Elastic N.V. (Form: 8-K, Received: 08/26/2020 16:27:57)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 26, 2020

Elastic N.V.

(Exact name of registrant as specified in its charter)

The Netherlands

(State or other jurisdiction

of incorporation)

001-38675

(Commission File Number)

Not Applicable

(I.R.S. Employer

Identification Number)

800 West El Camino Real, Suite 350

Mountain View, California 94040

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (650) 458-2620

N/A

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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

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

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

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

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


Title of each class	Trading Symbol(s)	Name of each exchange of which registered
Ordinary Shares, €0.01 Par Value	ESTC	The New York Stock Exchange

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

Emerging growth company ☐

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

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 26, 2020, Elastic N.V. (the “Company” or “Elastic”) publicly announced the appointment of Mr. Paul Appleby as President, Worldwide Field Operations effective August 24, 2020, which was Mr. Appleby’s first day of employment at the Company.

Prior to joining Elastic, Mr. Appleby, 57, served as the Chief Executive Officer of Kinetica DB, Inc., a developer of analytics and artificial intelligence software, from December 2017 to June 2020. Before this, Mr. Appleby served as President – Worldwide Sales and Marketing of BMC Software, Inc., an enterprise IT operations software company, from April 2014 to July 2017. Previously, Mr. Appleby served as Executive Vice President of Global Enterprise Sales of Salesforce.com, Inc., a provider of cloud-based customer relationship management systems from 2012 to 2014, Managing Director – EMEA and APJ of Travelex plc, a foreign exchange company, from 2006 to 2009, and Vice President APJ of Siebel Systems, a provider of customer relationship management software, prior to its acquisition by Oracle, from 2002 to 2006.

In connection with his appointment, the Company entered into an employment letter with Mr. Appleby. The employment letter does not have a specific term and provides that Mr. Appleby will serve as an at-will employee. Mr. Appleby will receive a one-time sign-on bonus of $200,000, his initial annual base salary will be $500,000, and he will be eligible for an annual target cash incentive payment equal to 60% of his annual base salary. In addition, Mr. Appleby will be granted equity awards covering ordinary shares of Elastic with an aggregate approximate value of $8,000,000. Seventy-five percent of the value of the equity awards will be in the form of a restricted stock unit award, and 25% of the value of the equity awards will be in the form of a stock option award to purchase shares of Elastic. The restricted stock unit award and stock option award will each vest over a 4-year period with 25% of the total original number of shares subject to the applicable award vesting on the one-year anniversary of the applicable vesting commencement date, and the remainder vesting ratably thereafter on designated vesting dates over the following three years in accordance with Elastic’s equity grant practices, subject to Mr. Appleby’s continuous service with Elastic or its affiliates through each vesting date. The restricted stock unit award and stock option award will be subject to such other terms as set forth in the Elastic N.V. Amended and Restated 2012 Stock Option Plan (the “Plan”), the applicable award agreement under the Plan, and the Company’s equity grant practices in effect from time to time.

The foregoing description of Mr. Appleby’s compensatory arrangement with the Company does not purport to be complete and is qualified in its entirety by reference to the full text of the employment letter which is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.

The Company also entered into the Company’s standard change in control and severance agreement with Mr. Appleby. The change in control and severance agreement provides certain severance payments and benefits if Mr. Appleby’s employment is terminated other than for “cause” (as defined in the agreement) or if he resigns for “good reason” (as defined in the agreement), subject to Mr. Appleby satisfying certain other terms as set forth in the agreement. The Company also entered into the Company’s standard indemnification agreement with Mr. Appleby. The indemnification agreement will provide indemnification for certain liabilities that may arise by reason of his status or service. For a full description of the Company’s standard change in control and severance agreements and indemnification agreements, please see Exhibit 10.3 and Exhibit 10.1, respectively, to the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2020, filed with the Securities and Exchange Commission on June 26, 2020.

There are no family relationships between Mr. Appleby and any director or executive officer of the Company, and the Company has not entered into any transactions with Mr. Appleby that are reportable pursuant to Item 404(a) of Regulation S-K. Except as described above, there are no arrangements or understandings between Mr. Appleby and any other persons pursuant to which he was appointed President, Worldwide Field Operations.

Item 8.01. Other Events.

