ZS DEF 14A Report ended Jan. 10, 2020

☐	Soliciting Material Pursuant to §240.14a‑11(c) or §240.14a‑2

(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0‑11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

☐	Check box if any part of the fee is offset as provided by Exchange Act Rule 0‑11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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•	the election of three Class II directors to hold office until the 2022 annual meeting of stockholders or until their successors are elected and qualified;

•	the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending July 31, 2020;

•	a proposal to approve, on a non-binding advisory basis, the frequency of future stockholder advisory votes on the compensation of our named executive officers.

•	FOR the election of each of the three director nominees nominated by our board of directors and named in this proxy statement as Class II directors to serve for a three-year term;

•	FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending July 31, 2020; and

•	“ONE YEAR” as the preferred frequency for future advisory non-binding votes to approve the compensation of our named executive officers.

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•	You may vote via the Internet . To vote via the Internet, go to http://www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the control number from the proxy card you receive. Your vote must be received by 11:59 p.m. Eastern Time on January 9, 2020 to be counted. If you vote via the Internet, you do not need to return a proxy card by mail.

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You may vote by telephone . To vote by telephone, dial toll-free 1-800-690-6903 in the United States and Canada or 1-800-454-8683 from countries outside the United States and Canada and follow the recorded instructions. You will be asked to provide the control number from the proxy card. Your vote must be received by 11:59 p.m. Eastern Time on January 9, 2020 to be counted. If you vote by telephone, you do not need to return a proxy card by mail.

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You may vote by mail . To vote by mail using the proxy card (if you requested paper copies of the proxy materials to be mailed to you), you need to complete, date and sign the proxy card and return it promptly by mail in the envelope to be provided so that it is received no later than January 9, 2020. The persons named in the proxy card will vote the shares you own in accordance with your instructions on the proxy card you mail. If you return the proxy card, but do not give any instructions on a particular matter to be voted on at the Annual Meeting, the persons named in the proxy card will vote the shares you own in accordance with the recommendations of our board of directors.

•	You may vote at the Annual Meeting . To vote at the meeting, following the instructions at www.virtualshareholdermeeting.com/ZS2019 (have your Notice or proxy card in hand when you visit the website).

•	entering a new vote by Internet or telephone;

•	signing and returning a new proxy card with a later date;

•	delivering a written revocation to our Secretary at Zscaler, Inc., 110 Rose Orchard Way, San Jose, California 95134, by 11:59 p.m. Eastern Time on January 9, 2020; or

•	following the instructions at www.virtualshareholdermeeting.com/ZS2019.

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•	FOR the election of each of the three directors nominated by our board of directors and named in this proxy statement as Class II directors to serve for a three-year term (Proposal No. 1);

•	FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending July 31, 2020 (Proposal No. 2);

•	FOR “ONE YEAR” as the preferred frequency for future advisory non-binding votes to approve the compensation of our named executive officers (Proposal No. 3); and

•	in the discretion of the named proxy holders regarding any other matters properly presented for a vote at the Annual Meeting.

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Proposal No. 1: The election of Class II directors requires a plurality vote of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon to be approved. Plurality means that the three nominees who receive the most FOR votes will be elected. You may (i) vote FOR all nominees, (ii) WITHHOLD your vote as to all nominees, or (iii) vote FOR all nominees except for those specific nominees from whom you WITHHOLD your vote. Any shares not voted FOR a particular nominee (whether as a result of voting withheld or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election. A vote withheld with respect to the election of any or all nominees will be counted for purposes of determining whether there is a quorum, but, with respect to any specific nominee, will not be considered to have been voted for such nominee and will have no effect on the outcome.

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Proposal No. 2: The ratification of the appointment of PricewaterhouseCoopers LLP requires an affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon to be approved. You may vote FOR, AGAINST or ABSTAIN. If you ABSTAIN from voting on Proposal No. 2, the abstention will have the same effect as a vote AGAINST the proposal.

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Proposal No. 3: The approval, on an advisory basis, of the frequency of future stockholder advisory votes on the compensation of our named executive officers. The frequency receiving the highest number of votes from holders of shares present in person or by proxy at the Annual Meeting and entitled to vote thereon will be considered the frequency preferred by the stockholders. You may vote for the frequency of future advisory votes on executive compensation to be “ONE YEAR,” “TWO YEARS,” or “THREE YEARS,” or you may “ABSTAIN” with respect to this proposal. Abstentions and broker non-votes will have no effect on the outcome. Because this proposal is an advisory vote, the result will not be binding on our board of directors or our company. However, our board of directors values stockholders’ opinions, and our board of directors and our compensation

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•	not earlier than September 13, 2020; and

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•	not later than October 13, 2020.

•	the 90th day prior to such annual meeting; or

•	the 10th day following the day on which public announcement of the date of such annual meeting is first made.

