to make the Plan or Award fully effective.
(iii)To settle all controversies regarding the Plan and Awards granted under it.
(iv)To accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest, notwithstanding the provisions in the Award Agreement stating the time at which it may first be exercised or the time during which it will vest.
(v)To prohibit the exercise of any Option, SAR, or other exercisable Award during a period of up to 30 days prior to the consummation of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation, or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Class A Common Stock or the share price of the Class A Common Stock including any Corporate Transaction, for reasons of administrative convenience.
(vi)To suspend or terminate the Plan at any time. Suspension or termination of the Plan will not Materially Impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant.
(vii)To amend the Plan in any respect the Board deems necessary or advisable; provided, however, that stockholder approval will be required for any amendment to the extent required by Applicable Law. Except as provided above, rights under any Award granted before amendment of the Plan will not be Materially Impaired by any amendment of the Plan unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.
(viii)To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of (1) Section 422 of the Code regarding “incentive stock options” or (2) Rule 16b-3.
(ix)To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided, however, that, a Participant’s rights under any Award will not be Materially Impaired by any such amendment unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.
(x)Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Awards.
(xi)To adopt such rules, procedures, and sub-plans as are necessary or appropriate to permit and facilitate participation in the Plan by, or take advantage of specific tax treatment for Awards granted to, Employees, Directors, or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications to the
Plan or any Award Agreement made to ensure or facilitate compliance with the laws or regulations of the relevant foreign jurisdiction).
(xii)To effect, at any time and from time to time, subject to the consent of any Participant whose Award is Materially Impaired by such action, (1) the reduction of the exercise, purchase, or strike price of any outstanding Option or SAR; (2) the cancellation of any outstanding Option or SAR and the grant in substitution therefor of (A) a new Option, SAR, Restricted Stock Award, RSU Award, or Other Award, under the Plan or another equity plan of the Company, covering the same or a different number of shares of Class A Common Stock, (B) cash and/or (C) other valuable consideration (as determined by the Board); or (3) any other action that is treated as a repricing under generally accepted accounting principles.
(c)Delegation to Committee.
(i)General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to another Committee or a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. Each Committee may retain the authority to concurrently administer the Plan with the Committee or subcommittee to which it has delegated its authority hereunder and may, at any time, revest in such Committee some or all of the powers previously delegated. The Board may retain the authority to concurrently administer the Plan with any Committee and may, at any time, revest in the Board some or all of the powers previously delegated.
(ii)Rule 16b-3 Compliance. To the extent an Award is intended to qualify for the exemption from Section 16(b) of the Exchange Act that is available under Rule 16b-3 of the Exchange Act, the Award will be granted by the Board or a Committee that consists solely of two or more Non-Employee Directors, as determined under Rule 16b-3(b)(3) of the Exchange Act and thereafter any action establishing or modifying the terms of the Award will be approved by the Board or a Committee meeting such requirements to the extent necessary for such exemption to remain available.
(d)Effect of Board’s Decision. All determinations, interpretations, and constructions made by the Board or any Committee in good faith will not be subject to review by any person and will be final, binding, and conclusive on all persons.
(e)Delegation to an Officer. The Board or any Committee may delegate to one (1) or more Officers the authority to do one or both of the following: (i) to the extent permitted by Applicable Law, designate Employees who are not Officers to be recipients of Awards and, to the extent permitted by Applicable Law, the terms thereof, and (ii) determine the number of shares of Class A Common Stock to be subject to such Awards granted to such Employees. Any such Awards will be granted on the applicable form of Award Agreement most recently approved for use by the Board or the Committee, unless otherwise provided in the resolutions approving the delegation authority. Notwithstanding anything to the contrary herein, neither the Board nor any Committee may delegate the authority to determine the Fair Market Value to an Officer who is acting solely in the capacity of an Officer (and not also as a Director).
3.SHARES SUBJECT TO THE PLAN.
(a)Share Reserve. Subject to adjustment in accordance with Section 3(c) and any adjustments as necessary to implement any Capitalization Adjustments, the aggregate number of shares of Class A Common Stock that may be issued pursuant to Awards will not exceed 34,100,000 shares, plus a number of shares of Class A Common Stock equal to the number of Returning Shares, if any, as such shares become available from time to time. In addition, subject to any adjustments as necessary to implement any Capitalization Adjustments, such aggregate number of shares of Class A Common Stock will automatically increase on February 1 of each fiscal year for a period of ten years ending on (and including) February 1, 2030 in an amount equal to 5% of the total number of shares of Capital Stock outstanding on January 31 of the preceding fiscal year; provided, however, that the Board may act prior to February 1 of a given fiscal year to provide that the increase for such year will be a lesser number of shares of Class A Common Stock.
(b)Aggregate Incentive Stock Option Limit. Notwithstanding anything to the contrary in Section 3(a) and subject to any adjustments as necessary to implement any Capitalization Adjustments, the aggregate maximum number of shares of Class A Common Stock that may be issued pursuant to the exercise of Incentive Stock Options is a number of shares of Class A Common Stock equal to three (3) multiplied by the Share Reserve.
(c)Share Reserve Operation.
(i)Limit Applies to Class A Common Stock Issued Pursuant to Awards. For clarity, the Share Reserve is a limit on the number of shares of Class A Common Stock that may be issued pursuant the Plan. As a single share may be subject to grant more than once (e.g., if a share subject to a Stock Award is forfeited, it may be made subject to grant again as provided in subsection 3(c)(iii) below), the Share Reserve does not limit the granting of Awards, except that the Company will keep available at all times the number of shares of Class A Common Stock reasonably required to satisfy its obligations to issue shares pursuant to such Awards. Shares may be issued in connection with a merger or acquisition as permitted by, as applicable, Nasdaq Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, NYSE American Company Guide Section 711, or other applicable rules, and such issuance will not reduce the number of shares available for issuance under the Plan.
(ii)Actions that Do Not Constitute Issuance of Class A Common Stock and Do Not Reduce Share Reserve. The following actions do not result in an issuance of shares under the Plan, and accordingly do not reduce the number of shares subject to the Share Reserve and available for issuance under the Plan: (1) the expiration or termination of any portion of an Award without the shares covered by such portion of the Award having been issued, (2) the settlement of any portion of an Award in cash (i.e., the Participant receives cash rather than Class A Common Stock), (3) the withholding of shares that would otherwise be issued by the Company to satisfy the exercise, strike, or purchase price of an Award; or (4) the withholding of shares that would otherwise be issued by the Company to satisfy a tax withholding obligation in connection with an Award.
(iii)Reversion of Previously Issued Shares of Class A Common Stock to Share Reserve. The following shares of Class A Common Stock previously issued pursuant to an Award and accordingly initially deducted from the Share Reserve will be added back to the Share Reserve and again become available for issuance under the Plan: (1) any shares that are forfeited back to or repurchased by the Company because of a failure to meet a contingency or condition required for the vesting of such shares; (2) any shares that are reacquired by the Company to satisfy the exercise, strike, or purchase price
of an Award; and (3) any shares that are reacquired by the Company to satisfy a tax withholding obligation in connection with an Award.
(d)Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Class A Common Stock, including shares repurchased by the Company on the open market or otherwise.
4.ELIGIBILITY AND LIMITATION.
(a)Eligible Award Recipients. Subject to the terms of the Plan, Employees, Directors, and Consultants are eligible to receive Awards.
(b)Specific Award Limitations.
(i)Limitations on Incentive Stock Option Recipients. Incentive Stock Options may be granted only to Employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and (f) of the Code).
(ii)Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Class A Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds U.S. $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).
(iii)Limitations on Incentive Stock Options Granted to Ten Percent Stockholders. A Ten Percent Stockholder may not be granted an Incentive Stock Option unless (i) the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant of such Option and (ii) the Option is not exercisable after the expiration of five years from the date of grant of such Option.
(iv)Limitations on Nonstatutory Stock Options and SARs. Nonstatutory Stock Options and SARs may not be granted to Employees, Directors, and Consultants who are providing Continuous Service only to any “parent” of the Company (as such term is defined in Rule 405) unless the stock underlying such Awards is treated as “service recipient stock” under Section 409A because the Awards are granted pursuant to a corporate transaction (such as a spin off transaction) or unless such Awards otherwise comply with the distribution requirements of Section 409A.
(c)Non-Employee Director Compensation Limit. The aggregate value of all compensation granted or paid, as applicable, to any individual for service as a Non-Employee Director with respect to any calendar year, including Awards granted and cash fees paid by the Company to such Non-Employee Director, will not exceed (i) U.S. $750,000 in total value or (ii) in the event such Non-Employee Director is first appointed or elected to the Board during such calendar year, U.S. $1,000,000 in total value, in each case calculating the value of any equity awards based on the grant date fair value of such equity awards for financial reporting purposes.
5.OPTIONS AND STOCK APPRECIATION RIGHTS.
Each Option and SAR will have such terms and conditions as determined by the Board. Each Option will be designated in writing as an Incentive Stock Option or Nonstatutory Stock Option at the time of grant; provided, however, that if an Option is not so designated, then such Option will be a Nonstatutory Stock Option, and the shares purchased upon exercise of each type of Option will be separately accounted for. Each SAR will be denominated in shares of Class A Common Stock equivalents. The terms and conditions of separate Options and SARs need not be identical; provided, however, that each Option Agreement and SAR Agreement will conform (through incorporation of provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
(a)Term. Subject to Section 4(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of ten years from the date of grant of such Award or such shorter period specified in the Award Agreement.
(b)Exercise or Strike Price. Subject to Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will not be less than 100% of the Fair Market Value on the date of grant of such Award. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value on the date of grant of such Award if such Award is granted pursuant to an assumption of, or substitution for, another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Sections 409A and, if applicable, 424(a) of the Code.
(c)Exercise Procedure and Payment of Exercise Price for Options. In order to exercise an Option, the Participant must provide notice of exercise to the Plan Administrator in accordance with the procedures specified in the Option Agreement or otherwise provided by the Company. The Board has the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment. The exercise price of an Option may be paid, to the extent permitted by Applicable Law and as determined by the Board, by one or more of the following methods of payment to the extent set forth in the Option Agreement:
(i)by cash or check, bank draft, or money order payable to the Company;
(ii)pursuant to a “cashless exercise” program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the Class A Common Stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the exercise price to the Company from the sales proceeds;
(iii)by delivery to the Company (either by actual delivery or attestation) of shares of Class A Common Stock that are already owned by the Participant free and clear of any liens, claims, encumbrances, or security interests, with a Fair Market Value on the date of exercise that does not exceed the exercise price, provided that (1) at the time of exercise, the Class A Common Stock is publicly traded, (2) any remaining balance of the exercise price not satisfied by such delivery is paid by the Participant in cash or other permitted form of payment, (3) such delivery would not violate any Applicable Law or agreement restricting the redemption of the Class A Common Stock, (4) any certificated shares are endorsed or accompanied by an executed assignment separate from certificate, and (5) such shares have
been held by the Participant for any minimum period necessary to avoid adverse accounting treatment as a result of such delivery;
(iv)if the Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Class A Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value on the date of exercise that does not exceed the exercise price, provided that (1) such shares used to pay the exercise price will not be exercisable thereafter and (2) any remaining balance of the exercise price not satisfied by such net exercise is paid by the Participant in cash or other permitted form of payment; or
(v)in any other form of consideration that may be acceptable to the Board and permissible under Applicable Law.
(d)Exercise Procedure and Payment of Appreciation Distribution for SARs. In order to exercise any SAR, the Participant must provide notice of exercise to the Plan Administrator in accordance with the SAR Agreement. The appreciation distribution payable to a Participant upon the exercise of a SAR will not be greater than an amount equal to the excess of (i) the aggregate Fair Market Value on the date of exercise of a number of shares of Class A Common Stock equal to the number of Class A Common Stock equivalents that are vested and being exercised under such SAR, over (ii) the strike price of such SAR. Such appreciation distribution may be paid to the Participant in the form of Class A Common Stock or cash (or any combination of Class A Common Stock and cash) or in any other form of payment, as determined by the Board and specified in the SAR Agreement.
(e)Transferability. Options and SARs may not be transferred to third-party financial institutions for value. The Board may impose such additional limitations on the transferability of an Option or SAR as it determines. In the absence of any such determination by the Board, the following restrictions on the transferability of Options and SARs will apply, provided that except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration and provided, further, that if an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer:
(i)Restrictions on Transfer. An Option or SAR will not be transferable, except by will or by the laws of descent and distribution, and will be exercisable during the lifetime of the Participant only by the Participant; provided, however, that the Board may, in its sole discretion, permit transfer of an Option or SAR in a manner that is not prohibited by applicable tax and securities laws upon the Participant’s request, including to a trust if the Participant is considered to be the sole beneficial owner of such trust (as determined under Section 671 of the Code and applicable state law) while such Option or SAR is held in such trust, provided that the Participant and the trustee enter into a transfer and other agreements required by the Company.
(ii)Domestic Relations Orders. Notwithstanding the foregoing, subject to the execution of transfer documentation in a format acceptable to the Company and subject to the approval of the Board or a duly authorized Officer, which approval the Board or authorized Officer is not required to provide in its or his or her sole discretion, an Option or SAR may be transferred pursuant to a domestic relations order, official marital settlement agreement, or other divorce or separation instrument as permitted by Treasury Regulations Section 1.421-1(b)(2) or comparable non-U.S. law.
(iii)Beneficiary Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering written notice to the Company or to any third party
designated by the Company, in a form approved by the Company (or the designated broker), designate a third party who, upon the death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Class A Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time and for any reason, including due to any conclusion by the Company that such designation would be inconsistent with the provisions of Applicable Law. In the absence of such a designation or in the event the Company determines that any such designation does not comply with Applicable Law, upon the death of the Participant, the executor or administrator of the Participant’s estate or the Participant’s legal heirs will be entitled to exercise the Option or SAR and receive the Class A Common Stock or other consideration resulting from such exercise.
(f)Vesting. The Board may impose such restrictions on, or conditions to, the vesting and/or exercisability of an Option or SAR as determined by the Board which may vary. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Options and SARs will cease upon termination of the Participant’s Continuous Service.
(g)Termination of Continuous Service for Cause. Except as explicitly otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service is terminated for Cause, the Participant’s Options and SARs will terminate and be forfeited immediately upon such termination of Continuous Service, and the Participant will be prohibited from exercising any portion (including any vested portion) of such Awards on and after the date of such termination of Continuous Service and the Participant will have no further right, title, or interest in such forfeited Award, the shares of Class A Common Stock subject to the forfeited Award, or any consideration in respect of the forfeited Award.
(h)Post-Termination Exercise Period Following Termination of Continuous Service for Reasons Other than Cause. Subject to Section 5(i), if a Participant’s Continuous Service terminates for any reason other than for Cause, the Participant may exercise his or her Option or SAR to the extent vested, but only within the following period of time or, if applicable, such other period of time provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate; provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 5(a)):
(i)three (3) months following the date of such termination if such termination is a termination without Cause (other than any termination due to the Participant’s Disability or death);
(ii)12 months following the date of such termination if such termination is due to the Participant’s Disability;
(iii)18 months following the date of such termination if such termination is due to the Participant’s death; or
(iv)18 months following the date of the Participant’s death if such death occurs following the date of such termination but during the period such Award is otherwise exercisable (as provided in (i) or (ii) above).
Following the date of such termination, to the extent the Participant does not exercise such Award within the applicable Post-Termination Exercise Period (or, if earlier, prior to the expiration of the maximum term of such Award), such unexercised portion of the Award will terminate, and the Participant
will have no further right, title, or interest in terminated Award, the shares of Class A Common Stock subject to the terminated Award, or any consideration in respect of the terminated Award.
(i)Restrictions on Exercise; Extension of Exercisability. A Participant may not exercise an Option or SAR at any time that the issuance of shares of Class A Common Stock upon such exercise would violate Applicable Law. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason other than for Cause and, at any time during the last 30 days of the applicable Post-Termination Exercise Period: (i) the exercise of the Participant’s Option or SAR would be prohibited solely because the issuance of shares of Class A Common Stock upon such exercise would violate Applicable Law, or (ii) the immediate sale of any shares of Class A Common Stock issued upon such exercise would violate the Company’s Insider Trading Policy, then the applicable Post-Termination Exercise Period will be extended to the last day of the calendar month that commences following the date the Award would otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply if any of the foregoing restrictions apply at any time during such extended exercise period, generally without limitation as to the maximum permitted number of extensions); provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 5(a)).
(j)Non-Exempt Employees. No Option or SAR, whether or not vested, granted to an Employee who is a non-exempt employee for purposes of the U.S. Fair Labor Standards Act of 1938, as amended, will be first exercisable for any shares of Class A Common Stock until at least six months following the date of grant of such Award. Notwithstanding the foregoing, in accordance with the provisions of the U.S. Worker Economic Opportunity Act, any vested portion of such Award may be exercised earlier than six months following the date of grant of such Award in the event of (i) such Participant’s death or Disability, (ii) a Corporate Transaction in which such Award is not assumed, continued or substituted, (iii) a Change in Control, or (iv) such Participant’s retirement (as such term may be defined in the Award Agreement or another applicable agreement or, in the absence of any such definition, in accordance with the Company’s then current employment policies and guidelines). This Section 5(j) is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay.
(k)Whole Shares. Options and SARs may be exercised only with respect to whole shares of Class A Common Stock or their equivalents.
6.AWARDS OTHER THAN OPTIONS AND STOCK APPRECIATION RIGHTS.
(a)Restricted Stock Awards and RSU Awards. Each Restricted Stock Award and RSU Award will have such terms and conditions as determined by the Board; provided, however, that each Restricted Stock Award Agreement and RSU Award Agreement will conform (through incorporation of the provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
(i)Form of Award.
(1)RSAs: To the extent consistent with the Company’s Bylaws, at the Board’s election, shares of Class A Common Stock subject to a Restricted Stock Award may be (i) held in book entry form subject to the Company’s instructions until such shares become vested or any other restrictions lapse, or (ii) evidenced by a certificate, which certificate will be held in such form and manner
as determined by the Board. Unless otherwise determined by the Board, a Participant will have voting and other rights as a stockholder of the Company with respect to any shares subject to a Restricted Stock Award.
(2)RSUs: An RSU Award represents a Participant’s right to be issued on a future date the number of shares of Class A Common Stock that is equal to the number of restricted stock units subject to the RSU Award (which, with respect to Performance Awards, may be expressed as a range of numbers of restricted stock units based on the achievement, if any, of the applicable Performance Goals as determined in accordance with Section 6(b)). As a holder of an RSU Award, a Participant is an unsecured creditor of the Company with respect to the Company's unfunded obligation, if any, to issue shares of Class A Common Stock in settlement of such Award, and nothing contained in the Plan or any RSU Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between a Participant and the Company or an Affiliate or any other person. A Participant will not have voting or any other rights as a stockholder of the Company with respect to any RSU Award (unless and until shares are actually issued in settlement of a vested RSU Award).
(ii)Consideration.
(1)RSA: A Restricted Stock Award may be granted in consideration for (A) cash, check, bank draft, or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of consideration as the Board may determine and permissible under Applicable Law.
(2)RSU: Unless otherwise determined by the Board at the time of grant, the Participant will not be required to make any cash payment to the Company with respect to the grant or vesting of the RSU Award or the issuance of any shares of Class A Common Stock pursuant to the RSU Award. If, at the time of grant, the Board determines that any consideration must be paid by the Participant upon the issuance of any shares of Class A Common Stock in settlement of the RSU Award, such consideration may be paid in any form of consideration as the Board may determine and permissible under Applicable Law.
(iii)Vesting. The Board may impose such restrictions on, or conditions to, the vesting of a Restricted Stock Award or RSU Award as determined by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Restricted Stock Awards and RSU Awards will cease upon termination of the Participant’s Continuous Service.
(iv)Termination of Continuous Service. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason, (i) the Company may receive through a forfeiture condition or a repurchase right any or all of the shares of Class A Common Stock held by the Participant under his or her Restricted Stock Award that have not vested as of the date of such termination as set forth in the Restricted Stock Award Agreement and (ii) any portion of his or her RSU Award that has not vested will be forfeited upon such termination and the Participant will have no further right, title or interest in the RSU Award, the shares of Class A Common Stock issuable pursuant to the RSU Award, or any consideration in respect of the RSU Award.
(v)Dividends and Dividend Equivalents. Dividends or dividend equivalents may be paid or credited, as applicable, with respect to any shares of Class A Common Stock subject to a Restricted Stock Award or RSU Award, as determined by the Board and specified in the Award Agreement.
(vi)Settlement of RSU Awards. An RSU Award may be settled by the issuance of shares of Class A Common Stock or cash (or any combination thereof) or in any other form of payment, as determined by the Board and specified in the RSU Award Agreement. At the time of grant, the Board may determine to impose such restrictions or conditions that delay such delivery to a date following the vesting of the RSU Award.
(b)Performance Awards. With respect to any Performance Award, the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, the other terms and conditions of such Award, and the measure of whether and to what degree such Performance Goals have been attained will be determined by the Board.
(c)Other Awards. Other Awards may be granted either alone or in addition to Awards provided for under Section 5 and the preceding provisions of this Section 6. Subject to the provisions of the Plan, the Board will have sole and complete discretion to determine the persons to whom and the time or times at which such Other Awards will be granted, the number of shares of Class A Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Awards and all other terms and conditions of such Other Awards.
7.ADJUSTMENTS UPON CHANGES IN CLASS A COMMON STOCK; OTHER CORPORATE EVENTS.
(a)Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board shall appropriately and proportionately adjust: (i) the class(es) and maximum number of shares of Class A Common Stock subject to the Plan and the maximum number of shares by which the Share Reserve may annually increase pursuant to Section 3(a), (ii) the class(es) and maximum number of shares that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(b), and (iii) the class(es) and number of securities and exercise price, strike price or purchase price of Class A Common Stock subject to outstanding Awards. The Board shall make such adjustments, and its determination shall be final, binding, and conclusive, provided that in the event the adjustment would result in a fraction of a share of Class A Common Stock, the Company reserves the right to round up or down to the nearest whole share or settle such fraction of a share in cash, taking into consideration applicable laws and accounting guidance.
(b)Dissolution or Liquidation. Except as otherwise provided in the Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Awards (other than Awards consisting of vested and outstanding shares of Class A Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Class A Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Award is providing Continuous Service; provided, however, that the Board may determine to cause some or all Awards to become fully vested, exercisable, and/or no longer subject to repurchase or forfeiture (to the extent such Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.
(c)Corporate Transaction. The following provisions will apply to Awards in the event of a Corporate Transaction except as set forth in Section 10 and unless otherwise provided in the instrument evidencing the Award or any other written agreement between the Company and the Participant or unless otherwise expressly provided by the Board at the time of grant of an Award.
(i)Awards May Be Assumed. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue any or all Awards outstanding under the Plan or may substitute similar awards for Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Class A Common Stock issued pursuant to Awards may be assigned by the Company to the successor of the Company (or the successor’s parent company, if any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation (or its parent) may choose to assume or continue only a portion of an Award or substitute a similar award for only a portion of an Award, or may choose to assume or continue the Awards held by some, but not all Participants. The terms of any assumption, continuation or substitution will be set by the Board.
(ii)Awards Held by Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to Awards that have not been assumed, continued, or substituted and that are held by Participants whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction (referred to as the “Current Participants”), the vesting of such Awards (and, with respect to Options and Stock Appreciation Rights, the time when such Awards may be exercised) will be accelerated in full to a date prior to the effective time of such Corporate Transaction (contingent upon the effectiveness of the Corporate Transaction) as the Board determines (or, if the Board does not determine such a date, to the date that is five days prior to the effective time of the Corporate Transaction), and such Awards will terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Awards will lapse (contingent upon the effectiveness of the Corporate Transaction). With respect to the vesting of Performance Awards that will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection (ii) and that have multiple vesting levels depending on the level of performance, unless otherwise provided in the Award Agreement or any other written agreement or plan, the vesting of such Performance Awards will accelerate at 100% of the target level upon the occurrence of the Corporate Transaction. With respect to the vesting of Awards that will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection (ii) and are settled in the form of a cash payment, such cash payment will be made no later than 30 days following the occurrence of the Corporate Transaction.
(iii)Awards Held by Persons other than Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to Awards that have not been assumed, continued, or substituted and that are held by persons other than Current Participants, such Awards will terminate if not exercised (if applicable) prior to the occurrence of the Corporate Transaction; provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Awards will not terminate and may continue to be exercised notwithstanding the Corporate Transaction.
(iv)Payment for Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event an Award will terminate if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Award may not exercise such Award but will receive a payment, in such form as may be determined by the Board, equal in value, at the effective time, to the excess, if any, of (1) the value of the property the Participant would have received upon the exercise of the Award (including, at the discretion of the Board, any unvested portion of such Award), over (2) any exercise price payable by such holder in connection with such exercise.
(d)Appointment of Stockholder Representative. As a condition to the receipt of an Award under this Plan, a Participant will be deemed to have agreed that the Award will be subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on the Participant’s behalf with respect to any escrow, indemnities, and any contingent consideration.
(e)No Restriction on Right to Undertake Transactions. The grant of any Award under the Plan and the issuance of shares pursuant to any Award does not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization, or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, rights, or options to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Class A Common Stock or the rights thereof or which are convertible into or exchangeable for Class A Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
8.TAX WITHHOLDING
(a)Withholding Authorization. As a condition to acceptance of any Award under the Plan, a Participant authorizes withholding from payroll and any other amounts payable to such Participant, and otherwise agrees to make adequate provision for (including), any sums required to satisfy any U.S. federal, state, local, and/or foreign tax or social insurance contribution withholding obligations of the Company or an Affiliate, if any, which arise in connection with the grant, exercise, vesting, settlement or any aspect of such Award, as applicable. Accordingly, a Participant may not be able to exercise an Award even though the Award is vested, and the Company shall have no obligation to issue shares of Class A Common Stock subject to an Award or any proceeds of the sale of shares of Class A Common Stock acquired pursuant to such Award, unless and until such obligations are satisfied.
(b)Satisfaction of Withholding Obligation. To the extent permitted by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any U.S. federal, state, local, and/or foreign tax or social insurance withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Class A Common Stock from the shares of Class A Common Stock issued or otherwise issuable to the Participant in connection with the Award; (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; (v) allowing a Participant to effectuate a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board; (vi) permitting or requiring the Participant to enter into a “sell to cover” arrangement, or (vii) such other method as may be set forth in the Award Agreement.
(c)No Obligation to Notify or Minimize Taxes; No Liability to Claims. Except as required by Applicable Law, the Company and its Affiliates have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Award. Furthermore, the Company has no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award and will not be liable to any holder of an Award for any adverse tax consequences to such holder in connection with an Award. As a condition to accepting an Award under the Plan, each Participant (i) agrees to not make any claim against the Company, or any of its Officers, Directors, Employees, or Affiliates related to tax liabilities arising from such Award or other Company compensation, and (ii) acknowledges that such Participant was advised to consult with his or her own personal tax, financial, and other legal advisors regarding the tax consequences of the Award and has either done so or knowingly and voluntarily declined to do so. Additionally, each Participant acknowledges any Option or SAR granted under the Plan is exempt from Section 409A only if the exercise or strike price is at least equal to the “fair market value” of the Class A Common Stock on the date of grant as determined by the U.S. Internal Revenue Service and there is no other impermissible deferral of compensation associated with the Award. Additionally, as a condition to accepting an Option or SAR granted under the Plan, each Participant agrees not make any claim against the Company, or any of its Officers, Directors, Employees, or Affiliates in the event that the U.S. Internal Revenue Service asserts that such exercise price or strike price is less than the “fair market value” of the Class A Common Stock on the date of grant as subsequently determined by the U.S. Internal Revenue Service.
(d)Withholding Indemnification. As a condition to accepting an Award under the Plan, in the event that the amount of the Company’s and/or its Affiliate’s withholding obligation in connection with such Award was greater than the amount actually withheld by the Company and/or its Affiliates, each Participant agrees to indemnify and hold the Company and/or its Affiliates harmless from any failure by the Company and/or its Affiliates to withhold the proper amount.
9.MISCELLANEOUS.
(a)Use of Proceeds from Sales of Class A Common Stock. Proceeds from the sale of shares of Class A Common Stock pursuant to Awards will constitute general funds of the Company.
(b)Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions, or minutes) documenting the corporate action approving the grant contain terms (e.g., exercise price, vesting schedule, or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.
(c)Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Class A Common Stock subject to such Award unless and until (i) such Participant has satisfied all requirements for exercise of the Award pursuant to its terms, if applicable, and (ii) the issuance of the Class A Common Stock subject to such Award is reflected in the records of the Company.
(d)No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement, or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or affect the right (if any) of the Company or an Affiliate to terminate at will and without regard to any future vesting opportunity that a Participant may have with respect to any Award (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state or foreign jurisdiction in which the Company or the Affiliate is incorporated, as the case may be. Further, nothing in the Plan, any Award Agreement, or any other instrument executed thereunder or in connection with any Award will constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation, or any other term or condition of employment or service or confer any right or benefit under the Award or the Plan unless such right or benefit has specifically accrued under the terms of the Award Agreement and/or Plan.
(e)Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board (or, in the case of Employees who are not executive officers of the Company, a duly authorized Officer) may determine, to the extent permitted by Applicable Law, to (i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.
(f)Execution of Additional Documents. As a condition to accepting an Award under the Plan, the Participant agrees to execute any additional documents or instruments necessary or desirable, as determined in the Plan Administrator’s sole discretion, to carry out the purposes or intent of the Award, or facilitate compliance with securities and/or other regulatory requirements, in each case at the Plan Administrator’s request.
(g)Electronic Delivery and Participation. Any reference herein or in an Award Agreement to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto), or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access). By accepting any Award, the Participant consents to receive documents by electronic delivery and to participate in the Plan through any online electronic system established and maintained by the Plan Administrator or a third party selected by the Plan Administrator. The form of delivery of any Class A Common Stock (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.
(h)Clawback / Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable Law and any clawback policy that the Company otherwise adopts, to the extent applicable and
permissible under Applicable Law. In addition, the Board may impose such other clawback, recovery, or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Class A Common Stock or other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a Participant’s right to voluntary terminate employment upon a “resignation for good reason,” or for a “constructive termination” or any similar term under any plan of or agreement with the Company or an Affiliate.
(i)Compliance with Law. A Participant will not be issued any shares in respect of an Award unless either (i) the shares are registered under the Securities Act; or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Each Award also must comply with any other Applicable Law governing the Award, and a Participant will not receive shares of Class A Common Stock if the Company determines that the grant, vesting or settlement of an Award or the issuance of shares of Class A Common Stock would be in violation of any Applicable Law. The Company may seek to obtain from a regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Class A Common Stock upon exercise or vesting of the Awards; provided, however, that the Company will not be required to register under the Securities Act or any other Applicable Law the Plan, any Award, or any Class A Common Stock issued or issuable pursuant to any such Award. If the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary or advisable for the lawful issuance and sale of Class A Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Class A Common Stock upon exercise or vesting of such Awards.
(j)Transfer or Assignment of Awards; Issued Shares. Except as expressly provided in the Plan or the form of Award Agreement, Awards granted under the Plan may not be transferred or assigned by the Participant. After the vested shares subject to an Award have been issued, or in the case of Restricted Stock and similar awards, after the issued shares have vested, the holder of such shares is free to assign, hypothecate, donate, encumber, or otherwise dispose of any interest in such shares, provided that any such actions are in compliance with the provisions herein, the terms of the Company’s Insider Trading Policy, and Applicable Law.
(k)Effect on Other Employee Benefit Plans. The value of any Award granted under the Plan, as determined upon grant, vesting or settlement, shall not be included as compensation, earnings, salaries, or other similar terms used when calculating any Participant’s benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company's or any Affiliate's employee benefit plans.