On August 26, 2020, the Company issued a press release announcing the appointment of Mr. Paul Appleby as President, Worldwide Field Operations.

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits


Exhibit						Description
10.1						Employment Letter between Elasticsearch, Inc. and Paul Appleby, dated as o f A ugust 10, 2020
99.1						Press Release dated August 26, 2020
104						Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURE

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

Dated: August 26, 2020

ELASTIC N.V.

By:

/s/ Janesh Moorjani

Name:

Janesh Moorjani

Title:

Chief Financial Officer

Exhibit 10.1

August 9^th, 2020

Paul Andrew Appleby

175 Britton Avenue

Atherton, CA 94027

Dear Paul:

Elasticsearch, Inc. (the “Company”), is pleased to offer you employment with the Company on the terms described below.

1.Position. Your position will be President, Worldwide Field Operations, reporting to the Chief Executive Officer, Shay Bannon. As this offer is for a position that will be an “executive officer” position (as such term is defined in Rule 3b-7 under the Securities and Exchange Act of 1934 (the “’34 Act”)) and an “officer” position (as such term is defined in Section 16 of the ’34 Act), the terms of this offer letter and your appointment to the position contemplated hereby are subject to the approval of the board of directors of Elastic N.V. (the “Board”) and the Compensation Committee of the Board (the “Compensation Committee”).

2.Compensation.

a.Base Salary. You will be paid a starting salary at the rate of $500,000 per year, which will be paid in accordance with the Company’s standard payroll policies and subject to applicable withholdings and other required deductions.

b.Sign-On Bonus. The Company will also pay you a one-time, non-recurring sign-on bonus of $200,000 which you will receive in the first payroll after your start date. The signing bonus is taxable, and all regular payroll taxes will be withheld. In the event that you resign, or are no longer actively providing services, or your employment with the Company terminates at any time within your first 12 months, you will be responsible for reimbursing the Company this amount pro-rated by 1/12th for every month of employment served, and you hereby consent. Any sign-on bonus paid will not be part of normal or expected salary or compensation for any purpose, including the calculation of severance, if any, upon termination.

c.Annual Incentive Compensation. Your annual target incentive compensation for fiscal year 2021 will be equal to 60% of your annual base salary, less applicable withholding, and will be subject to the terms and conditions of the Company’s Executive Incentive Compensation Plan or any successor plan or arrangement adopted and implemented by the Company.

You should note that the Company reserves the right to modify salaries and/or incentive compensation opportunities from time to time as it deems necessary.

3.Equity Award. Subject to the approval of the Board or the Compensation Committee, you will be granted awards covering ordinary shares of Elastic N.V. with an aggregate approximate value of $8,000,000 (each an “Equity Award”, and together, the “Equity Awards”). 75% of the value of the Equity Awards will be in the form of a restricted stock unit award, and 25% of the value of the Equity Awards will be in the form of a stock option grant to purchase shares of Elastic N.V.

The dollar value of each Equity Award will be converted into a number of shares subject to the Equity Award at the time the award is granted in accordance with our equity grant practices in effect at that time. Each Equity Award will vest over a 4-year period with 25% of the total original number of shares subject to the applicable Equity Award vesting on the 1 year anniversary of your vesting commencement date, and the remainder vesting ratably thereafter on designated vesting dates over the following 3 years in accordance with our equity grant practices, subject to your continuous service with the Company or its affiliates through each vesting date. Each Equity Award will be subject to the terms and conditions set forth in the Elastic N.V. Amended and Restated 2012 Stock Option Plan or a future equity plan, a standard form of either a restricted stock unit award agreement or an option award agreement adopted under such plan, as applicable, and our equity grant practices in effect from time to time.

4.Vacation and Holidays. During your employment with the Company, you will be entitled to 4 weeks of paid vacation during each calendar year, which shall accrue ratably over the calendar year and be pro-rated for the remainder of this calendar year. Such vacation shall be subject to and taken in accordance with the vacation policies of the Company. We strongly encourage you to take the vacation that you accrue in a calendar year in the same calendar year. Vacation must be taken by you at such time or times as mutually agreed between you and the Company. You will also be entitled to the paid holidays as set forth in the Company’s policies. Upon termination of your employment with the Company, you will be paid for any unused vacation accrued by you as of the termination date.

