Teradata Corporation (NYSE: TDC) today announced that the independent members of the Board of Directors have made certain equity awards to new President and Chief Executive Officer Steve McMillan, effective June 9, 2020. The awards were made pursuant to the company’s previously-announced offer letter with Mr. McMillan, and as a material inducement to his joining Teradata as President and Chief Executive Officer and a member of the Board of Directors.
The awards made to Mr. McMillan are as follows: (i) a make-whole award consisting of service-based restricted share units covering 200,530 shares, which shall vest 45% on December 1, 2020, 42% on the first anniversary of the date of grant, and 13% on the second anniversary of the date of grant, (ii) an annual grant of service-based restricted share units covering 146,237 shares, which shall vest in equal amounts on the first, second and third anniversaries of the grant date, and (iii) an annual grant of performance-based restricted share units covering 219,355 shares, which shall vest based on the extent to which the company achieves two equally weighted financial goals (year-over-year growth of reported annual recurring revenue and free cash flow as a percent of total reported revenue) during the 3-year performance period ending December 31, 2022. The make-whole award is subject to accelerated vesting in full, and the annual grants are subject to pro-rated vesting (subject to a minimum pro-ration factor of 2/3rds) upon a termination of employment by Teradata without cause or by Mr. McMillan for good reason (with the performance-based restricted share units vesting based on actual performance results).
The restricted share units were all granted outside of the Teradata 2012 Stock Incentive Plan (but generally have terms and conditions consistent with those set forth in that plan) and were approved by the independent members of the Board of Directors in reliance on the employment inducement exemption under the NYSE’s Listed Company Manual Rule 303A.08, which requires public announcement of inducement awards. Pursuant to the requirements of that rule, Teradata is issuing this press release.
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