(l)Deferrals. To the extent permitted by Applicable Law, the Board, in its sole discretion, may determine that the delivery of Class A Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may also establish programs and procedures for deferral elections to be made by Participants. Deferrals will be made in accordance with the requirements of Section 409A.
(m)Section 409A. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A, and, to the extent not so exempt, in compliance with the requirements of Section 409A. If the Board determines that any Award granted
hereunder is not exempt from, and is therefore subject to, Section 409A, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Class A Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A is a “specified employee” for purposes of Section 409A, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A without regard to alternative definitions thereunder) will be issued or paid before the date that is six months and one day following the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule.
(n)Choice of Law. This Plan and any controversy arising out of or relating to this Plan shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to conflict of law principles that would result in any application of any law other than the law of the State of Delaware.
10.ADDITIONAL RULES FOR AWARDS SUBJECT TO SECTION 409A.
(a)Application. Unless the provisions of this Section of the Plan are expressly superseded by the provisions in the form of Award Agreement, the provisions of this Section shall apply and shall supersede anything to the contrary set forth in the Award Agreement for a Non-Exempt Award.
(b)Non-Exempt Awards Subject to Non-Exempt Severance Arrangements. To the extent a Non-Exempt Award is subject to Section 409A due to application of a Non-Exempt Severance Arrangement, the following provisions of this subsection (b) apply.
(i)If the Non-Exempt Award vests in the ordinary course during the Participant’s Continuous Service in accordance with the vesting schedule set forth in the Award Agreement, and does not accelerate vesting under the terms of a Non-Exempt Severance Arrangement, in no event will the shares be issued in respect of such Non-Exempt Award any later than the later of: (i) December 31 of the calendar year that includes the applicable vesting date, or (ii) the 60th day that follows the applicable vesting date.
(ii)If vesting of the Non-Exempt Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with the Participant’s Separation from Service, and such vesting acceleration provisions were in effect as of the date of grant of the Non-Exempt Award and, therefore, are part of the terms of such Non-Exempt Award as of the date of grant, then the shares will be earlier issued in settlement of such Non-Exempt Award upon the Participant’s Separation from Service in accordance with the terms of the Non-Exempt Severance Arrangement, but in no event later than the 60th day that follows the date of the Participant’s Separation from Service. However, if at the time the shares would otherwise be issued the Participant is subject to the distribution limitations contained in Section 409A applicable to “specified employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such shares shall not be issued before the date that is six months following the date of such Participant’s Separation from Service, or, if earlier, the date of the Participant’s death that occurs within such six month period.
(iii)If vesting of a Non-Exempt Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with a Participant’s Separation from Service, and such vesting acceleration provisions were not in effect as of the date of grant of the Non-Exempt Award and, therefore, are not a part of the terms of such Non-Exempt Award on the date of grant, then such acceleration of vesting of the Non-Exempt Award shall not accelerate the issuance date of the shares, but the shares shall instead be issued on the same schedule as set forth in the Grant Notice as if they had vested in the ordinary course during the Participant’s Continuous Service, notwithstanding the vesting acceleration of the Non-Exempt Award. Such issuance schedule is intended to satisfy the requirements of payment on a specified date or pursuant to a fixed schedule, as provided under Treasury Regulations Section 1.409A-3(a)(4).
(c)Treatment of Non-Exempt Awards Upon a Corporate Transaction for Employees and Consultants. The provisions of this subsection (c) shall apply and shall supersede anything to the contrary set forth in the Plan with respect to the permitted treatment of any Non-Exempt Award in connection with a Corporate Transaction if the Participant was either an Employee or Consultant upon the applicable date of grant of the Non-Exempt Award.
(i)Vested Non-Exempt Awards. The following provisions shall apply to any Vested Non-Exempt Award in connection with a Corporate Transaction:
(1)If the Corporate Transaction is also a Section 409A Change in Control then the Acquiring Entity may not assume, continue, or substitute the Vested Non-Exempt Award. Upon the Section 409A Change in Control the settlement of the Vested Non-Exempt Award will automatically be accelerated, and the shares will be immediately issued in respect of the Vested Non-Exempt Award. Alternatively, the Company may instead provide that the Participant will receive a cash settlement equal to the Fair Market Value of the shares that would otherwise be issued to the Participant upon the Section 409A Change in Control.
(2)If the Corporate Transaction is not also a Section 409A Change in Control, then the Acquiring Entity must either assume, continue, or substitute each Vested Non-Exempt Award. The shares to be issued in respect of the Vested Non-Exempt Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares, the Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be issued to the Participant on such issuance dates, with the determination of the Fair Market Value of the shares made on the date of the Corporate Transaction.
(ii)Unvested Non-Exempt Awards. The following provisions shall apply to any Unvested Non-Exempt Award unless otherwise determined by the Board pursuant to subsection (e) of this Section.
(1)In the event of a Corporate Transaction, the Acquiring Entity shall assume, continue, or substitute any Unvested Non-Exempt Award. Unless otherwise determined by the Board, any Unvested Non-Exempt Award will remain subject to the same vesting and forfeiture restrictions that were applicable to the Award prior to the Corporate Transaction. The shares to be issued in respect of any Unvested Non-Exempt Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares, the
Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be issued to the Participant on such issuance dates, with the determination of Fair Market Value of the shares made on the date of the Corporate Transaction.
(2)If the Acquiring Entity will not assume, substitute, or continue any Unvested Non-Exempt Award in connection with a Corporate Transaction, then such Award shall automatically terminate and be forfeited upon the Corporate Transaction with no consideration payable to any Participant in respect of such forfeited Unvested Non-Exempt Award. Notwithstanding the foregoing, to the extent permitted and in compliance with the requirements of Section 409A, the Board may in its discretion determine to elect to accelerate the vesting and settlement of the Unvested Non-Exempt Award upon the Corporate Transaction, or instead substitute a cash payment equal to the Fair Market Value of such shares that would otherwise be issued to the Participant, as further provided in subsection (e)(ii) below. In the absence of such discretionary election by the Board, any Unvested Non-Exempt Award shall be forfeited without payment of any consideration to the affected Participants if the Acquiring Entity will not assume, substitute, or continue the Unvested Non-Exempt Awards in connection with the Corporate Transaction.
(3)The foregoing treatment shall apply with respect to all Unvested Non-Exempt Awards upon any Corporate Transaction, and regardless of whether or not such Corporate Transaction is also a Section 409A Change in Control.
(d)Treatment of Non-Exempt Awards Upon a Corporate Transaction for Non-Employee Directors. The following provisions of this subsection (d) shall apply and shall supersede anything to the contrary that may be set forth in the Plan with respect to the permitted treatment of a Non-Exempt Director Award in connection with a Corporate Transaction.
(i)If the Corporate Transaction is also a Section 409A Change in Control then the Acquiring Entity may not assume, continue, or substitute the Non-Exempt Director Award. Upon the Section 409A Change in Control, the vesting and settlement of any Non-Exempt Director Award will automatically be accelerated, and the shares will be immediately issued to the Participant in respect of the Non-Exempt Director Award. Alternatively, the Company may provide that the Participant will instead receive a cash settlement equal to the Fair Market Value of the shares that would otherwise be issued to the Participant upon the Section 409A Change in Control pursuant to the preceding provision.
(ii)If the Corporate Transaction is not also a Section 409A Change in Control, then the Acquiring Entity must either assume, continue, or substitute the Non-Exempt Director Award. Unless otherwise determined by the Board, the Non-Exempt Director Award will remain subject to the same vesting and forfeiture restrictions that were applicable to the Award prior to the Corporate Transaction. The shares to be issued in respect of the Non-Exempt Director Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares, the Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be issued to the Participant on such issuance dates, with the determination of Fair Market Value made on the date of the Corporate Transaction.
(e)If the RSU Award is a Non-Exempt Award, then the provisions in this Section 10(e) shall apply and supersede anything to the contrary that may be set forth in the Plan or the Award Agreement with respect to the permitted treatment of such Non-Exempt Award:
(i)Any exercise by the Board of discretion to accelerate the vesting of a Non-Exempt Award shall not result in any acceleration of the scheduled issuance dates for the shares in respect of the Non-Exempt Award unless earlier issuance of the shares upon the applicable vesting dates would be in compliance with the requirements of Section 409A.
(ii)The Company explicitly reserves the right to earlier settle any Non-Exempt Award to the extent permitted and in compliance with the requirements of Section 409A, including pursuant to any of the exemptions available in Treasury Regulations Section 1.409A-3(j)(4)(ix).
(iii)To the extent the terms of any Non-Exempt Award provide that it will be settled upon a Change in Control or Corporate Transaction, to the extent it is required for compliance with the requirements of Section 409A, the Change in Control or Corporate Transaction event triggering settlement must also constitute a Section 409A Change in Control. To the extent the terms of a Non-Exempt Award provides that it will be settled upon a termination of employment or termination of Continuous Service, to the extent it is required for compliance with the requirements of Section 409A, the termination event triggering settlement must also constitute a Separation From Service. However, if at the time the shares would otherwise be issued to a Participant in connection with a “separation from service” such Participant is subject to the distribution limitations contained in Section 409A applicable to “specified employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such shares shall not be issued before the date that is six months following the date of the Participant’s Separation From Service, or, if earlier, the date of the Participant’s death that occurs within such six month period.
(iv)The provisions in this subsection (e) for delivery of the shares in respect of the settlement of an RSU Award that is a Non-Exempt Award are intended to comply with the requirements of Section 409A so that the delivery of the shares to the Participant in respect of such Non-Exempt Award will not trigger the additional tax imposed under Section 409A, and any ambiguities herein will be so interpreted.
11.SEVERABILITY.
If all or any part of the Plan or any Award Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of the Plan or such Award Agreement not declared to be unlawful or invalid. Any Section of the Plan or any Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
12.TERMINATION OF THE PLAN.
The Board may suspend or terminate the Plan at any time. No Incentive Stock Options may be granted after the tenth anniversary of the earlier of: (i) the Adoption Date, or (ii) the date the Plan is approved by the Company’s stockholders. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
13.DEFINITION.
As used in the Plan, the following definitions apply to the capitalized terms indicated below:
(a)“Acquiring Entity” means the surviving or acquiring corporation (or its parent company) in connection with a Corporate Transaction.
(b)“Adoption Date” means the date the Plan is first approved by the Board or Compensation Committee.
(c)“Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.
(d)“Applicable Law” means shall mean any applicable securities, federal, state, foreign, material local or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (including under the authority of any applicable self-regulating organization such as the Nasdaq Stock Market, New York Stock Exchange, or the Financial Industry Regulatory Authority).
(e)“Award” means any right to receive Class A Common Stock, cash or other property granted under the Plan (including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, an RSU Award, a SAR, a Performance Award, or any Other Award).
(f)“Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an Award. The Award Agreement generally consists of the Grant Notice and the agreement containing the written summary of the general terms and conditions applicable to the Award and which is provided to a Participant along with the Grant Notice.
(g)“Board” means the Board of Directors of the Company (or its designee). Any decision or determination made by the Board shall be a decision or determination that is made in the sole discretion of the Board (or its designee), and such decision or determination shall be final and binding on all Participants.
(h)“Capital Stock” means the Class A Common Stock and the Class B Common Stock.
(i)“Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Class A Common Stock subject to the Plan or subject to any Award after the Adoption Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure, or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
(j)“Cause” has the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) such Participant’s commission of any felony or any crime involving fraud, dishonesty, or moral turpitude whether under the laws of the United States or any state thereof or any comparable non-U.S. law; (ii) such Participant’s attempted commission of, or participation in, a fraud or act of dishonesty against the Company or one of its Affiliates; (iii) such Participant’s intentional, material violation of any contract or agreement between the Participant and the Company or an Affiliate or of any statutory duty owed to the Company or an Affiliate; (iv) such Participant’s unauthorized use or disclosure of the Company’s confidential
information or trade secrets; or (v) such Participant’s gross misconduct. The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause for purposes of the Plan will be made by the Board with respect to Participants who are executive officers of the Company and by the Company’s Chief Executive Officer with respect to Participants who are not executive officers of the Company. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.
(k)“Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events; provided, however, to the extent necessary to avoid adverse personal income tax consequences to the Participant in connection with an Award, any one or more of the following events also constitutes a Section 409A Change in Control:
(i)any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation, or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof, or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;
(ii)there is consummated a merger, consolidation, or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;
(iii)the stockholders of the Company approve, or the Board approves, a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company shall otherwise occur, except for a liquidation into a parent corporation;
(iv)there is consummated a sale, lease, exclusive license, or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which
are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or
(v)individuals who, on the date the Plan is adopted by the Board, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board.
Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in Control shall not include a sale of assets, merger, or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply.
(l)“Class A Common Stock” means Class A common stock of the Company.
(m)“Class B Common Stock” means Class B common stock of the Company.
(n)“Code” means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(o)“Committee” means the Compensation Committee and any other committee of one or more Directors to whom authority has been delegated by the Board or Compensation Committee in accordance with the Plan.
(p) “Company” means Snowflake Inc., a Delaware corporation.
(q)“Compensation Committee” means the Compensation Committee of the Board of Directors of the Company.
(r)“Consultant” means any person, including an advisor or independent contractor, who is (i) engaged by the Company or an Affiliate to render consulting or other services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person.
(s)“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director, or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Director, or Consultant or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however, that if the Entity for which a
Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by Applicable Law, the Board or a duly authorized Officer, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or a duly authorized Officer, including sick leave, military leave, or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may be provided in the Company’s leave of absence policy, if applicable, in the written terms of any leave of absence agreement or policy applicable to the Participant, if applicable, or as otherwise required by Applicable Law. In addition, to the extent required for exemption from or compliance with Section 409A, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of “separation from service” as defined under Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder).
(t)“Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i)a sale or other disposition of all or substantially all, as determined by the Board, of the consolidated assets of the Company and its Subsidiaries;
(ii)a sale or other disposition of at least 50% of the outstanding securities of the Company;
(iii)a merger, consolidation, or similar transaction following which the Company is not the surviving corporation; or
(iv)a merger, consolidation, or similar transaction following which the Company is the surviving corporation but the shares of Capital Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
(u)“Director” means a member of the Board of Directors of the Company.
(v)“determine” or “determined” means as determined by the Board or the Committee (or its designee) in its sole discretion.
(w)“Disability” means, with respect to a Participant, such Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, as provided in Section 22(e)(3) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
(x)“Effective Date” means the IPO Date, provided this Plan is approved by the Company’s stockholders prior to the IPO Date.
(y)“Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.
(z)“Employer” means the Company or the Affiliate of the Company that employs the Participant.
(aa)“Entity” means a corporation, partnership, limited liability company or other entity.
(bb)“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(cc)“Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.
(dd)“Fair Market Value” means, as of any date, unless otherwise determined by the Board, the value of the Class A Common Stock (as determined on a per share or aggregate basis, as applicable) determined as follows:
(i)If the Class A Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value will be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Class A Common Stock) on the date of determination, as reported in a source the Board deems reliable.
(ii)If there is no closing sales price for the Class A Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.
(iii)In the absence of such markets for the Class A Common Stock, or if otherwise determined by the Board, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.
(ee)“Governmental Body” means any: (a) nation, state, commonwealth, province, territory, county, municipality, district, or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign, or other government; (c) governmental or regulatory body, or quasi-governmental body of any nature (including any governmental division, department, administrative agency or bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body, or Entity and any court or other tribunal, and for the avoidance of doubt, any Tax authority) or other body exercising similar powers or authority; or (d) self-regulatory organization (including the Nasdaq Stock Market, New York Stock Exchange, and the Financial Industry Regulatory Authority).
(ff)“Grant Notice” means the notice provided to a Participant that he or she has been granted an Award under the Plan and which includes the name of the Participant, the type of Award, the date of grant of the Award, number of shares of Class A Common Stock subject to the Award or potential cash payment right, (if any), the vesting schedule for the Award (if any) and other key terms applicable to the Award.
(gg)“Incentive Stock Option” means an option granted pursuant to Section 5 of the Plan that is intended to be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.
(hh)“IPO Date” means the date of the underwriting agreement between the Company and the underwriter(s) managing the initial public offering of the Class A Common Stock, pursuant to which the Class A Common Stock is priced for the initial public offering.
(ii)“Materially Impair” means any amendment to the terms of the Award that materially adversely affects the Participant’s rights under the Award. A Participant's rights under an Award will not be deemed to have been Materially Impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant's rights. For example, the following types of amendments to the terms of an Award do not Materially Impair the Participant’s rights under the Award: (i) imposition of reasonable restrictions on the minimum number of shares subject to an Option that may be exercised, (ii) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (iii) to change the terms of an Incentive Stock Option in a manner that disqualifies, impairs or otherwise affects the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (iv) to clarify the manner of exemption from, or to bring the Award into compliance with or qualify it for an exemption from, Section 409A; or (v) to comply with other Applicable Laws.
(jj)“Non-Employee Director” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.
(kk)“Non-Exempt Award” means any Award that is subject to, and not exempt from, Section 409A, including as the result of (i) a deferral of the issuance of the shares subject to the Award which is elected by the Participant or imposed by the Company or (ii) the terms of any Non-Exempt Severance Agreement.
(ll)“Non-Exempt Director Award” means a Non-Exempt Award granted to a Participant who was a Director but not an Employee on the applicable grant date.
(mm)Non-Exempt Severance Arrangement means a severance arrangement or other agreement between the Participant and the Company that provides for acceleration of vesting of an Award and issuance of the shares in respect of such Award upon the Participant’s termination of employment or separation from service (as such term is defined in Section 409A(a)(2)(A)(i) of the Code (and without
regard to any alternative definition thereunder) (“Separation from Service”) and such severance benefit does not satisfy the requirements for an exemption from application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(4), 1.409A-1(b)(9), or otherwise.
(nn)“Nonstatutory Stock Option” means any option granted pursuant to Section 5 of the Plan that does not qualify as an Incentive Stock Option.
(oo)“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.
(pp)“Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Class A Common Stock granted pursuant to the Plan.
(qq)“Option Agreement” means a written agreement between the Company and the Optionholder evidencing the terms and conditions of the Option grant. The Option Agreement includes the Grant Notice for the Option and the agreement containing the written summary of the general terms and conditions applicable to the Option and which is provided to a Participant along with the Grant Notice. Each Option Agreement will be subject to the terms and conditions of the Plan.
(rr)“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
(ss)“Other Award” means an award valued in whole or in part by reference to, or otherwise based on, Class A Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value at the time of grant) that is not an Incentive Stock Option, Nonstatutory Stock Option, SAR, Restricted Stock Award, RSU Award, or Performance Award.
(tt)“Other Award Agreement” means a written agreement between the Company and a holder of an Other Award evidencing the terms and conditions of an Other Award grant. Each Other Award Agreement will be subject to the terms and conditions of the Plan.
(uu)“Own,” “Owned,” “Owner,” “Ownership” means that a person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
(vv)“Participant” means an Employee, Director, or Consultant to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.
(ww)“Performance Award” means an Award that may vest or may be exercised or a cash award that may vest or become earned and paid contingent upon the attainment during a Performance Period of certain Performance Goals and which is granted under the terms and conditions of Section 6(b) pursuant to such terms as are approved by the Board. In addition, to the extent permitted by Applicable Law and set forth in the applicable Award Agreement, the Board may determine that cash or other property may be used in payment of Performance Awards. Performance Awards that are settled in cash or other property are not required to be valued in whole or in part by reference to, or otherwise based on, the Class A Common Stock.
(xx) “Performance Criteria” means the one or more criteria that the Board will select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals will be set by the Board, and may be based on any one of, or combination of, the following: earnings (including earnings per share and net earnings); earnings before interest, taxes, and depreciation; earnings before interest, taxes, depreciation, and amortization; total stockholder return; return on equity or average stockholder’s equity; return on assets, investment, or capital employed; stock price; margin (including gross margin); income (before or after taxes); operating income; operating income after taxes; pre-tax profit; operating cash flow; sales or revenue targets; increases in revenue or product revenue; expenses and cost reduction goals; improvement in or attainment of working capital levels; economic value added (or an equivalent metric); market share; cash flow; cash flow per share; share price performance; debt reduction; customer satisfaction; stockholders’ equity; capital expenditures; debt levels; operating profit or net operating profit; workforce diversity; growth of net income or operating income; billings; financing; regulatory milestones; stockholder liquidity; corporate governance and compliance; intellectual property; personnel matters; progress of partnered programs; partner satisfaction; budget management; partner or collaborator achievements; internal controls, including those related to the Sarbanes-Oxley Act of 2002; investor relations, analysts and communication; implementation or completion of projects or processes; employee retention; strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property); establishing relationships with respect to the marketing, distribution, and sale of the Company’s products; co-development, co-marketing, profit sharing, joint venture, or other similar arrangements; individual performance goals; corporate development and planning goals; bookings goals, including net ACV bookings goals, and other measures of performance selected by the Board or Committee.
(yy)“Performance Goals” means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. The Performance Goals may be based on GAAP or Non-GAAP results, and any actual results may be adjusted by the Board or Committee for one-time items, unbudgeted or unexpected items. In addition, the Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Award Agreement or the written terms of a Performance Cash Award.
(zz)“Performance Period” means the period of time selected by the Board over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to vesting or exercise of an Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.
(aaa)“Plan” means this Snowflake Inc. 2020 Equity Incentive Plan, as amended from time to time.
(bbb)“Plan Administrator” means the person, persons, and/or third-party administrator designated by the Company to administer the day to day operations of the Plan and the Company’s other equity incentive programs.
(ccc)“Post-Termination Exercise Period” means the period following termination of a Participant’s Continuous Service within which an Option or SAR is exercisable, as specified in Section 5(h).
(ddd)“Prior Plan’s Available Reserve” means the number of shares available for the grant of new awards under the Prior Plan as of immediately prior to the Effective Date.
(eee)“Prior Plan” means the Snowflake Inc. 2012 Equity Incentive Plan.
(fff)“Prospectus” means the document containing the Plan information specified in Section 10(a) of the Securities Act.
(ggg)“Restricted Stock Award” or “RSA” means an Award of shares of Class A Common Stock which is granted pursuant to the terms and conditions of Section 6(a).
(hhh)“Restricted Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. The Restricted Stock Award Agreement includes the Grant Notice for the Restricted Stock Award and the agreement containing the written summary of the general terms and conditions applicable to the Restricted Stock Award and which is provided to a Participant along with the Grant Notice. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.
(iii)“Returning Shares” means shares subject to outstanding stock awards granted under the Prior Plan and that following the Effective Date: (A) are not issued because such stock award or any portion thereof expires or otherwise terminates without all of the shares covered by such stock award having been issued; (B) are not issued because such stock award or any portion thereof is settled in cash; (C) are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of such shares; (D) are withheld or reacquired to satisfy the exercise, strike, or purchase price; or (E) are withheld or reacquired to satisfy a tax withholding obligation; provided, however, that any such shares that are shares of Class B Common Stock shall instead be added to the Share Reserve as shares of Class A Common Stock as described in Section 3(a).
(jjj)“RSU Award” or “RSU” means an Award of restricted stock units representing the right to receive an issuance of shares of Class A Common Stock which is granted pursuant to the terms and conditions of Section 6(a).
(kkk)“RSU Award Agreement” means a written agreement between the Company and a holder of an RSU Award evidencing the terms and conditions of an RSU Award. The RSU Award Agreement includes the Grant Notice for the RSU Award and the agreement containing the written summary of the general terms and conditions applicable to the RSU Award and which is provided to a Participant along with the Grant Notice. Each RSU Award Agreement will be subject to the terms and conditions of the Plan.
(lll)“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.
(mmm)“Rule 405” means Rule 405 promulgated under the Securities Act.
(nnn)“Section 409A” means Section 409A of the Code and the regulations and other guidance thereunder.
(ooo)“Section 409A Change in Control” means a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company’s assets, as provided in Section 409A(a)(2)(A)(v) of the Code and Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).
(ppp)“Securities Act” means the U.S. Securities Act of 1933, as amended.
(qqq)“Share Reserve” means the number of shares available for issuance under the Plan as set forth in Section 3(a).
(rrr)“Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Class A Common Stock that is granted pursuant to the terms and conditions of Section 5.
(sss)“SAR Agreement” means a written agreement between the Company and a holder of a SAR evidencing the terms and conditions of a SAR grant. The SAR Agreement includes the Grant Notice for the SAR and the agreement containing the written summary of the general terms and conditions applicable to the SAR and which is provided to a Participant along with the Grant Notice. Each SAR Agreement will be subject to the terms and conditions of the Plan.
(ttt)“Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding Capital Stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Com.pany, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.
(uuu)“Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.
(vvv)“Insider Trading Policy” means the Company’s policy permitting certain individuals to sell Company shares only during certain “window” periods and/or otherwise restricting the ability of certain individuals to transfer or encumber Company shares, as in effect from time to time.
(www)“Unvested Non-Exempt Award” means the portion of any Non-Exempt Award that had not vested in accordance with its terms upon or prior to the date of any Corporate Transaction.
(xxx)“U.S.” means the United States of America.
(yyy)“Vested Non-Exempt Award” means the portion of any Non-Exempt Award that had vested in accordance with its terms upon or prior to the date of a Corporate Transaction.
SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
STOCK OPTION GRANT NOTICE
Snowflake Inc. (the “Company”), pursuant to its 2020 Equity Incentive Plan (the “Plan”), has granted to you (“Optionholder”) an option to purchase the number of shares of the Class A Common Stock set forth below (the “Option”). Your Option is subject to all of the terms and conditions as set forth herein and in the Plan, the Global Stock Option Agreement, including any appendices thereto (the “Appendices”), and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Global Stock Option Agreement (including the Appendices) shall have the meanings set forth in the Plan or the Global Stock Option Agreement, as applicable.
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Optionholder:
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Date of Grant:
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Vesting Commencement Date:
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Number of Shares of Class A Common Stock Subject to Option:
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Exercise Price (Per Share):
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Total Exercise Price:
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Expiration Date:
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Type of Grant: [Incentive Stock Option] OR [Nonstatutory Stock Option]
Exercise and
Vesting Schedule: Subject to the Optionholder’s Continuous Service through each applicable vesting date, the Option will vest as follows:
[__________]
Optionholder Acknowledgements: By your signature below or by electronic acceptance or authentication in a form authorized by the Company, you understand and agree that:
•The Option is governed by this Stock Option Grant Notice, and the provisions of the Plan and the Global Stock Option Agreement (including the Appendices) and the Notice of Exercise, all of which are made a part of this document. This Grant Notice, the Global Stock Option Agreement, and the Appendices (collectively, the “Agreement”) may not be modified, amended or revised except in a writing signed by you and a duly authorized officer of the Company, unless otherwise provided in the Plan.
•If the Option is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options granted to you) cannot be first exercisable for more than U.S. $100,000 in value (measured by exercise price) in any calendar year. Any excess over U.S. $100,000 is a Nonstatutory Stock Option.
•You consent to receive the Agreement, the Plan, the Prospectus, and any other Plan-related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
•You have read and are familiar with the provisions of the Plan, the Agreement and the Prospectus. In the event of any conflict between the provisions in this Agreement (including the Grant Notice, the Global Option Agreement, and the Appendices), the Notice of Exercise, or the Prospectus and the terms of the Plan, the terms of the Plan shall control.
•This Agreement sets forth the entire understanding between you and the Company regarding the acquisition of Class A Common Stock in connection with this Option and supersedes all prior oral and written agreements, promises, and/or representations on that subject.
•Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes.
•Notwithstanding the above, if you have not actively accepted the Option within 90 days of the Date of Grant set forth in this Stock Option Grant Notice, you are deemed to have accepted the Option, subject to all of the terms and conditions of the Plan and Agreement.
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SNOWFLAKE INC.
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OPTIONHOLDER:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
GLOBAL STOCK OPTION AGREEMENT
As reflected by your Stock Option Grant Notice (“Grant Notice”) Snowflake Inc. (the “Company”) has granted you an option under its 2020 Equity Incentive Plan (the “Plan”) to purchase a number of shares of Class A Common Stock at the exercise price indicated in your Grant Notice (the “Option”). The terms of your Option as specified in the Grant Notice and this Global Stock Option Agreement, including the Appendices described below, constitute your Agreement (the Grant Notice, Global Stock Option Agreement, and Appendices, collectively, are referred to as the “Agreement”). Capitalized terms not explicitly defined in this Global Stock Option Agreement but defined in the Grant Notice or the Plan shall have the same definitions as in the Grant Notice or Plan, as applicable.
The general terms and conditions applicable to your Option are as follows:
1.GOVERNING PLAN DOCUMENT. Your Option is subject to all the provisions of the Plan. Your Option is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the Option Agreement and the provisions of the Plan, the provisions of the Plan shall control.
2.EXERCISE.
(a)You may generally exercise the vested portion of your Option for whole shares of Class A Common Stock at any time during its term by delivery of payment of the exercise price and applicable withholding taxes and other required documentation to the Plan Administrator in accordance with the exercise procedures established by the Plan Administrator, which may include an electronic submission. Please review the Plan, which may restrict or prohibit your ability to exercise your Option during certain periods.
(b)To the extent permitted by Applicable Law, you may pay your Option exercise price as follows:
i.cash, check, bank draft or money order;
ii.subject to Company and/or Committee consent at the time of exercise, pursuant to a “cashless exercise” program as further described in the Plan if at the time of exercise the Class A Common Stock is publicly traded;
iii.subject to Company and/or Committee consent at the time of exercise, by delivery of previously owned shares of Class A Common Stock as further described in the Plan; or
iv.subject to Company and/or Committee consent at the time of exercise, if the Option is a Nonstatutory Stock Option, by a “net exercise” arrangement as further described in the Plan.
3.TERM. You may not exercise your Option before the commencement of its term or after its term expires. The term of your option commences on the Date of Grant and expires upon the earliest of the following:
(a)immediately upon the termination of your Continuous Service for Cause;
(b)three (3) months after the termination of your Continuous Service for any reason other than Cause, Disability or death;
(c)12 months after the termination of your Continuous Service due to your Disability;
(d)18 months after your death if you die during your Continuous Service;
(e)immediately upon a Corporate Transaction if the Board has determined that the Option will terminate in connection with a Corporate Transaction,
(f)the Expiration Date indicated in your Grant Notice; or
(g)the day before the 10th anniversary of the Date of Grant.
Notwithstanding the foregoing, if you die during the period provided in Section 3(b), the term of your Option shall not expire until the earlier of (i) 18 months after your death, (ii) upon any termination of the Option in connection with a Corporate Transaction, (iii) the Expiration Date indicated in your Grant Notice, or (iv) the day before the tenth anniversary of the Date of Grant. Additionally, the Post-Termination Exercise Period of your Option may be extended as provided in the Plan.
To obtain the U.S. federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the date of grant of your Option and ending on the day three months before the date on which your option becomes exercisable, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. If the Company provides for the extended exercisability of your Option under certain circumstances for your benefit, your Option will not necessarily be treated as an Incentive Stock Option if you exercise your Option more than three months after the date your employment terminates.
4.WITHHOLDING OBLIGATIONS.
(a)Regardless of any action taken by the Company or, if different, the Affiliate to which you provide Continuous Service (the “Service Recipient”) with respect to any income tax, social insurance, payroll tax, fringe benefits tax, payment on account, or other tax related items associated with the grant, vesting or exercise of the Option or sale of the underlying Class A Common Stock or other tax-related items related to your participation in the Plan and legally applicable to you (the “Tax Liability”), you hereby acknowledge and agree that the Tax Liability is your ultimate responsibility and may exceed the amount, if any, actually withheld by the Company or the Service Recipient. You further acknowledge that the Company and the Service Recipient (i) make no representations or undertakings regarding any Tax Liability in connection with any aspect of this Option, including, but not limited to, the grant, vesting or exercise of the Option, the issuance of Class A Common Stock pursuant to such exercise, the subsequent sale of shares of Class A Common Stock, and the payment of any dividends on the shares; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate your Tax Liability or achieve a particular tax result. Further, if you are
subject to Tax Liability in more than one jurisdiction, you acknowledge that the Company and/or the Service Recipient (or former service recipient, as applicable) may be required to withhold or account for Tax Liability in more than one jurisdiction.