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(1)	Member of our audit committee

(2)	Member of our compensation committee

(3)	Member of our nominating and corporate governance committee

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•	selecting and hiring our registered public accounting firm ;

•	evaluating the performance and independence of our registered public accounting firm;

•	approving the audit and pre-approving any non-audit services to be performed by our registered public accounting firm ;

•	reviewing our financial statements and related disclosures and reviewing our critical accounting policies and practices ;

•	reviewing the adequacy and effectiveness of our internal control policies and procedures and our disclosure controls and procedures ;

•	overseeing procedures for the treatment of complaints on accounting, internal accounting controls or audit matters ;

•	reviewing and discussing with management and the independent registered public accounting firm the results of our annual audit, our quarterly financial statements and our publicly filed reports ;

•	reviewing and approving in advance any proposed related-person transactions ; and

•	preparing the audit committee report that the SEC will require in our annual proxy statement.

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•	reviewing and approving our chief executive officer’s and other executive officers’ annual base salaries, incentive compensation plans, including the specific goals and amounts, equity compensation, employment agreements, severance arrangements and change in control agreements and any other benefits, compensation or arrangements ;

•	administering our equity compensation plans ;

•	overseeing our overall compensation philosophy, compensation plans and benefits programs; and

•	preparing the compensation committee report that the SEC will require in our annual proxy statement .

•	evaluating and making recommendations regarding the composition, organization and governance of our board of directors and its committees ;

•	evaluating and making recommendations regarding the creation of additional committees or the change in mandate or dissolution of committees ;

•	reviewing and making recommendations with regard to our corporate governance guidelines and compliance with laws and regulations; and

•	reviewing and approving conflicts of interest of our directors and corporate officers, other than related person transactions reviewed by the audit committee .

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•	The nominating and corporate governance committee will consider candidates recommended by stockholders in the same manner as candidates recommended to the nominating and corporate governance committee from other sources.

•	In its evaluation of director candidates, including the members of our board of directors eligible for re-election, the nominating and corporate governance committee will consider factors such as:

•	business expertise;

•	diversity, including differences in professional background, gender, race, ethnicity, education, skill, and other individual qualities and attributes that contribute to the total mix of viewpoints and experience represented on the board of directors;

•	past attendance at meetings, and participation in and contributions to the activities of our board of directors; and

•	other factors that the nominating and corporate governance committee deems appropriate.

•	The nominating and corporate governance committee requires the following minimum qualifications to be satisfied by any nominee for a position on our board of directors:

•	the highest personal and professional ethics and integrity;

•	proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment;

•	skills that are complementary to those of the existing board of directors;

•	the ability to assist and support management and make significant contributions to the Company’s success; and

•	an understanding of the fiduciary responsibilities that is required of a member of our board of directors and the commitment of time and energy necessary to diligently carry out those responsibilities.

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(1)	Initial RSU grant with a target value of $175,000 pro-rated from the date of appointment or election (automatically granted on the effective date of appointment or election). These RSUs vest in equal quarterly installments over the remainder of the year of appointment in advance of the next annual meeting of stockholders; and

(2)	Annual RSU grant with target value of $175,000 (automatically granted at the annual meeting). These RSUs vest in four equal quarterly installments over a one-year period.

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(1)	Amounts represent the grant date fair market value of RSUs automatically granted to serving directors following our 2018 annual meeting of stockholders.

(3)	Mr. Raj elected to exercise his right to receive payments of director fees effective in October 2018 after previously electing to forego his right to receive fees for service as a director.

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(1)

Audit Fees consist of fees for professional services rendered in connection with the audit of our annual consolidated financial statements, the review of our quarterly condensed consolidated financial statements, statutory audit fees, and audit services that are normally provided by the independent registered public accounting firm in connection with regulatory filings. This category also includes fees for professional services provided in connection with our initial public offering, incurred during the fiscal year ended July 31, 2018, including comfort letters, consents and review of documents filed with the SEC.

(2)

Audit-Related Fees consist primarily of fees for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and not reported under “Audit Fees.” For our fiscal year ended July 31, 2018, this category includes accounting consultations and technical accounting guidance associated with the adoption of the new revenue accounting standard issued by the Financial Accounting Standards Board (“FASB”), Accounting Standards Updated (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606).

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(3)	All Other Fees consist of aggregate fees billed for products and services provided by the independent registered public accounting firm other than those disclosed above. These services specifically relate to subscription fees paid for access to online accounting research software and regulatory applications.

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•	our accounting and financial reporting processes and the audit of our financial statements;

•	the integrity of our financial statements;

•	our compliance with legal and regulatory requirements;

•	inquiring about significant risks, reviewing our policies for risk assessment and risk management, and assessing the steps management has taken to control these risks; and

•	the independent registered public accounting firm’s appointment, qualifications and independence.