5.Employee Benefits. As a regular employee of the Company, you will be eligible to participate in the employee benefit plans, if any, currently and hereafter maintained by the Company, subject in each case to the terms and conditions of the plan in question, including any eligibility requirements set forth therein, and the determination of any person or committee administering the plan. You should note that the Company may modify or terminate benefits from time to time as it deems necessary or appropriate.

6.Severance & Change of Control Benefits. As an executive of the Company, you will be eligible to receive severance and change of control benefits under certain circumstances pursuant to a Change in Control and Severance Agreement to be entered into between you and the Company, in substantially the form of the Company’s standard agreements with its executives (the “Severance Agreement”). Accordingly, your potential severance and change of control benefits and the terms and conditions thereof shall be set forth in the Severance Agreement.

7.Confidential Information and Invention Assignment Agreement. Like all Company employees, you will be required as a condition of your employment with the Company, to sign the Company’s standard Confidential Information and Invention Assignment Agreement.

8.Employment Relationship. Employment with the Company is for no specific period of time. Your employment with the Company will be “at will,” meaning that either you or the Company may terminate your employment at any time and for any reason, with or without cause or notice. Any contrary representations which may have been made to you are superseded by this offer. This is the full and complete agreement between you and the Company on this term. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by you and the Company’s Chief Executive Officer.

9.Location: You will work from the Company’s Mountain View, CA Office.

10.Outside Activities. While you render services to the Company, you agree that you will not engage in any other employment, consulting, or other business activity without the written consent of the Company. In addition, while you render services to the Company, you will not assist any person or entity in competing with the Company, in preparing to compete with the Company, or in hiring any employees or consultants of the Company.

11.Withholding and Required Deductions. All forms of compensation referred to in this letter are subject to all withholding and any other deductions required by applicable law.

12.Entire Agreement and Governing Law. This letter supersedes and replaces any prior or contemporaneous understandings or agreements, whether oral, written or implied, between you and the Company regarding the matters described in this letter. This letter will be interpreted in accordance with the laws of the State of California without giving effect to provisions governing the choice of law.

13.Counterparts. This letter may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Execution of a facsimile, electronic, or scanned image will have the same force and effect as execution of an original, and a facsimile signature, electronic, or scanned image will be deemed an original and valid signature. If you wish to accept this offer, please sign electronically as presented.

As required by law, your employment with the Company is also contingent upon your providing legal proof of your identity and authorization to work in the United States. If visa sponsorship is needed, employment may not commence until an approval notice is received by the Company from USCIS. Employment may be contingent upon successfully obtaining an export license, if one is required for you to perform the duties you are being hired to perform. In addition, the Company may conduct a background verification and/or reference check, not to exceed the limitations of the law, and you acknowledge that this offer is contingent upon our receipt of satisfactory results of any and all performed checks. You acknowledge and agree that by signing this offer and returning it to the Company, you are consenting to the Company's performance of such background verification and/or reference checks.

[Signature page follows.]

This offer, if not accepted, will expire at the close of business on August 11, 2020.

We look forward to your favorable reply and to working with you at Elastic.


Very truly yours,

Elasticsearch, Inc.

/s/ Leah Sutton
Leah Sutton, SVP Global HR

August 9, 2020
Date


ACCEPTED AND AGREED:

/s/ Paul Andrew Appleby
Paul Andrew Appleby

August 10, 2020
Date

Anticipated Start Date: August 24, 2020

Exhibit 99.1

Elastic Appoints Paul Appleby President, Worldwide Field Operations

Former Kinetica, BMC, Salesforce Executive Joins Elastic to Further Scale the Company

MOUNTAIN VIEW, Calif. --(BUSINESS WIRE)-- Elastic (NYSE: ESTC) (“Elastic”), the company behind Elasticsearch and the Elastic Stack, today announced the appointment of Paul Appleby as president, worldwide field operations. Appleby was most recently the chief executive officer of Kinetica, and will be responsible for enhancing the customer journey, driving global revenue growth, and developing strategies for addressing the large market opportunity for Elastic. Appleby will report to Elastic founder and Chief Executive Officer Shay Banon.

Appleby joins Elastic as the company continues to see increasing demand for its enterprise search, observability and security solutions that are built on a single technology stack under a unified pricing model. Elastic’s unified, resource-based pricing enables customers to predictably control costs and fuel rapid adoption across its solutions.