(b)Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to the Company and/or the Service Recipient to satisfy all Tax Liability. As further provided in Section 8 of the Plan, you hereby authorize the Company and any applicable Service Recipient to satisfy any applicable withholding obligations with regard to the Tax Liability by one or a combination of the following methods: (i) causing you to pay any portion of the Tax Liability in cash or cash equivalent in a form acceptable to the Company; (ii) withholding from any compensation otherwise payable to you by the Company or the Service Recipient; (iii) withholding from the proceeds of the sale of shares of Class A Common Stock issued upon exercise of the Option (including by means of a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company, or by means of the Company acting as your agent to sell sufficient shares of Class A Common Stock for the proceeds to settle such withholding requirements, on your behalf pursuant to this authorization without further consent); (iv) withholding shares of Class A Common Stock otherwise issuable to you upon the exercise of the Option, provided that to the extent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the express prior approval of the Board or the Company’s Compensation Committee; and/or (v) any other method determined by the Company to be in compliance with Applicable Law. Furthermore, you agree to pay the Company or the Service Recipient any amount the Company or the Service Recipient may be required to withhold, collect or pay as a result of your participation in the Plan or that cannot be satisfied by the means previously described. In the event it is determined that the amount of the Tax Liability was greater than the amount withheld by the Company or the Service Recipient, you agree to indemnify and hold the Company and/or the Service Recipient (as applicable) harmless from any failure by the Company or the applicable Service Recipient to withhold the proper amount.
(c)The Company may withhold or account for your Tax Liability by considering statutory withholding amounts or other withholding rates applicable in your jurisdiction(s), including (i) maximum applicable rates in your jurisdiction(s), in which case you may receive a refund of any over-withheld amount in cash (whether from applicable tax authorities or the Company) and you will have no entitlement to the equivalent amount in Class A Common Stock or (ii) minimum or such other applicable rates in your jurisdiction(s), in which case you may be solely responsible for paying any additional Tax Liability to the applicable tax authorities or to the Company and/or the Service Recipient. If the Tax Liability withholding obligation is satisfied by withholding shares of Class A Common Stock, for tax purposes, you are deemed to have been issued the full number of shares of Class A Common Stock subject to the exercised portion of the Option, notwithstanding that a number of the shares of Class A Common Stock is held back solely for the purpose of paying such Tax Liability.
(d)You acknowledge that you may not be able to exercise your Option even though the Option is vested, and that the Company shall have no obligation to issue shares of Class A Common Stock, in each case, unless and until you have fully satisfied any applicable Tax Liability, as determined by the Company. Unless any withholding obligation for the Tax Liability is satisfied, the Company shall have no obligation to deliver to you any Class A Common Stock in respect of the Option.
5.INCENTIVE STOCK OPTION DISPOSITION REQUIREMENT. If your option is an Incentive Stock Option, you must notify the Company in writing within 15 days after the date of any disposition of any of the shares of the Class A Common Stock issued upon exercise of your option that
occurs within two years after the date of your option grant or within one year after such shares of Class A Common Stock are transferred upon exercise of your option.
6.TRANSFERABILITY. Except as otherwise provided in the Plan, your Option is not transferable, except by will or by the applicable laws of descent and distribution, and is exercisable during your life only by you.
7.CORPORATE TRANSACTION. Your Option is subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on your behalf with respect to any escrow, indemnities and any contingent consideration.
8.NO LIABILITY FOR TAXES. As a condition to accepting the Option, you hereby (a) agree to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to any Tax Liability arising from the Option or any other compensation from the Company or the Service Recipient and (b) acknowledge that you were advised to consult with your own personal tax, financial and other legal advisors regarding the tax consequences of the Option and have either done so or knowingly and voluntarily declined to do so. Additionally, if you are subject to taxation in the U.S., (i) you acknowledge that the Option is exempt from Section 409A only if the exercise price is at least equal to the “fair market value” of the Class A Common Stock on the date of grant as determined by the U.S. Internal Revenue Service and there is no other impermissible deferral of compensation associated with the Option, and (ii) as a condition to accepting the Option, you agree not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the U.S. Internal Revenue Service asserts that such exercise is less than the “fair market value” of the Class A Common Stock on the date of grant as subsequently determined by the U.S. Internal Revenue Service.
9.DATA PRIVACY. In order for the Company to administer the Option and your participation in the Plan, the Company must collect, process and transfer certain of your personal data, as further described in Appendix A to this Global Stock Option Agreement. Appendix A constitutes part of this Agreement.
10.SEVERABILITY. If any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
11.OTHER DOCUMENTS. You hereby acknowledge receipt of or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Prospectus. In addition, you acknowledge receipt of the Company’s Insider Trading Policy.
12.QUESTIONS. If you have questions regarding these or any other terms and conditions applicable to your Option, including a summary of the applicable U.S. federal income tax consequences, please see the Prospectus (or, for a summary of the tax consequences if you are based outside the U.S., the employee information supplement to the Prospectus applicable for your jurisdiction).
13.LOCK-UP. By accepting the Option, you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale with respect to any shares of Class A Common Stock, Class B Common Stock or other securities of the Company held by you, for a period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2241 or any successor or similar rules or regulation (the “Lock-Up Period”); provided, however, that nothing contained in this section will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Class A Common Stock until the end of such period. You also agree that any transferee of any shares of Class A Common Stock (or other securities) of the Company held by you will be bound by this Section 13. The underwriters of the Company’s stock are intended third party beneficiaries of this Section 13 and will have the right, power and authority to enforce the provisions hereof as though they were a party hereto.
14.GOVERNING LAW. This Agreement and any controversy arising out of or relating to this Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to conflict of law principles that would result in any application of any law other than the law of the State of Delaware.
15.WAIVER. You acknowledge that a waiver by the Company of any provision, or breach thereof, of this Agreement on any occasion shall not operate or be construed as a waiver of such provision on any other occasion or as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other Participant.
16.IMPOSITION OF OTHER REQUIREMENTS. The Company reserves the right to impose other requirements on your participation in the Plan, on the Option and on any Class A Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
17.NO ADVICE REGARDING GRANT. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Class A Common Stock. You should consult with your own personal tax, financial and/or legal advisors regarding the Tax Liability arising in connection with the Option and by accepting the Option, you have agreed that you have done so or knowingly and voluntarily declined to do so.
18.COUNTRY-SPECIFIC PROVISIONS. The Option shall be subject to any additional or different terms and conditions set forth in Appendix B to this Global Stock Option Agreement. Moreover, if you relocate to one of the countries included in Appendix B, the additional or different terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendix B constitutes part of this Agreement.
SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
APPENDIX A TO GLOBAL STOCK OPTION AGREEMENT
This Appendix A forms part of the Agreement. Capitalized terms used but not defined in this Appendix A have the meanings set forth in the Plan and/or in the Global Stock Option Agreement.
DATA PRIVACY. To participate in the Plan, you need to review the information provided in (a) through (f) below and, where applicable, consent to the processing of Personal Data (as defined below) by the Company and the third parties according to (g) below.
If you are based in the European Union (“EU”), the European Economic Area (“EEA”), Switzerland or the United Kingdom (collectively, “EEA+”), Snowflake Inc., with its registered address at 450 Concar Drive, San Mateo, CA 94402, USA is the controller responsible for the processing of your Personal Data in connection with the Agreement and the Plan. The Company's representative in the EU is Snowflake Computing Netherlands B.V. with its primary office located at FOZ Building, Gustav Mahleraan 300-314, 1082 ME Amsterdam, Netherlands.
(a)Data Collection and Usage. The Company collects, processes and uses Personal Data about you, including your name, home address, email address and telephone number, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any shares of Class A Common Stock or directorships held in the Company, details of all options over shares of Class A Common Stock or any other entitlement to shares of Class A Common Stock awarded, canceled, exercised, purchased, vested, unvested or outstanding in your favor, which the Company receives from you or the Service Recipient (“Personal Data”). In order for you to participate in the Plan, the Company will collect Personal Data for purposes of allocating shares of Class A Common Stock and implementing, administering and managing the Plan.
If you are based in the EEA+, the Company’s legal basis for the processing of Personal Data is the necessity of the processing for the Company's performance of its obligations under the Agreement and the Company’s legitimate interest of complying with statutory obligations to which it is subject.
If you are based in any other jurisdiction, the Company relies on your consent to the processing of Personal Data, as further described below.
(b)Stock Plan Administration and Service Provides. The Company may transfer Personal Data to Cooley LLP, Fidelity Stock Plan Services LLC, Computershare Trust Company, N.A., and/or Solium Plan Managers LLC (each, an “administrator”), each of which is an independent service provider based in the U.S., which is assisting the Company with the implementation, administration and management of the Plan. Administrators may open an account for you to receive and, when applicable, trade shares of Class A Common Stock. You may be asked to acknowledge, or agree to, separate terms and data processing practices with any administrator, with such acknowledgement or agreement being a condition to your ability to participate in the Plan.
(c)International Data Transfers. Personal Data will be transferred from your country to the U.S., where the Company and its service providers are based. You understand and acknowledge that the U.S. has enacted data privacy laws that are different from those applicable in your country of residence. The EU Commission has determined that an appropriate level of protection can be achieved by implementing safeguards such as the Standard Contractual Clauses adopted by the EU Commission.
If you are based in the EEA+, Personal Data will be transferred from the EEA+ to the Company based on the Standard Contractual Clauses adopted by the EU Commission that are entered into by the Company and its Affiliates located in the EEA+. The onward transfer of your Personal Data by the Company to the administrators will be based on a data processing agreement or the EU Standard Contractual Clauses. You may request a copy of such appropriate safeguards at privacy@snowflake.com.
If you are based in any other jurisdiction, the Company relies on your consent to the transfer of Personal Data to the U.S., as further described below.
(d)Data Retention. The Company will use Personal Data only as long as necessary to implement, administer and manage my participation in the Plan or as required to comply with legal or regulatory obligations, including, without limitation, under tax and securities laws. When the Company no longer needs Personal Data for any of the above purposes, which will generally be seven (7) years after you participate in the Plan, the Company will cease to use Personal Data and remove it from its systems. If the Company keeps Personal Data longer, it would be to satisfy legal or regulatory obligations and the Company’s legal basis would be relevant laws or regulations (if you are in the EEA+) and/or your consent (if you are outside the EEA+).
(e)Data Subject Rights. You understand that you may have a number of rights under data privacy laws in your jurisdiction. Subject to the conditions set out in the applicable law and depending on where you are based, such rights may include the right to (i) request access to, or copies of, Personal Data processed by the Company, (ii) rectification of incorrect Personal Data, (iii) deletion of Personal Data, (iv) restrictions on the processing of Personal Data, (v) object to the processing of Personal Data for legitimate interests, (vi) portability of Personal Data, (vii) lodge complaints with competent authorities in your jurisdiction, and/or to (viii) receive a list with the names and addresses of any potential recipients of Personal Data. To receive clarification regarding these rights or to exercise these rights, you can contact privacy@snowflake.com.
(f)Necessary Disclosure of Personal Data. You understand that providing the Company with Personal Data is necessary for the performance of the Agreement and that your refusal to provide Personal Data or, where applicable, consent to process and transfer Personal Data would make it impossible for the Company to perform its contractual obligations and may affect your ability to participate in the Plan.
(g)Data Privacy Consent. If you are located in a jurisdiction outside the EEA+, you hereby voluntarily and unambiguously consent to the collection, use and transfer, in electronic or other form, of Personal Data, as described above and in any other Award materials, by and among, as applicable, the Company, the Service Recipient and any Affiliate for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that you may, at any time, refuse or withdraw the consents herein, in any case without cost, by contacting in writing privacy@snowflake.com. If you do not consent or later seek to revoke your consent, your employment status or service with the Service Recipient will not be affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant the Option or other equity awards to you or administer or maintain such awards. Therefore, you understand that refusing or withdrawing consent may affect your ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, you should contact privacy@snowflake.com.
SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
APPENDIX B TO GLOBAL STOCK OPTION AGREEMENT
Terms and Conditions
This Appendix B forms part of the Agreement and includes special terms and conditions that govern the Option granted to you under the Plan if you reside or work in one of the jurisdictions listed below. Capitalized terms used but not defined in this Appendix B have the meanings set forth in the Plan and/or in the Global Stock Option Agreement.
If you are a citizen or resident (or are considered as such for local law purposes) of a country other than the country in which you are currently residing and/or working, or if you relocate to another country after the grant of the Option, the Company shall, in its discretion, determine to what extent the special terms and conditions contained herein shall be applicable to you.
Notifications
This Appendix B may also include information regarding exchange controls and certain other issues of which you should be aware with respect to participation in the Plan. The information is based on the securities, exchange control, and other laws in effect in the respective countries as of August 2020. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information in this Appendix B as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at the time you vest in the Option, exercise the Option and acquire shares of Class A Common Stock, or sell shares of Class A Common Stock acquired under the Plan.
In addition, the information contained below is general in nature and may not apply to your particular situation. You are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.
ALL COUNTRIES OUTSIDE THE UNITED STATES
NATURE OF GRANT. In accepting this Option, you acknowledge, understand and agree that:
(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b)the grant of the Option is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past;
(c)all decisions with respect to future option or other grants, if any, will be at the sole discretion of the Company;
(d)the grant of the Option and your participation in the Plan will not create a right to continue to serve the Company or the Service Recipient in the capacity in effect at the time the Award was granted;
(e)the grant of the Option and your participation in the Plan will not be interpreted as forming or amending an employment or service contract with the Company or the Service Recipient, and will not interfere with the right (if any) of the Company or the Service Recipient, as applicable, to terminate your Continuous Service;
(f)you are voluntarily participating in the Plan;
(g)the Option and the Class A Common Stock subject to the Option, and the income from and value of same, are not intended to replace any pension rights or compensation;
(h)the Option and the Class A Common Stock subject to the Option, and the income from and value of same, are not part of normal or expected compensation for purposes of, including but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar payments;
(i)unless otherwise agreed with the Company in writing, the Option and the Class A Common Stock subject to the Option, and the income from and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of an Affiliate;
(j)the future value of the underlying Class A Common Stock is unknown, indeterminable and cannot be predicted with certainty; if the value of the shares of Class A Common Stock does not increase, the Option will have no value; if you acquire shares of Class A Common Stock pursuant to the exercise of the Option, the value of the shares may increase or decrease, even below the exercise price;
(k)no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from the termination of your Continuous Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment or labor laws in the jurisdiction where you provide services or the terms of your employment or service agreement, if any);
(l)for purposes of the Option, your Continuous Service will be considered terminated as of the date you are no longer actively providing services to the Company, the Service Recipient or any other Affiliate (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment or labor laws in the jurisdiction where you are employed or provide services or the terms of your employment or service agreement, if any), and such date will not be extended by any notice period (e.g., your period of Continuous Service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment or labor laws in the jurisdiction where you are employed or providing services or the terms of your employment or service agreement, if any); the Board or, if delegated pursuant to Section 2 of the Plan, the Compensation Committee or a designated officer of the Company (or a designee of any of the foregoing), shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the Option (including whether you may still be considered to be providing services while on a leave of absence); and
(m)neither the Company, the Service Recipient nor any other Affiliate shall be liable for any foreign exchange rate fluctuation between your local currency and the U.S. dollar that may affect the value of the Option or of any amounts due to you upon exercise of the Option or the subsequent sale of any Class A Common Stock acquired upon settlement.
LANGUAGE. You acknowledge that you are proficient in the English language, or have consulted with an advisor who is proficient in the English language, so as to enable you to understand the provisions of this Agreement and the Plan. If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
FOREIGN ASSET/ACCOUNT, EXCHANGE CONTROL AND TAX REPORTING.
You acknowledge that, depending on your country, there may be certain foreign asset and/or account reporting requirements or exchange control restrictions which may affect your ability to acquire or hold the Option or the shares of Class A Common Stock or cash received from participating in the Plan (including proceeds from the sale of shares and dividends paid on shares) in a brokerage or bank account outside your country. You may be required to report such accounts, assets or related transactions to the tax or other authorities in your country. You also may be required to repatriate sale proceeds or other funds received as a result of participating in the Plan to your country through a designated bank or broker and/or within a certain time after receipt. You acknowledge that you are responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements and should consult your personal legal and tax advisors on this matter.
INSIDE TRADING RESTRICTIONS/MARKET ABUSE LAWS.
You may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including but not limited to the United States and your country, which may affect your ability to accept, acquire, sell or otherwise dispose of shares of Class A Common Stock, rights to shares of Class A Common Stock (e.g., the Option) or rights linked to the value of shares of Class A Common Stock during such times as you are considered to have “inside information” regarding the Company (as defined by the laws in applicable jurisdictions). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company. You acknowledge that it is your responsibility to comply with any applicable restrictions and you should speak with your personal legal advisor on this matter.
VENUE. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant of the Option or the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of San Mateo County, California, or the United States federal courts for the Northern District of California, and no other courts, where this grant is made and/or to be performed.
SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
APPENDIX B TO GLOBAL STOCK OPTION AGREEMENT
Terms and Conditions
This Appendix B forms part of the Agreement and includes special terms and conditions that govern the Option granted to you under the Plan if you reside or work in one of the jurisdictions listed below. Capitalized terms used but not defined in this Appendix have the meanings set forth in the Plan and/or in the Global Stock Option Agreement.
If you are a citizen or resident (or are considered as such for local law purposes) of a country other than the country in which you are currently residing and/or working, or if you relocate to another country after the grant of the option, the Company shall, in its discretion, determine to what extent the special terms and conditions contained herein shall be applicable to you.
Notifications
This Appendix B may also include information regarding exchange controls and certain other issues of which you should be aware with respect to participation in the Plan. The information is based on the securities, exchange control, and other laws in effect in the respective countries as of August 2020. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information in this Appendix B as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at the time you exercise the option or sell shares of Common Stock acquired under the Plan.
In addition, the information contained below is general in nature and may not apply to your particular situation. You are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.
AUSTRALIA
TAX INFORMATION. It is intended that Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies to the Option granted under the Plan, such that the Option will be subject to deferred taxation.
SECURITIES LAW INFORMATION. If you offer any shares of Class A Common Stock for sale to a person or entity resident in Australia, the offer may be subject to disclosure requirements under Australian law (in addition to any requirements under the Plan and this Agreement). You should consult your personal legal advisor prior to making any such offer to ensure compliance with the applicable requirements.
CANADA
METHOD OF PAYMENT. This provision supplements Section 2 (“Exercise”) of the Global Stock Option Agreement:
Due to tax considerations in Canada, you will not be permitted to pay your Option exercise price using the methods set forth in Section 2(b)(iii) or (iv) of the Global Stock Option Agreement.
TERMINATION OF CONTINUOUS SERVICE. This provision replaces subsection (l) of the Nature of Grant provision of this Appendix B:
For purposes of the Option, your Continuous Service will be considered terminated, and the right (if any) to vest in the Option will terminate effective, as of the date that is the earliest of: (a) the date your employment or service relationship with the Company, Service Recipient, or any of its Affiliates is terminated, (b) the date you receive notice of termination of your employment or service relationship with the Company Service Recipient, or an Affiliate, and (c) the date you are no longer actively providing services to the Company, Service Recipient, or any Affiliates, in any case regardless of any notice period or period of pay in lieu of such notice required under applicable employment law in the jurisdiction where you are employed or providing services or the terms of your employment agreement, if any; in the event the date you are no longer providing active service cannot be reasonably determined under the terms of this Agreement and/or the Plan, the Board or, if delegated pursuant to Section 2 of the Plan, the Compensation Committee or a designated officer of the Company (or a designee of any of the foregoing), shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the Option (including whether you may still be considered to be providing services while on a leave of absence). You will not earn or be entitled to any pro-rated vesting for that portion of time before the date on which your Continuous Service is terminated (as determined under this provision) nor will you be entitled to any compensation for lost vesting. Notwithstanding the foregoing, if applicable employment standards legislation explicitly requires continued entitlement to vesting during a statutory notice period, your right to vest in the Option under the Plan, if any, will terminate effective as of the last day of your minimum statutory notice period.
DATA PRIVACY. This provision supplements the Data Privacy provision of Appendix A:
You hereby authorize the Company or any Affiliate, including the Service Recipient, and any agents or representatives to (i) discuss with and obtain all relevant information from all personnel, professional or non-professional, involved in the administration and operation of the Plan, and (ii) disclose and discuss any and all information relevant to the Plan with their advisors. You further authorize the Company or any Affiliate, including the Service Recipient, and any agents or representatives to record such information and to keep such information in your file.
SECURITIES LAW INFORMATION. The sale or other disposal of the shares of Class A Common Stock acquired under the Plan may not take place within Canada. If the Class A Common Stock is registered under the Securities Act, you will be permitted to sell shares of Class A Common Stock acquired under the Plan through the designated broker appointed under the Plan, provided the resale of shares of Class A Common Stock takes place outside Canada through the facilities of the exchange on which the shares of Class A Common Stock are then listed. You should consult your personal legal advisor prior to selling shares of Class A Common Stock to ensure compliance with any applicable requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You are required to report foreign property on form T1135 (Foreign Income Verification Statement) if the total cost of the foreign property exceeds C$100,000 at any time in the year. Foreign property includes shares of Class A Common Stock acquired under the Plan and may include the Option. The Option must be reported--generally at a nil cost--if the C$100,000 cost threshold is exceeded because of other foreign property held. If shares of Class A Common Stock are acquired, their cost generally is the adjusted cost base (“ACB”) of the shares. The ACB ordinarily would equal the fair market value of the shares at the time of acquisition, but if other shares of Class A Common Stock are owned, this ACB may need to be averaged with the ACB of the
other shares. The form T1135 generally must be filed by April 30 of the following year. You should consult your personal tax advisor to ensure compliance with the applicable reporting requirements.
The following provisions apply only if you reside in Quebec:
LANGUAGE CONSENT. The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.
CONSENTMENT RELATIF À LA LANGUE UTILISÉE. Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention («Agreement»), ainsi que de tous documents, avis et procédures judiciaires, exécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à, la présente convention.
DENMARK
DANISH STOCK OPTION ACT. By accepting this Option, you acknowledge that you have received an Employer Statement, translated into Danish, if you are entitled to receive one, which is provided to comply with the Danish Stock Option Act, as amended with effect from January 1, 2019.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. If you establish an account holding shares of Class A Common Stock or cash outside of Denmark, you must report the account and deposits on your annual tax return in the section on foreign affairs and income. You should consult your personal tax advisor to ensure compliance with the applicable reporting requirements.
FINLAND
There are no country-specific provisions.
FRANCE
LANGUAGE CONSENT. You confirm having read and understood the documents relating to the Plan, including the Agreement, with all terms and conditions included therein, which were provided in the English language. You accept the terms of those documents accordingly.
CONSENTMENT RELATIF À LA LANGUE UTILISÉE. Vous confirmez avoir lu et compris le Plan et cette convention («Agreement»), incluant tous leurs terms et conditions, qui ont été transmis en langue anglaise. Vouz acceptez les dispositions de ces documents en connaissance de cause.
FOREIGN ASSET / ACCOUNT REPORTING INFORMATION. If you maintain a foreign bank account, you must report such account to the French tax authorities when filing your annual tax return. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
GERMANY
EXCHANGE RESTRICTION. Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank (Bundesbank). In case of payments in connection with securities (including proceeds realized upon the sale of shares of Class A Common Stock or the receipt of dividends), the report must be made by the 5th day of the month following the month in which the payment was received.
The report must be filed electronically and the form of report (“Allgemeine Meldeportal Statistik”) can be accessed via the Bundesbank’s website (www.bundesbank.de) in both German and English. You should consult your personal legal advisor to ensure compliance with the applicable reporting requirements.
INDIA
EXERCISE RESTRICTION. This provision supplements Section 2 (“Exercise”) of the Global Stock Option Agreement:
You must comply at the time of exercise with applicable laws and regulations of India, including but not limited to the Foreign Exchange Management Act, 1999 of India and the rules, regulations and amendments thereto (“FEMA”). To this end, you will not be permitted to pay the exercise price by a “sell to cover” arrangement where you sell some, but not all, of the shares of Class A Common Stock purchased on exercise of the Option (although the Company reserves the right to allow such method of payment depending on the development of local law). In addition, you may be required on exercise of your Option to immediately sell all shares of Class A Common Stock purchased on exercise in order to facilitate any required repatriation of proceeds in connection with your shares of Class A Common Stock issued on exercise of your Option.
EXCHANGE CONTROL INFORMATION. You must repatriate any funds received from participation in the Plan (e.g., proceeds from the sale of shares of Class A Common Stock) within such time as prescribed under applicable Indian exchange control laws, which may be amended from time to time. You should obtain a foreign inward remittance certificate (“FIRC”) from the bank where you deposit the foreign currency and maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Company or your employer requests proof of repatriation. You should consult your personal legal advisor to ensure compliance with the applicable requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You must declare the following items in your annual tax return: (i) any foreign assets held (including shares of Class A Common Stock acquired under the Plan), and (ii) any foreign bank accounts for which you have signing authority. You should consult your personal tax advisor to ensure compliance with the applicable requirements.
IRELAND
There are no country-specific provisions.
ITALY
ACKNOWLEDGEMENT OF SPECIFIC PROVISIONS. You acknowledge that you have read and specifically and expressly approve the following sections of the Agreement: Exercise; Withholding Obligations; No Liability for Taxes; Other Documents; Imposition of Other Requirements; Nature of Grant; Venue
FORIGN ASSET/ACCOUNT REPORTING INFORMATION. If, at any time during the fiscal year, you hold foreign financial assets (including the Option and shares of Class A Common Stock) which may generate income taxable in Italy, you are required to report these assets on your annual tax return (UNICO Form, RW Schedule) for the year during which the assets are held (or on a special form if no tax return is due). These reporting obligations will also apply to Italian residents who are the beneficial owners of
foreign financial assets under Italian money laundering provisions. You should consult your personal tax advisor to ensure compliance with the applicable requirements.
JAPAN
EXCHANGE CONTROL INFORMATION. If you acquire shares of Class A Common Stock valued at more than JPY 100,000,000 in a single transaction, you must file a Securities Acquisition Report with the Ministry of Finance through the Bank of Japan within twenty (20) days of the acquisition of the shares. You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You are required to report details of any assets held outside Japan as of December 31st (including shares of Class A Common Stock acquired under the Plan), to the extent such assets have a total net fair market value exceeding JPY 50,000,000. Such report is due by March 15th each year. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
NETHERLANDS
There are no country-specific provisions.
NEW ZEALAND
SECURITIES LAW INFORMATION. WARNING: You are being offered Options which, upon exercise in accordance with the terms of the Agreement and the Plan, will enable you to acquire shares of Company Stock. The shares of Class A Common Stock, if issued, will give you a stake in the ownership of the Company. You may receive a return if dividends are paid.
If the Company runs into financial difficulties and is wound up, you will be paid only after all creditors and holders of preference shares (if any) have been paid. You may lose some or all of your investment, if any.
New Zealand law normally requires people who offer financial products to give information to investors before they invest. This information is designed to help investors to make an informed decision. The usual rules do not apply to this offer because it is made under an employee share purchase scheme. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.
The shares of Class A Common Stock are quoted on the New York Stock Exchange. This means that if the you acquire shares of Class A Common Stock under the Plan, you may be able to sell such shares on the New York Stock Exchange if there are interested buyers. If you sell your investment, the price you get may vary depending on factors such as the financial condition of the Company. You may receive less than the full amount that you paid for the investment. The price will depend on the demand for shares of Class A Common Stock.
A copy of the Company's most recent financial statements (and, if applicable, a copy of the auditor's report on those financial statements) as well as information on risk factors impacting the Company’s business that may affect the value of the shares of Class A Common Stock, are included in the Company’s Registration Statement on Form S-1 and (when applicable) the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. These documents have been or will be filed with the U.S.
Securities and Exchange Commission and are or will be available to you free of charge online at www.sec.gov or on the Company’s “Investor Relations” website at [website to be inserted].
You should ask questions, read all documents carefully, and seek independent financial advice before committing yourself.
POLAND
EXCHANGE CONTROL INFORMATION. Polish residents holding foreign securities (e.g., shares of Class A Common Stock) and/or maintaining accounts abroad must report information to the National Bank of Poland on transactions and balances of the securities and cash deposited in such accounts if the value of such securities and cash (when combined with all other assets possessed abroad) exceeds PLN 7 million. If required, the reports must be filed on a quarterly basis on special forms that are available on the website of the National Bank of Poland. Further, if you transfer funds in excess of EUR 15,000 into or out of Poland, the funds must be transferred via a bank account. You are required to retain the documents connected with a foreign exchange transaction for a period of five years, as measured from the end of the year in which such transaction occurred. You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
SINGAPORE
SECURITIES LAW INFORMATION. The Option is granted pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”) under which it is exempt from the prospectus and registration requirements and is not made with a view to the underlying shares of Class A Common Stock being subsequently offered for sale to any other party. The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that the Options are subject to section 257 of the SFA and that you will not be able to make any offer or subsequent sale of the shares of Class A Common Stock in Singapore, unless such offer or sale is made (1) after six (6) months from the Date of Grant or (2) pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA.
DIRECTOR REPORTING INFORMATION. If you are a director, associate director or shadow director of a Singapore Affiliate, you may be subject to certain notification requirements under the Singapore Companies Act, regardless of whether you are a Singapore resident or employed in Singapore. These requirements include an obligation to notify the Singapore Affiliate in writing of an interest (e.g., the Option, shares of Class A Common Stock) in the Company or any Affiliate within two days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest (e.g., when the Option vests or is exercised), or (iii) becoming a director, associate director or shadow director if such an interest exists at that time. If you are the chief executive officer (“CEO”) of a Singapore Affiliate and the above notification requirements are determined to apply to the CEO of a Singapore Affiliate, the above notification requirements also may apply.
SLOVAK REPUBLIC
There are no country-specific provisions.
SPAIN
NATURE OF GRANT. This provision supplements the Nature of Grant provision of this Appendix B:
By accepting the Option, you consent to participation in the Plan and acknowledge that you have received a copy of the Plan.
You understand that the Company has unilaterally, gratuitously and in its sole discretion decided to grant Options under the Plan to individuals who may be employees or service providers of the Company or one of its Affiliates throughout the world. The decision is limited and entered into based upon the express assumption and condition that any Option will not economically or otherwise bind the Company or any Affiliate, including the Service Recipient, on an ongoing basis, other than as expressly set forth in the Agreement. Consequently, you understand that the Option is given on the assumption and condition that the Option shall not become part of any employment or other service contract (whether with the Company or any Affiliate , including the Service Recipient) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever. Furthermore, you understand and freely accept that there is no guarantee that any benefit whatsoever shall arise from the Option, which is gratuitous and discretionary, since the future value of the Option and the underlying shares of Class A Common Stock is unknown, indeterminable, and unpredictable.