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•	Jay Chaudhry, our Chief Executive Officer, President and Chairman of the board of directors (our “CEO”);

•	Remo E. Canessa, our Chief Financial Officer;

•	Amit Sinha, Ph.D., our President of Research &Development, Operations & Customer Service, Chief Technology Officer;

•	Manoj Apte, Ph.D., our Chief Strategy Officer; and

•	Robert Schlossman, our Chief Legal Officer and Secretary

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•	Total revenue was $302.8 million, an increase of 59% year-over-year.

•	Calculated billings were $390 million, an increase of 51% year-over-year. Calculated billings is a non-GAAP financial measure. The reconciliation of GAAP revenue and calculation billings is set forth on page 58 of our Annual Report on Form 10-K, as filed with the SEC on September 18, 2019.

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GAAP loss from operations was $35.3 million, or 12% of total revenue, compared to a GAAP loss of $34.6 million in fiscal 2018, or 18% of total revenue. Non-GAAP income from operations was $25.1 million, or 8% of total revenue, compared to Non-GAAP loss from operations of $15.4 million in fiscal 2018, or 8% of total revenue. The reconciliation of GAAP loss from operations and non-GAAP loss from operations is set forth on page 57 of our Annual Report on Form 10-K, as filed with the SEC on September 18, 2019.

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Cash provided by operations was $58.0 million, or 19% of revenue, compared to $17.3 million, or 9% of revenue, in fiscal 2018. Positive free cash flow was $29.3 million, or 10% of revenue, compared to $2.1 million, or 1% of revenue, in fiscal 2018. Free cash flow is a non-GAAP financial measure. The reconciliation of cash provided by operations and free cash flow is set forth on page 57 of our Annual Report on Form 10-K, as filed with the SEC on September 18, 2019.

•	Base Salaries – The compensation committee maintained annual base salaries at their fiscal 2018 levels, including for our CEO, who has a salary of $23,660.

•	Annual Cash Bonuses – While we had a strong year as described above, the targets set for our annual cash bonus plan required extraordinary or stretch level performance to achieve

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Long-Term Incentive Compensation – The compensation committee determined that a substantial part of long-term incentive compensation should also reflect our pay-for-performance philosophy. As a result, the compensation committed granted long-term incentive compensation opportunities in the form of both time-based restricted stock unit (“RSU”) awards and performance-based restricted stock unit (“PSU”) awards, including a PSU award for our CEO with an aggregate grant date fair value of approximately $5.6 million. In addition to requiring continued service for vesting, our PSU awards provide that our named executive officers may earn shares of our common stock based on our achievement of pre-established target levels for one or more financial or operational performance measures established for a fiscal year. Despite our strong financial performance in fiscal 2019, we did not meet the aggressive threshold performance measures that were established for attainment of PSU Awards for 2019 and none of the shares of our common stock underlying PSU awards subject to the fiscal 2019 performance measures were earned.

•	First, we provide the opportunity to participate in our cash bonus plan which provides semi-annual cash payments if our named executive officers produce short-term financial, operational, and strategic results that meet or exceed the objectives set by our compensation committee.

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In addition, we grant RSU and PSU awards that will reward recipients over a multi-year period, with the PSUs only being earned for achieving performance objectives established by our compensation committee. The RSU and, if earned, PSU awards comprise a majority of our named executive officers’ target total direct compensation opportunities, the future value of which depends significantly on the value of our common stock, thereby incentivizing them to build sustainable long-term value for the benefit of our stockholders.

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•	Maintain an Independent Compensation Committee . The compensation committee consists solely of independent directors who establish our compensation policies and practices.

•	Retain an Independent Compensation Advisor . The compensation committee has engaged its own compensation consultant to provide information, analysis, and other advice on executive compensation independent of management. This consultant performed no other consulting or other services for us in fiscal 2019.

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Annual Executive Compensation Review . The compensation committee conducts an annual review and approval of our compensation strategy, including a review and determination of our compensation peer group used for comparative purposes and a review of our compensation-related risk profile to ensure that our compensation programs do not encourage excessive or inappropriate risk-taking and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on us.

•	Compensation At-Risk . Our executive compensation program is designed so that a significant portion of our named executive officers’ compensation is “at risk” based on corporate performance, as well as equity-based, to align the interests of our named executive officers and stockholders.

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Use a Pay-for-Performance Philosophy . The majority of our named executive officers’ compensation is directly linked to corporate performance; we also structure their target total direct compensation opportunities with a significant long-term equity component, thereby making a substantial portion of each named executive officer’s target total direct compensation dependent upon our stock price and/or total stockholder return.

•	Nominal Base Salary and Zero Bonus Potential for our CEO . Our CEO receives only a nominal base salary and is not eligible for a cash bonus.

•	Succession Planning . We review the risks associated with our key executive officer positions to ensure adequate succession plans are in place.

