Chegg 2013 Annual Report Download - page 33

Option and RSU Awards During 2013
In November 2013, we granted options to purchase 666,666, 266,666 and 266,666 shares of our common
stock to Messrs. Rosensweig, Brown and Geiger, respectively, each at an exercise price of $12.50 per share. Each
of these stock options vests as to one-third of the shares on the one-year anniversary of the date of grant, and as
to 1/36 of the shares each month over the following two years. In addition, in connection with our Designated
IPO Equity Incentive Program, in November 2013, we granted options to purchase 314,407, 77,088 and 75,591
shares of our common stock, each at an exercise price of $12.50 per share and 151,862, 34,983, and 59,146 RSUs
to Messrs. Rosensweig, Brown and Geiger, respectively. The awards granted pursuant to the Designated IPO
Equity Incentive Program will vest on the same schedule as the equity awards previously granted to each
executive, taken as a whole, including the vesting start date for such awards. In addition, the vesting of these
awards will accelerate by (i) 25% and 50% of the remaining unvested shares for Messrs. Rosensweig and Brown,
respectively, in the event their employment is terminated by us other than for cause or for good reason (as such
terms are defined in each officer’s offer letter). The vesting of these awards will also accelerate by and (ii) 100%,
50% and 50% for Messrs. Rosensweig, Brown, and Geiger, respectively, of the remaining unvested shares in the
event of a qualifying termination of employment within 12 months of a change of control (as such terms are
defined in each officer’s offer letter and described in “—Termination or Change in Control Arrangements”
below).
Designated IPO Equity Incentive Program. Our board of directors adopted the Designated IPO Equity
Incentive Program (the “Program”) in 2012 as a means to incentivize, motivate and retain certain of our
employees through an initial public offering by issuing them stock options and RSUs to acquire shares of our
common stock to offset the dilutive effects of the issuance of additional shares of Series D and Series E
convertible preferred stock in connection with an IPO as a result of the special conversion adjustments applicable
to those series of preferred stock. Upon our IPO in November 2013, the participants in the Program received
stock option and RSU grants covering such number of shares of our common stock as would allow them to
maintain substantially the same ownership percentage of our common stock with respect to their outstanding
equity awards as they did immediately prior to our IPO, excluding any shares sold in the IPO. The mix of options
and RSUs granted to each participant was based on an iterative calculation that first determined the number of
additional shares necessary to achieve the applicable ownership percentage for each participant prior to the IPO,
which number was then reduced by a number of RSUs necessary to offset the higher exercise price for the stock
options to be granted under the Program compared to the exercise price of each participant’s underlying stock
options. Each participant was granted stock options to purchase that reduced number of shares along with the
number of RSUs necessary to offset the higher exercise price of the stock options granted under the Program.
Each stock option granted under the program had an exercise price equal to $12.50, the price per share offered to
the public in our IPO. The vesting schedules of the equity awards granted under the Program proportionally
mirror each participant’s existing equity awards. All awards granted under the Program were granted under our
2013 Equity Incentive Plan and are subject to its terms and conditions. The Program terminated upon the
occurrence of our IPO and no further grants may be made under it.
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