Appleby brings more than 20 years of experience in senior management roles in the enterprise software industry to Elastic. He has a track record of driving significant scale and sustained growth across all channels, building and leading high-performing teams, leading go-to-market operations, and developing new markets.

Prior to Kinetica, Appleby served as president of worldwide sales and marketing of BMC. He also served in senior leadership roles at Salesforce, Siebel Systems, C3 AI, Travelex, and SAP.

Supporting Quotes:

•“I’m pleased to welcome Paul to Elastic as president of worldwide field operations. He joins us as the demand for our solutions continues to grow, and his more than 20 years of experience in successfully building and leading global teams will help us further scale the company,” said Shay Banon, founder and chief executive officer, Elastic. “Paul is an industry veteran and an experienced global leader who is uniquely qualified for this key leadership position at Elastic as we build on our free and open heritage and drive value for our customers and partners.”

•“Elastic brings customers the speed, scale and simplicity they need to effectively explore and analyze their data using the power of search to drive business insights,” said Paul Appleby, president, worldwide field operations, Elastic. “I’m excited by Elastic’s solutions and how they help to explore and analyze data differently using the power of search and the boundless ability of organizations who use Elastic to solve their most critical and complex challenges.”

Learn more about the Elastic leadership team here.

About Elastic:

Elastic is a search company built on a free and open heritage. Anyone can use Elastic products and solutions to get started quickly and frictionlessly. Elastic offers three solutions for enterprise search, observability, and security, built on one technology stack that can be deployed anywhere. From finding documents to monitoring infrastructure to hunting for threats, Elastic makes data usable in real time and at scale. Thousands of organizations worldwide, including Cisco, eBay, Goldman Sachs, Microsoft, The Mayo Clinic, NASA, The New York Times, Wikipedia, and Verizon, use Elastic to power mission-critical systems. Founded in 2012, Elastic is a distributed company with Elasticians around the globe and is publicly traded on the NYSE under the symbol ESTC. Learn more at elastic.co.

Forward-Looking Statements

This press release contains forward-looking statements that involve substantial risk and uncertainties, which include, but are not limited to, the appointment of our President, Worldwide Field Operations and our future growth. These forward-looking statements are subject to the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Our expectations and beliefs in light of currently available information regarding these matters may not materialize. Actual outcomes and results may differ materially from those contemplated by these forward-looking statements due to uncertainties, risks, and changes in circumstances, including but not limited to those related to: the impact of the COVID-19 pandemic on the macroeconomic environment, on our business, operations, hiring and financial results, and on businesses of our customers and partners, including their spending priorities, the effect of governmental lockdowns, restrictions and new regulations; our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit or gross margin, operating expenses (which include changes in sales and marketing, research and development and general and administrative expenses), and our ability to achieve and maintain future profitability; our ability to continue to deliver and improve our offerings and successfully develop new offerings, including security-related product offerings and SaaS offerings; customer acceptance and purchase of our existing offerings and new offerings, including the expansion and adoption of our SaaS offerings; our inability to realize value from investments in the business, including R&D investments; our ability to maintain and expand our user and customer base; the impact of foreign currency exchange rate and interest rate fluctuations on our results; our international expansion strategy; our operating results and cash flows; our beliefs and objectives for future operations; the sufficiency of our capital resources; our ability to successfully execute our go-to-market strategy and expand in our existing markets and into new markets, and our ability to forecast customer retention and expansion; our ability to attract and retain qualified employees and key personnel; our ability to onboard, provide training to and integrate new employees; and general market, political, economic and business conditions (including developments and volatility arising from the COVID-19 pandemic). Additional risks and uncertainties that could cause actual outcomes and results to differ materially are included in our filings with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the fiscal year ended April 30, 2020 and any subsequent reports filed with the SEC. SEC filings are available on the Investor Relations section of Elastic’s website at ir.elastic.co and the

SEC’s website at www.sec.gov. Elastic assumes no obligation to, and does not currently intend to, update any such forward-looking statements, except as required by law.

Elastic and associated marks are trademarks or registered trademarks of Elastic N.V. and its subsidiaries. All other company and product names may be trademarks of their respective owners.

Contacts

Lisa Boughner

Elastic Corporate Communications

lisa.boughner@elastic.co

Anthony Luscri

Elastic Investor Relations

ir@elastic.co

(650) 695-1055