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No Executive Retirement Plans . We do not currently offer, nor do we have plans to offer, defined benefit pension plans or any non-qualified deferred compensation plans or arrangements to our named executive officers other than the plans and arrangements that are available to all employees. Our named executive officers are eligible to participate in our 401(k) retirement plan on the same basis as our other employees.

•	Limited Perquisites. Perquisites or other personal benefits are not a material part of our compensation program for our named executive officers.

•	No Excise Tax Payments on Future Post-Employment Compensation Arrangements . We do not provide any excise tax reimbursement payments (including “gross-ups”) on payments or benefits contingent upon a change in control of the Company.

•	No Special Health or Welfare Benefits . We do not provide our named executive officers with any health or welfare benefit programs, other than participation in our broad-based employee programs on the same basis as our other full-time, salaried employees.

•	No Hedging or Pledging of our Equity Securities. We prohibit our employees, including our named executive officers and the members of our board of directors from hedging or pledging our equity securities.

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•	Provide market competitive compensation and benefit levels that will attract, retain, motivate, and reward a highly-talented team of executives within the context of responsible cost management;

•	Establish a direct link between our financial and operational results and strategic objectives and the compensation of our executives;

•	Align the interests and objectives of our executives with those of our stockholders by linking their long-term incentive compensation opportunities to stockholder value creation and their cash incentives to our annual performance; and

•	Offer total compensation opportunities to our executives that, while competitive, are internally consistent and fair.

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•	our executive compensation program objectives;

•	our performance against the financial, operational, and strategic objectives established by the compensation committee and our board of directors;

•	each individual named executive officer’s knowledge, skills, experience, qualifications, and tenure relative to other similarly-situated executives at the companies in our compensation peer group;

•	the scope of each named executive officer’s role and responsibilities compared to other similarly-situated executives at the companies in our compensation peer group;

•	the prior performance of each individual named executive officer, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function, and work as part of a team, all of which reflect our core values;

•	the potential of each individual named executive officer to contribute to our long-term financial, operational, and strategic objectives;

•	our CEO’s compensation relative to that of our named executive officers, and compensation parity among our named executive officers;

•	our financial performance relative to our compensation and performance peers;

•	the compensation practices of our compensation peer group and the positioning of each named executive officer’s compensation in a ranking of peer company compensation levels based on an analysis of competitive market data; and

•	the recommendations of our CEO with respect to the compensation of our named executive officers (except with respect to his own compensation).

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•	consultation with the compensation committee chair and other members between compensation committee meetings;

•	review, research, and updating of our compensation peer group;

•	an analysis of competitive market data based on the compensation peer group for our named executive officers’ positions and an evaluation of how the compensation we pay our named executive officers compares both to our performance and to how the companies in our compensation peer group compensate their executives;

•	review and analysis of the base salary levels, annual incentive bonus opportunities, and long-term incentive compensation opportunities of our named executive officers;

•	review and analysis of the base salary levels, annual incentive bonus opportunities, and long-term incentive compensation opportunities for possible new hires;

•	review and analysis of the compensation arrangements of the non-employee members of our board of directors against the companies in the compensation peer group;

•	assessment of executive compensation trends within our industry, and updating on corporate governance and regulatory issues and developments; and

•	support on other ad hoc matters throughout the year.

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•	publicly-traded companies headquartered in the United States and traded on a major United States stock exchange;

•	companies in the software and Internet services sectors, with a secondary focus on other technology companies;

•	similar revenues – within a range of ~0.5x to ~2.0x our then-projected fiscal 2017 revenues of approximately $170 million (approximately $85 million to approximately $340 million); and

•	similar market capitalization – within a range of ~0.5x to ~2.0x our then-projected market capitalization of approximately $2.5 billion (approximately $1.25 billion to approximately $5.0 billion).

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Mr. Chaudhry – Mr. Chaudhry was not granted as RSU award, but was granted four separate PSU awards, each covering 150,000 units which may be settled for shares of our common stock with individual annual performance periods to correspond to fiscal 2019 through fiscal 2022. Each such PSU award is subject to being earned and vesting annually for each fiscal year from fiscal 2019 through fiscal 2022 based on the achievement of one or more performance measures to be established at the beginning of each fiscal year by the

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Mr. Canessa – Mr. Canessa was granted a mix of RSU awards and PSU awards. Mr. Canessa was granted a RSU award covering 56,250 units subject to a delayed vesting schedule. The RSU award will vest over approximately six years in total, with 6.25% of the units subject to vesting on December 15, 2020 and 6.25% of the units vesting on the first trading day on or after each of March 15, June 15, September 15 and December 15 (each a "Quarterly Vesting Date") thereafter. Mr. Canessa was also granted two separate PSU awards consisting of 28,125 units each, with individual annual performance periods to correspond to fiscal 2019 and fiscal 2020. For the 2019 performance year, the total number of units that could be earned scaled from 0% to 150% of the target number of units, based on actual achievement of the 2019 performance measure. The performance measures and related target performance levels for the 2020 performance year were determined by the compensation committee in the first quarter of fiscal 2020. For each performance year, any earned units will vest on the same schedule as for his RSU award, with 6.25% of the earned units vesting on December 15, 2020 and 6.25% of the units vesting each Quarterly Vesting Date thereafter. For each of the RSU and PSU awards, receipt of any shares of common stock upon settlement of the awards is subject to Mr. Canessa continuing to be a service provider through any applicable vesting date.