Further, your participation in the Plan is expressly conditioned on your continued and active rendering of service, such that, unless otherwise set forth in the Plan, if your Continuous Service terminates for any reason, your participation in the Plan will cease immediately. This will be the case, for example, even if (a) you are considered to be unfairly dismissed without good cause (i.e., subject to a “despido improcedente”); (b) you are dismissed for disciplinary or objective reasons or due to a collective dismissal; (c) your Continuous Service ceases due to a change of work location, duties or any other employment or contractual condition; (d) your Continuous Service ceases due to a unilateral breach of contract by the Company or any Affiliate; or (e) your Continuous Service terminates for any other reason whatsoever. Consequently, upon termination of your Continuous Service for any of the above reasons, you automatically lose any right to participate in the Plan on the date of your termination of Continuous Service, as described in the Plan and the Agreement.
SECURITIES LAW INFORMATION. The grant of the Option and the shares of Class A Common Stock issued pursuant to the exercise of the Option are considered a private placement outside the scope of Spanish laws on public offerings and issuances of securities. Neither the Plan nor this Agreement have been registered with the Comisión National del Mercado de Valores and do not constitute a public offering prospectus.
EXCHANGE CONTROL INFORMATION. The acquisition, ownership and disposition of shares of Class A Common Stock must be declared for statistical purposes to the Dirección General de Comercio e Inversiones (the “DGCI”), which is a department of the Ministry of Economy and Competitiveness. If you acquire shares of Class A Common Stock through the use of a Spanish financial institution, that institution will automatically make the declaration to the DGCI for the you; otherwise, you will be required make the declaration by filing the appropriate form with the DGCI. Generally, the declaration must be made in January for shares of Class A Common Stock owned as of December 31 of the prior year; however, if the value of shares acquired or sold exceeds certain thresholds, the declaration must be filed within one (1) month of the acquisition or sale, as applicable.
Further, you are required to electronically declare to the Bank of Spain any foreign accounts (including brokerage accounts held abroad), any foreign instruments (including shares acquired under the Plan), and any transactions with non-Spanish residents (including any payments of cash or shares made to you under the Plan) depending on the balances in such accounts together with the value of such instruments as of
December 31 of the relevant year, or the volume of transactions with non-Spanish residents during the relevant year.
You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
FORIGN ASSET/ACCOUNT REPORTING INFORMATION. To the extent you hold rights or assets outside of Spain with a value in excess of EUR 50,000 per type of right or asset (e.g., shares of Class A Common Stock, cash, etc.) as of December 31 each year, you will be required to report information on such rights and assets on your annual tax return for such year. After such rights and assets are initially reported, the reporting obligation will apply for subsequent years only if the value of any previously-reported rights or assets increases by more than EUR 20,000. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
SWEDEN
AUTHORIZATION TO WITHHOLD. This provision supplements Section 4 (“Withholding Obligations”) of the Global Stock Option Agreement:
Without limiting the Company’s and the Service Recipient’s authority to satisfy their withholding obligations for Tax Liability as set forth in Section 4 of the Agreement, in accepting the Option, you authorize the Company to withhold shares of Class A Common Stock or to sell shares of Class A Common Stock otherwise issuable to you upon exercise/settlement to satisfy Tax Liability, regardless of whether the Company and/or your employer have an obligation to withhold such Tax Liability.
SWITZERLAND
SECURITIES LAW INFORMATION. Neither this document nor any other materials relating to the Option (i) constitute a prospectus according to articles 35 et seq. of the Swiss Federal Act on Financial Services (“FinSA”), (ii) may be publicly distributed nor otherwise made publicly available in Switzerland to any person other than an employee of the Company or a service provider of the Service Recipient or (iii) has been or will be filed with, approved or supervised by any Swiss reviewing body according to article 51 FinSA or any Swiss regulatory authority, including the Swiss Financial Market Supervisory Authority (FINMA).
UNITED KINGDOM
RESPONSIBILITY FOR TAXES. This provision supplements Section 4 (“Withholding Obligations”) of the Global Stock Option Agreement:
(a)Without limitation to Section 4 of the Agreement, you agree that you are liable for all the Tax Liability and you hereby covenant to pay all such Tax Liability, as and when requested by the Company and/or the Service Recipient or by Her Majesty’s Revenue & Customs (“HMRC”) (or any other tax authority or any other relevant authority). You also agree to indemnify and keep indemnified the Company and/or your employer against any Tax Liability that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on your behalf.
(b)As a condition of the vesting or exercise of, or the receipt of any benefit pursuant to, the Option, you agree to accept any liability for secondary Class 1 National Insurance contributions which may be payable by the Company and/or the Service Recipient in connection with the Option and any event giving rise to Tax Liability (the “Employer NICs”). Without prejudice to the foregoing, by accepting the Option, you agree to enter into a joint election with the Company or the Service Recipient, the form of such joint election being formally approved by HMRC (the “NIC Joint Election”), a copy of which is either attached to this Appendix B or provided to you under separate cover and any other required consent or election. You further agree to execute such other joint elections as may be required between you and any successor to the Company and/or the Service Recipient. You further agree that the Company and/or the Service Recipient may collect the Employer NICs from you by any of the means set forth in Section 4 of the Agreement.
If you do not enter into the NIC Joint Election prior to the exercise of the Option or any other event giving rise to the Tax Liability, you will not be entitled to exercise the Option and receive shares of Class A Common Stock (or receive any benefit in connection with the Option) unless and until you enter into the NIC Joint Election, and no shares of Class A Common Stock or other benefit will be issued to you under the Plan, without any liability to the Company or the employer.
(c)As a condition of the vesting or exercise of, or the receipt of any benefit pursuant to, the Options, you agree to sign, promptly, all documents required by the Company to effect the terms of the foregoing provisions.
SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
GLOBAL STOCK OPTION AGREEMENT
IMPORTANT NOTE ON THE JOINT ELECTION FOR TRANSFER OF LIABILITY OF
EMPLOYER NATIONAL INSURANCE CONTRIBUTIONS TO THE EMPLOYEE
As a condition of the vesting of, or the receipt of any benefit pursuant to, your stock options ("Options") granted under the Snowflake Inc. 2020 Equity Incentive Plan, as amended from time to time (the “Plan”), you are required to enter into a joint election to transfer to you any liability for employer National Insurance contributions (the “Employer NICs”) that may arise in connection with the Options and in connection with any other options granted to you under the Plan, if any, that may be granted to you under the Plan (the “NIC Joint Election”).
By entering into the Joint Election:
•you agree that any liability for Employer NICs that may arise in connection with or pursuant to the exercise of the Options and the acquisition of shares of common stock of Snowflake Inc. (the “Company”) or other taxable events in connection with the Options will be transferred to you; and
•you authorize the Company and/or your employer to recover an amount sufficient to cover this liability by any method set forth in the Option Agreement and/or the NIC Joint Election.
To enter into the NIC Joint Election, please indicate your agreement where indicated on the acceptance screen. Please note that your acceptance indicates your agreement to be bound by all of the terms of the NIC Joint Election.
Please note that even if you have indicated your acceptance of this NIC Joint Election electronically, you may still be required to sign a paper copy of this NIC Joint Election (or a substantially similar form) if the Company determines such is necessary to give effect to the NIC Joint Election.
Please read the terms of the NIC Joint Election carefully before entering into the NIC Joint Election (by executing the related Global Stock Option Agreement in hard copy or by electronically accepting such Global Stock Option Agreement or by signing or electronically accepting this NIC Joint Election). You should print and keep a copy of this NIC Joint Election for your records.
SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
GLOBAL STOCK OPTION AGREEMENT
ELECTION TO TRANSFER THE EMPLOYER'S LIABILITY FOR
NATIONAL INSURANCE LIABILITY TO THE EMPLOYEE
(UK EMPLOYEES)
1.PARTIES
This Election is between:
(A)The individual who has gained authorized access to this Election (the “Employee”), who is employed by one of the employing companies listed in the attached schedule (the “Employer”) and who is eligible to receive stock options (“Options”) pursuant to the terms and conditions of the Snowflake Inc. 2020 Equity Incentive Plan, as amended from time to time (the “Plan”), and
(B)Snowflake Inc. of 450 Concar Drive, San Mateo, CA 94402, USA (the “Company”), which may grant Options under the Plan and is entering into this Election on behalf of the Employer.
2.PURPOSE OF ELECTION
2.1This Election relates to all Options granted to Employee under the Plan up to the termination date of the Plan.
2.2In this Election the following words and phrases have the following meanings:
“Taxable Event” means any event giving rise to Relevant Employment Income.
“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003.
“Relevant Employment Income” from Options on which Employer’s National Insurance Contributions becomes due is defined as:
(i)an amount that counts as employment income of the earner under section 426 ITEPA (restricted securities: charge on certain post-acquisition events);
(ii)an amount that counts as employment income of the earner under section 438 of ITEPA (convertible securities: charge on certain post-acquisition events); or
(iii)any gain that is treated as remuneration derived from the earner's employment by virtue of section 4(4)(a) SSCBA, including without limitation:
(A)the acquisition of securities pursuant to the Options (within the meaning of section 477(3)(a) of ITEPA);
(B)the assignment (if applicable) or release of the Options in return for consideration (within the meaning of section 477(3)(b) of ITEPA);
(C)the receipt of a benefit in connection with the Options, other than a benefit within (i) or (ii) above (within the meaning of section 477(3)(c) of ITEPA).
“SSCBA” means the Social Security Contributions and Benefits Act 1992.
2.3This Election relates to the Employer’s secondary Class 1 National Insurance Contributions (the “Employer’s Liability”) which may arise in respect of Relevant Employment Income in respect of the Options pursuant to section 4(4)(a) and/or paragraph 3B(1A) of Schedule 1 of the SSCBA.
2.4This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the SSCBA or the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
2.5This Election does not apply to the extent that it relates to relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part VII of ITEPA (employment income: securities with artificially depressed market value).
2.6Any reference to the Company and/or the Employer shall include that entity’s successors in title and assigns as permitted in accordance with the terms of the Plan and the Option Agreement. This Election will have effect in respect of the Options and any awards which replace or replaced the Options following their grant in circumstances where section 483 of ITEPA applies.
3.ELECTION
The Employee and the Company jointly elect that the entire liability of the Employer to pay the Employer’s Liability that arises on any Relevant Employment Income is hereby transferred to the Employee. The Employee understands that by electronically accepting or by signing this Election or by accepting the Options, he or she will become personally liable for the Employer’s Liability covered by this Election. This Election is made in accordance with paragraph 3B(1) of Schedule 1 to SSCBA.
4.PAYMENT OF THE EMPLOYER'S LIABILITY
4.1The Employee hereby authorizes the Company and/or the Employer to collect the Employer’s Liability in respect of any Relevant Employment Income from the Employee at any time after the Taxable Event:
(i)by deduction from salary or any other payment payable to the Employee at any time on or after the date of the Taxable Event; and/or
(ii)directly from the Employee by payment in cash or cleared funds; and/or
(iii)by arranging, on behalf of the Employee, for the sale of some of the securities which the Employee is entitled to receive in respect of the Options; and/or
(iv)where the proceeds of the gain are to be paid through a third party, by that party withholding an amount from the payment or selling some of the securities which the Employee is entitled to receive in respect of the Options; and/or
(v)by any other means specified in the applicable stock option agreement.
4.2The Company hereby reserves for itself and the Employer the right to withhold the transfer of any securities in respect of the Options to the Employee until full payment of the Employer’s Liability is received.
4.3The Company agrees to procure the remittance by the Employer of the Employer’s Liability to HM Revenue and Customs on behalf of the Employee within 14 days after the end of the UK tax month during which the Taxable Event occurs (or within 17 days after the end of the UK tax month during which the Taxable Event occurs, if payments are made electronically).
5.DURATION OF ELECTION
5.1The Employee and the Company agree to be bound by the terms of this Election regardless of whether the Employee is transferred abroad or is not employed by the Employer on the date on which the Employer’s Liability becomes due.
5.2This Election will continue in effect until the earliest of the following:
(i)the Employee and the Company agree in writing that it should cease to have effect;
(ii)on the date the Company serves written notice on the Employee terminating its effect;
(iii)on the date HM Revenue and Customs withdraws approval of this Election; or
(iv)after due payment of the Employer’s Liability in respect of the entirety of the Options to which this Election relates or could relate, such that the Election ceases to have effect in accordance with its terms.
5.3This Election will continue in full force regardless of whether the Employee ceases to be an employee of the Employer.
Acceptance by the Employee
The Employee acknowledges that, by accepting the Options (by signing the related Notice of Stock Option Grant in hard copy or by electronically accepting such Notice of Stock Option Grant) or by signing or electronically accepting this Election, the Employee agrees to be bound by the terms of this Election.
Acceptance by the Company
The Company acknowledges that, by arranging for the signature of an authorized representative to appear on this Election, the Company agrees to be bound by the terms of this Election.
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By:
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Michael P. Scarpelli
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Chief Financial Officer
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SCHEDULE OF EMPLOYER COMPANIES
The following Employer(s) shall be covered by the Joint Election:
Snowflake Computing U.K. Limited
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Address:
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c/o Fieldfisher
Riverbank House, 2 Swan Lane
London, United Kingdom EC4R 3TT
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Corporation Tax Number:
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[Corporation Tax Number Intentionally Omitted]
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Company Registration Number
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10611715
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PAYE Reference
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[PAYE Reference Intentionally Omitted]
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NOTICE OF EXERCISE
SNOWFLAKE INC.
450 CONCAR DRIVE
SAN MATEO, CA 94402
Date of Exercise: _______________
This constitutes notice to Snowflake Inc. (the “Company”) under my stock option that I elect to purchase the below number of shares of Class A Common Stock of the Company (the “Shares”) for the exercise price set forth below.
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Type of option (check one):
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Incentive ☐
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Nonstatutory ☐
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Stock option dated:
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_______________
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_______________
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Number of Shares as
to which option is
exercised:
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_______________
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_______________
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Certificates to be
issued in name of:
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_______________
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_______________
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Total exercise price:
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$______________
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$______________
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Cash payment delivered
herewith:
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$______________
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$______________
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Regulation T Program (cashless exercise1):
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$______________
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$______________
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Value of ________ Shares delivered herewith2:
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$______________
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$______________
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the Snowflake Inc. 2020 Equity Incentive Plan, (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within fifteen (15) days after the date of any disposition of any of the Shares issued upon exercise of this option that occurs within two (2) years after the date of grant of this option or within one (1) year after such Shares are issued upon exercise of this option.
________________________
1 Shares must meet the public trading requirements set forth in the option agreement.
2 Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate.
I agree that, if required by the Company (or a representative of the underwriters) in connection with the first underwritten registration of the offering of any securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”), I will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to any shares of Common Stock or other securities of the Company for a period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act (or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2241 or any successor or similar rule or regulation) (the “Lock-Up Period”). I further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period.
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Very truly yours,
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Signature
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Print Name
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Address of Record:
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SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
RSU AWARD GRANT NOTICE
Snowflake Inc. (the “Company”) has awarded to you (the “Participant”) the number of restricted stock units specified and on the terms set forth below (the “RSU Award”). Your RSU Award is subject to all of the terms and conditions as set forth herein and in the Company’s 2020 Equity Incentive Plan (the “Plan”) and the Global Restricted Stock Unit Award Agreement, including any appendices thereto (the “Appendices”), which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Global Restricted Stock Unit Award Agreement shall have the meanings set forth in the Plan or the Global Restricted Stock Unit Award Agreement, as applicable.
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Participant:
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Date of Grant:
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Vesting Commencement Date:
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Number of Restricted Stock Units:
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[
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Vesting Schedule:
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Notwithstanding the foregoing, vesting shall terminate and any unvested restricted stock units shall be forfeited upon the Participant’s termination of Continuous Service.
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Issuance Schedule:
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One share of Class A Common Stock shall be issued for each restricted stock unit which vests at the time set forth in Section 5 of the Global Restricted Stock Unit Award Agreement.
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Participant Acknowledgments: By your signature below or by electronic acceptance or authentication in a form authorized by the Company, you understand and agree that:
•The RSU Award is governed by this RSU Award Grant Notice (the “Grant Notice”), and the provisions of the Plan and the Global Restricted Stock Unit Award Agreement (including the Appendices), all of which are made a part of this document. This Grant Notice, the Global Restricted Stock Unit Award Agreement, and the Appendices (collectively, the “Agreement”) may not be modified, amended, or revised except in a writing signed by you and a duly authorized officer of the Company, unless otherwise provided in the Plan.
•You have read and are familiar with the provisions of the Plan, the Agreement, and the Prospectus. In the event of any conflict between the provisions in this Agreement (including the Grant Notice, the Global Restricted Stock Unit Award Agreement, and the Appendices) or the Prospectus and the terms of the Plan, the terms of the Plan shall control.
•This Agreement sets forth the entire understanding between you and the Company regarding the acquisition of Class A Common Stock in connection with the RSU Award and supersedes all prior oral and written agreements, promises, and/or representations on that subject.
•You consent to receive the Agreement, the Plan, the Prospectus and any other Plan-related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
•Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes.
•Notwithstanding the above, if you have not actively accepted the RSU Award within 90 days of the Date of Grant set forth in the RSU Award Grant Notice, you are deemed to have accepted the RSU Award, subject to all of the terms and conditions of the Plan and Agreement.
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SNOWFLAKE INC.
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PARTICIPANT:
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By:
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Signature
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Signature
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Title:
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Date:
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Date:
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SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
GLOBAL RESTRICTED STOCK UNIT AWARD AGREEMENT (RSU AWARD)
As reflected by your RSU Award Grant Notice (“Grant Notice”) Snowflake Inc. (the “Company”) has granted you an RSU Award under its 2020 Equity Incentive Plan (the “Plan”) for the number of restricted stock units as indicated in your Grant Notice (the “RSU Award”). The terms of your RSU Award as specified in this Global Restricted Stock Unit Award Agreement for your RSU Award, including the Appendices described below and the Grant Notice constitute your Agreement (the Grant Notice, Global Restricted Stock Unit Award Agreement, and Appendices, collectively, are referred to as the “Agreement”). Capitalized terms not explicitly defined in this Global Restricted Stock Unit Award Agreement but defined in the Grant Notice or the Plan shall have the same definitions as in the Grant Notice or Plan, as applicable.
The general terms applicable to your RSU Award are as follows:
1.GOVERNING PLAN DOCUMENT. Your RSU Award is subject to all the provisions of the Plan, including but not limited to the provisions in:
(a)Section 7 of the Plan regarding the impact of a Capitalization Adjustment, dissolution, liquidation, or Corporate Transaction on your RSU Award;
(b)Section 9(d) of the Plan regarding the right (if any) of the Company or an Affiliate to terminate your Continuous Service notwithstanding the grant of the RSU Award; and
(c)Section 8 of the Plan regarding the tax consequences of your RSU Award.
Your RSU Award is further subject to all interpretations, amendments, rules, and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the RSU Award Agreement and the provisions of the Plan, the provisions of the Plan shall control.
2.GRANT OF THE RSU AWARD. This RSU Award represents your right to be issued on a future date the number of shares of Class A Common Stock that is equal to the Number of Restricted Stock Units indicated in the Grant Notice as modified to reflect any Capitalization Adjustment and subject to your satisfaction of the vesting conditions set forth therein (the “Restricted Stock Units”). Any additional Restricted Stock Units that become subject to the RSU Award pursuant to Capitalization Adjustments as set forth in the Plan, if any, shall be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Restricted Stock Units covered by your RSU Award.
3.DIVIDENDS. You shall receive no benefit or adjustment to your RSU Award with respect to any cash dividend, stock dividend, or other distribution that does not result from a Capitalization Adjustment as provided in the Plan; provided, however, that this sentence shall not apply with respect to any shares of Class A Common Stock that are delivered to you in connection with your RSU Award after such shares have been delivered to you.
4.WITHHOLDING OBLIGATIONS.
(a)Regardless of any action taken by the Company or, if different, the Affiliate to which you provide Continuous Service (the “Service Recipient”) with respect to any income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax related items associated with the grant or vesting of the RSU Award or sale of the underlying Class A Common Stock or other tax-related items related to your participation in the Plan and legally applicable to you (the “Tax Liability”), you hereby acknowledge and agree that the Tax Liability is your ultimate responsibility and may exceed the amount, if any, actually withheld by the Company or the Service Recipient. You further acknowledge that the Company and the Service Recipient (i) make no representations or undertakings regarding any Tax Liability in connection with any aspect of this RSU Award, including, but not limited to, the grant or vesting of the RSU Award, the issuance of Class A Common Stock pursuant to such vesting, the subsequent sale of shares of Class A Common Stock, and the payment of any dividends on the Class A Common Stock; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the RSU Award to reduce or eliminate your Tax Liability or achieve a particular tax result. Further, if you are subject to Tax Liability in more than one jurisdiction, you acknowledge that the Company and/or the Service Recipient (or former service recipient, as applicable) may be required to withhold or account for Tax Liability in more than one jurisdiction.
(b)Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to the Company and/or the Service Recipient to satisfy all Tax Liability. As further provided in Section 8 of the Plan, you hereby authorize the Company and any applicable Service Recipient to satisfy any applicable withholding obligations with regard to the Tax Liability by any of the following means or by a combination of such means: (i) causing you to pay any portion of the Tax Liability in cash or cash equivalent in a form acceptable to the Company; (ii) withholding from any compensation otherwise payable to you by the Company or the Service Recipient; (iii) withholding shares of Class A Common Stock from the shares of Class A Common Stock issued or otherwise issuable to you in connection with the Award; provided, however, that to the extent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the express prior approval of the Board or the Company’s Compensation Committee; (iv) permitting or requiring you to enter into a “same day sale” commitment, if applicable, with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”), pursuant to this authorization and without further consent, whereby you irrevocably elect to sell a portion of the shares of Class A Common Stock to be delivered in connection with your Restricted Stock Units to satisfy the Tax Liability and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Tax Liability directly to the Company or the Service Recipient; and/or (v) any other method determined by the Company to be in compliance with Applicable Law. Furthermore, you agree to pay the Company or the Service Recipient any amount the Company or the Service Recipient may be required to withhold, collect, or pay as a result of your participation in the Plan or that cannot be satisfied by the means previously described. In the event it is determined that the amount of the Tax Liability was greater than the amount withheld by the Company and/or the Service Recipient (as applicable), you agree to indemnify and hold the Company and/or the Service Recipient (as applicable) harmless from any failure by the Company or the applicable Service Recipient to withhold the proper amount.
(c)The Company may withhold or account for your Tax Liability by considering statutory withholding amounts or other withholding rates applicable in your jurisdiction(s), including (i) maximum applicable rates in your jurisdiction(s), in which case you may receive a refund of any over-withheld amount in cash (whether from applicable tax authorities or the Company) and you will have no
entitlement to the equivalent amount in Class A Common Stock or (ii) minimum or such other applicable rates in your jurisdiction(s), in which case you may be solely responsible for paying any additional Tax Liability to the applicable tax authorities or to the Company and/or the Service Recipient. If the Tax Liability withholding obligation is satisfied by withholding shares of Class A Common Stock, for tax purposes, you are deemed to have been issued the full number of shares of Class A Common Stock subject to the vested portion of the RSU Award, notwithstanding that a number of the shares of Class A Common Stock is held back solely for the purpose of paying such Tax Liability.
(d)You acknowledge that you may not participate in the Plan and the Company shall have no obligation to deliver shares of Class A Common Stock until you have fully satisfied the Tax Liability, as determined by the Company. Unless any withholding obligation for the Tax Liability is satisfied, the Company shall have no obligation to deliver to you any Class A Common Stock in respect of the RSU Award.
5.DATE OF ISSUANCE.
(a)The issuance of shares in respect of the Restricted Stock Units is intended to comply with U.S. Treasury Regulations Section 1.409A-3(a) and will be construed and administered in such a manner. Subject to the satisfaction of the Tax Liability withholding obligation, if any, in the event one or more Restricted Stock Units vests, the Company shall issue to you one (1) share of Class A Common Stock for each vested Restricted Stock Unit. Each issuance date determined by this paragraph is referred to as an “Original Issuance Date.”
(b)If the Original Issuance Date falls on a date that is not a business day, delivery shall instead occur on the next following business day. In addition, if:
(i)the Original Issuance Date does not occur (1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you are otherwise permitted to sell shares of Class A Common Stock on an established stock exchange or stock market (including but not limited to under a previously established written trading plan that meets the requirements of Rule 10b5-1 under the Exchange Act and was entered into in compliance with the Company’s policies (a “10b5-1 Arrangement)), and
(ii)either (1) a Tax Liability withholding obligation does not apply, or (2) the Company decides, prior to the Original Issuance Date, (A) not to satisfy the Tax Liability withholding obligation by withholding shares of Class A Common Stock from the shares otherwise due, on the Original Issuance Date, to you under this Award, and (B) not to permit you to enter into a “same day sale” commitment with a broker-dealer (including but not limited to a commitment under a 10b5-1 Arrangement) and (C) not to permit you to pay your Tax Liability in cash, then the shares that would otherwise be issued to you on the Original Issuance Date will not be delivered on such Original Issuance Date and will instead be delivered on the first business day when you are not prohibited from selling shares of the Class A Common Stock in the open public market, but in no event later than December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), or, if and only if permitted in a manner that complies with U.S. Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the applicable year following the year in which the shares of Class A Common Stock under this Award are no longer subject to a “substantial risk of forfeiture” within the meaning of U.S. Treasury Regulations Section 1.409A-1(d).
6.TRANSFERABILITY. Except as otherwise provided in the Plan, your RSU Award is not transferable, except by will or by the applicable laws of descent and distribution.
7.CORPORATE TRANSACTION. Your RSU Award is subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on your behalf with respect to any escrow, indemnities and any contingent consideration.
8.NO LIABILITY FOR TAXES. As a condition to accepting the RSU Award, you hereby (a) agree to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to any Tax Liability arising from the RSU Award or any other compensation from the Company or the Service Recipient and (b) acknowledge that you were advised to consult with your own personal tax, financial and other legal advisors regarding the tax consequences of the RSU Award and have either done so or knowingly and voluntarily declined to do so.
9.DATA PRIVACY. In order for the Company to administer the RSU Award and your participation in the Plan, the Company must collect, process and transfer certain of your personal data, as further described in Appendix A to this Global Restricted Stock Unit Award Agreement. Appendix A constitutes part of this Agreement.
10.SEVERABILITY. If any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
11.OTHER DOCUMENTS. You hereby acknowledge receipt of or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Prospectus. In addition, you acknowledge receipt of the Company’s Trading Policy.
12.QUESTIONS. If you have questions regarding these or any other terms and conditions applicable to your RSU Award, including a summary of the applicable U.S. federal income tax consequences, please see the Prospectus (or, for a summary of the tax consequences if you are based outside the U.S., the employee information supplement to the Prospectus applicable for your jurisdiction).
13.LOCK-UP. By accepting this RSU Award, you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to any shares of Class A Common Stock, Class B Common Stock or other securities of the Company held by you, for a period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2241 or any successor or similar rules or regulation (the “Lock-Up Period”); provided, however, that nothing contained in this section will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Class A Common Stock until the end of such period. You also agree that any transferee
of any shares of Class A Common Stock (or other securities) of the Company held by you will be bound by this Section 13. The underwriters of the Company’s stock are intended third party beneficiaries of this Section 13 and will have the right, power and authority to enforce the provisions hereof as though they were a party hereto.
14.GOVERNING LAW. This Agreement and any controversy arising out of or relating to this Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to conflict of law principles that would result in any application of any law other than the law of the State of Delaware.
15.WAIVER. You acknowledge that a waiver by the Company of any provision, or breach thereof, of this Agreement on any occasion shall not operate or be construed as a waiver of such provision on any other occasion or as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other Participant.
16.IMPOSITION OF OTHER REQUIREMENTS. The Company reserves the right to impose other requirements on your participation in the Plan, on the RSU Award and on any Class A Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
17.NO ADVICE REGARDING GRANT. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying shares of Class A Common Stock. You should consult with your own personal tax, financial and/or legal advisors regarding the Tax Liability arising in connection with the RSU Award and by accepting the RSU Award, you have agreed that you have done so or knowingly and voluntarily declined to do so.
18.COUNTRY-SPECIFIC PROVISIONS. The RSU Award shall be subject to any additional or different terms and conditions set forth in Appendix B to this Global Restricted Stock Unit Award Agreement. Moreover, if you relocate to one of the countries included in Appendix B, the additional or different terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendix B constitutes part of this Agreement.
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SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
APPENDIX A TO GLOBAL RESTRICTED STOCK UNIT AWARD AGREEMENT
This Appendix A forms part of the Agreement. Capitalized terms used but not defined in this Appendix A have the meanings set forth in the Plan and/or in the Global Restricted Stock Unit Award Agreement.
DATA PRIVACY. To participate in the Plan, you need to review the information provided in (a) through (f) below and, where applicable, consent to the processing of Personal Data (as defined below) by the Company and the third parties according to (g) below.
If you are based in the European Union (“EU”), the European Economic Area (“EEA”), Switzerland or the United Kingdom (collectively, “EEA+”), Snowflake Inc., with its registered address at 450 Concar Drive, San Mateo, CA 94402, USA is the controller responsible for the processing of your Personal Data in connection with the Agreement and the Plan. The Company's representative in the EU is Snowflake Computing Netherlands B.V. with its primary office located at FOZ Building, Gustav Mahleraan 300-314, 1082 ME Amsterdam, Netherlands.
(a)Data Collection and Usage. The Company collects, processes and uses Personal Data about you, including your name, home address, email address and telephone number, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any shares of Class A Common Stock or directorships held in the Company, details of all Restricted Stock Units over shares of Class A Common Stock or any other entitlement to shares of Class A Common Stock awarded, canceled, exercised, purchased, vested, unvested or outstanding in your favor, which the Company receives from you or the Service Recipient (“Personal Data”). In order for you to participate in the Plan, the Company will collect Personal Data for purposes of allocating shares of Class A Common Stock and implementing, administering and managing the Plan.
If you are based in the EEA+, the Company’s legal basis for the processing of Personal Data is the necessity of the processing for the Company's performance of its obligations under the Agreement and the Company’s legitimate interest of complying with statutory obligations to which it is subject.
If you are based in any other jurisdiction, the Company relies on your consent to the processing of Personal Data, as further described below.
(b)Stock Plan Administration and Service Provides. The Company may transfer Personal Data to Cooley LLP, Fidelity Stock Plan Services LLC, Computershare Trust Company, N.A., and/or Solium Plan Managers LLC (each, an “administrator”), each of which is an independent service provider based in the U.S., which is assisting the Company with the implementation, administration and management of the Plan. Administrators may open an account for you to receive and, when applicable, trade shares of Class A Common Stock. You may be asked to acknowledge, or agree to, separate terms and data processing practices with any administrator, with such acknowledgement or agreement being a condition to your ability to participate in the Plan.
(c)International Data Transfers. Personal Data will be transferred from your country to the U.S., where the Company and its service providers are based. You understand and acknowledge that the U.S. has enacted data privacy laws that are different from those applicable in your country of residence. The EU Commission has determined that an appropriate level of protection can be achieved by implementing safeguards such as the Standard Contractual Clauses adopted by the EU Commission.
If you are based in the EEA+, Personal Data will be transferred from the EEA+ to the Company based on the Standard Contractual Clauses adopted by the EU Commission that are entered into by the Company and its Affiliates located in the EEA+. The onward transfer of your Personal Data by the Company to the administrators will be based on a data processing agreement or the EU Standard Contractual Clauses. You may request a copy of such appropriate safeguards at privacy@snowflake.com.
If you are based in any other jurisdiction, the Company relies on your consent to the transfer of Personal Data to the U.S., as further described below.
(d)Data Retention. The Company will use Personal Data only as long as necessary to implement, administer and manage my participation in the Plan or as required to comply with legal or regulatory obligations, including, without limitation, under tax and securities laws. When the Company no longer needs Personal Data for any of the above purposes, which will generally be seven (7) years after you participate in the Plan, the Company will cease to use Personal Data and remove it from its systems. If the Company keeps Personal Data longer, it would be to satisfy legal or regulatory obligations and the Company’s legal basis would be relevant laws or regulations (if you are in the EEA+) and/or your consent (if you are outside the EEA+).
