VMware 2012 Annual Report Download - page 139

Performance Stock Unit Award
PSUs are performance-based equity awards that are convertible into a number of shares of VMware Class A common
stock based upon the level of performance achieved in comparison to predetermined metrics. Your PSU grant (the “ Initial
PSU Award ”) will vest over the service period and performance period specified below on the date that the Committee
determines the extent to which performance objectives specified in the grant agreement have been achieved (the “ PSU
Vesting Date ”). The Committee will make its determination no later than sixty days after the end of the applicable
performance period. Vesting will not occur, and no shares will be issued, for performance below minimum thresholds
specified in the grant agreement. The service period to which your performance goals relate will begin with the
commencement of your service as the Company’s Chief Executive Officer. The grant of this PSU award is conditioned
upon your agreement with Parent (as defined below) to cancel a long-term incentive performance award granted to you by
Parent on August 3, 2011 for 239,617 units (the “ LTIP ”), which cancellation will become effective on the date that the
Committee grants your Initial PSU Award.
Your Initial PSU Award will have a Target Value of approximately $4,000,000.
The PSUs subject to your Initial PSU Award will vest if the Company meets a revenue growth target designated by the
Committee over the three-year period commencing January 1, 2012. The PSUs will convert into VMware’s Class A
common stock at a ratio ranging from 0.5 to 2.0 shares for each PSU, depending upon the degree of performance.
Parent Equity Awards
It is understood that, with the exception of the LTIP, the remaining unvested equity awards previously granted to you by
Parent will continue to vest during your employment with VMware in accordance with and subject to the terms of the
agreements between Parent and you with respect to such equity awards.
CHANGE IN CONTROL:
Effect on RSUs : If there is a Change in Control (as defined below), in lieu of any other severance or termination
compensation (unless otherwise required by law or described herein), 100% of any unvested RSUs from the Initial RSU
Grant will become immediately vested (“ Change-in-Control Acceleration ”) in the event that:
Effect on PSUs :
If there is a Change in Control during the performance period for your Initial PSU Award, the performance
period will terminate immediately prior to consummation of the Change in Control. The affected PSUs will vest on the
originally scheduled PSU Vesting Date. If the Change in Control is consummated during the first year of the performance
period, each PSU subject to the Initial PSU Award will convert into one share of VMware Class A common stock (the “
Conversion Ratio ”) (or the equivalent number of securities into which one such VMware share was converted pursuant to
the Change in Control) on the PSU Vesting Date. If the Change in Control is consummated after the first year of the
performance period, then the Conversion Ratio will be determined based upon Company performance prior to the Change
in Control as set forth in the grant agreement.
Additionally, in the event that:
1. The Company terminates your employment without Cause (as defined below) during the first twelve months after a
Change in Control, or
2. You terminate your employment for Good Reason (as defined below) during the first twelve months after a Change in
Control.
1.
The Company terminates your employment without Cause after a Change in Control, or