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Dr. Sinha, Dr. Apte and Mr. Schlossman – Dr. Sinha, Dr. Apte and Mr. Schlossman were granted a mix of RSU and PSU awards. Dr. Sinha’s RSU award consists of two separate RSU awards each covering 62,500 units with 62,500 units vesting in 16 equal quarterly installments beginning on December 15, 2019 and the remaining 62,500 units vesting in 16 equal quarterly installments beginning on December 15, 2020. Dr. Apte’s RSU award consists of two separate RSU awards each covering 56,250 units with 56,250 units vesting in 16 equal quarterly installments beginning on December 15, 2019 and the remaining 56,250 units vesting in 16 equal quarterly installments beginning on December 15, 2020. Mr. Schlossman’s RSU award consists of two separate RSU awards each covering 31,250 units with 31,250 units vesting in 16 equal quarterly installments beginning on December 15, 2019 and the remaining 31,250 units vesting in 16 equal quarterly installments beginning on December 15, 2020.

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•	payment of the full amounts specified in the policy to which he or she is entitled; or

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•	payment of such lesser amount that does not trigger the excise tax imposed by Section 4999, whichever results in him or her receiving a higher amount after taking into account all federal, state, and local income, excise and employment taxes.

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•	accelerated vesting as to the number of unvested shares subject to equity awards that otherwise would have vested during the 6 months following the date his employment with us terminates had he remained employed with us through such time;

•	extension of the period of time in which he has to exercise his vested options until the date that is 12 months following his termination date, subject to earlier termination on a change in control (or similar transaction) pursuant to the terms of the equity plan under which the options are granted; and

•	severance pay at a rate equal to 100% of his base salary, as then in effect, for a period of 6 months following the date of such termination, payable in accordance with our normal payroll practices.

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•	100% of the then-unvested shares subject to his then-outstanding equity awards will become vested and exercisable, and in the case of equity awards with performance-based vesting, all performance goals and other vesting criteria will be deemed achieved at the specified percentage of target levels;

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a lump-sum payment equal to 100% of the greatest of (i) a participant's annual base salary as in effect immediately prior to his termination, (ii) if the termination is a resignation for good reason based on a material reduction in base salary, a participant's annual base salary as in effect immediately prior to such reduction, or (iii) a participant's annual base salary as in effect immediately prior to the change of control;

•	a lump-sum payment equal to (i) 100% of a participant's target annual bonus for the fiscal year in which the termination occurs plus (ii) a pro-rated portion of such target annual bonus reduced by any bonus payments made during such fiscal year; and

•	a lump-sum health benefit severance payment of $36,000.

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(1)

The amounts reported represent the grant date fair value of the awards granted to the named executive officers during fiscal years 2019, 2018 and 2017 as computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in Note 10 to our audited consolidated financial statements included in our Annual Report on Form 10-K for our fiscal year ended July 31, 2019.  The awards for fiscal year 2019 are comprised of (i) time-based RSU and (ii) PSU awards. The amounts shown in respect of the PSUs represent the grant date fair value of the first of multiple tranches of the PSU award that was granted in October 2018 based upon the probable outcome of the fiscal 2019 performance condition as of the grant date. The grant date fair value of the PSU awards granted in fiscal years 2019 assuming achievement of the maximum level of performance are: Mr. Chaudhry, $8,334,000; Mr. Canessa $1,562,625; Dr. Sinha $3,472,500; Dr. Apte $3,125,250; and Mr. Schlossman $1,736,250. These amounts do not necessarily correspond to the actual value recognized by our named executive officers. For example, no PSUs were earned for fiscal year 2019.

(2)

The amounts reported represent the aggregate grant date fair value of the stock options granted to our named executive officers, calculated in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in Note 10 to our audited consolidated financial statements included in our Annual Report on Form 10-K for our fiscal year ended July 31, 2019.  These amounts do not necessarily correspond to the actual value recognized by the named executive officers.

(3)	Dr. Sinha was an executive officer but not a named executive officer for fiscal 2017.

(4)	Dr. Apte was an executive officer but not a named executive officer for fiscal 2017 and 2018.

(5)	Mr. Schlossman was an executive officer but not a named executive officer for fiscal 2017 and 2018.