(e)Data Subject Rights. You understand that you may have a number of rights under data privacy laws in your jurisdiction. Subject to the conditions set out in the applicable law and depending on where you are based, such rights may include the right to (i) request access to, or copies of, Personal Data processed by the Company, (ii) rectification of incorrect Personal Data, (iii) deletion of Personal Data, (iv) restrictions on the processing of Personal Data, (v) object to the processing of Personal Data for legitimate interests, (vi) portability of Personal Data, (vii) lodge complaints with competent authorities in your jurisdiction, and/or to (viii) receive a list with the names and addresses of any potential recipients of Personal Data. To receive clarification regarding these rights or to exercise these rights, you can contact privacy@snowflake.com.
(f)Necessary Disclosure of Personal Data. You understand that providing the Company with Personal Data is necessary for the performance of the Agreement and that your refusal to provide Personal Data or, where applicable, consent to process and transfer Personal Data would make it impossible for the Company to perform its contractual obligations and may affect your ability to participate in the Plan.
(g)Data Privacy Consent. If you are located in a jurisdiction outside the EEA+, you hereby voluntarily and unambiguously consent to the collection, use and transfer, in electronic or other form, of Personal Data, as described above and in any other Award materials, by and among, as applicable, the Company, the Service Recipient and any Affiliate for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that you may, at any time, refuse or withdraw the consents herein, in any case without cost, by contacting in writing privacy@snowflake.com. If you do not consent or later seek to revoke your consent, your employment status or service with the Service Recipient will not be affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant the Restricted Stock Units or other equity awards to you or administer or maintain such awards. Therefore, you understand that refusing or withdrawing consent may affect your ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, you should contact privacy@snowflake.com.
SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
APPENDIX B TO GLOBAL RESTRICTED STOCK UNIT AWARD AGREEMENT
Terms and Conditions
This Appendix B forms part of the Agreement and includes special terms and conditions that govern the RSU Award granted to you under the Plan if you reside or work in one of the jurisdictions listed below. Capitalized terms used but not defined in this Appendix B have the meanings set forth in the Plan and/or in the Global Restricted Stock Unit Award Agreement.
If you are a citizen or resident (or are considered as such for local law purposes) of a country other than the country in which you are currently residing and/or working, or if you relocate to another country after the grant of the RSU Award, the Company shall, in its discretion, determine to what extent the special terms and conditions contained herein shall be applicable to you.
Notifications
This Appendix B may also include information regarding exchange controls and certain other issues of which you should be aware with respect to participation in the Plan. The information is based on the securities, exchange control, and other laws in effect in the respective countries as of August 2020. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information in this Appendix B as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at the time you vest in the Restricted Stock Units, acquire shares of Class A Common Stock, or sell shares of Class A Common Stock acquired under the Plan.
In addition, the information contained below is general in nature and may not apply to your particular situation. You are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.
ALL COUNTRIES OUTSIDE THE UNITED STATES
NATURE OF GRANT. In accepting this RSU Award, you acknowledge, understand and agree that:
(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b)the grant of the RSU Award is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of restricted stock units, or benefits in lieu of restricted stock units, even if restricted stock units have been granted in the past;
(c)all decisions with respect to future restricted stock units or other grants, if any, will be at the sole discretion of the Company;
(d)the grant of the RSU Award and your participation in the Plan will not create a right to continue to serve the Company or the Service Recipient in the capacity in effect at the time the Award was granted;
(e)the grant of the RSU Award and your participation in the Plan will not be interpreted as forming or amending an employment or service contract with the Company or the Service Recipient, and will not interfere with the right (if any) of the Company or the Service Recipient, as applicable, to terminate your Continuous Service ;
(f)you are voluntarily participating in the Plan;
(g)the RSU Award and the Class A Common Stock subject to the RSU Award, and the income from and value of same, are not intended to replace any pension rights or compensation;
(h)the RSU Award and the Class A Common Stock subject to the RSU Award, and the income from and value of same, are not part of normal or expected compensation for purposes of, including but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar payments;
(i)unless otherwise agreed with the Company in writing, the Restricted Stock Units and the Class A Common Stock subject to the RSU Award, and the income from and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of an Affiliate;
(j)the future value of the underlying Class A Common Stock is unknown, indeterminable and cannot be predicted with certainty;
(k)no claim or entitlement to compensation or damages shall arise from forfeiture of the RSU Award resulting from the termination of your Continuous Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment or labor laws in the jurisdiction where you provide services or the terms of your employment or service agreement, if any);
(l)for purposes of the RSU Award, your Continuous Service will be considered terminated as of the date you are no longer actively providing services to the Company, the Service Recipient or any other Affiliate (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment or labor laws in the jurisdiction where you are employed or provide services or the terms of your employment or service agreement, if any), and such date will not be extended by any notice period (e.g., your period of Continuous Service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment or labor laws in the jurisdiction where you are employed or providing services or the terms of your employment or service agreement, if any); the Board or, if delegated pursuant to Section 2 of the Plan, the Compensation Committee or a designated officer of the Company (or a designee of any of the foregoing) shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the RSU Award (including whether you may still be considered to be providing services while on a leave of absence); and
(m)neither the Company, the Service Recipient nor any other Affiliate will be liable for any foreign exchange rate fluctuation between your local currency and the U.S. dollar that may affect the value of the RSU Award or of any amounts due to you pursuant to the settlement of the RSU Award or the subsequent sale of any Class A Common Stock acquired upon settlement.
LANGUAGE. You acknowledge that you are proficient in the English language, or have consulted with an advisor who is proficient in the English language, so as to enable you to understand the provisions of
this Agreement and the Plan. If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
FOREIGN ASSET/ACCOUNT, EXCHANGE CONTROL AND TAX REPORTING. You acknowledge that, depending on your country, there may be certain foreign asset and/or account reporting requirements or exchange control restrictions which may affect your ability to acquire or hold the RSU Award or the shares of Class A Common Stock or cash received from participating in the Plan (including proceeds from the sale of shares and dividends paid on shares) in a brokerage or bank account outside your country. You may be required to report such accounts, assets or related transactions to the tax or other authorities in your country. You also may be required to repatriate sale proceeds or other funds received as a result of participating in the Plan to your country through a designated bank or broker and/or within a certain time after receipt. You acknowledge that you are responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements and should consult your personal legal and tax advisors on this matter.
INSIDER TRADING RESTRICTIONS/MARKET ABUSE LAWS. You may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including but not limited to the United States and your country, which may affect your ability to accept, acquire, sell or otherwise dispose of shares of Class A Common Stock, rights to shares of Class A Common Stock (e.g., the RSU Award) or rights linked to the value of shares of Class A Common Stock during such times as you are considered to have “inside information” regarding the Company (as defined by the laws in applicable jurisdictions). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company. You acknowledge that it is your responsibility to comply with any applicable restrictions and you should speak with your personal legal advisor on this matter.
VENUE. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant of the RSU Award or the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of San Mateo County, California, or the United States federal courts for the Northern District of California, and no other courts, where this grant is made and/or to be performed.
AUSTRALIA
TAX INFORMATION. It is intended that Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies to the RSU Award granted under the Plan, such that the RSU Award will be subject to deferred taxation.
SECURITIES LAW INFORMATION. There are legal consequences associated with participating in the Plan. You should ensure that you understand these consequences before participating in the Plan. Any information given by or on behalf of the Company is general information only. You should obtain your own financial product advice from an independent person who is licensed by the Australian Securities and Investments Commission (“ASIC”) to give advice about participating in the Plan.
The grant of Restricted Stock Units under the terms of the Plan and the Agreement does not require disclosure under the Corporations Act 2001 (Cth) (the “Corporations Act”). No document provided to you in connection with your participation in the Plan (including the Agreement):
•is a prospectus for purposes of the Corporations Act; or
•has been filed or reviewed by a regulator in Australia (including ASIC).
You should not rely on any oral statements made in connection with your participation in the Plan. You should rely only upon the statements contained in the Agreement and the Plan when considering whether to participate in the Plan.
In the event that shares of Class A Common Stock are issued to you under the Plan, the value of such shares will be affected by the Australian / U.S. dollar exchange rate, in addition to fluctuations in value caused by the fortunes of the Company.
If you offer any shares of Class A Common Stock for sale to a person or entity resident in Australia, the offer may be subject to disclosure requirements under Australian law (in addition to any requirements under the Plan and this Agreement). You should consult your personal legal advisor prior to making any such offer to ensure compliance with the applicable requirements.
CANADA
GRANT OF THE RSU AWARD. This provision supplements Section 2 of the Global Restricted Stock Unit Award Agreement:
The RSU Award will be settled by the issuance of shares of Class A Common Stock and not by the issuance of cash (or by a combination of cash and shares), notwithstanding the discretion to settle an RSU Award in cash as described in Section 6(a)(vi) of the Plan.
TERMINATION OF CONTINUOUS SERVICE. This provision replaces subsection (l) of the Nature of Grant provision of this Appendix B:
For purposes of the Restricted Stock Units, your Continuous Service will be considered terminated, and the right (if any) to vest in the Restricted Stock Units will terminate effective, as of the date that is the earliest of: (a) the date your employment or service relationship with the Company, Service Recipient, or any of its Affiliates is terminated, (b) the date you receive notice of termination of your employment or service relationship with the Company Service Recipient, or an Affiliate, and (c) the date you are no longer actively providing services to the Company Service Recipient, or any Affiliates, in any case regardless of any notice period or period of pay in lieu of such notice required under applicable employment law in the jurisdiction where you are employed or providing services or the terms of your employment agreement, if any; in the event the date you are no longer providing active service cannot be reasonably determined under the terms of this Agreement and/or the Plan, the Board or, if delegated pursuant to Section 2 of the Plan, the Compensation Committee or a designated officer of the Company (or a designee of any of the foregoing), shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of the Restricted Stock Units (including whether you may still be considered to be providing services while on a leave of absence). You will not earn or be entitled to any pro-rated vesting for that portion of time before the date on which your Continuous Service is terminated (as determined under this provision) nor will you be entitled to any compensation for lost vesting. Notwithstanding the foregoing, if applicable employment standards legislation explicitly requires continued entitlement to vesting during a statutory notice period, your right to vest in the Restricted Stock Units under the Plan, if any, will terminate effective as of the last day of your minimum statutory notice period.
DATA PRIVACY. This provision supplements the Data Privacy provision of Appendix A:
You hereby authorize the Company or any Affiliate, including the Service Recipient, and any agents or representatives to (i) discuss with and obtain all relevant information from all personnel, professional or non-professional, involved in the administration and operation of the Plan, and (ii) disclose and discuss any and all information relevant to the Plan with their advisors. You further authorize the Company or any Affiliate, including the Service Recipient, and any agents or representatives to record such information and to keep such information in your file.
SECURITIES LAW INFORMATION. The sale or other disposal of the shares of Class A Common Stock acquired under the Plan may not take place within Canada. If the Class A Common Stock is registered under the Securities Act, you will be permitted to sell shares of Class A Common Stock acquired under the Plan through the designated broker appointed under the Plan, provided the resale of shares of Class A Common Stock takes place outside Canada through the facilities of the exchange on which the shares of Class A Common Stock are then listed. You should consult your personal legal advisor prior to selling shares of Class A Common Stock to ensure compliance with any applicable requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You are required to report foreign property on form T1135 (Foreign Income Verification Statement) if the total cost of the foreign property exceeds C$100,000 at any time in the year. Foreign property includes shares of Class A Common Stock acquired under the Plan and may include the Restricted Stock Units. The Restricted Stock Units must be reported--generally at a nil cost--if the C$100,000 cost threshold is exceeded because of other foreign property held. If shares of Class A Common Stock are acquired, their cost generally is the adjusted cost base (“ACB”) of the shares. The ACB ordinarily would equal the fair market value of the shares at the time of acquisition, but if other shares of Class A Common Stock are owned, this ACB may need to be averaged with the ACB of the other shares. The form T1135 generally must be filed by April 30 of the following year. You should consult your personal tax advisor to ensure compliance with the applicable reporting requirements.
The following provisions apply only if you reside in Quebec:
LANGUAGE CONSENT. The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.
CONSENTMENT RELATIF À LA LANGUE UTILISÉE. Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention («Agreement»), ainsi que de tous documents, avis et procédures judiciaires, exécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à, la présente convention.
DENMARK
DANISH STOCK OPTION ACT. By accepting this RSU Award, you acknowledge that you have received an Employer Statement, translated into Danish, if you are entitled to receive one, which is provided to comply with the Danish Stock Option Act, as amended with effect from January 1, 2019.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. If you establish an account holding shares of Class A Common Stock or cash outside of Denmark, you must report the account and deposits
on your annual tax return in the section on foreign affairs and income. You should consult your personal tax advisor to ensure compliance with the applicable reporting requirements.
FINLAND
There are no country-specific provisions.
FRANCE
GRANT OF THE RSU AWARD. This provision supplements Section 2 of the Global Restricted Stock Unit Award Agreement:
The Restricted Stock Units granted under this Agreement are not intended to qualify for special tax and social security treatment pursuant to Sections L. 225-197-1 to L. 225-197-6 of the French Commercial Code, as amended.
LANGUAGE CONSENT. You confirm having read and understood the documents relating to the Plan, including the Agreement, with all terms and conditions included therein, which were provided in the English language. You accept the terms of those documents accordingly.
CONSENTMENT RELATIF À LA LANGUE UTILISÉE. Vous confirmez avoir lu et compris le Plan et cette convention («Agreement»), incluant tous leurs terms et conditions, qui ont été transmis en langue anglaise. Vouz acceptez les dispositions de ces documents en connaissance de cause.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. If you maintain a foreign bank account, you must report such account to the French tax authorities when filing your annual tax return. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
GERMANY
EXCHANGE CONTROL INFORMATION. Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank (Bundesbank). In case of payments in connection with securities (including proceeds realized upon the sale of shares of Class A Common Stock or the receipt of dividends), the report must be made by the 5th day of the month following the month in which the payment was received. The report must be filed electronically and the form of report (“Allgemeine Meldeportal Statistik”) can be accessed via the Bundesbank’s website (www.bundesbank.de) in both German and English. You should consult your personal legal advisor to ensure compliance with the applicable reporting requirements.
INDIA
EXCHANGE CONTROL INFORMATION. You must repatriate any funds received from participation in the Plan (e.g., proceeds from the sale of shares of Class A Common Stock) within such time as prescribed under applicable Indian exchange control laws, which may be amended from time to time. You should obtain a foreign inward remittance certificate (“FIRC”) from the bank where you deposit the foreign currency and maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Company or your employer requests proof of repatriation. You should consult your personal legal advisor to ensure compliance with the applicable requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You must declare the following items in your annual tax return: (i) any foreign assets held (including shares of Class A Common Stock acquired under the Plan), and (ii) any foreign bank accounts for which you have signing authority. You should consult your personal tax advisor to ensure compliance with the applicable requirements.
IRELAND
There are no country-specific provisions.
ITALY
ACKNOWLEDGEMENT OF SPECIFIC PROVISIONS. You acknowledge that you have read and specifically and expressly approve the following sections of the Agreement: Governing Plan Document; Grant of the RSU Award; Withholding Obligations; No Liability for Taxes; Other Documents; Imposition of Other Requirements; Nature of Grant; Venue.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. If, at any time during the fiscal year, you hold foreign financial assets (including Restricted Stock Units and shares of Class A Common Stock) which may generate income taxable in Italy, you are required to report these assets on your annual tax return (UNICO Form, RW Schedule) for the year during which the assets are held (or on a special form if no tax return is due). These reporting obligations will also apply to Italian residents who are the beneficial owners of foreign financial assets under Italian money laundering provisions. You should consult your personal tax advisor to ensure compliance with the applicable requirements.
JAPAN
EXCHANGE CONTROL INFORMATION. If you acquire shares of Class A Common Stock valued at more than JPY 100,000,000 in a single transaction, you must file a Securities Acquisition Report with the Ministry of Finance through the Bank of Japan within twenty (20) days of the acquisition of the shares. You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. You are required to report details of any assets held outside Japan as of December 31st (including shares of Class A Common Stock acquired under the Plan), to the extent such assets have a total net fair market value exceeding JPY 50,000,000. Such report is due by March 15th each year. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
NETHERLANDS
There are no country-specific provisions.
NEW ZEALAND
SECURITIES LAW INFORMATION. WARNING: You are being offered Restricted Stock Units which, upon vesting in accordance with the terms of the Agreement and the Plan, will enable you to acquire shares of Company Stock. The shares of Class A Common Stock, if issued, will give you a stake in the ownership of the Company. You may receive a return if dividends are paid.
If the Company runs into financial difficulties and is wound up, you will be paid only after all creditors and holders of preference shares (if any) have been paid. You may lose some or all of your investment, if any.
New Zealand law normally requires people who offer financial products to give information to investors before they invest. This information is designed to help investors to make an informed decision. The usual rules do not apply to this offer because it is made under an employee share purchase scheme. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.
The shares of Class A Common Stock are quoted on the New York Stock Exchange. This means that if the you acquire shares of Class A Common Stock under the Plan, you may be able to sell such shares on the New York Stock Exchange if there are interested buyers. If you sell your investment, the price you get may vary depending on factors such as the financial condition of the Company. You may receive less than the full amount that you paid for the investment, if anything. The price will depend on the demand for shares of Class A Common Stock.
A copy of the Company's most recent financial statements (and, if applicable, a copy of the auditor's report on those financial statements) as well as information on risk factors impacting the Company’s business that may affect the value of the shares of Class A Common Stock, are included in the Company’s Registration Statement on Form S-1 and (when applicable) the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. These documents have been or will be filed with the U.S. Securities and Exchange Commission and are or will be available to you free of charge online at www.sec.gov or on the Company’s “Investor Relations” website at [website to be inserted].
You should ask questions, read all documents carefully, and seek independent financial advice before committing yourself.
POLAND
EXCHANGE CONTROL INFORMATION. Polish residents holding foreign securities (e.g., shares of Class A Common Stock) and/or maintaining accounts abroad must report information to the National Bank of Poland on transactions and balances of the securities and cash deposited in such accounts if the value of such securities and cash (when combined with all other assets possessed abroad) exceeds PLN 7 million. If required, the reports must be filed on a quarterly basis on special forms that are available on the website of the National Bank of Poland. Further, if you transfer funds in excess of EUR 15,000 into or out of Poland, the funds must be transferred via a bank account. You are required to retain the documents connected with a foreign exchange transaction for a period of five years, as measured from the end of the year in which such transaction occurred. You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
SINGAPORE
SECURITIES LAW INFORMATION. The RSU Award is granted pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”) under which it is exempt from the prospectus and registration requirements and is not made with a view to the underlying shares of Class A Common Stock being subsequently offered for sale to any other party. The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that the Restricted Stock Units are subject to section 257 of the SFA and that you will not be able to make any offer or subsequent sale of the shares of Class A Common Stock in
Singapore, unless such offer or sale is made (1) after six (6) months from the Date of Grant or (2) pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA.
DIRECTOR REPORTING INFORMATION. If you are a director, associate director or shadow director of a Singapore Affiliate, you may be subject to certain notification requirements under the Singapore Companies Act, regardless of whether you are a Singapore resident or employed in Singapore. These requirements include an obligation to notify the Singapore Affiliate in writing of an interest (e.g., Restricted Stock Units, shares of Class A Common Stock) in the Company or an Affiliate within two days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest (e.g., when the Restricted Stock Units vest), or (iii) becoming a director, associate director or shadow director if such an interest exists at that time. If you are the chief executive officer (“CEO”) of a Singapore Affiliate or Subsidiary and the above notification requirements are determined to apply to the CEO of a Singapore Affiliate or Subsidiary, the above notification requirements also may apply.
SLOVAK REPUBLIC
There are no country-specific provisions.
SPAIN
NATURE OF GRANT. This provision supplements the Nature of Grant provision of this Appendix B:
By accepting the RSU Award, you consent to participation in the Plan and acknowledge that you have received a copy of the Plan.
You understand that the Company has unilaterally, gratuitously and in its sole discretion decided to grant RSU Awards under the Plan to individuals who may be employees or service providers of the Company or one of its Affiliates throughout the world. The decision is limited and entered into based upon the express assumption and condition that any RSU Award will not economically or otherwise bind the Company or any Affiliate , including the Service Recipient, on an ongoing basis, other than as expressly set forth in the Agreement. Consequently, you understand that the RSU Award is given on the assumption and condition that the RSU Award shall not become part of any employment or other service contract (whether with the Company or any Affiliate, including the Service Recipient) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever. Furthermore, you understand and freely accept that there is no guarantee that any benefit whatsoever shall arise from the RSU Award, which is gratuitous and discretionary, since the future value of the RSU Award and the underlying shares of Class A Common Stock is unknown, indeterminable, and unpredictable.
Further, your participation in the Plan is expressly conditioned on your continued and active rendering of service, such that, unless otherwise set forth in the Plan, if your Continuous Service terminates for any reason, your participation in the Plan will cease immediately. This will be the case, for example, even if (a) you are considered to be unfairly dismissed without good cause (i.e., subject to a “despido improcedente”); (b) you are dismissed for disciplinary or objective reasons or due to a collective dismissal; (c) your Continuous Service ceases due to a change of work location, duties or any other employment or contractual condition; (d) your Continuous Service ceases due to a unilateral breach of contract by the Company or the Service Recipient; or (e) your Continuous Service terminates for any other reason whatsoever. Consequently, upon termination of your Continuous Service for any of the
above reasons, you automatically lose any right to participate in the Plan on the date of your termination of Continuous Service, as described in the Plan and the Agreement.
SECURITIES LAW INFORMATION. The grant of the Restricted Stock Units and the shares of Class A Common Stock issued pursuant to the vesting of the Restricted Stock Units are considered a private placement outside the scope of Spanish laws on public offerings and issuances of securities. Neither the Plan nor this Agreement have been registered with the Comisión National del Mercado de Valores and do not constitute a public offering prospectus.
EXCHANGE CONTROL INFORMATION. The acquisition, ownership and disposition of shares of Class A Common Stock must be declared for statistical purposes to the Dirección General de Comercio e Inversiones (the “DGCI”), which is a department of the Ministry of Economy and Competitiveness. If you acquire shares of Class A Common Stock through the use of a Spanish financial institution, that institution will automatically make the declaration to the DGCI for the you; otherwise, you will be required make the declaration by filing the appropriate form with the DGCI. Generally, the declaration must be made in January for shares of Class A Common Stock owned as of December 31 of the prior year; however, if the value of shares acquired or sold exceeds certain thresholds, the declaration must be filed within one (1) month of the acquisition or sale, as applicable.
Further, you are required to electronically declare to the Bank of Spain any foreign accounts (including brokerage accounts held abroad), any foreign instruments (including shares acquired under the Plan), and any transactions with non-Spanish residents (including any payments of cash or shares made to you under the Plan) depending on the balances in such accounts together with the value of such instruments as of December 31 of the relevant year, or the volume of transactions with non-Spanish residents during the relevant year.
You should consult your personal legal advisor to ensure compliance with applicable reporting requirements.
FOREIGN ASSET/ACCOUNT REPORTING INFORMATION. To the extent you hold rights or assets outside of Spain with a value in excess of EUR 50,000 per type of right or asset (e.g., shares of Class A Common Stock, cash, etc.) as of December 31 each year, you will be required to report information on such rights and assets on your annual tax return for such year. After such rights and assets are initially reported, the reporting obligation will apply for subsequent years only if the value of any previously-reported rights or assets increases by more than EUR 20,000. You should consult your personal tax advisor to ensure compliance with applicable reporting requirements.
SWEDEN
AUTHORIZATION TO WITHHOLD. This provision supplements Section 4 (“Withholding Obligations”) of the Global Restricted Stock Unit Award Agreement:
Without limiting the Company’s and the Service Recipient’s authority to satisfy their withholding obligations for Tax Liability as set forth in Section 4 of the Agreement, in accepting the RSU Award, you authorize the Company to withhold shares of Class A Common Stock or to sell shares of Class A Common Stock otherwise issuable to you upon vesting/settlement to satisfy Tax Liability, regardless of whether the Company and/or your employer have an obligation to withhold such Tax Liability.
SWITZERLAND
SECURITIES LAW INFORMATION. Neither this document nor any other materials relating to the RSU Award (i) constitute a prospectus according to articles 35 et seq. of the Swiss Federal Act on Financial Services (“FinSA”), (ii) may be publicly distributed nor otherwise made publicly available in Switzerland to any person other than an employee of the Company or a service provider of the Service Recipient or (iii) has been or will be filed with, approved or supervised by any Swiss reviewing body according to article 51 FinSA or any Swiss regulatory authority, including the Swiss Financial Market Supervisory Authority (FINMA).
UNITED KINGDOM
GRANT OF THE RSU AWARD. This provision supplements Section 2 of the Global Restricted Stock Unit Award Agreement:
The RSU Award will be settled by the issuance of shares of Class A Common Stock and not by the issuance of cash (or by a combination of cash and shares), notwithstanding the discretion to settle an RSU Award in cash as described in Section 6(a)(vi) of the Plan.
RESPONSIBILITY FOR TAXES. This provision supplements Section 4 (“Withholding Obligations”) of the Global Restricted Stock Unit Award Agreement:
(a)Without limitation to Section 4 of the Agreement, you agree that you are liable for all the Tax Liability and you hereby covenant to pay all such Tax Liability, as and when requested by the Company and/or the Service Recipient or by Her Majesty’s Revenue & Customs (“HMRC”) (or any other tax authority or any other relevant authority). You also agree to indemnify and keep indemnified the Company and/or your employer against any Tax Liability that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on your behalf.
(b)As a condition of the vesting of, or the receipt of any benefit pursuant to, the Restricted Stock Units, you agree to accept any liability for secondary Class 1 National Insurance contributions which may be payable by the Company and/or the Service Recipient in connection with the Restricted Stock Units and any event giving rise to Tax Liability (the “Employer NICs”). Without prejudice to the foregoing, by accepting the RSU Award, you agree to enter into a joint election with the Company or the Service Recipient, the form of such joint election being formally approved by HMRC (the “NIC Joint Election”), a copy of which is either attached to this Appendix B or provided to you under separate cover and any other required consent or election. You further agree to execute such other joint elections as may be required between you and any successor to the Company and/or the Service Recipient. You further agree that the Company and/or the Service Recipient may collect the Employer NICs from you by any of the means set forth in Section 4 of the Agreement.
If you do not enter into the NIC Joint Election prior to the vesting of the RSU Award or any other event giving rise to the Tax Liability, you will not be entitled to vest in the RSU Award and receive shares of Class A Common Stock (or receive any benefit in connection with the RSU Award) unless and until you enter into the NIC Joint Election, and no shares of Class A
Common Stock or other benefit will be issued to you under the Plan, without any liability to the Company or the Service Recipient.
(c)As a condition of the vesting of, or the receipt of any benefit pursuant to, the RSUs, you agree to sign, promptly, all documents required by the Company to effect the terms of the foregoing provisions.
SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
GLOBAL RESTRICTED STOCK UNIT AWARD AGREEMENT
IMPORTANT NOTE ON THE JOINT ELECTION FOR THE TRANSFER OF LIABILITY OF
EMPLOYER NATIONAL INSURANCE CONTRIBUTIONS TO THE EMPLOYEE
AS A CONDITION OF THE VESTING OF, OR THE RECEIPT OF ANY BENEFIT PURSUANT TO, YOUR RESTRICTED STOCK UNITS (“RSUS”) GRANTED UNDER THE SNOWFLAKE INC. 2020 EQUITY INCENTIVE PLAN (THE “PLAN”), YOU ARE REQUIRED TO ENTER INTO A JOINT ELECTION TO TRANSFER TO YOU ANY LIABILITY FOR EMPLOYER NATIONAL INSURANCE CONTRIBUTIONS (THE “EMPLOYER NICS”) THAT MAY ARISE IN CONNECTION WITH THE RSUS AND IN CONNECTION WITH FUTURE RSUS, IF ANY, THAT MAY BE GRANTED TO YOU UNDER THE PLAN (THE “NIC JOINT ELECTION”).
BY ENTERING INTO THE JOINT ELECTION:
•YOU AGREE THAT ANY LIABILITY FOR EMPLOYER NICS THAT MAY ARISE IN CONNECTION WITH OR PURSUANT TO THE VESTING OF THE RSUS AND THE ACQUISITION OF SHARES OF CLASS A COMMON STOCK OF SNOWFLAKE INC. (THE “COMPANY”) OR OTHER TAXABLE EVENTS IN CONNECTION WITH THE RSUS WILL BE TRANSFERRED TO YOU; AND
•YOU AUTHORIZE THE COMPANY AND/OR YOUR EMPLOYER TO RECOVER AN AMOUNT SUFFICIENT TO COVER THIS LIABILITY BY ANY METHOD SET FORTH IN THE AGREEMENT AND/OR THE NIC JOINT ELECTION.
TO ENTER INTO THE NIC JOINT ELECTION, PLEASE INDICATE YOUR AGREEMENT WHERE INDICATED ON THE ACCEPTANCE SCREEN. PLEASE NOTE THAT YOUR ACCEPTANCE INDICATES YOUR AGREEMENT TO BE BOUND BY ALL OF THE TERMS OF THE NIC JOINT ELECTION.
PLEASE NOTE THAT EVEN IF YOU HAVE INDICATED YOUR ACCEPTANCE OF THIS NIC JOINT ELECTION ELECTRONICALLY, YOU MAY STILL BE REQUIRED TO SIGN A PAPER COPY OF THIS NIC JOINT ELECTION (OR A SUBSTANTIALLY SIMILAR FORM) IF THE COMPANY DETERMINES SUCH IS NECESSARY TO GIVE EFFECT TO THE NIC JOINT ELECTION.
PLEASE READ THE TERMS OF THE NIC JOINT ELECTION CAREFULLY BEFORE ENTERING INTO THE NIC JOINT ELECTION (BY EXECUTING THE RELATED GLOBAL RESTRICTED STOCK UNIT AWARD AGREEMENT IN HARD COPY OR BY ELECTRONICALLY ACCEPTING SUCH GLOBAL RESTRICTED STOCK UNIT AWARD AGREEMENT OR BY SIGNING OR ELECTRONICALLY ACCEPTING THIS NIC JOINT ELECTION). YOU SHOULD PRINT AND KEEP A COPY OF THIS NIC JOINT ELECTION FOR YOUR RECORDS.
SNOWFLAKE INC.
2020 EQUITY INCENTIVE PLAN
GLOBAL RESTRICTED STOCK UNIT AWARD AGREEMENT
ELECTION TO TRANSFER THE EMPLOYER'S LIABILITY FOR
NATIONAL INSURANCE LIABILITY TO THE EMPLOYEE
(UK EMPLOYEES)
1.PARTIES
This Election is between:
(A)The individual who has gained authorized access to this Election (the “Employee”), who is employed by one of the employing companies listed in the attached schedule (the “Employer”) and who is eligible to receive restricted stock units (“RSUs”) pursuant to the terms and conditions of the Snowflake Inc. 2020 Equity Incentive Plan, (the “Plan”), and
(B)Snowflake Inc. of 450 Concar Drive, San Mateo, CA 94402, USA (the “Company”), which may grant RSUs under the Plan and is entering into this Election on behalf of the Employer.
2.PURPOSE OF ELECTION
2.1This Election relates to all RSUs granted to Employee under the Plan up to the termination date of the Plan.
2.2In this Election the following words and phrases have the following meanings:
“Taxable Event” means any event giving rise to Relevant Employment Income.
“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003.