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(1)

These amounts reflect the fiscal 2019 target cash bonus amounts for each of our named executive officers under our Incentive Compensation Plan. Mr. Chaudhry did not participate in the Incentive Compensation Plan. There are no threshold bonus amounts under the Incentive Compensation Plan. As set forth in the Summary Compensation Table, no bonuses were earned for fiscal 2019. As such, the amounts set forth do not represent actual compensation earned or earnable by the named executive officers for fiscal 2019. For a description of the Incentive Compensation Plan, see “Compensation Discussion and Analysis –Annual Cash Bonuses” above.

(2)

These amounts reflect PSUs for the 2019 fiscal year performance period granted during the 2019 fiscal year to each of our named executive officers under our 2018 Equity Incentive Plan. The PSUs were eligible to be earned based on the achievement of 2019 fiscal year ACV targets established by the compensation committee. There were no threshold amounts for the 2019 fiscal year performance period. The amounts set forth do not represent actual compensation earned or earnable by the named executive officers for fiscal 2019. For a description of the 2019 fiscal year PSU program, see “Compensation Discussion and Analysis –Long-Term Incentive Compensation” above.

(3)

The amounts reported represent the aggregate grant date fair value of the stock awards granted to our named executive officers in fiscal 2019, calculated in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value are set forth in the notes to our consolidated financial statements included in the Annual Report. These amounts do not necessarily correspond to the actual value recognized by our named executive officers.

(4)	The RSUs vest in 16 equal quarterly installments beginning on December 15, 2020.

(5)	The RSUs vest as follows: (i) 62,500 RSUs vest in 16 equal quarterly installments beginning on December 15, 2019 and (ii) 62,500 RSUs vest in 16 equal quarterly installments beginning on December 15, 2020.

(6)	The RSUs vest as follows: (i) 56,250 RSUs vest in 16 equal quarterly installments beginning on December 15, 2019 and (ii) 56,250 RSUs vest in 16 equal quarterly installments beginning on December 15, 2020.

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(7)	The RSUs vest as follows: (i) 31,250 RSUs vest in 16 equal quarterly installments beginning on December 15, 2019 and (ii) 31,250 RSUs vest in 16 equal quarterly installments beginning on December 15, 2020.

(1)	This column represents the market value of the shares underlying the RSUs or PSUs, as applicable, as of July 31, 2019, based on the closing price of our common stock, as reported on NASDAQ, of $84.27 per share on July 31, 2019.

(2)	Upon achievement of specified performance metrics, earned PSUs vest on September 15, 2019, or the first quarterly vesting date after achievement has been certified. Amounts reported are at 100% target level of achievement, with maximum achievement paying out at 150%. None of these PSUs were earned in fiscal 2019.

(3)	Upon achievement of specified performance metrics, earned PSUs vest on September 15, 2020, or the first quarterly vesting date after achievement has been certified. Because the performance metrics for this award had not been determined in FY 2019 (and hence, no grant date fair value could be determined), it was not included in the summary

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(4)

Upon achievement of specified performance metrics, earned PSUs vest on September 15, 2021, or the first quarterly vesting date after achievement has been certified. Because the performance metrics for this award had not been determined in FY 2019 (and hence, no grant date fair value could be determined), it was not included in the summary compensation table or grants of plan-based awards table above. Amounts reported are at 100% target level of achievement, with maximum achievement paying out at 150%.

(5)

Upon achievement of specified performance metrics, earned PSUs vest on September 15, 2022, or the first quarterly vesting date after achievement has been certified. Because the performance metrics for this award had not been determined in FY 2019 (and hence, no grant date fair value could be determined), it was not included in the summary compensation table or grants of plan-based awards table above. Amounts reported are at 100% target level of achievement, with maximum achievement paying out at 150%.

(6)	The option is subject to an early exercise provision and is immediately exercisable. One-fourth of the shares subject to the option vested on February 6, 2018 and 1/48 of the shares vest monthly thereafter.

(7)	The RSUs vest in 16 equal quarterly installments beginning on December 15, 2020.

(8)	Upon achievement of specified performance metrics, earned PSUs vest in 16 equal quarterly installments beginning on December 15, 2020. Amounts reported are at 100% target level of achievement, with maximum achievement paying out at 150%.  None of these PSUs were earned in fiscal year 2019.

(9)

Upon achievement of specified performance metrics, earned PSUs vest in 16 equal quarterly installments beginning on December 15, 2020. Because the performance metrics for this award had not been determined in FY 2019 (and hence, no grant date fair value could be determined), it was not included in the summary compensation table or grants of plan-based awards table above. Amounts reported are at 100% target level of achievement, with maximum achievement paying out at 150%.

(10)	Shares subject to the option are fully vested and immediately exercisable.

(11)	One-fourth of the shares subject to the option vested on November 1, 2018 and 1/48 of the shares vest monthly thereafter.

(12)	The RSUs vest as follows: (i) 62,500 RSUs vest in 16 equal quarterly installments beginning on December 15, 2019 and (ii) 62,500 RSUs vest in 16 equal quarterly installments beginning on December 15, 2020.

(13)	Upon achievement of specified performance metrics, earned PSUs vest in 16 equal quarterly installments beginning on December 15, 2019. Amounts reported are at 100% target level of achievement, with maximum achievement paying out at 150%. None of these PSUs were earned in fiscal year 2019.

(14)

Upon achievement of specified performance metrics, earned PSUs vest in 16 equal quarterly installments beginning on December 15, 2020. Because the performance metrics for this award had not been determined in FY 2019 (and hence, no grant date fair value could be determined), it was not included in the summary compensation table or grants of plan-based awards table above. Amounts reported are at 100% target level of achievement, with maximum achievement paying out at 150%.

(15)	The RSUs vest as follows: (i) 56,250 RSUs vest in 16 equal quarterly installments beginning on December 15, 2019 and (ii) 56,250 RSUs vest in 16 equal quarterly installments beginning on December 15, 2020.

(16)	One-fourth of the shares subject to the option vested on January 14, 2017 and 1/48 of the shares vest monthly thereafter.

(17)	The RSUs vest as follows: (i) 31,250 RSUs vest in 16 equal quarterly installments beginning on December 15, 2019 and (ii) 31,250 RSUs vest in 16 equal quarterly installments beginning on December 15, 2020.

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(1)	The value realized on exercise is pre-tax and represents the difference between the market price of our company's common stock on the date of exercise less the option exercise price paid for those shares, multiplied by the number of shares for which the option was exercised.

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(1)

These amounts reflect the aggregate market value of the unvested shares of our common stock underlying outstanding restricted stock unit awards. The aggregate market value is equal to the product obtained by multiplying (i) the number of unvested shares of our common stock subject to outstanding restricted stock unit awards as of July 31, 2019, by (ii) $84.27 (the closing market price of our common stock on the Nasdaq Global Select Market on July 31, 2019, the last trading day in the fiscal year ended July 31, 2019). For performance-based restricted stock unit awards, the assumed number of unvested shares is equal to the target number of shares subject to such award, which includes the target number of shares subject to the portions of such awards that had a fiscal 2019 performance period since those portions of the awards were outstanding as of July 31, 2019 (even though those portions of the awards were subsequently forfeited due to the failure to achieve the relevant performance objectives).

(2)

These amounts reflect the aggregate market value of the unvested shares of our common stock underlying outstanding options. The aggregate market value is equal to (i) the product obtained by multiplying (x) the number of unvested shares of our common stock subject to outstanding options as of July 31, 2019, by (y) $84.27 (the closing market price of our common stock on the Nasdaq Global Select Market on July 31, 2019, the last trading day in the fiscal year ended July 31, 2019), minus (ii) the aggregate exercise price for such unvested shares.

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(1)

As a result of the adoption of the 2018 Plan, we no longer grant awards under the 2007 Plan; however, all outstanding options issued pursuant to the 2007 Plan continue to be governed by their existing terms. To the extent that any such awards are forfeited or lapse unexercised or are repurchased, the shares of common stock subject to such awards will become available for issuance under the 2018 Plan.

(2)	Our 2018 Plan provides that the number of shares available for issuance under the 2018 Plan will be increased on the first day of each fiscal year, in an amount equal to the least of (i) 12,700,000 shares, (ii) five percent (5%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) such other amount as our board of directors may determine.

(3)	Includes all PSUs granted in fiscal 2019 which consists of (i) fiscal 2019 PSUs at the maximum payout (no PSUs were paid out for fiscal 2019 resulting in 696,369 PSUs being forfeited) (ii) fiscal 2020, fiscal 2021, fiscal 2022 at target (100%), as no metrics had been determined as of fiscal 2019 year-end.

(4)

Our Fiscal Year 2018 Employee Stock Purchase Plan (the "ESPP") provides that the number of shares available for issuance under the ESPP will be increased on the first day of each fiscal year, in an amount equal to the least of (i) 2,200,000 shares, (ii) one percent (1%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) such other amount as may be determined by the administrator of the ESPP.

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•	each person, or group of affiliated persons, who beneficially owned more than 5% of our common stock;

•	each of our named executive officers;

•	each of our directors and nominees for director; and

•	all of our current executive officers and directors as a group.

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*	Represents beneficial ownership of less than one percent (1%) of the outstanding shares of our common stock.

(1)

Consists of (i) 21,566,041 shares held of record by The CJCP Trust for which Mr. Mangal serves as trustee and (ii) 8,258,491 shares held of record by The CKS Trust for which Mr. Mangal serves as trustee. The beneficiaries of The CJCP Trust and The CKS Trust are members of Jay Chaudhry’s family. The address for The CJCP Trust and The CKS Trust is c/o The Goldman Sachs Trust Company, 200 Bellevue Parkway, Suite 250, Wilmington, Delaware 19809.