“Relevant Employment Income” from RSUs on which Employer’s National Insurance Contributions becomes due is defined as:
(i)an amount that counts as employment income of the earner under section 426 ITEPA (restricted securities: charge on certain post-acquisition events);
(ii)an amount that counts as employment income of the earner under section 438 of ITEPA (convertible securities: charge on certain post-acquisition events); or
(iii)any gain that is treated as remuneration derived from the earner's employment by virtue of section 4(4)(a) SSCBA, including without limitation:
(A)the acquisition of securities pursuant to the RSUs (within the meaning of section 477(3)(a) of ITEPA);
(B)the assignment (if applicable) or release of the RSUs in return for consideration (within the meaning of section 477(3)(b) of ITEPA);
(C)the receipt of a benefit in connection with the RSUs, other than a benefit within (i) or (ii) above (within the meaning of section 477(3)(c) of ITEPA).
“SSCBA” means the Social Security Contributions and Benefits Act 1992.
2.3This Election relates to the Employer’s secondary Class 1 National Insurance Contributions (the “Employer’s Liability”) which may arise in respect of Relevant Employment Income in respect of the RSUs pursuant to section 4(4)(a) and/or paragraph 3B(1A) of Schedule 1 of the SSCBA.
2.4This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the SSCBA or the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
2.5This Election does not apply to the extent that it relates to relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part VII of ITEPA (employment income: securities with artificially depressed market value).
2.6Any reference to the Company and/or the Employer shall include that entity’s successors in title and assigns as permitted in accordance with the terms of the Plan and the Agreement. This Election will have effect in respect of the RSUs and any awards which replace or replaced the RSUs following their grant in circumstances where section 483 of ITEPA applies.
3.ELECTION
The Employee and the Company jointly elect that the entire liability of the Employer to pay the Employer’s Liability that arises on any Relevant Employment Income is hereby transferred to the Employee. The Employee understands that by electronically accepting or by accepting the RSU (by signing the related Restricted Stock Unit Grant Notice (the "Grant Notice") in hard copy or by electronically accepting such Grant Notice), he or she will become personally liable for the Employer’s Liability covered by this Election. This Election is made in accordance with paragraph 3B(1) of Schedule 1 to SSCBA.
4.PAYMENT OF THE EMPLOYER'S LIABILITY
4.1The Employee hereby authorizes the Company and/or the Employer to collect the Employer’s Liability in respect of any Relevant Employment Income from the Employee at any time after the Taxable Event:
(i)by deduction from salary or any other payment payable to the Employee at any time on or after the date of the Taxable Event; and/or
(ii)directly from the Employee by payment in cash or cleared funds; and/or
(iii)by arranging, on behalf of the Employee, for the sale of some of the securities which the Employee is entitled to receive in respect of the RSUs; and/or
(iv)where the proceeds of the gain are to be paid through a third party, by that party withholding an amount from the payment or selling some of the securities which the Employee is entitled to receive in respect of the RSUs; and/or
(v)by any other means specified in the applicable restricted stock unit agreement.
4.2The Company hereby reserves for itself and the Employer the right to withhold the transfer of any securities in respect of the RSUs to the Employee until full payment of the Employer’s Liability is received.
4.3The Company agrees to procure the remittance by the Employer of the Employer’s Liability to HM Revenue and Customs on behalf of the Employee within 14 days after the end of the UK tax month during which the Taxable Event occurs (or within 17 days after the end of the UK tax month during which the Taxable Event occurs, if payments are made electronically).
5.DURATION OF ELECTION
5.1The Employee and the Company agree to be bound by the terms of this Election regardless of whether the Employee is transferred abroad or is not employed by the Employer on the date on which the Employer’s Liability becomes due.
5.2This Election will continue in effect until the earliest of the following:
(i)the Employee and the Company agree in writing that it should cease to have effect;
(ii)on the date the Company serves written notice on the Employee terminating its effect;
(iii)on the date HM Revenue and Customs withdraws approval of this Election; or
(iv)after due payment of the Employer’s Liability in respect of the entirety of the RSUs to which this Election relates or could relate, such that the Election ceases to have effect in accordance with its terms.
5.3This Election will continue in full force regardless of whether the Employee ceases to be an employee of the Employer.
Acceptance by the Employee
The Employee acknowledges that, by accepting the RSUs (by signing the related RSU Award Grant Notice in hard copy or by electronically accepting such Grant Notice) or by signing or electronically accepting this Election, the Employee agrees to be bound by the terms of this Election.
Acceptance by the Company
The Company acknowledges that, by arranging for the signature of an authorized representative to appear on this Election, the Company agrees to be bound by the terms of this Election.
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By:
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Michael P. Scarpelli
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Chief Financial Officer
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SCHEDULE OF EMPLOYER COMPANIES
The following Employer(s) shall be covered by the Joint Election:
Snowflake Computing U.K. Limited
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Address:
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c/o Fieldfisher
Riverbank House, 2 Swan Lane
London, United Kingdom EC4R 3TT
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Corporation Tax Number:
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[Corporation Tax Number Intentionally Omitted]
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Company Registration Number
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10611715
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PAYE Reference
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[PAYE Reference Intentionally Omitted]
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SNOWFLAKE INC.
2020 EMPLOYEE STOCK PURCHASE PLAN
ADOPTED BY THE BOARD OF DIRECTORS: SEPTEMBER 4, 2020
APPROVED BY THE STOCKHOLDERS: SEPTEMBER 5, 2020
IPO DATE: ______________, 2020
1.GENERAL; PURPOSE.
(a)Purpose. The Company, by means of the Plan, seeks to retain the services of Employees, to secure and retain the services of new Employees, and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Related Corporations. The Plan provides a means by which Eligible Employees of the Company and certain designated Related Corporations may be given an opportunity to purchase shares of Class A Common Stock. The Plan permits the Company to grant a series of Purchase Rights to Eligible Employees under an Employee Stock Purchase Plan. In addition, the Plan permits the Company to grant a series of Purchase Rights to Eligible Employees that do not meet the requirements of an Employee Stock Purchase Plan. Capitalized terms not defined in the text are defined in Section 16 below.
(b)Qualified and Non-Qualified Offerings Permitted. The Plan includes two components: a 423 Component and a Non-423 Component. The Company intends (but makes no undertaking or representation to maintain) the 423 Component to qualify as an Employee Stock Purchase Plan. The provisions of the 423 Component, accordingly, will be construed in a manner that is consistent with the requirements of Section 423 of the Code. Except as otherwise provided in the Plan or determined by the Board, the Non-423 Component will operate and be administered in the same manner as the 423 Component.
2.ADMINISTRATION.
(a)Administration by Board. The Board or the Committee will administer the Plan. References herein to the Board shall be deemed to refer to the Committee except where context dictates otherwise.
(b)Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i)To determine how and when Purchase Rights will be granted and the provisions of each Offering (which need not be identical);
(ii)To designate from time to time (A) which Related Corporations of the Company will be eligible to participate in the Plan, (B) whether such Related Corporations will participate in the 423 Component or the Non-423 Component, and (C) to the extent that the Company makes separate Offerings under the 423 Component, in which Offering the Related Corporations in the 423 Component will participate;
(iii)To construe and interpret the Plan and Purchase Rights, and to establish, amend, and revoke rules and regulations for its administration. The Board, in the exercise of this power, may
correct any defect, omission, or inconsistency in the Plan, in a manner and to the extent it deems necessary or expedient to make the Plan fully effective;
(iv)To settle all controversies regarding the Plan and Purchase Rights granted under the Plan;
(v)To suspend or terminate the Plan at any time as provided in Section 12;
(vi)To amend the Plan at any time as provided in Section 12;
(vii)Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and its Related Corporations and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan with respect to the 423 Component; and
(viii)To adopt such rules, procedures, and sub-plans as are necessary or appropriate to permit or facilitate participation in the Plan by Employees who are foreign nationals or employed or located outside the United States. Without limiting the generality of, and consistent with, the foregoing, the Board specifically is authorized to adopt rules, procedures, and sub-plans regarding, without limitation, eligibility to participate in the Plan, the definition of eligible “earnings,” handling and making of Contributions, establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of share issuances, any of which may vary according to applicable requirements, and which, if applicable to a Related Corporation designated for participation in the Non-423 Component, do not have to comply with the requirements of Section 423 of the Code.
(c)Delegation. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers of the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references to the Board in this Plan and in any applicable Offering Document will thereafter be to the Committee or subcommittee, as applicable, except where context dictates otherwise), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated. The Board or Committee may also delegate tasks and duties to an officer of the Company, to the extent permitted by Applicable Law. Whether or not the Board has delegated administration of the Plan to a Committee, the Board will have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan.
(d)Effect of Board’s Decision. All determinations, interpretations, and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
3.SHARES OF CLASS A COMMON STOCK SUBJECT TO THE PLAN.
(a)Number of Shares Available. Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the maximum number of shares of Class A Common Stock that may be
issued under the Plan will not exceed 5,700,000 shares of Class A Common Stock, plus the number of shares of Class A Common Stock that are automatically added on February 1 of each fiscal year for a period of up to ten years, commencing on the first February 1 following the year in which the IPO Date occurs and ending on (and including) February 1, 2030 in an amount equal to the lesser of (i) one percent (1%) of the total number of shares of Capital Stock outstanding on January 31 of the preceding fiscal year, and (ii) 8,500,000 shares of Class A Common Stock. Notwithstanding the foregoing, the Board may act prior to the first day of any fiscal year to provide that there will be no February 1 increase in the share reserve for such fiscal year or that the increase in the share reserve for such fiscal year will be a lesser number of shares of Class A Common Stock than would otherwise occur pursuant to the preceding sentence. For the avoidance of doubt, up to the maximum number of shares of Class A Common Stock reserved under this Section 3(a) may be used to satisfy purchases of Class A Common Stock under the 423 Component, and any remaining portion of such maximum number of shares may be used to satisfy purchases of Class A Common Stock under the Non-423 Component.
(b)Share Recycling. If any Purchase Right granted under the Plan terminates without having been exercised in full, the shares of Class A Common Stock not purchased under such Purchase Right will again become available for issuance under the Plan.
(c)Source of Shares. The stock purchasable under the Plan will be shares of authorized but unissued or reacquired Class A Common Stock, including shares repurchased by the Company on the open market.
4.GRANT OF PURCHASE RIGHTS; OFFERING.
(a)Offerings. The Board may from time to time grant or provide for the grant of Purchase Rights to Eligible Employees under an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board. Each Offering will be in such form and will contain such terms and conditions as the Board will deem appropriate, and, with respect to the 423 Component, will comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights will have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering will include (through incorporation of the provisions of this Plan by reference in the Offering Document or otherwise) the period during which the Offering will be effective, which period will not exceed 27 months beginning with the Offering Date, and the substance of the provisions contained in Sections 5 through 8, inclusive.
(b)Multiple Purchase Rights. If a Participant has more than one Purchase Right outstanding under the Plan, unless he or she otherwise indicates in forms delivered to the Company: (i) each form will apply to all of his or her Purchase Rights under the Plan, and (ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase Right, if different Purchase Rights have identical exercise prices) will be exercised to the fullest possible extent before a Purchase Right with a higher exercise price (or a later-granted Purchase Right if different Purchase Rights have identical exercise prices) will be exercised.
(c)Restart Provision Permitted. The Board will have the discretion to structure an Offering so that if the Fair Market Value of a share of Class A Common Stock on the first Trading Day of a new Purchase Period within that Offering is less than or equal to the Fair Market Value of a share of Class A Common Stock on the Offering Date for that Offering, then (i) that Offering will terminate immediately
as of that first Trading Day, and (ii) the Participants in such terminated Offering will be automatically enrolled in a new Offering beginning on the first Trading Day of such new Purchase Period.
5.ELIGIBILITY.
(a)General. Purchase Rights may be granted only to Employees of the Company or, as the Board may designate in accordance with Section 2(b), to Employees of a Related Corporation. Except as provided in Section 5(b) or as required by Applicable Law, an Employee will not be eligible to be granted Purchase Rights unless, on the Offering Date, the Employee has been in the employ of the Company or the Related Corporation, as the case may be, for such continuous period preceding such Offering Date as the Board may require, but in no event will the required period of continuous employment be equal to or greater than two years. In addition, the Board may (unless prohibited by Applicable Law) provide that no Employee will be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employee’s customary employment with the Company or the Related Corporation is more than 20 hours per week and more than five months per calendar year or such other criteria as the Board may determine consistent with Section 423 of the Code with respect to the 423 Component. The Board may also exclude from participation in the Plan or any Offering Employees who are “highly compensated employees” (within the meaning of Section 423(b)(4)(D) of the Code) of the Company or a Related Corporation or a subset of such highly compensated employees.
(b)Grant of Purchase Rights. The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Purchase Right under that Offering, which Purchase Right will thereafter be deemed to be a part of that Offering. Such Purchase Right will have the same characteristics as any Purchase Rights originally granted under that Offering, as described herein, except that:
(i)the date on which such Purchase Right is granted will be the “Offering Date” of such Purchase Right for all purposes, including determination of the exercise price of such Purchase Right;
(ii)the period of the Offering with respect to such Purchase Right will begin on its Offering Date and end coincident with the end of such Offering; and
(iii)the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she will not receive any Purchase Right under that Offering.
(c)5% Stockholders. No Employee will be eligible for the grant of any Purchase Rights if, immediately after any such Purchase Rights are granted, such Employee owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Related Corporation. For purposes of this Section 5(c), the rules of Section 424(d) of the Code will apply in determining the stock ownership of any Employee, and stock which such Employee may purchase under all outstanding Purchase Rights and options will be treated as stock owned by such Employee.
(d)$25,000 Limit. As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights only if such Purchase Rights, together with any other rights granted under all Employee Stock Purchase Plans of the Company and any Related Corporation, do not permit such Eligible Employee’s rights to purchase stock of the Company or any Related Corporation to accrue at a
rate which, when aggregated, exceeds U.S. $25,000 of Fair Market Value of such stock (determined at the time such rights are granted, and which, with respect to the Plan, will be determined as of their respective Offering Dates) for each calendar year in which such rights are outstanding at any time.
(e)Highly Compensated Employees. Officers of the Company and any designated Related Corporation, if they are otherwise Eligible Employees, will be eligible to participate in Offerings under the Plan. Notwithstanding the foregoing, the Board may (unless prohibited by Applicable Law) provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code will not be eligible to participate.
(f)Non-423 Component Offerings. Notwithstanding anything in this Section 5 to the contrary, in the case of an Offering under the Non-423 Component, an Eligible Employee (or group of Eligible Employees) may be excluded from participation in the Plan or an Offering if the Board has determined, in its sole discretion, that participation of such Eligible Employee(s) is not advisable or practical for any reason.
6.PURCHASE RIGHTS; PURCHASE PRICE
(a)Grant and Maximum Contribution Rate. On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, will be granted a Purchase Right to purchase up to that number of shares of Class A Common Stock purchasable either with a percentage, a maximum dollar amount, or both, as designated by the Board, but in either case not exceeding 15% of such Employee’s earnings (as defined by the Board in each Offering) during the period that begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date will be no later than the end of the Offering.
(b)Purchase Dates. The Board will establish one or more Purchase Dates during an Offering on which Purchase Rights granted for that Offering will be exercised and shares of Class A Common Stock will be purchased in accordance with such Offering.
(c)Other Purchase Limitations. In connection with each Offering made under the Plan, the Board may specify (i) a maximum number of shares of Class A Common Stock that may be purchased by any Participant on any Purchase Date during such Offering, (ii) a maximum aggregate number of shares of Class A Common Stock that may be purchased by all Participants pursuant to such Offering, and/or (iii) a maximum aggregate number of shares of Class A Common Stock that may be purchased by all Participants on any Purchase Date under the Offering. If the aggregate purchase of shares of Class A Common Stock issuable upon exercise of Purchase Rights granted under the Offering would exceed any such maximum aggregate number, then, in the absence of any Board action otherwise, a pro rata (based on each Participant’s accumulated Contributions) allocation of the shares of Class A Common Stock (rounded down to the nearest whole share, unless fractional shares may be purchased under the applicable Offering) available will be made in as uniform a manner as will be practicable and equitable.
(d)Purchase Price. The purchase price of shares of Class A Common Stock acquired pursuant to Purchase Rights will be not less than the lesser of:
(i)an amount equal to 85% of the Fair Market Value of the shares of Class A Common Stock on the Offering Date; or
(ii)an amount equal to 85% of the Fair Market Value of the shares of Class A Common Stock on the applicable Purchase Date.
7.PARTICIPATION; WITHDRAWAL; TERMINATION
(a)Enrollment and Contributions. An Eligible Employee may elect to participate in an Offering and authorize payroll deductions as the means of making Contributions by completing and delivering to the Company, within the time specified in the Offering, an enrollment form provided by the Company and agreeing to any other terms and conditions of participation in the Plan provided by the Company and applicable to the Offering. The enrollment form will specify the amount of Contributions not to exceed the maximum amount specified by the Board. Each Participant’s Contributions will be credited to a bookkeeping account for such Participant under the Plan and will be deposited with the general funds of the Company except where Applicable Law requires that Contributions be segregated and/or deposited with a third party. If permitted in the Offering, a Participant may begin such Contributions with the first practicable payroll occurring on or after the Offering Date (or, in the case of a payroll date that occurs after the end of the prior Offering but before the Offering Date of the next new Offering, Contributions from such payroll will be included in the new Offering). If permitted in the Offering, a Participant may thereafter reduce his or her Contributions (including to zero) or increase his or her Contributions, each as determined by the Board. If required under Applicable Law or if specifically provided in the Offering, in addition to or instead of making Contributions by payroll deductions, a Participant may make Contributions through the payment by cash, check, or wire transfer prior to a Purchase Date.
(b)Withdrawals. During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the Company a withdrawal form provided by the Company. The Company may impose a deadline before a Purchase Date for withdrawing, subject to Applicable Law. Upon such withdrawal, such Participant’s Purchase Right in that Offering will immediately terminate and the Company will distribute as soon as practicable to such Participant all of his or her accumulated but unused Contributions and such Participant’s Purchase Right in that Offering shall thereupon terminate. A Participant’s withdrawal from that Offering will have no effect upon his or her eligibility to participate in any other Offerings under the Plan, but such Participant will be required to deliver a new enrollment form to participate in subsequent Offerings.
(c)Termination of Eligibility. Unless otherwise required by Applicable Law, Purchase Rights granted pursuant to any Offering under the Plan will terminate immediately if the Participant either (i) is no longer an Employee for any reason or for no reason or (ii) is otherwise no longer eligible to participate, including if the Participant's employer ceases to be a Related Corporation. The Company will distribute to such individual as soon as practicable all of his or her accumulated but unused Contributions.
(d)Employee Transfers. Unless otherwise determined by the Board, a Participant whose employment transfers or whose employment terminates with an immediate rehire (with no break in service) by or between the Company and a Related Corporation that has been designated for participation in the Plan will not be treated as having terminated employment for purposes of participating in the Plan or an Offering; however, if a Participant transfers from an Offering under the 423 Component to an Offering under the Non-423 Component, the exercise of the Participant’s Purchase Right will be qualified under the 423 Component only to the extent such exercise complies with Section 423 of the Code. If a Participant transfers from an Offering under the Non-423 Component to an Offering under the 423 Component, the exercise of the Purchase Right will remain non-qualified under the Non-423 Component. The Board may establish different and additional rules governing transfers between separate Offerings within the 423 Component and between Offerings under the 423 Component and Offerings under the Non-423 Component.
(e)No Transfers of Rights. During a Participant’s lifetime, Purchase Rights will be exercisable only by such Participant. Purchase Rights are not transferable by a Participant, except by will, by the laws of descent and distribution, or, if permitted by the Company, by a beneficiary designation as described in Section 10.
(f)No Interest. Unless otherwise specified in the Offering or required by Applicable Law, the Company will have no obligation to pay interest on Contributions.
8.EXERCISE OF PURCHASE RIGHTS.
(a)Accumulated Contributions. On each Purchase Date, each Participant’s accumulated Contributions will be applied to the purchase of shares of Class A Common Stock (rounded down to the nearest whole share, unless fractional shares may be purchased under the applicable Offering), up to the maximum number of shares of Class A Common Stock permitted by the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares will be issued unless specifically provided for in the Offering.
(b)Remaining Contributions. Unless otherwise provided in the Offering, if any amount of accumulated Contributions remains in a Participant’s account after the purchase of shares of Class A Common Stock and such remaining amount is less than the amount required to purchase one share of Class A Common Stock on the final Purchase Date of an Offering, then such remaining amount will be held in such Participant’s account for the purchase of shares of Class A Common Stock under the next Offering under the Plan, unless such Participant withdraws from or is not eligible to participate in such Offering, in which case such amount will be distributed to such Participant after the final Purchase Date, without interest (unless the payment of interest is required by Applicable Law). Unless otherwise provided in the Offering, if the amount of Contributions remaining in a Participant’s account after the purchase of shares of Class A Common Stock is at least equal to the amount required to purchase one whole share of Class A Common Stock on the final Purchase Date of an Offering, then such remaining amount will not roll over to the next Offering and will instead be distributed in full to such Participant after the final Purchase Date of such Offering without interest (unless the payment of interest is required by Applicable Law).
(c)Limitations on Exercise. No Purchase Rights may be exercised to any extent unless the shares of Class A Common Stock to be issued upon such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable U.S. federal and state, foreign, and other securities, exchange control and other laws applicable to the Plan. If on a Purchase Date the shares of Class A Common Stock are not so registered or the Plan is not in such compliance, no Purchase Rights will be exercised on such Purchase Date, and the Purchase Date will be delayed until the shares of Class A Common Stock are subject to such an effective registration statement and the Plan is in material compliance, except that the Purchase Date will in no event be more than 27 months from the Offering Date. If, on the Purchase Date, as delayed to the maximum extent permissible, the shares of Class A Common Stock are not registered and the Plan is not in material compliance with all Applicable Laws, as determined by the Company in its sole discretion, no Purchase Rights will be exercised and all accumulated but unused Contributions will be distributed as soon as practicable to the Participants without interest (unless the payment of interest is otherwise required by Applicable Law).
9.COVENANTS OF THE COMPANY.
The Company may seek to obtain from each U.S. federal or state, foreign, or other regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Purchase Rights and issue and sell shares of Class A Common Stock thereunder; provided that the Company may determine, in its sole discretion, that doing so is not practical or would cause the Company to incur costs that are unreasonable. If the Company decides not to seek, or is unable to obtain, the authority that counsel for the Company deems necessary or advisable for the grant of Purchase Rights or the lawful issuance and sale of Class A Common Stock under the Plan, the Company will be relieved from any liability for failure to grant Purchase Rights and/or to issue and sell Class A Common Stock upon exercise of such Purchase Rights.
10.DESIGNATION OF BENEFICIARY.
(a)The Company may, but is not obligated to, permit a Participant to submit a form designating a beneficiary who will receive any shares of Class A Common Stock and/or Contributions from the Participant’s account under the Plan if the Participant dies before such shares and/or Contributions are delivered to the Participant. The Company may, but is not obligated to, permit the Participant to change such designation of beneficiary. Any such designation and/or change must be on a form approved by the Company.
(b) If a Participant dies, and in the absence of a valid beneficiary designation (which validity shall be determined by the Company in its discretion and in consideration of the requirements of Applicable Law), the Company may deliver any shares of Class A Common Stock and/or Contributions to the executor or administrator of the estate of the Participant. If no executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such shares of Class A Common Stock and/or Contributions, without interest (unless the payment of interest is otherwise required by Applicable Law), to the Participant’s spouse, dependents, or relatives, or if no spouse, dependent, or relative is known to the Company, then to such other person as the Company may designate.
11.ADJUSTMENTS UPON CHANGES IN CLASS A COMMON STOCK; CORPORATE TRANSACTIONS.
(a)Capitalization Adjustment. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities by which the share reserve is to increase automatically each year pursuant to Section 3(a), (iii) the class(es) and number of securities subject to, and the purchase price applicable to outstanding Offerings and Purchase Rights, and (iv) the class(es) and number of securities that are the subject of the purchase limits under each ongoing Offering. The Board will make these adjustments, and its determination will be final, binding and conclusive.
(b)Corporate Transaction. In the event of a Corporate Transaction, then: (i) any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue outstanding Purchase Rights or may substitute similar rights (including a right to acquire the same consideration paid to the stockholders in the Corporate Transaction) for outstanding Purchase Rights, or (ii) if any surviving or acquiring corporation (or its parent company) does not assume or continue such Purchase Rights or does not substitute similar rights for such Purchase Rights, then the
Participants’ accumulated Contributions will be used to purchase shares of Class A Common Stock (rounded down to the nearest whole share, unless fractional shares may be issued under the applicable Offering) within ten business days prior to the Corporate Transaction under the outstanding Purchase Rights, and the Purchase Rights will terminate immediately after such purchase.
12.AMENDMENT, TERMINATION, OR SUSPENSION OF THE PLAN.
(a)Plan Amendment. The Board may amend the Plan at any time in any respect the Board deems necessary or advisable. However, except as provided in Section 11(a) relating to Capitalization Adjustments, stockholder approval will be required for any amendment of the Plan for which stockholder approval is required by Applicable Law.
(b)Suspension or Termination. The Board may suspend or terminate the Plan at any time. No Purchase Rights may be granted under the Plan while the Plan is suspended or after it is terminated.
(c)No Impairment of Rights. Any benefits, privileges, entitlements, and obligations under any outstanding Purchase Rights granted before an amendment, suspension, or termination of the Plan will not be materially impaired by any such amendment, suspension, or termination except (i) with the consent of the person to whom such Purchase Rights were granted, (ii) as necessary to comply with any Applicable Laws (including, without limitation, the provisions of Section 423 of the Code and the regulations and other interpretive guidance issued thereunder relating to Employee Stock Purchase Plans), including without limitation any laws, regulations or other guidance that may be issued or amended after the date the Plan is adopted by the Board, or (iii) as necessary to obtain or maintain favorable tax, listing, or regulatory treatment. To be clear, the Board may amend outstanding Purchase Rights without a Participant’s consent if such amendment is necessary to ensure that the Purchase Right and/or the Plan complies with the requirements of Section 423 of the Code with respect to the 423 Component or with respect to other Applicable Laws.
(d)Corrections and Administrative Procedures. Notwithstanding anything in the Plan or any Offering Document to the contrary, the Board will be entitled to: (i) establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars; (ii) permit Contributions in excess of the amount designated by a Participant in order to adjust for mistakes in the Company’s processing of properly completed Contribution elections; (iii) establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Class A Common Stock for each Participant properly correspond with amounts withheld from the Participant’s Contributions; (iv) amend any outstanding Purchase Rights or clarify any ambiguities regarding the terms of any Offering to enable the Purchase Rights to qualify under and/or comply with Section 423 of the Code with respect to the 423 Component; and (v) establish other limitations or procedures as the Board determines in its sole discretion advisable that are consistent with the Plan. The actions of the Board pursuant to this paragraph will not be considered to alter or impair any Purchase Rights granted under an Offering as they are part of the initial terms of each Offering and the Purchase Rights granted under each Offering.
13.TAX QUALIFICATION; TAX WITHHOLDING.
(a)No Guarantee of Tax Treatment. Although the Company may endeavor to (i) qualify a Purchase Right for special tax treatment under the laws of the United States or jurisdictions outside of the United States or (ii) avoid adverse tax treatment, the Company makes no representation to that effect and expressly disavows any covenant to maintain special or to avoid unfavorable tax treatment,
notwithstanding anything to the contrary in this Plan. The Company will be unconstrained in its corporate activities without regard to the potential negative tax impact on Participants.
(b)Withholding. Each Participant will make arrangements, satisfactory to the Company and any applicable Related Corporation, to enable the Company or the Related Corporation to fulfill any withholding obligation for Tax-Related Items. Without limitation to the foregoing, in the Company's sole discretion and subject to Applicable Law, such withholding obligation may be satisfied in whole or in part by (i) requiring the Participant to make a payment in a form acceptable to the Company; (ii) withholding from the Participant’s salary or any other cash payment due to the Participant from the Company or a Related Corporation; (iii) withholding from the proceeds of the sale of shares of Class A Common Stock acquired under the Plan, either through a voluntary sale or a mandatory sale arranged by the Company; (iv) withholding shares of Class A Common Stock otherwise issuable upon exercise of a Purchase Right; or (v) any other method deemed acceptable by the Board.
14.EFFECTIVE DATE OF PLAN.
The Plan will become effective immediately prior to and contingent upon the IPO Date. No Purchase Rights will be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval must be within 12 months before or after the date the Plan is adopted (or if required under Section 12(a) above, materially amended) by the Board.
15.MISCELLANEOUS PROVISIONS.
(a)Any reference herein to a “written” agreement, form, or document will include any agreement, form, or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto), or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access). By participating in the Plan, the Participant consents to receive documents related to current or future participation in the Plan by electronic delivery and to participate in the Plan through any online or electronic system established and maintained by the Company or a third party selected by the Company. The form of delivery of any Class A Common Stock (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.
(b)Proceeds from the sale of shares of Class A Common Stock pursuant to Purchase Rights will constitute general funds of the Company.
(c)A Participant will not be deemed to be the holder of, or to have any of the rights of a holder with respect to, shares of Class A Common Stock subject to Purchase Rights unless and until the Participant’s shares of Class A Common Stock acquired upon exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent).
(d)The Plan and Offering do not constitute an employment contract. Nothing in the Plan or in the Offering will in any way alter the at will nature of a Participant’s employment, if applicable, or be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employ of the Company or a Related Corporation, or on the part of the Company or a Related Corporation to continue the employment of a Participant.
(e)The provisions of the Plan will be governed by the laws of the State of Delaware without resort to that state’s conflict of laws rules.
(f)If any particular provision of the Plan is found to be invalid or otherwise unenforceable, in whole or in part, such provision will not affect the other provisions of the Plan, but the Plan will be construed in all respects as if such invalid provision were omitted.
(g)If any provision of the Plan does not comply with Applicable Law, such provision shall be construed in such a manner as to comply with Applicable Law.
16.DEFINITIONS.
As used in the Plan, the following definitions will apply to the capitalized terms indicated below:
(a)“423 Component” means the part of the Plan, which excludes the Non-423 Component, pursuant to which Purchase Rights that satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.
(b)“Applicable Law” means any applicable securities, federal, state, foreign, material local, or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling, or requirement issued, enacted, adopted, promulgated, implemented, or otherwise put into effect by or under the authority of any Governmental Body (or under the authority of the Exchange or the Financial Industry Regulatory Authority).
(c)“Board” means the Board of Directors of the Company.
(d)“Capital Stock” means the Class A Common Stock and the Class B Common Stock.
(e)“Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Class A Common Stock subject to the Plan or subject to any Purchase Right after the date the Plan is adopted by the Board without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure, or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
(f)“Class A Common Stock” means the Class A common stock of the Company.
(g)“Class B Common Stock” means the Class B common stock of the Company.
(h)“Code” means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(i)“Committee” means a committee of one or more members of the Board to whom authority has been delegated by the Board in accordance with Section 2(c).
(j) “Company” means Snowflake Inc., a Delaware corporation.
(k)“Contributions” means the payroll deductions and other additional payments specifically provided for in the Offering that a Participant contributes to fund the exercise of a Purchase Right. A
Participant may make additional payments into his or her account if specifically provided for in the Offering, and then only if the Participant has not already had the maximum permitted amount withheld during the Offering through payroll deductions.