(2)

Based solely on Schedule 13G filed with the SEC on February 13, 2019. Consists of 6,410,165 shares held of record in accounts managed by direct or indirect subsidiaries of FMR LLC. Abigail P. Johnson is a Director, the Chairman, the Chief Executive Officer, and the President of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B stockholders have entered into a stockholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the stockholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Ms. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act of 1940 (the Fidelity Funds), advised by Fidelity Management & Research Company (“FMR Co”), a wholly owned subsidiary of FMR LLC, which power resides in the Fidelity Funds’ Boards of Trustees. FMR Co carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. The address for FMR LLC is 245 Summer Street, Boston, Massachusetts 02210.

(3)	Consists of (i) 2,177,994 shares held of record by Mr. Chaudhry, (ii) 24,617,379 shares held of record by Jyoti Chaudhry and (iii) 6,666 shares held of record by P. Jyoti Chaudhry Family Trust dated March 1, 2000 for which Surjit Kaur serves as trustee.

(4)	Consists of (i) 252,554 shares held of record by Mr. Canessa and (ii) 530,000 shares subject to options exercisable within 60 days of November 15, 2019, of which 259,171 are fully vested.

(5)

Consists of (i) 2,664 shares held of record by Dr. Sinha, (ii) 566,702 shares held of record by the Sinha Revocable Trust dated September 24, 2011 for which Dr. Sinha serves as trustee, (iii) 298,749 shares held of record by the ADRR Trust for which Neha Kumar serves as trustee, (iv) 281,892 shares subject to options exercisable within 60 days of November 15, 2019, all of which are fully vested and (v) 3,906 shares issuable upon vesting of RSUs within 60 days of November 15, 2019.

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(6)

Consists of (i) 2,573 shares held of record by Dr. Apte, (ii) 36,022 shares of record by the Akshay Kosh Family Trust dated December 18, 2006 for which Dr. Apte and his spouse serve as trustees, (iii) 132 shares held of record directly by Dr. Apte's mother-in-law, (iv) 132 shares held of record directly by Dr. Apte's father-in-law, (v) 138,594 shares held of record directly by the Manoj Apte 2017 GRAT for which Dr. Apte serves as trustee, (vi) 141,784 shares held of record directly by the Lalita Godbole 2017 GRAT for which Dr. Apte's spouse serves as trustee, (vii) 299,394 shares subject to options exercisable within 60 days of November 15, 2019, all of which are fully vested and (viii) 3,515 issuable upon vesting of RSUs within 60 days of November 15, 2019.

(7)	Consists of (i) 30,466 shares held of record by Mr. Schlossman, (ii) 175,000 shares subject to options exercisable within 60 days of November 15, 2019, all of which are fully vested and (iii) 1,953 shares issuable upon vesting of RSUs within 60 days of November 15, 2019.

(8)

Consists of (i) 446 shares held of record by Ms. Blasing, (ii) 55,624 shares held of record by The Blasing Family Revocable Trust U/A dtd 12/22/2005 for which Ms. Blasing serves as trustee and (iii) 185,334 shares subject to options exercisable within 60 days of November 15, 2019, of which 127,002 shares are fully vested and (iv) 1,149 shares issuable upon vesting of RSUs within 60 days of November 15, 2019.

(9)

Consists of (i) 4,633 shares held of record by Mr. Brown, (ii) 42,513 shares held of record by the Andrew W.F. Brown 2017 Grantor Retained Annuity Trust, for which Mr. Brown’s spouse serves as a trustee and (iii) 130,333 shares subject to options exercisable within 60 days of November 15, 2018, of which 125,757 are vested and (iv) 1,149 shares issuable upon vesting of RSUs within 60 days of November 15, 2019.

(10)	Consists of (i) 65,946 shares held of record by Mr. Darling and (ii) 1,149 shares issuable upon vesting of RSUs within 60 days of November 15, 2019.

(11)

Consists of (i) 183,307 shares held of record by Mr. Giancarlo, of which 53,471 may be repurchased by us at the original exercise price as of November 15, 2019, (ii) 125,000 shares are held of record by The Charles H. & Dianne G. Giancarlo Family Trust U/D/T 11/2/98 for which Mr. Giancarlo serves as trustee, (iii) 26,736 shares held of record by The 2012 Marielle Christina Giancarlo Trust UAD 12/26/12 for which Mr. Giancarlo serves as a trustee, (iv) 26,736 shares held of record by The 2012 Gianna Marie Giancarlo Trust UAD 12/26/12 for which Mr. Giancarlo serves as a trustee and (v) 1,149 shares issuable upon vesting of RSUs within 60 days of November 15, 2019.

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•	the amounts involved exceeded or will exceed $120,000; and

•	any of our directors, nominees for director, executive officers or beneficial holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities (each, a related person), had or will have a direct or indirect material interest.

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