(l)“Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i)a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its subsidiaries;
(ii)a sale or other disposition of more than 50% of the outstanding securities of the Company;
(iii)a merger, consolidation, or similar transaction following which the Company is not the surviving corporation; or
(iv)a merger, consolidation, or similar transaction following which the Company is the surviving corporation but the shares of Capital Stock outstanding immediately preceding the merger, consolidation, or similar transaction are converted or exchanged by virtue of the merger, consolidation, or similar transaction into other property, whether in the form of securities, cash or otherwise.
(m)“Director” means a member of the Board.
(n)“Eligible Employee” means an Employee who meets the requirements set forth in the document(s) governing the Offering for eligibility to participate in the Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan.
(o)“Employee” means any person, including an Officer or Director, who is providing services to the Company or a Related Corporation in an employee-employer relationship and, with respect to the 423 Component, who is “employed” for purposes of Section 423(b)(4) of the Code by the Company or a Related Corporation. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.
(p)“Employee Stock Purchase Plan” means a plan that grants Purchase Rights intended to be options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code.
(q)“Exchange” means the exchange on which the Company’s stock is listed.
(r)“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.
(s)“Fair Market Value” means, as of any date, the value of the Class A Common Stock determined as follows:
(i)If the Class A Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Class A Common Stock will be, unless otherwise determined by the Board, the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Class A Common Stock) on the date of determination, as reported in such source as the Board deems reliable.
Unless otherwise provided by the Board, if there is no closing sales price for the Class A Common Stock on the date of determination, then the Fair Market Value will be the closing sales price on the last preceding date for which such quotation exists.
(ii)In the absence of such markets for the Class A Common Stock, the Fair Market Value will be determined by the Board in good faith in compliance with Applicable Laws in a manner that complies with Sections 409A of the Code
(iii)Notwithstanding the foregoing, for any Offering that commences on the IPO Date, the Fair Market Value of the shares of Class A Common Stock on the Offering Date will be the price per share at which shares are first sold to the public in the Company’s initial public offering as specified in the final prospectus for that initial public offering.
(t)“Governmental Body” means any: (a) nation, state, commonwealth, province, territory, county, municipality, district, or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign, or other government; (c) governmental or regulatory body, or quasi-governmental body of any nature (including any governmental division, department, administrative agency or bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body, or entity and any court or other tribunal, and for the avoidance of doubt, any tax authority) or other body exercising similar powers or authority; or (d) self-regulatory organization (including the Exchange and the Financial Industry Regulatory Authority).
(u)“IPO Date” means the date of the underwriting agreement between the Company and the underwriters managing the initial public offering of the Class A Common Stock, pursuant to which the Class A Common Stock is priced for the initial public offering.
(v)“Non-423 Component” means the part of the Plan, which excludes the 423 Component, pursuant to which Purchase Rights that are not intended to satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.
(w)“Offering” means the grant to Eligible Employees of Purchase Rights, with the exercise of those Purchase Rights automatically occurring at the end of one or more Purchase Periods. The terms and conditions of an Offering will generally be set forth in the “Offering Document” approved by the Board for that Offering.
(x)“Offering Date” means a date selected by the Board for an Offering to commence.
(y)“Officer” means a person who is an officer of the Company or a Related Corporation within the meaning of Section 16 of the Exchange Act.
(z) “Participant” means an Eligible Employee who holds an outstanding Purchase Right.
(aa)“Plan” means this Snowflake Inc. 2020 Employee Stock Purchase Plan, as amended from time to time, including both the 423 Component and the Non-423 Component.
(bb)“Purchase Date” means one or more dates during an Offering selected by the Board on which Purchase Rights will be exercised and on which purchases of shares of Class A Common Stock will be carried out in accordance with such Offering.
(cc)“Purchase Period” means a period of time specified within an Offering, generally beginning on the Offering Date or on the first Trading Day following a Purchase Date, and ending on a Purchase Date. An Offering may consist of one or more Purchase Periods.
(dd)“Purchase Right” means an option to purchase shares of Class A Common Stock granted pursuant to the Plan.
(ee)“Related Corporation” means any “parent corporation” or “subsidiary corporation” of the Company whether now or subsequently established, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.
(ff)“Securities Act” means the U.S. Securities Act of 1933, as amended.
(gg)“Tax-Related Items” means any income tax, social insurance, payroll tax, fringe benefit tax, payment on account, or other tax-related items arising out of or in relation to a Participant’s participation in the Plan, including, but not limited to, the grant or exercise of a Purchase Right, the receipt of shares of Class A Common Stock or the sale or other disposition of shares of Class A Common Stock acquired under the Plan.
(hh)“Trading Day” means any day on which the exchange(s) or market(s) on which shares of Class A Common Stock are listed, including but not limited to the NYSE, Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or any successors thereto, is open for trading.
(ii)“U.S.” means the United States of America.
SNOWFLAKE INC.
COMMON STOCK PURCHASE AGREEMENT
September 5, 2020
TABLE OF CONTENTS
Page
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1.
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Purchase and Sale of Stock
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1
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1.1
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Sale and Issuance of Common Stock
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1
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1.2
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Closing
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1
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2.
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Registration Rights.
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1
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3.
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Representations and Warranties of the Company
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1
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3.1
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Organization, Good Standing and Qualification
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1
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3.2
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Authorization
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2
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3.3
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Valid Issuance of Common Stock
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2
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3.4
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Compliance with Other Instruments
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2
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3.5
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Description of Capital Stock
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2
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3.6
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Registration Statement
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3
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3.7
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Brokers or Finders
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3
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3.8
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Private Placement
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3
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4.
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Representations, Warranties and Covenants of the Investor
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3
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4.1
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Organization, Good Standing and Qualification
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3
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4.2
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Authorization
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3
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4.3
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Purchase Entirely for Own Account
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4
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4.4
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Disclosure of Information
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4
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4.5
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Investment Experience
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4
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4.6
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Accredited Investor
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4
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4.7
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Brokers or Finders
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4
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4.8
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Restricted Securities
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4
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4.9
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Legends
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5
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4.10
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Market Stand-Off Agreement; Lock-Up Agreement
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5
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4.11
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Standstill.
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5
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4.12
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Regulatory Approvals
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6
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5.
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Conditions of the Investor’s Obligations at Closing
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7
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5.1
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Representations and Warranties
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7
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5.2
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Public Offering Shares
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8
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5.3
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Rights Agreement Amendment
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8
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5.4
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Absence of Injunctions, Decrees, Etc
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8
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5.5
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Governmental Approvals
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8
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6.
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Conditions of the Company’s Obligations at Closing
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8
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6.1
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Representations, Warranties and Covenants
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8
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6.2
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Public Offering Shares
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8
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6.3
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Absence of Injunctions, Decrees, Etc
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8
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6.4
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Governmental Approvals.
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8
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7.
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Termination
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9
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8.
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Miscellaneous
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9
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8.1
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Publicity
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9
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8.2
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Survival of Warranties
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9
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8.3
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Successors and Assigns
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9
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8.4
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Governing Law
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9
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8.5
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Counterparts
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9
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8.6
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Notices
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9
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8.7
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Brokers or Finders
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10
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8.8
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Amendments and Waivers
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10
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8.9
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Severability
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10
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8.10
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Corporate Securities Law
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11
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8.11
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Entire Agreement
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11
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8.12
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Specific Performance
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11
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SNOWFLAKE INC.
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of September 5, 2020, by and among Snowflake Inc., a Delaware corporation (the “Company”), Salesforce Ventures LLC, a Delaware limited liability company (the “Investor”), and salesforce.com, inc., a Delaware corporation (the “Parent”).
THE PARTIES HEREBY AGREE AS FOLLOWS:
1.Purchase and Sale of Stock.
1.1Sale and Issuance of Common Stock. Subject to the terms and conditions of this Agreement, the Investor agrees to purchase from the Company, and the Company agrees to sell and issue to the Investor, the Shares (as defined below) at a price per share equal to the per share initial public offering price (before underwriting discounts and expenses) in the Qualified IPO (as defined below) (the “IPO Price”). “Shares” shall mean the number of shares of Class A Common Stock of the Company (the “Common Stock”), equal to $250,000,000.00 divided by the IPO Price, rounded down to the nearest whole share (with the total purchase price correspondingly reduced for such fractional share amount). “Qualified IPO” shall mean the issuance and sale of shares of the Common Stock by the Company, pursuant to an Underwriting Agreement to be entered into by and among the Company and certain underwriters (the “Underwriters”), in connection with the Company’s initial public offering pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-248280) (the “Registration Statement”) and/or any related registration statements (the “Underwriting Agreement”).
1.2Closing. The purchase and sale of the Shares shall take place at the location and at the time immediately subsequent to the closing of the Qualified IPO (which time and place are designated as the “Closing”). At the Closing, the Investor shall make payment of the purchase price of the Shares by wire transfer in immediately available funds to the account specified by the Company against delivery to the Investor of the Shares registered in the name of the Investor, which Shares shall be uncertificated shares.
2.Registration Rights. At the Closing, in connection with the purchase of the Shares, the Company’s Amended and Restated Investors Rights Agreement, dated February 7, 2020, by and among the Company and the stockholders of the Company listed thereto (the “Existing Rights Agreement”), shall, pursuant to Section 5.5 of the Existing Rights Agreement, be amended, in substantially the form attached hereto as Exhibit A (the “Rights Agreement Amendment” and, together with the Existing Rights Agreement, the “Rights Agreement”).
3.Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor and the Parent that as of the date hereof and as of the date of the Closing:
3.1Organization, Good Standing and Qualification.
(a)The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted.
(b)The Company is duly qualified to transact business and is in good standing in each jurisdiction in which it is required to be so qualified or in good standing, except where the failure to so qualify or be in good standing would not be material and adverse to the Company.
3.2Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and, subject to obtaining the requisite stockholder approval for the Rights Agreement Amendment, the Rights Agreement Amendment, the performance of all obligations of the Company under this Agreement and the Rights Agreement Amendment, and the authorization, issuance, sale and delivery of the Shares being sold hereunder has been taken, and this Agreement constitutes and as of the Closing the Rights Agreement Amendment shall constitute, valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies and (iii) to the extent the indemnification provisions contained in the Rights Agreement may be limited by applicable federal or state securities laws.
3.3Valid Issuance of Common Stock. The Shares being purchased by the Investor hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and will be free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws or as contemplated hereby or by the Rights Agreement.
3.4Compliance with Other Instruments.
(a)The Company is not in violation or default of any provision of its Amended and Restated Certificate of Incorporation, or Amended and Restated Bylaws.
(b)Except as would not be material to the Company, the Company is not in violation or default in any material respect of any instrument, judgment, order, writ, decree or contract to which it is a party or by which it is bound, or, to its knowledge, of any provision of any federal or state statute, rule or regulation applicable to the Company. The execution, delivery and performance of this Agreement and the Rights Agreement Amendment, and the consummation of the transactions contemplated by this Agreement and the Rights Agreement Amendment will not result in any material violation or default or be in conflict with or constitute, with or without the passage of time and giving of notice, either a material default under any such provision, instrument, judgment, order, writ, decree or contract or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization, or approval applicable to the Company, its business or operations or any of its assets or properties.
(c)The Company hereby represents, warrants and covenants to Investor and Parent that, immediately following the Closing, the Shares will not represent more than 3% of the outstanding voting power of the Company.
3.5Description of Capital Stock. As of the date of the Closing, the statements set forth in the Pricing Prospectus (as defined in the Underwriting Agreement) and Prospectus (as defined in the Underwriting Agreement) under the caption “Description of Capital Stock,” insofar as they purport to
constitute a summary of the terms of the Company’s capital stock, are accurate, complete and fair in all material respects.
3.6Registration Statement. To the Company’s knowledge, the Registration Statement as presently filed with United States Securities and Exchange Commission (the “SEC”), and any amendment thereto, including any information deemed to be included therein pursuant to the rules and regulations of the SEC promulgated under the Securities Act of 1933, as amended (the “Securities Act”), complied (or, in the case of amendments filed after the date of this Agreement, will comply) as of its filing date in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC promulgated thereunder, and did not (or, in the case of amendments filed after the date hereof, will not) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of the date it is declared effective by the SEC, the Registration Statement, as so amended, and any related registration statements, will comply in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC promulgated thereunder, and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Any preliminary prospectus included in the Registration Statement or any amendment thereto, any free writing prospectus related to the Registration Statement and any final prospectus related to the Registration Statement filed pursuant to Rule 424 promulgated under the Securities Act, in each case as of its date, will comply in all material respects with the requirements of the Securities Act and the rules and regulations promulgated thereunder, and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
3.7Brokers or Finders. The Company has not engaged any brokers, finders or agents such that the Investor or the Parent will incur, directly or indirectly, as a result of any action taken by the Company, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the sale of the Shares contemplated by this Agreement.
3.8Private Placement. Assuming the accuracy of the representations, warranties and covenants of the Investor and the Parent set forth in Section 4 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor under this Agreement.
4.Representations, Warranties and Covenants of the Investor and the Parent. Each of the Investor and the Parent, on behalf of itself and as applicable, hereby represents and warrants that as of the date hereof and as of the date of the Closing:
4.1Organization, Good Standing and Qualification. The Investor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. The Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
4.2Authorization. The Investor has full power and authority to enter into this Agreement and the Rights Agreement, and each such agreement constitutes a valid and legally binding obligation of the Investor, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies and (iii) to the extent the indemnification provisions contained in the Rights Agreement may be limited by applicable federal or state securities laws. The Parent has full power and authority to enter into this Agreement, which constitutes a valid and legally binding obligation of the Parent, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
4.3Purchase Entirely for Own Account. By the Investor’s execution of this Agreement, the Investor hereby confirms, that the Shares to be received by the Investor will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the distribution of any part thereof, and that the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same, except as permitted by applicable federal or state securities laws. By executing this Agreement, the Investor further represents that the Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Shares.
4.4Disclosure of Information. The Investor believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the Shares. The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Shares and the business, properties, prospects and financial condition of the Company. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 3 of this Agreement or the right of the Investor to rely thereon.
4.5Investment Experience. The Investor is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Shares. Investor also represents it has not been organized for the purpose of acquiring the Shares.
4.6Accredited Investor. The Investor is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the SEC under the Securities Act, as presently in effect.
4.7Brokers or Finders. The Investor and the Parent have not engaged any brokers, finders or agents such that the Company will incur, directly or indirectly, as a result of any action taken by the Investor or the Parent, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the sale of the Shares contemplated by this Agreement.
4.8Restricted Securities. The Investor understands that the Shares will be characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act, only in certain limited circumstances. In this connection, the Investor represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
4.9Legends. The Investor understands that the Shares may bear one or all of the following legends:
(a)“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTIONS. THESE SECURITIES MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT, APPLICABLE STATE SECURITIES LAWS (PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM). INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”
(b)“THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A 365 DAY MARKET STANDOFF RESTRICTION AS SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S PRINCIPAL OFFICE. AS A RESULT OF SUCH AGREEMENT, THESE SECURITIES MAY NOT BE TRADED PRIOR TO 365 DAYS AFTER THE EFFECTIVE DATE OF ANY PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES.”
(c)Any legend required by applicable state “blue sky” securities laws, rules and regulations.
4.10Market Stand-Off Agreement; Lock-Up Agreement. The Investor hereby agrees that it shall not sell or otherwise transfer or dispose of the Shares, other than to donees, partners or Affiliates (as defined below) of the Investor who agree to be similarly bound, for up to 365 days following the effective date of the Qualified IPO. In order to enforce this covenant, the Company shall have the right to place restrictive legends on the book-entry accounts representing the Shares and to impose stop transfer instructions with respect to the Shares until the end of such period. The provisions of this Section 4.10 shall not apply to shares acquired in market purchases (subject to Section 4.11) following the Qualified IPO, unless otherwise required by the underwriters of securities of the Company. In addition, the Investor hereby confirms that it has executed and delivered to the Underwriters the lock-up agreement provided by the Company (the “Lock-Up Agreement”). The Lock-Up Agreement is in full force and effect, and following the consummation of the transactions contemplated by this Agreement will remain in full force and effect, including with respect to the Shares. For purposes of this Agreement, the term “Affiliates” means any individual or entity that directly or indirectly controls, is controlled by, or is under common control with the individual or entity in question.
4.11Standstill. Unless approved in advance in writing by the board of directors of the Company, the Investor and the Parent agree that, neither they nor any of their Representatives (as defined below) acting on behalf of or in concert with the Investor or the Parent will, until 365 days following the effective date of the Qualified IPO (“Standstill Expiration”), directly or indirectly:
(a)Make any statement or proposal to any of the Company’s directors, officers, attorneys, or financial advisors or any persons known to the Investor or the Parent to be one of the Company’s stockholders (other than a private communication with one or more members of the board
of directors or executive officers of the Company) regarding, or make any public announcement, proposal, or offer (including any “solicitation” of “proxies” as such terms are defined or used in Regulation 14A of the Securities Exchange Act of 1934, as amended) with respect to, or otherwise solicit, seek, or offer to effect (including, for the avoidance of doubt, indirectly by means of communication with the press or media) (i) any business combination, merger, tender offer, exchange offer, or similar transaction involving the Company or any of its subsidiaries, including any restructuring, recapitalization, liquidation, or similar transaction undertaken in connection with any of the foregoing, (ii) any acquisition of any of the Company’s loans, debt securities, equity securities or assets, or rights or options to acquire interests in any of the Company’s loans, debt securities, equity securities, or assets, other than (A) equity securities acquired from the Company in exchange for equity securities of the Company currently held by the Investor (subject to any agreement restricting such exchange entered into by Investor or Parent) and (B) the acquisition of the Shares as contemplated by this Agreement, (iii) any proposal to seek representation on the board of directors of the Company or otherwise seek to control or influence the management, board of directors, or policies of the Company, or (iv) any proposal, arrangement, or other statement that is inconsistent with the terms of this Agreement, including this Section 4.11;
(b)acquire (or propose or agree to acquire), of record or beneficially, by purchase or otherwise, any loans, debt securities, equity securities, or assets of the Company or any of its subsidiaries, or rights or options to acquire interest in any of the Company’s loans, debt securities, equity securities, or assets, other than (i) equity securities acquired from the Company in exchange for equity securities of the Company currently held by the Investor (subject to any agreement restricting such exchange entered into by Investor or Parent), the Parent, any of the direct and indirect subsidiaries of the Parent and the Investor or any of such officers and (ii) the acquisition of the Shares as contemplated by this Agreement.
(c)instigate, encourage, or assist any third party (including forming a “group” with any such third party) to do, or enter into any discussions or agreements with any third party with respect to, any of the actions set forth in Section 4.11(a) or Section 4.11(b); or
(d)take any action that would reasonably be expected to require the Company or any of its Affiliates to make a public announcement regarding any of the actions set forth in Section 4.11(a) or Section 4.11(b).
For purposes of this Section 4.11, the term “Representatives” means the direct and indirect subsidiaries of Parent or the Investor, the directors of Parent, the officers of Parent, the officers or managers (as such term is used in § 18-402 of the Delaware Limited Liability Company Act) of the Investor, and all agents acting at the direction of an officer or director of Parent, or an officer or manager of the Investor, including, without limitation, attorneys, financial advisors, and accountants.
4.12Regulatory Approvals
(a)Subject to the terms hereof, including Section 4.12(b), the Investor, Parent and the Company shall, and shall cause each of their respective subsidiaries to, cooperate and to use their respective commercially reasonable efforts to cause the waiting period for the Notification and Report Form filed on August 10, 2020 pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), to expire or be terminated, and to respond as promptly as reasonably practicable to any government requests for information pursuant to the HSR Act. Each party hereto shall (i) give the other party prompt notice of any material request, inquiry, objection, charge or other Action, actual or threatened, by or before any Governmental Entity with respect to the transactions contemplated
by this Agreement, (ii) keep the other party informed as to the status of any such material request, inquiry, objection, charge or other action, suit, proceeding, claim, arbitration or investigation (collectively, “Action”), (iii) promptly inform the other party of any material communication to or from any Governmental Entity regarding the transactions contemplated by this Agreement and (iv) permit the other party to review in advance, and consider in good faith any comments made by the other party in relation to, any proposed substantive communication by such party to any Governmental Entity relating to such matters. The parties hereto will (A) use their commercially reasonable efforts to resolve any such request, inquiry, objection, charge or other action so as to permit consummation of the transactions contemplated by this Agreement, and (B) consult and cooperate with one another, and consider in good faith the views of one another, in connection with, and provide to the other party in advance, any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party hereto in connection with the transactions contemplated by this Agreement. Such cooperation shall include consulting with each other in advance of any meeting or substantive communication with any Governmental Entity and, to the extent permitted by law or such applicable Governmental Entity, providing each other the opportunity to participate in such meetings and other substantive conversations.
(b)Notwithstanding anything to the contrary in this Agreement, none of the Investor, Parent, the Company, or any of their respective subsidiaries shall be required to (i) respond to a Second Request, (ii) contest, administratively or in court, any ruling, order or other action of the Federal Trade Commission (“FTC”) or the United States Department of Justice (“DOJ”) or any third party respecting the transactions contemplated hereby, or (iii) become subject to, consent to, or offer or agree to, or otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement or order to (A) sell, license, assign, transfer, divest, hold separate or otherwise dispose of any assets, business or portion of business of the Company, the Investor, Parent or any of their respective subsidiaries, (B) conduct, restrict, operate, invest or otherwise change the assets, business or portion of business of the Company, the Investor, Parent or any of their respective subsidiaries in any manner or (C) impose any restriction, requirement or limitation on the operation of the business or portion of the business of the Company, the Investor, Parent or any of their respective subsidiaries.
For purposes of this Agreement, “Governmental Entity” means any foreign or domestic governmental authority, including any supranational, national, federal, territorial, state, commonwealth, province, territory, county, municipality, district, local governmental jurisdiction of any nature or any other governmental, self-regulatory or quasi-governmental authority of any nature (including any governmental department, division, agency, bureau, office, branch, court, arbitrator, commission, tribunal or other governmental instrumentality and any national or international stock exchange) or any political or other subdivision or part of any of the foregoing.
Notwithstanding anything to the contrary, nothing in this Section 4.12 shall be deemed to require the Company or any of its subsidiaries to (1) delay, postpone, or otherwise alter the timing for or other plans or activities relating to the Qualified IPO or (2) file, or take or agree to take any action that would require the filing of, any amendment to its Registration Statement with the SEC.
5.Conditions of the Investor’s Obligations at Closing. The obligations of the Investor under subsection 1.1 of this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions.
5.1Representations and Warranties. The representations and warranties of the Company contained in Sections 3.1(b), 3.4(b), 3.7 and 3.8 shall be true on and as of the Closing, except as would not reasonably be expected to have a material adverse effect on the Company. The representations
and warranties of the Company contained in Sections 3.1(a), 3.2, 3.3, 3.4(a), and 3.5. shall be true on and as of the Closing.
5.2Public Offering Shares. The Underwriters shall have purchased, immediately prior to the purchase of the Shares by the Investor hereunder, the Firm Shares (as defined in the Underwriting Agreement) pursuant to the Registration Statement and Underwriting Agreement.
5.3Rights Agreement Amendment. The Rights Agreement Amendment shall have been executed and delivered by the Company and the other parties to the Existing Rights Agreement sufficient to amend the Existing Rights Agreement pursuant to Section 5.5 thereof.
5.4Absence of Injunctions, Decrees, Etc. During this period from the date of this Agreement to immediately prior to the Closing, no governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any decision, injunction, decree, ruling, law or order permanently enjoining or otherwise prohibiting or making illegal the consummation of the transactions contemplated at the Closing.
5.5Governmental Approvals. The Company, Parent and the Investor shall have timely obtained from each Governmental Entity all approvals, waivers and consents, if any, necessary for consummation of, or in connection with, the transactions contemplated by this Agreement. All applicable waiting periods under the HSR Act or applicable foreign antitrust laws shall have expired or early termination of such waiting periods shall have been granted by both the FTC and the DOJ (or, with respect to foreign antitrust laws, the applicable foreign Governmental Entity).
6.Conditions of the Company’s Obligations at Closing. The obligations of the Company under subsection 1.1 of this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions.
6.1Representations, Warranties and Covenants. The representations, warranties and covenants of the Investor and the Parent contained in Section 4 shall be true on and as of the Closing.
6.2Public Offering Shares. The Underwriters shall have purchased, immediately prior to the purchase of the Shares by the Investor hereunder, the Firm Shares (as defined in the Underwriting Agreement) pursuant to the Registration Statement and Underwriting Agreement, with an aggregate initial offering price to the public (before underwriting discount and commissions) of at least $2,000,000,000.
6.3Absence of Injunctions, Decrees, Etc. During this period from the date of this Agreement to immediately prior to the Closing, no governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any decision, injunction, decree, ruling, law or order permanently enjoining or otherwise prohibiting or making illegal the consummation of the transactions contemplated at the Closing.
6.4Governmental Approvals. The Company, Parent and the Investor shall have timely obtained from each Governmental Entity all approvals, waivers and consents, if any, necessary for consummation of, or in connection with, the transactions contemplated by this Agreement. All applicable waiting periods under the HSR Act or applicable foreign antitrust laws shall have expired or early termination of such waiting periods shall have been granted by both the FTC and the DOJ (or, with respect to foreign antitrust laws, the applicable foreign Governmental Entity).
7.Termination. This Agreement shall terminate (a) at any time upon the written consent of the Company, the Investor and the Parent, (b) upon the withdrawal by the Company of the Registration Statement, or (c) on October 31, 2020 if the Closing has not occurred.
8.Miscellaneous.
8.1Publicity. No party shall issue any press release or make any other public announcement, including any website posting or social media post, that includes the name or any logo or brand name of any party, or discloses the terms of this Agreement or the fact that the Investor has made or proposes to make an investment in the Company, except as may be required by law or with the prior written consent of the other parties. Each party will provide reasonable advance notice to the other parties prior to making any disclosure of this Agreement or the terms hereof in any filings made with the SEC, and will provide the other parties with reasonable opportunity to review and comment on such proposed disclosures. Notwithstanding the foregoing, the parties may use the other parties’ current logo or logos in connection with describing their portfolio or this investment on their webpages and in their promotional materials.
8.2Survival of Warranties. The warranties, representations and covenants of the Company, the Investor and the Parent contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Investor, the Parent or the Company.
8.3Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by the Investor without the prior written consent of the Company; provided, however, that after the Closing, the Shares and the rights, duties and obligations of the Investor hereunder may be assigned to an Affiliate of the Investor without the prior written consent of the Company. Any attempt by the Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement in a manner that is not permitted by the foregoing sentence to be made without such permission shall be void. Subject to the foregoing and except as otherwise provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. Notwithstanding the foregoing, the Investor, the Parent and their Representatives shall remain subject to Section 4.11 of this Agreement until the Standstill Expiration.
8.4Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of Delaware as applied to agreements entered into among Delaware residents to be performed entirely within Delaware, without regard to principles of conflicts of law.
8.5Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.
8.6Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail (if to the Investor, the Parent or any other holder of Company securities) or otherwise delivered by hand, messenger or courier service addressed:
(a)if to the Investor, to the Investor’s address or electronic mail address as shown on the Investor’s signature page to this Agreement, with a copy (which shall not constitute notice)
to Bradley Chernin, Covington & Burling LLP, 415 Mission Street, Suite 5400, San Francisco, California 94105.
(b)if to the Parent, to the Parent’s address or electronic mail address as shown on the Parent’s signature page to this Agreement, with a copy (which shall not constitute notice) to Bradley Chernin, Covington & Burling LLP, 415 Mission Street, Suite 5400, San Francisco, California 94105.
(c)if to the Company, to the attention of the General Counsel of the Company at 450 Concar Drive, San Mateo, California 94402, or at such other current address or electronic mail address as the Company shall have furnished to the Investor and the Parent, with a copy (which shall not constitute notice) to Mark Tanoury, Jon Avina, Seth Gottlieb and Alex Kassai, Cooley LLP, 3175 Hanover Street, Palo Alto, California 94304.
Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via mail, at the earlier of its receipt or five days after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via electronic mail, when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient’s next business day. In the event of any conflict between the Company’s books and records and this Agreement or any notice delivered hereunder, the Company’s books and records will control absent fraud or error.
8.7Brokers or Finders. The Company shall indemnify and hold harmless the Investor and the Parent from any liability for any commission or compensation in the nature of a brokerage or finder’s fee or agent’s commission (and the costs and expenses of defending against such liability or asserted liability) for which the Investor and the Parent or any of their constituent partners, members, officers, directors, employees or representatives is responsible to the extent such liability is attributable to any inaccuracy or breach of the representations and warranties contained in Section 3.7, and the Investor and the Parent agree to indemnify and hold harmless the Company and the Investor and the Parent from any liability for any commission or compensation in the nature of a brokerage or finder’s fee or agent’s commission (and the costs and expenses of defending against such liability or asserted liability) for which the Company, the Investor, the Parent or any of their constituent partners, members, officers, directors, employees or representatives is responsible to the extent such liability is attributable to any inaccuracy or breach of the representations and warranties contained in Section 4.7.
8.8Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company, the Investor, and the Parent; provided, however, that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party.
8.9Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the
illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.
8.10Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
8.11Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties. No party shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein or therein.
8.12Specific Performance. The parties to this Agreement hereby acknowledge and agree that the Company would be irreparably injured by a breach of this Agreement by the Investor and the Parent, and the Investor and the Parent would be irreparably injured by a breach of this Agreement by the Company, and that money damages are an inadequate remedy for an actual or threatened breach of this Agreement because of the difficulty of ascertaining the amount of damage that will be suffered by the aggrieved party in the event that this agreement is breached. Therefore, each of the parties to this Agreement agree to the granting of specific performance of this Agreement and injunctive or other equitable relief in favor of the aggrieved party as a remedy for any such breach, without proof of actual damages, and the parties to this Agreement further waive any requirement for the securing or posting of any bond in connection with any such remedy. Such remedy shall not be deemed to be the exclusive remedy for breach of this Agreement, but shall be in addition to all other remedies available at law or in equity to the aggrieved party. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties have executed this Common Stock Purchase Agreement as of the date first above written.
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SNOWFLAKE INC.
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By:
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/s/ Michael P. Scarpelli
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Name:
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Michael P. Scarpelli
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Title:
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Chief Financial Officer
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Address:
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450 Concar Drive
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San Mateo, CA 94402
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SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Common Stock Purchase Agreement as of the date first above written.
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INVESTOR:
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SALESFORCE VENTURES LLC
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By:
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/s/ John Somorjai
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Name:
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John Somorjai
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Title:
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President
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Address:
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[Intentionally Omitted.]
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Email:
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PARENT:
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SALESFORCE.COM, INC
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By:
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/s/ John Somorjai
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Name:
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John Somorjai
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Title:
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EVP, Corporate Development & Salesforce
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Ventures
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Address:
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SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT
Exhibit A
Amendment to the Existing Rights Agreement
SNOWFLAKE INC.
AMENDMENT TO THE
Amended and Restated Investor Rights Agreement
This Amendment to the Amended and Restated Investor Rights Agreement (this “Amendment”), is made as of September [●], 2020, by and among Snowflake Inc., a Delaware corporation (the “Company”) and each of those persons and entities whose names are set forth on the signature pages hereto. Capitalized terms used but not herein defined shall have the meanings ascribed to them in that certain Amended and Restated Investor Rights Agreement, by and among the Company, the Investors and the Holders, dated as of February 7, 2020 (the “Existing Rights Agreement”).
RECITALS
WHEREAS, the Company has entered into that certain Common Stock Purchase Agreement, dated September [●], 2020, with Salesforce Ventures LLC, a Delaware limited liability company (“Salesforce”) and salesforce.com, inc., a Delaware corporation (the “Salesforce Purchase Agreement”), pursuant to which Salesforce will purchase shares of the Company’s Class A Common Stock (the “Salesforce Shares”), immediately subsequent to the closing of the Qualified IPO (as defined in the Salesforce Purchase Agreement).
WHEREAS, the Company has entered into that certain Common Stock Purchase Agreement, dated September [●], 2020, with Berkshire Hathaway Inc., a Delaware corporation (“Berkshire Hathaway”) (such agreement, the “Berkshire Hathaway Purchase Agreement”), pursuant to which Berkshire Hathaway will purchase shares of the Company’s Class A Common Stock (the “Berkshire Hathaway Shares”), immediately subsequent to the closing of the Qualified IPO (as defined in the Berkshire Hathaway Purchase Agreement).
WHEREAS, the Company and the undersigned parties desire to amend the terms of the Existing Rights Agreement for the limited purpose of providing Salesforce and Berkshire Hathaway with certain registration rights under Section 2.2 of the Existing Rights Agreement with respect to the Salesforce Shares, the Berkshire Hathaway Shares and the Secondary Sale Shares (as defined in the Berkshire Hathaway Purchase Agreement), respectively.
WHEREAS, pursuant to Section 5.5 of the Existing Rights Agreement, the Existing Rights Agreement may be amended only upon the written consent of the Company and holders of a majority of the then-outstanding Registrable Securities (collectively, the “Requisite Consent”).
WHEREAS, the undersigned parties constitute the Requisite Consent and consent to this Amendment.
AGREEMENT
NOW, THEREFORE, the undersigned parties hereby agree as follows:
1.Amendment to Section 1.2(h) of the Existing Rights Agreement. Section 1.2(h) of the Existing Rights Agreement is hereby amended and restated in its entirety to read as follows:
"(h)“Registrable Securities” means (a) Common Stock of the Company issuable or issued upon conversion of the Shares, (b) any
Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities, (c) the shares of Common Stock issuable pursuant to that certain Common Stock Purchase Agreement, dated as of September [●], 2020, by and among the Company, Salesforce Ventures LLC, and salesforce.com, inc. (Salesforce Ventures LLC and salesforce.com, inc. collectively, with their affiliates, donees, and partners, “Salesforce” and such shares of Common Stock, the “Salesforce Registrable Securities”), (d) the shares of Common Stock issuable pursuant to that certain Common Stock Purchase Agreement, dated as of September [●], 2020 (the “Berkshire Hathaway Purchase Agreement”), by and between the Company and Berkshire Hathaway Inc. (Berkshire Hathaway Inc. collectively, with its affiliates, donees, and partners, “Berkshire Hathaway”) and the Secondary Sale Shares (as defined in the Berkshire Hathaway Purchase Agreement) (the shares of Common Stock issuable pursuant to the Berkshire Hathaway Purchase Agreement and the Secondary Sale Shares, collectively, the “Berkshire Hathaway Registrable Securities”), and (e) the Tender Offer Registrable Securities; provided, however, that (i) such Salesforce Registrable Securities shall not be deemed Registrable Securities and Salesforce shall not be deemed to be a Holder with respect to such Salesforce Registrable Securities for the purposes of Sections 2.2 (and any other applicable sections of this Agreement with respect to registrations under Section 2.2), 2.4 (and any other applicable sections of this Agreement with respect to registrations under Section 2.4), 2.6, 3.1, 3.2, 3.6 and 4 of this Agreement, (ii) such Berkshire Hathaway Registrable Securities shall not be deemed Registrable Securities and Berkshire Hathaway shall not be deemed to be a Holder with respect to such Berkshire Hathaway Registrable Securities for the purposes of Sections 2.2 (and any other applicable sections of this Agreement with respect to registrations under Section 2.2), 2.4 (and any other applicable sections of this Agreement with respect to registrations under Section 2.4), 2.6, 3.1, 3.2, 3.6 and 5.15 of this Agreement, and (iii) such Tender Offer Registrable Securities shall not be deemed Registrable Securities and the Tender Offer Holders shall not be deemed to be Holders with respect to such Tender Offer Registrable Securities for the purposes of Sections 2.2 (and any other applicable sections of this Agreement with respect to registrations under Section 2.2), 2.4 (and any other applicable sections of this Agreement with respect to registrations under Section 2.4), 2.6, 3.1, 3.2, 3.6 and 4 of this Agreement. Notwithstanding the foregoing, Registrable Securities shall not include any securities (x) sold by a person to the public either pursuant to a registration statement or Rule 144 or (y) sold in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not assigned.”
2.Full Force and Effect. Except as expressly modified by this Amendment, the terms of the Existing Rights Agreement shall remain in full force and effect.
3.Governing Law. This Amendment shall be governed by and construed under the laws of the State of California in all respects as such laws are applied to agreements among California residents entered into and to be performed entirely within California, without reference to conflicts of laws or principles thereof. The parties agree that any action brought by either party under or in relation to this Amendment, including without limitation to interpret or enforce any provision of this Amendment, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the County of Santa Clara, California.
4.Integration. This Amendment and the Existing Rights Agreement, and the documents referred to herein and therein and the exhibits and schedules thereto, constitute the entire agreement among the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing between the parties hereto are expressly canceled.
5.Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[SIGNATURE PAGES FOLLOW]
SNOWFLAKE INC.
COMMON STOCK PURCHASE AGREEMENT
September 7, 2020
TABLE OF CONTENTS
Page
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1.
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Purchase and Sale of Stock
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1
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1.1
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Sale and Issuance of Common Stock
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1
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1.2
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Closing
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1
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2.
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Registration Rights.
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1
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3.
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Representations and Warranties of the Company
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1
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3.1
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Organization, Good Standing and Qualification
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1
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3.2
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Authorization
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2
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3.3
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Valid Issuance of Common Stock
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2
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3.4
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Compliance with Other Instruments
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2
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3.5
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Description of Capital Stock
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2
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3.6
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Registration Statement
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3
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3.7
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Brokers or Finders
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3
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3.8
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Private Placement
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3
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4.
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Representations, Warranties and Covenants of the Investor
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3
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4.1
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Organization, Good Standing and Qualification
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3
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4.2
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Authorization
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3
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4.3
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Purchase Entirely for Own Account
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4
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4.4
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Disclosure of Information
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4
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4.5
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Investment Experience
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4
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4.6
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Accredited Investor
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4
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4.7
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Brokers or Finders
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4
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4.8
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Restricted Securities
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4
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4.9
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Legends
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4
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4.10
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Market Stand-Off Agreement; Lock-Up Agreement
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5
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5.
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Conditions of the Investor’s Obligations at Closing
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6
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5.1
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Representations and Warranties
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6
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5.2
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Public Offering Shares
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6
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5.3
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Rights Agreement Amendment
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6
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5.4
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Absence of Injunctions, Decrees, Etc
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6
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6.
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Conditions of the Company’s Obligations at Closing
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6
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6.1
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Representations, Warranties and Covenants
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6
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6.2
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Public Offering Shares
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6
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6.3
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Absence of Injunctions, Decrees, Etc
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6
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7.
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Termination
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6
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8.
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Miscellaneous
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7
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8.1
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Publicity
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7
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8.2
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Survival of Warranties
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7
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8.3
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Successors and Assigns
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7
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8.4
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Governing Law
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7
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8.5
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Counterparts
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7
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8.6
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Notices
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7
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8.7
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Brokers or Finders
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8
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8.8
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Amendments and Waivers
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8
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8.9
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Severability
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8
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8.10
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Corporate Securities Law
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8
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8.11
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Entire Agreement
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9
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8.12
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Specific Performance
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9
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SNOWFLAKE INC.
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of September 7, 2020, by and between Snowflake Inc., a Delaware corporation (the “Company”), and Berkshire Hathaway Inc., a Delaware corporation (the “Investor”).
THE PARTIES HEREBY AGREE AS FOLLOWS:
1.Purchase and Sale of Stock.
1.1Sale and Issuance of Common Stock. Subject to the terms and conditions of this Agreement, the Investor agrees to purchase from the Company, and the Company agrees to sell and issue to Columbia Insurance Company, a Nebraska corporation and wholly owned subsidiary of the Investor, as designee of the Investor (the “Designee”), the Shares (as defined below) at a price per share equal to the per share initial public offering price (before underwriting discounts and expenses) in the Qualified IPO (as defined below) (the “IPO Price”). “Shares” shall mean the number of shares of Class A Common Stock of the Company (the “Common Stock”), equal to $250,000,000.00 divided by the IPO Price, rounded down to the nearest whole share (with the total purchase price correspondingly reduced for such fractional share amount). “Qualified IPO” shall mean the issuance and sale of shares of the Common Stock by the Company, pursuant to an Underwriting Agreement to be entered into by and among the Company and certain underwriters (the “Underwriters”), in connection with the Company’s initial public offering pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-248280) (the “Registration Statement”) and/or any related registration statements (the “Underwriting Agreement”).
1.2Closing. The purchase and sale of the Shares shall take place at the location and at the time immediately subsequent to the closing of the Qualified IPO (which time and place are designated as the “Closing”). At the Closing, the Investor shall make payment of the purchase price of the Shares by wire transfer in immediately available funds to the account specified by the Company against delivery to the Designee of the Shares registered in the name of the Designee, which Shares shall be uncertificated shares.
2.Registration Rights. At the Closing, in connection with the purchase of the Shares, the Company’s Amended and Restated Investors Rights Agreement, dated February 7, 2020, by and among the Company and the stockholders of the Company listed thereto (the “Existing Rights Agreement”), shall, pursuant to Section 5.5 of the Existing Rights Agreement, be amended, in substantially the form attached hereto as Exhibit A (the “Rights Agreement Amendment” and, together with the Existing Rights Agreement, the “Rights Agreement”).
3.Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor that as of the date hereof and as of the date of the Closing:
3.1Organization, Good Standing and Qualification.
(a)The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted.
(b)The Company is duly qualified to transact business and is in good standing in each jurisdiction in which it is required to be so qualified or in good standing, except where the failure to so qualify or be in good standing would not be material and adverse to the Company.
3.2Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and, subject to obtaining the requisite stockholder approval for the Rights Agreement Amendment, the Rights Agreement Amendment, the performance of all obligations of the Company under this Agreement and the Rights Agreement Amendment, and the authorization, issuance, sale and delivery of the Shares being sold hereunder has been taken, and this Agreement constitutes and as of the Closing the Rights Agreement Amendment and the Rights Agreement shall constitute, valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies and (iii) to the extent the indemnification provisions contained in the Rights Agreement may be limited by applicable federal or state securities laws.
3.3Valid Issuance of Common Stock. The Shares being purchased by the Investor hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and will be free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws or as contemplated hereby or by the Rights Agreement.
3.4Compliance with Other Instruments.
(a)The Company is not in violation or default of any provision of its Amended and Restated Certificate of Incorporation, or Amended and Restated Bylaws.
(b)Except as would not be material to the Company, the Company is not in violation or default in any material respect of any instrument, judgment, order, writ, decree or contract to which it is a party or by which it is bound, or, to its knowledge, of any provision of any federal or state statute, rule or regulation applicable to the Company. The execution, delivery and performance of this Agreement and the Rights Agreement Amendment, and the consummation of the transactions contemplated by this Agreement and the Rights Agreement Amendment will not result in any material violation or default or be in conflict with or constitute, with or without the passage of time and giving of notice, either a material default under any such provision, instrument, judgment, order, writ, decree or contract or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization, or approval applicable to the Company, its business or operations or any of its assets or properties.
3.5Description of Capital Stock. As of the date of the Closing, the statements set forth in the Pricing Prospectus (as defined in the Underwriting Agreement) and Prospectus (as defined in the Underwriting Agreement) under the caption “Description of Capital Stock,” insofar as they purport to constitute a summary of the terms of the Company’s capital stock, are accurate, complete and fair in all material respects.
3.6Registration Statement. To the Company’s knowledge, the Registration Statement as presently filed with United States Securities and Exchange Commission (the “SEC”), and any amendment thereto, including any information deemed to be included therein pursuant to the rules and regulations of the SEC promulgated under the Securities Act of 1933, as amended (the “Securities Act”), complied (or, in the case of amendments filed after the date of this Agreement, will comply) as of its filing date in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC promulgated thereunder, and did not (or, in the case of amendments filed after the date hereof, will not) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of the date it is declared effective by the SEC, the Registration Statement, as so amended, and any related registration statements, will comply in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC promulgated thereunder, and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Any preliminary prospectus included in the Registration Statement or any amendment thereto, any free writing prospectus related to the Registration Statement and any final prospectus related to the Registration Statement filed pursuant to Rule 424 promulgated under the Securities Act, in each case as of its date, will comply in all material respects with the requirements of the Securities Act and the rules and regulations promulgated thereunder, and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
3.7Brokers or Finders. The Company has not engaged any brokers, finders or agents such that the Investor will incur, directly or indirectly, as a result of any action taken by the Company, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the sale of the Shares contemplated by this Agreement.
3.8Private Placement. Assuming the accuracy of the representations, warranties and covenants of the Investor set forth in Section 4 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor under this Agreement.
4.Representations, Warranties and Covenants of the Investor. The Investor hereby represents and warrants that as of the date hereof and as of the date of the Closing with respect to the Investor and, with respect to Sections 4.1 through 4.8 and Section 4.10, the Designee (as if the Designee were the Investor):
4.1Organization, Good Standing and Qualification. The Investor is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. The Designee is a wholly owned subsidiary of the Investor.
4.2Authorization. The Investor has full power and authority to enter into this Agreement, the Rights Agreement, and the Rights Agreement Amendment, as applicable, and each such agreement constitutes a valid and legally binding obligation of the Investor, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies and (iii) to the extent the indemnification provisions contained in the Rights Agreement may be limited by applicable federal or state securities laws.
4.3Purchase Entirely for Own Account. By the Investor’s execution of this Agreement, the Investor hereby confirms, that the Shares to be received by the Investor will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the distribution of any part thereof, and that the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same, except as permitted by applicable federal or state securities laws. By executing this Agreement, the Investor further represents that the Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Shares.
4.4Disclosure of Information. The Investor believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the Shares. The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Shares and the business, properties, prospects and financial condition of the Company. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 3 of this Agreement or the right of the Investor to rely thereon.
4.5Investment Experience. The Investor is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Shares. Investor also represents it has not been organized for the purpose of acquiring the Shares.
4.6Accredited Investor. The Investor is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the SEC under the Securities Act, as presently in effect.
4.7Brokers or Finders. The Investor has not engaged any brokers, finders or agents such that the Company will incur, directly or indirectly, as a result of any action taken by the Investor, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the sale of the Shares contemplated by this Agreement.
4.8Restricted Securities. The Investor understands that the Shares will be characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act, only in certain limited circumstances. In this connection, the Investor represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
4.9Legends. The Investor understands that the Market Stand-Off Shares (as defined below) may bear one or all of the following legends (and with respect to Section 4.9(b) below, substantially similar language with respect to the Secondary Sale Shares (as defined below) in order to accurately reflect the parties that are party to the Secondary Sale Agreement (as defined below)):
(a)“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTIONS. THESE SECURITIES MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT, APPLICABLE STATE SECURITIES LAWS (PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM).
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”
(b)“THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A 365 DAY MARKET STANDOFF RESTRICTION AS SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S PRINCIPAL OFFICE. AS A RESULT OF SUCH AGREEMENT, THESE SECURITIES MAY NOT BE TRADED PRIOR TO 365 DAYS AFTER THE EFFECTIVE DATE OF THE INITIAL PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES.”
(c)Any legend required by applicable state “blue sky” securities laws, rules and regulations.
Following the expiration of the Market Stand-Off Period (as defined below), in the event that the Market Stand-Off Shares become registered under the Securities Act or are eligible to be transferred without restriction in accordance with Rule 144 under the Securities Act, the Company shall (x) instruct the Company’s transfer agent to issue new uncertificated (book-entry) instruments representing such Market Stand-Off Shares, which shall not contain such portion of the above legend that is no longer applicable, (y) take all actions with the Company’s transfer agent reasonably requested by the Investor to permit such un-legended Market Stand-Off Shares to be deposited into the account specified by the Investor to the Company in writing, and (z) instruct the Company’s transfer agent to cause such Market Stand-Off Shares to be assigned the same CUSIP as the shares of Class A Common Stock that are then traded on the principal stock exchange on which the shares of Class A Common Stock are then listed; provided that, (1) the Investor (or the Designee, as applicable) surrenders to the Company the previously issued uncertificated (book-entry) instruments representing the Market Stand-Off Shares and (2) the Investor (or the Designee, as applicable) delivers a customary representation letter requested by the Company’s transfer agent.
4.10Market Stand-Off Agreement; Lock-Up Agreement. The Investor agrees, on behalf of itself and the Designee, that it shall not sell or otherwise transfer or dispose of the Shares and any shares of capital stock of the Company purchased by the Investor or any subsidiary of the Investor (the “Secondary Sale Shares” and together with the Shares, the “Market Stand-Off Shares”) pursuant to that certain Stock Transfer Agreement by and among the Investor, Robert Muglia and Robert & Laura Ellen Muglia Descendants’ Trust dated as of the date hereof (the “Secondary Sale Agreement”), other than to donees, partners or Affiliates (as defined below) of the Investor who agree to be similarly bound, for up to 365 days following the effective date of the Qualified IPO (the “Market Stand-Off Period”). In order to enforce this covenant, the Company shall have the right to place restrictive legends on the book-entry accounts representing the Market Stand-Off Shares and to impose stop transfer instructions with respect to the Market Stand-Off Shares until the end of such period. The provisions of this Section 4.10 shall not apply to shares acquired in market purchases following the Qualified IPO. In addition, the Investor hereby confirms that the Designee has executed and delivered to the Underwriters the lock-up agreement provided by the Company pursuant to the Underwriting Agreement (the “Lock-Up Agreement”). The Lock-Up Agreement is in full force and effect, and following the consummation of the transactions contemplated by this Agreement and the Secondary Sale Agreement will remain in full force
and effect, including with respect to the Market Stand-Off Shares. For purposes of this Agreement, the term “Affiliates” means any individual or entity that directly or indirectly controls, is controlled by, or is under common control with the individual or entity in question.
5.Conditions of the Investor’s Obligations at Closing. The obligations of the Investor under subsection 1.1 of this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions.
5.1Representations and Warranties. The representations and warranties of the Company contained in Sections 3.1(b), 3.4(b), 3.7, and 3.8 shall be true on and as of the Closing, except as would not reasonably be expected to have a material adverse effect on the Company. The representations and warranties of the Company contained in Sections 3.1(a), 3.2, 3.3, 3.4(a), and 3.5 shall be true on and as of the Closing.
5.2Public Offering Shares. The Underwriters shall have purchased, immediately prior to the purchase of the Shares by the Investor hereunder, the Firm Shares (as defined in the Underwriting Agreement) pursuant to the Registration Statement and Underwriting Agreement.
5.3Rights Agreement Amendment. The Rights Agreement Amendment shall have been executed and delivered by the Company and the other parties to the Existing Rights Agreement sufficient to amend the Existing Rights Agreement pursuant to Section 5.5 thereof.
5.4Absence of Injunctions, Decrees, Etc. During this period from the date of this Agreement to immediately prior to the Closing, no governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any decision, injunction, decree, ruling, law or order permanently enjoining or otherwise prohibiting or making illegal the consummation of the transactions contemplated at the Closing.
6.Conditions of the Company’s Obligations at Closing. The obligations of the Company under subsection 1.1 of this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions.
6.1Representations, Warranties and Covenants. The representations, warranties and covenants of the Investor contained in Section 4 shall be true on and as of the Closing.
6.2Public Offering Shares. The Underwriters shall have purchased, immediately prior to the purchase of the Shares by the Investor hereunder, the Firm Shares (as defined in the Underwriting Agreement) pursuant to the Registration Statement and Underwriting Agreement.
6.3Absence of Injunctions, Decrees, Etc. During this period from the date of this Agreement to immediately prior to the Closing, no governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any decision, injunction, decree, ruling, law or order permanently enjoining or otherwise prohibiting or making illegal the consummation of the transactions contemplated at the Closing.
7.Termination. This Agreement shall terminate (a) at any time upon the written consent of the Company and the Investor, (b) upon the withdrawal by the Company of the Registration Statement, or (c) on October 31, 2020 if the Closing has not occurred.
8.Miscellaneous.
8.1Publicity. No party shall issue any press release or make any other public announcement, including any website posting or social media post, that includes the name or any logo or brand name of any party, or discloses the terms of this Agreement or the fact that the Investor has made or proposes to make an investment in the Company, except as may be required by law or with the prior written consent of the other party. Each party will provide reasonable advance notice to the other parties prior to making any disclosure of this Agreement or the terms hereof in any filings made with the SEC, and will provide the other party with reasonable opportunity to review and comment on such proposed disclosures.
8.2Survival of Warranties. The warranties, representations and covenants of the Company and the Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Investor or the Company.
8.3Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by the Investor without the prior written consent of the Company; provided, however, that after the Closing, the Shares and the rights, duties and obligations of the Investor hereunder may be assigned to a subsidiary of the Investor without the prior written consent of the Company. Any attempt by the Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement in a manner that is not permitted by the foregoing sentence to be made without such permission shall be void. Subject to the foregoing and except as otherwise provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.
8.4Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of Delaware as applied to agreements entered into among Delaware residents to be performed entirely within Delaware, without regard to principles of conflicts of law.
8.5Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.
8.6Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by electronic mail, or delivered by hand, messenger or courier service, or by nationally recognized overnight courier service, addressed:
(a)if to the Investor, to the Investor’s address or electronic mail address as shown on the Investor’s signature page to this Agreement, or at such other current address or electronic mail address as the Investor shall have furnished to the Company, with a copy (which shall not constitute notice) to Judith T. Kitano, Munger, Tolles & Olson LLP, 350 South Grand Ave, 50th Floor, Los Angeles, California 90071, judith.kitano@mto.com.
(b)if to the Company, to the attention of the General Counsel of the Company at 450 Concar Drive, San Mateo, California 94402, or at such other current address or electronic mail address as the Company shall have furnished to the Investor, with a copy (which shall not
constitute notice) to Mark Tanoury, Jon Avina, Seth Gottlieb and Alex Kassai, Cooley LLP, 3175 Hanover Street, Palo Alto, California 94304.
Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally recognized overnight courier service, charges prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via mail, at the earlier of its receipt or five days after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via electronic mail, when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient’s next business day.
8.7Brokers or Finders. The Company shall indemnify and hold harmless the Investor from any liability for any commission or compensation in the nature of a brokerage or finder’s fee or agent’s commission (and the costs and expenses of defending against such liability or asserted liability) for which the Investor or any of its constituent partners, members, officers, directors, employees or representatives is responsible or for which the existence of such liability is an inaccuracy in or breach of the representations and warranties contained in Section 3.7, and the Investor shall indemnify and hold harmless the Company from any liability for any commission or compensation in the nature of a brokerage or finder’s fee or agent’s commission (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its constituent partners, members, officers, directors, employees or representatives is responsible, or for which the existence of such liability is an inaccuracy in or breach of the representations and warranties contained in Section 4.7.
8.8Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor; provided, however, that any provision hereof may be waived by any waiving party on such party’s own behalf, without to consent of any other party.
8.9Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.
8.10Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
8.11Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties. No party shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein or therein.
8.12Specific Performance. The parties to this Agreement hereby acknowledge and agree that the Company would be irreparably injured by a breach of this Agreement by the Investor, and the Investor would be irreparably injured by a breach of this Agreement by the Company, and that money damages are an inadequate remedy for an actual or threatened breach of this Agreement because of the difficulty of ascertaining the amount of damage that will be suffered by the aggrieved party in the event that this agreement is breached. Therefore, each of the parties to this Agreement agree to the granting of specific performance of this Agreement and injunctive or other equitable relief in favor of the aggrieved party as a remedy for any such breach, without proof of actual damages, and the parties to this Agreement further waive any requirement for the securing or posting of any bond in connection with any such remedy. Such remedy shall not be deemed to be the exclusive remedy for breach of this Agreement, but shall be in addition to all other remedies available at law or in equity to the aggrieved party. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties have executed this Common Stock Purchase Agreement as of the date first above written.
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SNOWFLAKE INC.
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By:
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/s/ Michael P. Scarpelli
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Name:
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Michael P. Scarpelli
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Title:
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Chief Financial Officer
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Address:
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450 Concar Drive
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San Mateo, CA 94402
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SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Common Stock Purchase Agreement as of the date first above written.
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INVESTOR:
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BERKSHIRE HATHAWAY INC.
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By:
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/s/ Todd A. Combs
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Name:
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Todd A. Combs
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Title:
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Investment Officer
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Address:
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[Intentionally Omitted.]
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Email:
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SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT
Exhibit A
Amendment to the Existing Rights Agreement
SNOWFLAKE INC.
AMENDMENT TO THE
Amended and Restated Investor Rights Agreement
This Amendment to the Amended and Restated Investor Rights Agreement (this “Amendment”), is made as of September [●], 2020, by and among Snowflake Inc., a Delaware corporation (the “Company”) and each of those persons and entities whose names are set forth on the signature pages hereto. Capitalized terms used but not herein defined shall have the meanings ascribed to them in that certain Amended and Restated Investor Rights Agreement, by and among the Company, the Investors and the Holders, dated as of February 7, 2020 (the “Existing Rights Agreement”).
RECITALS
WHEREAS, the Company has entered into that certain Common Stock Purchase Agreement, dated September [●], 2020, with Salesforce Ventures LLC, a Delaware limited liability company (“Salesforce”) and salesforce.com, inc., a Delaware corporation (the “Salesforce Purchase Agreement”), pursuant to which Salesforce will purchase shares of the Company’s Class A Common Stock (the “Salesforce Shares”), immediately subsequent to the closing of the Qualified IPO (as defined in the Salesforce Purchase Agreement).
WHEREAS, the Company has entered into that certain Common Stock Purchase Agreement, dated September [●], 2020, with Berkshire Hathaway Inc., a Delaware corporation (“Berkshire Hathaway”) (such agreement, the “Berkshire Hathaway Purchase Agreement”), pursuant to which Berkshire Hathaway will purchase shares of the Company’s Class A Common Stock (the “Berkshire Hathaway Shares”), immediately subsequent to the closing of the Qualified IPO (as defined in the Berkshire Hathaway Purchase Agreement).
WHEREAS, the Company and the undersigned parties desire to amend the terms of the Existing Rights Agreement for the limited purpose of providing Salesforce and Berkshire Hathaway with certain registration rights under Section 2.2 of the Existing Rights Agreement with respect to the Salesforce Shares, the Berkshire Hathaway Shares and the Secondary Sale Shares (as defined in the Berkshire Hathaway Purchase Agreement), respectively.
WHEREAS, pursuant to Section 5.5 of the Existing Rights Agreement, the Existing Rights Agreement may be amended only upon the written consent of the Company and holders of a majority of the then-outstanding Registrable Securities (collectively, the “Requisite Consent”).
WHEREAS, the undersigned parties constitute the Requisite Consent and consent to this Amendment.
AGREEMENT
NOW, THEREFORE, the undersigned parties hereby agree as follows:
1.Amendment to Section 1.2(h) of the Existing Rights Agreement. Section 1.2(h) of the Existing Rights Agreement is hereby amended and restated in its entirety to read as follows:
"(h)“Registrable Securities” means (a) Common Stock of the Company issuable or issued upon conversion of the Shares, (b) any
Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities, (c) the shares of Common Stock issuable pursuant to that certain Common Stock Purchase Agreement, dated as of September [●], 2020, by and among the Company, Salesforce Ventures LLC, and salesforce.com, inc. (Salesforce Ventures LLC and salesforce.com, inc. collectively, with their affiliates, donees, and partners, “Salesforce” and such shares of Common Stock, the “Salesforce Registrable Securities”), (d) the shares of Common Stock issuable pursuant to that certain Common Stock Purchase Agreement, dated as of September [●], 2020 (the “Berkshire Hathaway Purchase Agreement”), by and between the Company and Berkshire Hathaway Inc. (Berkshire Hathaway Inc. collectively, with its affiliates, donees, and partners, “Berkshire Hathaway”) and the Secondary Sale Shares (as defined in the Berkshire Hathaway Purchase Agreement) (the shares of Common Stock issuable pursuant to the Berkshire Hathaway Purchase Agreement and the Secondary Sale Shares, collectively, the “Berkshire Hathaway Registrable Securities”), and (e) the Tender Offer Registrable Securities; provided, however, that (i) such Salesforce Registrable Securities shall not be deemed Registrable Securities and Salesforce shall not be deemed to be a Holder with respect to such Salesforce Registrable Securities for the purposes of Sections 2.2 (and any other applicable sections of this Agreement with respect to registrations under Section 2.2), 2.4 (and any other applicable sections of this Agreement with respect to registrations under Section 2.4), 2.6, 3.1, 3.2, 3.6 and 4 of this Agreement, (ii) such Berkshire Hathaway Registrable Securities shall not be deemed Registrable Securities and Berkshire Hathaway shall not be deemed to be a Holder with respect to such Berkshire Hathaway Registrable Securities for the purposes of Sections 2.2 (and any other applicable sections of this Agreement with respect to registrations under Section 2.2), 2.4 (and any other applicable sections of this Agreement with respect to registrations under Section 2.4), 2.6, 3.1, 3.2, 3.6 and 5.15 of this Agreement, and (iii) such Tender Offer Registrable Securities shall not be deemed Registrable Securities and the Tender Offer Holders shall not be deemed to be Holders with respect to such Tender Offer Registrable Securities for the purposes of Sections 2.2 (and any other applicable sections of this Agreement with respect to registrations under Section 2.2), 2.4 (and any other applicable sections of this Agreement with respect to registrations under Section 2.4), 2.6, 3.1, 3.2, 3.6 and 4 of this Agreement. Notwithstanding the foregoing, Registrable Securities shall not include any securities (x) sold by a person to the public either pursuant to a registration statement or Rule 144 or (y) sold in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not assigned.”
2.Full Force and Effect. Except as expressly modified by this Amendment, the terms of the Existing Rights Agreement shall remain in full force and effect.
3.Governing Law. This Amendment shall be governed by and construed under the laws of the State of California in all respects as such laws are applied to agreements among California residents entered into and to be performed entirely within California, without reference to conflicts of laws or principles thereof. The parties agree that any action brought by either party under or in relation to this Amendment, including without limitation to interpret or enforce any provision of this Amendment, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the County of Santa Clara, California.
4.Integration. This Amendment and the Existing Rights Agreement, and the documents referred to herein and therein and the exhibits and schedules thereto, constitute the entire agreement among the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing between the parties hereto are expressly canceled.
5.Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[SIGNATURE PAGES FOLLOW]
Subsidiaries of Snowflake Inc.
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Name of Subsidiary
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Jurisdiction of Organization
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Snowflake Holdings LLC
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Delaware
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Snowflake Computing Pty Ltd.
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Australia
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Snowflake Computing Canada Inc.
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Canada
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Snowflake Computing France SAS
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France
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Snowflake Computing GmbH
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Germany
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SNFL Cloudtech India Private Limited
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India
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Snowflake Computing India LLP
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India
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Snowflake K.K.
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Japan
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Snowflake Computing Netherlands B.V.
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Netherlands
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Snowflake Computing Singapore Pte. Ltd.
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Singapore
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Snowflake Computing Spain, S.L.
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Spain
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SNFL Technologies AB
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Sweden
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Snowflake Computing Switzerland GmbH
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Switzerland
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Snowflake Computing U.K. Limited
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United Kingdom
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CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-1 of Snowflake Inc. of our report dated June 7, 2020, except for the effects of disclosing segment information and net loss per share discussed in Note 2, Note 13, and Note 14 to the consolidated financial statements, as to which the date is June 15, 2020, relating to the financial statements of Snowflake Inc., which appears in this Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
San Jose, California
September 8, 2020
